SAP Point of View

Enable Your Digital Value Chain and Run Simple with

SAP S/4HANA
April 2015

Table of Contents

Executive Summary
4 Our Understanding
5 The SAP Solution
7 The Value
16 Innovation Roadmap and Customer Journey
17 Next Steps

SAP proprietary | 3

Executive Summary

Executive Summary

The future of business in the digital information age is now. A network of networks across social,
business, and devices is creating revolutionary conditions that can potentially double the current size
of the economy to $90 trillion1 by the year 2020. This networked economy is creating new opportunities
for business that touch every aspect of the value chain.
The Current Reality
Five years ago, there was only a handful of data sources,
each with limited granularity. Now, every two days, we create
as much data as we did from the dawn of civilization up until
2003. Information has exploded, and businesses need to
figure out how to harness and take advantage of this shift.
Customers now have even more control of their purchasing
decisions, and businesses struggle to understand customers
digital footprint to cater to their requirements. Talent
strategies need to align with what the digital information age
offers more collaboration plus transparency. Resources
need to be managed more efficiently to optimize the impact
to the P/L, and businesses need to shift from traditional
supplier interactions to leveraging the unconstrained access
to global networks.
Relevancy and impact of the digital information age will vary
for every organization and industry, but it is clear that
business complexities must be reduced to drive the future as
they can lead to lost sales and profits.
In addition, the prevalence of these complexities across the
value chain results from the fact that todays systems are not
able to support current requirements, they do not allow for
real-time information, inter-connections between processes,
or a holistic view of information internally and externally
across all key stakeholders.
The Future of Business Requires Simplicity
Businesses can focus on simplicity by reshaping how they
interact and make decisions. By leveraging a digital business
1, 2 Bain,

http://www.bain.com/Images/BAIN_REPORT_A_world_awash_in_money.pdf

platform, the following capabilities will be enabled:

Innovate for the future: Focus on driving new business
models and revenue streams instead of keeping the lights
on and maintaining the status quo
Run your business in real-time: Enable real-time
decisions and processes from information anywhere,
anytime, on any device, at any level of granularity
Simplified, connected, and open architecture: Integrate
enterprise processes around a simplified core data model
with best practice, pre-built innovations as well as the
ability to include customer innovation and partner solutions
Empower your users: Provide users with a simple and
intuitive way to create value through the digital value chain
How Can SAP Help?
SAP is the only partner that can power your entire value
chain and turn complexity into simplicity. By leveraging SAP
S/4HANA as the digital business platform, the value chain will
truly be digitized. This means that processes are redesigned
by interconnecting the back office and front office, connecting
with internal and external networks, and taking advantage of
the Internet of Things. This Point of View document will help
you take the next step in simplifying everything within the
digital value chain across all lines of business and driving
your innovation platform for the future.
Next Steps
The proposed next step is to partner with SAP Industry Value
Engineering to articulate the business case and value-based
road map to chart your journey.
SAP proprietary | 4

Our Understanding

Todays Reality: Value Chains Supported by Yesterdays

Systems, Disconnected Processes, and Siloed Information

Businesses today struggle with too much complexity inhibiting them from addressing vital business requirements meeting
stakeholder expectations in real time. Current processes have been intrinsically designed inefficiently as the available
technologies have forced organizations to use outdated capabilities such as batch jobs and multiple data sources. Systems
are built to support yesterdays business and not what the future requires. Siloed information makes decision compounds the
delays when decisions need to be made across end-to-end processes spanning multiple business areas. Ultimately, even the
processes themselves are not integrated, leading to even more delays. The transition to the digital economy, the Internet of
Things, social media, and other external, structured and unstructured data flows adds to the complexities that must be
addressed across the entire value chain before running simple can become a reality.
Disconnected
processes
Finance
Finance

Procurement
Procurement

Siloed
information

Technology
limitations
I cant understand my
customer profitability
at the level of detail I
need to?

Travel and
expense

Customer
data

Multiple
Data Sources

Staging DB

Lots of separate ETL processes!

Supply
Supply chain
chain
P/L

ETL
HR
HR

OmniOmnicommerce
commerce

ETL

Regulatory
requirements

Aggregate
Social

ETL

How much are we

spending in T&E to
support our top
customers?

I cant figure out if it

is more profitable for
a specific product to
expedite shipping or
use standard
transport?

24hr
Old Data
Demand
signals

SAP proprietary | 5

Our Understanding

Time for a New Mandate: Run Simple

Business and IT simplicity at the core of the digital value chain

Running simple requires a fully optimized end-to-end digital value chain. Outlined below are key attributes required to address this new reality:
Connected processes: Interconnected customers, resources, people, and suppliers to make immediate business impact from planning to
execution
Real-time insights: Analyze information immediately across internal and external channels (e.g., network, IoT, social) to drive business
insights without the need for aggregates
Modern technology platform: A digital platform that supports business today and in the future and also provides stakeholders with the
ability to interact with each other with ease
With the digital value chain enabled by the digital business platform, opportunities are available to drive value and optimize your customers
experience. This platform provides the foundation required to support real-time decisions across all areas that are part of a digital value chain
so that businesses can focus on strategic priorities versus spending their time keeping the lights on.

The Digital Value Chain

Manage materials, assets, money, and
other resources better
Enable frictionless commerce
by managing suppliers better

RESOURCES

PEOPLE
To enable the workforce of
the future employees +
contingent labor

IoT

Social

Business network

CUSTOMERS

Omnicommerce

To deliver exceptional experiences to

your customers across every channel
of interaction

SUPPLIERS

Other
unstructured/
structured
data

All LoBs running in real time on a digital business platform

The digital value chain

SAP proprietary | 6

The SAP Solution

Introducing the SAP S/4HANA Digital Business Foundation

Over the years, growth in transactional databases and other data sources as well as their associated
systems have complicated enterprise applications and infrastructure. This, in turn, has complicated and
stymied many organizations ability to meet the needs of the business, whether that be timely access to
analytics, the ability to absorb new business models, or to create new, streamlined business processes.
In response, SAP is rewriting and simplifying its applications to take advantage of its in-memory
business platform. This new and unique enterprise application is called SAP Business Suite 4 SAP
HANA (SAP S/4HANA). It removes previous technological barriers and helps companies manage
complexity and run simple across the digital value chain.
Reimagine business
With the enterprise running in real time and Big Data at the core, new business
models can easily be configured and opportunities to grow revenue and market
share can be realized.

Reimagine IT
The IT landscape is dramatically simplified by the consolidation of transactional and
analytical data into one common in-memory structure. The application code is
streamlined to leverage real-time processing. TCO is reduced, and performance is
improved.

Reimagine user experience

People-centric interfaces simplify the user experience. Business users can interact
in real time and access all data, of all types, on any device.

SAP proprietary | 7

The SAP Solution

What the Digital Business Foundation Means

To envision the possibilities provided by a

real-time, digital, simplified, and modern
business platform, the following strategic
areas articulate the business and IT
capabilities that are enabled as a result of the
digitization of the value chain.

Innovate for the future

Run your business in real time

Simplified, connected, and open architecture

Empower your users

SAP proprietary | 8

The SAP Solution

Innovate for the Future

By 2020, there will be as many as 50 billion1 devices connected to the Internet. Research also shows that there is over $14.4 trillion2 at stake
from a combination of increased revenues and lower costs for organizations that harness the Internet of Things and mandate that businesses
focus their strategies on taking advantage of the technologys inherent business opportunities.
Customers/consumer-driven demand across value chains: Increasing customer/consumer-generated data offers new insights into
behavior, and businesses must harness this information to drive meaningful insight
Asset optimization and utilization: Real-time asset usage, transparency, and the ability to optimize utilization will will lead to increased
revenues. Vital integration between assets and business processes will set the stage for the next level of value delivery across supply chain
and logistics
Emerging business models based on usage and metering: New business models seek to ask less of value chain stakeholders and
deliver more based on sophisticated usage models, meter data, and data science
The SAP S/4HANA digital business platform serves as the only holistic foundation to enable businesses to innovate for the future and address
these complexities. As 74% of the worlds GDP runs through SAP system, it is our responsibly to ensure that this platform monitors, analyzes,
and automates digital business in real time while continuously generating data-driven intelligence from all connected things, core business
processes, and lines of business.

SAP S/4HANA Digital Business Foundation

Manage materials, assets, money, and
other resources better
Enable frictionless commerce
by managing suppliers better

RESOURCES

PEOPLE
To enable the workforce of
the future employees +
contingent labor

IoT

Social

Business network

CUSTOMERS

hybris Omnicommerce

To deliver exceptional experiences to

your customers across every channel
of interaction

Ariba

Concur

Fieldglass

SUPPLIERS

SuccessFactors

Other
unstructured/
structured
data

SAP S/4HANA digital business foundation

1, 2 Cisco

SAP proprietary | 9

The SAP Solution

Innovate for the Future

SAP S/4HANA enables all assets, structured and unstructured data, and business processes across the digital value chain to
be connected through a common digital business platform. As a result, organizations can truly explore new business models
never before imagined. Outlined below are specific, representative use cases that will be enabled through the complete
integration to real-time information and process optimization. You will gain the ability to turn insight into action at the speed
required. These use cases, while specific to select industries, can be adopted on a broader scale as more and more industries
are breaking down the barriers to expand beyond their traditional business functions.

Connected customer intelligence

Retail
Expand beyond traditional boundaries
by leveraging wearable technology to
understand not just what customers
buy, but how they use products
ultimately driving increased sales .

Utilities

Insurance

Deliver targeted demand programs to

increase energy adoption and revenue,
reduce costs via more accurate
forecasts, and achieve energy savings
with the ability to take energy
profitability, forecasts, etc. and turn
them into instant insight.

Align telematics data from cars and

driver performance with customer and
financial data to provide a personalized
experience, including offers tailored to
each policy holder.

Connected manufacturing and logistics

Industrial machinery
Proactively schedule maintenance events based on
customer profitability so that work orders are aligned with
high-value customers based on scarce resource availability.

Transportation
Gain real-time transparency into transportation progress,
optimize inbound and hub-internal traffic, shrink wait times
and the need for manual monitoring with the goal of
exceeding customer expectations by providing the end
product on time.

SAP proprietary | 10

The SAP Solution

Run Your Business in Real-Time

In todays business environment, functional areas often are working in silos and/or are dependent on
information from multiple areas of the value chain to drive business decisions. This results in latency and
significant loss when it comes to top- and bottom-line impact. With SAP S/4HANA as the digital business
foundation supporting your end-to-end value chain, this scenario is eliminated as information required
from multiple functional areas can be accesses in real time to drive decisions immediately. Outlined
below are the strategic capabilities that are simplified with the SAP S/4HANA digital business foundation.

Strategic
capability

Process
optimization

Instant
insight

Future state with SAP S/4HANA digital

business foundation

Automation of tasks across the digital value

chain through integration between SAP S/
4HANA, the business network, and the cloud
800 core processes optimized to reduce
inefficiencies
Elimination of redundant or non-essential tasks
as key processes are simplified

Customer, supplier, resources, and talent

information available at your fingertips at all
levels of granularity so decisions can be made
in real time
Transactional and analytical processing now
together to enable simplified, accelerated, and
predictive insights in real time

Customers articulate the value

We have run SAP ERP since 2002, and will now
change our platform to SAP HANA, to enable us
to take advantage of SAPs continuing
innovations such as SAP Simple Finance, to
meet our goal of being a technology leader both in
our own business, as well as in our internal
support processes.
Christian Helfrich, CFO, Bundesdruckerei
(Germany)
As an example, with SAP Simple Finance, our
finance organization will be able to focus on the
most essential tasks and get the job done in real
time.
John Dewar, President & Vice Chancellor
La Trobe University (Australia)

SAP proprietary | 11

The SAP Solution

Run Your Business in Real-Time

With SAP S/4HANA, you will find it much more easier to run your business in real time. The software
enables process optimization coupled with instant access to insight. Outlined below are high-value use
cases which require SAP S/4HANA as the platform to enable the digital value chain with integration
across all business processes.
Integrated front- and back-office
processes

Business use case enabled by SAP S/4HANA

HR and SAP S/4HANA

Integrate strategic plans with workforce planning, including training

Drive comprehensive workforce analytics (internal employees + contingent
labor), including spend analysis at all levels of granularity country, region,
category, and at the individual level

Procurement and SAP

S/4HANA

Eliminate the need for AP and AR reconciliations with immediate alignment

between suppliers and purchasing organizations
Offer discounts based on real-time understanding of liquidity and cash flow

Customer and SAP S/

4HANA

Match high-value inventory with customers that are willing to pay a premium if
certain conditions are met
Enable a real-time demand-driven supply chain by leveraging customer order
history, forecasts, social data, and product sensor data
Base promotions on truly understanding in-stock levels, purchase trends, and
customer preferences in real time
Enable flexible fulfillment across all channels by matching customer orders
with total landed cost associated with products, inventory availability in each
channel, and other granular details

Resources and SAP S/

4HANA

Ensure availability of necessary technical resources and materials in the

required quantity and quality by immediate sourcing through the network and
understanding where and when materials are needed
Real-time business operations monitoring of resources to reduce bottlenecks

SAP proprietary | 12

The SAP Solution

Simplified, Connected, and Open Architecture

SAP S/4HANA forms the backbone and central nervous system that integrates, simplifies, and evolves
the digital value chain. This orchestration is critical to supporting boundless business processes,
reducing complexity, and maximizing return on data.
SAP S/4HANA enables the digital value chain in three major ways:
Simplified, real-time data foundation
Interconnected and flexible architecture
Open platform for innovation on any device

Business network/IoT

Ariba

SuccessFactors

Fieldglass

SAP Cloud for

Customer

Concur

SAP S/4HANA: Cloud platform/cloud integration/cloud mobile services

On-premise Edition

Cloud Edition

Customer and partner

innovation

SAP S/4HANA
SAP proprietary | 13

The SAP Solution

Simplified, Connected and Open Architecture

Simplified real-time data foundation

SAP S/4HANA brings transactions and analytics together
into a single in-memory, column-based platform.
Single source of the truth
No aggregation of data
Real-time calculations, no batch jobs
Transaction-level granularity
Vast simplification of data model/architecture
Reduced infrastructure and maintenance
Simplified functionality enhancements
Interconnected and flexible
With SAP S/4HANA, achieve real-time integration across
on-premise, cloud, and hybrid applications.
Native on- premise/cloud and cloud/cloud integration
SAP HANA Cloud Integration across domains:
SuccessFactors
Ariba
SAP Cloud for Customer
Fieldglass
Concur
Open platform for innovation on any device
SAP HANA Cloud Platform provides the data and tools to
rapidly extend, build, deploy, and manage cloud-based
enterprise applications to complement SAP and non-SAP
solutions.
All enterprise data available in the same SAP S/4HANA
platform (e.g., IOT, ERP, social media)
Build new or extend existing business processes in the
cloud or on premise
Quick and simple application build with native SAP
HANA Cloud Platform application and database
services
Applications enabled on any device with SAP HANA
Cloud Platform mobile services

SAP S/4 HANA Cloud Platform application services

UX

Analytics

API mgmt.

Portal

Integration

Collaboration

Cloud connector

SSO

Gateway

Identity mgmt.

Mobile

Doc. mgmt.

SAP S/4 HANA Cloud Platform database services

One store

Planning

HA/DR

Text

Predictive

Spatial

Streaming

Smart data

Multi_DB

Tiering

Graph

Other DBs, Hadoop

integration

SAP proprietary | 14

The SAP Solution

Empower your Users

The SAP S/4HANA user experience is centered around people and their goals or tasks rather than
transactions. Its important that the user experience be role-based, personalized, responsive, intuitive,
and work seamlessly across devices and deployment options. The user experience must unleash the
true power of the digital value chain.

Today
Functional-based applications
One transaction for multiple roles, exposing all data
and functions to all users

SAP S/4HANA
Role-based applications
Decomposed apps for each role, exposing
only relevant data and functions

Transactional
Analytical
Search
Multiple entry points for the user and inconsistent user
experience (e.g. ERP vs. CRM)

One entry point for the user and UX following

common design directions

SAP proprietary | 15

The Value

The Enterprise Value of the Digital Value Chain

The digital value chain redefines how business will be able to achieve enterprise value. Outlined
below are representative value drivers that are potentially available through a partnership with SAP
based on third-party benchmarks and SAP proof points.
Innovate for the future1
84% of C-suite executives believe their organizations
have the ability to create new service-based income
streams with IoT
61% of C-suite executives emphasized revenue streams
presented by digital investments

Simplified, connected, and open architecture

10x smaller data footprint
7x throughput, massive parallelization
50-70% improvement in operational reporting productivity

Enterprise Value
Run your business in real time
30-40% less time for closing books
2-5% manufacturing cycle time reduction
1-2% increased sales
0.5-0.75% maverick spend reduction
0.1-0.2% direct spend reduction
0.25-0.5% margin increase

Risk and compliance

0.5-1% fewer penalties
10% fewer fraud cases with real-time anomalies
screening

With an integrated solution built on the SAP HANA in-memory platform, New York Life is reimagining
how we use data to make decisions internally and externally and ultimately make things less
complicated for us and our customers.
Randy Gonzalez, Vice President and Head of Finance Transformation, New York Life

Accenture, CEO Briefing 2015: From Productivity to Outcomes, Using IoT to drive future business strategies

SAP proprietary | 16

Innovation Roadmap and Customer Journey

The Road to the Digital Enterprise

Innovation road map
Businesses have stated that they will adopt new technologies (e.g., cloud) at their own pace. The SAP S/4HANA digital
business platform will enable customers to adopt innovation in alignment with their business strategy, system complexity,
change management, and risk profile. Throughout the journey, businesses will be able to:
Reduce unnecessary steps with a common process mode, resulting in reduced workload
Increase throughput to enable faster consumption and reaction to growing demand
Complete analysis on the fly without aggregates, so questions can be answered flexibly
Ultimately, SAP S/4HANA enables innovation without disruption to your business with the goal of creating an end-to-end digital
value chain to support digital business. Each individual business will measure success differently, but ultimately its about
aligning where you see yourself in the maturity curve in relation to your short-, mid-, and long-term business strategy.

Digital enterprise
Maturity level

Business impact

NEW BUSINESS MODELS

5
4

Business Innovation
New customers
New markets

Better PRODUCTS

Optimize products
Offer new products or services

Better PROCESSES

Improve single processes

Replace single processes
Change end-to-end processes

Better DECISIONS

Transparency
Decision support
Decision automation

Better SPEED
DB exchange
SAP proprietary | 17

Innovation Roadmap and Customer Journey

The Road to the Digital Enterprise

Customer journey to the innovation end state
Below are three customer options for SAP S/4HANA. For each option, the customer has a full choice of deployment between
cloud, on premise, and hybrid.
Starting point A: New customer. This is a net new implementation of SAP S/4HANA with simple adoption ex. guided
configuration, easy onboarding from solution discovery via cloud trials to the deployment with pre-configured best practices
Starting point B: SAP Business Suite on any database customer. Moving to SAP S/4HANA from SAP ERP 6.0 requires
a move to the latest enhancement package, a database migration to SAP HANA, and current code replacement
Starting point C: SAP Business Suite powered by SAP HANA customer: Moving to SAP S/4HANA for an existing SAP
Business Suite powered by SAP HANA customer is faster as only the current code to the new code deployment is required
Partners and SAP will provide an easy path for customers to move to SAP S/4HANA with pre-defined migration and
deployment packages for quick time to value in order to enable the digital value chain and help you run simple.

Choice of deployment

Starting
point A
New customer

Starting
point B
SAP Business Suite
on any DB customer

Sap Business Suite

powered by SAP
S/4 HANA customer

On Premise

Cloud

Deploy new
installation

Up and running with

best practices in two days

On Premise

Cloud

Upgrade to the latest EHP, migrate

database to SANA S/4 HANA,
Deploy exchange innovation

Starting
point C

Hybrid

Hybrid

Transfer data to
the cloud

On Premise

Cloud

Deploy exchange
innovation

Transfer data to
the cloud

Hybrid

Innovation without disruption

SAP proprietary | 18

Next Steps

Next Steps
Enabling the digital value chain
Every company has an opportunity to leverage expanded data on customers, people, resources, and
suppliers to create new, innovative business models, greatly optimize business processes, and
significantly improve agility. The fully integrated digital value chain is the way to enable the future and
reduce complexity. SAP would like to partner with you on your transformation.
This framework will help to jointly discover the business and technical scenarios that will form your
digital value chain and propel your organization forward.

Business value identification

Use case identification

Strategy and technical design

Assess architectural
and landscape integration
considerations

Determine work
plan for first
project

Use case prioritization

Business value-driven
road map

Develop
project
road map

Assess data integration and

governance consideration

SAP proprietary | 19

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