SAP® Innovation Awards 2020 Entry Pitch Deck

Using Intelligent Data to Empower Human Capital and Transform Customer Profitability
Applied Industrial Technologies
 Company Information

Headquarters Cleveland, Ohio, United States

Industry Wholesale/Distribution
Web site www.applied.com
Applied Industrial Technologies (NYSE: AIT) is a $3.5B leading value-added distributor and technical solutions
provider of industrial motion, fluid power, flow control, and automation technologies.
Harnessing an intelligent data flow for performance and human capital is critical to the future of Industrial IoT. For
Applied, acquisition plays an important role in the growth strategy. As Applied moves deeper into the automation and
robotics markets, data will travel between machines, people, and performance. Applied’s success is linked to
understanding and managing these critical data streams internally and for customers.
Applied currently is:
❑ Utilizing a data-driven approach to propel sales, operations, and human capital. It has successfully bridged (SAP
ERP) sales/operations benchmark KPIs to skills and performance development within SAP SuccessFactors.
❑ Measuring competencies and coaching improvements to understand and drive accountability of the sales and
operations culture.
❑ Using learning analytics to drive financial acumen and sales process coaching of the front-line business manager
network.
❑ Using a social learning platform (SAP Jam) to help new business units quickly connect products and services
and adapt culture. On-the-job mobile access allows key communication and personalized learning. Social
content unifies sales processes and vast product offerings, including direct access to key vendors.

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Empowering human capital to transform customer profitability
Applied Industrial Technologies

Challenge
“With the ability to target Applied’s US operations have grown through sales and acquisitions. It now operates across 30 regions, with
coaching interventions based over 320 stores. After the implementation of SAP ERP in 2014, Applied identified $8M in margin improvement
on specific quantitative opportunities that would come from more consistent operational and sales performance across all stores.
competency measurements,
and the demonstration of Solution
quantifiable impact on A new VP of Sales spearheaded a culture shift where coaching skills and best practices were to be established
operational and revenue- across the enterprise. Applied implemented a learning analytics solution using SAP Jam, SAP SuccessFactors,
based metrics, Applied has SAP Cloud Platform, and Watershed LRS to unify sales training and coaching and to improve operating and
executed a learning sales performance across the company.
measurement strategy more Outcome
impactful than any other I’ve The solution included assessments that clearly identified gaps in knowledge and perfomance relative to target for
seen.” each sales manager across 5 different performance goals. Sales managers are now more empowered from
improved coaching skills and data acumen. The sales solution only recently went live, but performance increases
Tim Dickenson are already evident.

Watershed Learning

h122
Analytics Expert Percent of
Realized 122-basis- Number of
population utilize
managers trained

bps
point increase in
pricing for trained
associates vs. peers
49% SAP Jam social
learning tool /
800 and empowered
across 5 regions
monthly

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 Participating Partner Information

Watershed Systems, Inc.

Learning Analytics Platform and Learning Record Store

"Watershed has been a critical partner in helping Applied realize the potential of xAPI—visualizing a data-
driven approach critical to improving L&D, competencies, and business impacts.”

“Applied was one of the first operational applications to connect business performance metrics with learning
and competency data.”

“While engagement and coaching are commonplace, the next evolution in learning analytics will correlate
their impact on business metrics. Applied is on the edge of next generation learning analytics.”

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 Business Challenges and Objectives
Applied identified $8M in margin improvement opportunity that would come from more consistent operational
and sales performance across all the stores. Specific opportunities included:
• Front-line sales managers needed improved financial acumen to understand the data available to them
from SAP whereby they could identify and close sales/operational gaps
• Managers needed to understand how daily actions translate to financial results and performance metrics
• To develop targeted coaching and training plans, leaders needed a data-driven approach to understand
individual learning gaps and competency and their impact on performance
• Better alignment was needed between quarterly QBR objectives and sales coaching in the field

• Train associates on financial competencies and monitor performance for related KPIs

• Coach sales action steps with measurable outcomes

• Sustain a coaching cadence to build a culture of accountability

• Improve account profitability by increasing product depth across diverse business units (current QBR goal)

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 Project or Use Case Details

• Applied’s Service Center manager comprehension and SAP Business Objects performance
data measurements are used to identify gaps in knowledge and performance against targets
so that a personalized training and coaching plan can be implemented for each manager.

• Learning analytics is used to show managers how developing financial acumen and
competencies will impact their KPIs. Results and measures are monitored ongoing for driving
continuous improvement.

• Every two months a new strategic initiative is identified for improving account profitability that
is part of the company’s QBR. This intelligent data learning solution makes it easy for Applied
to identify opportunities and implement the corresponding new coaching and training
consistently across the regions to execute on these initiatives. This past quarter, for example,
the company identified ways to explore customer purchasing patterns and opportunities to
expand product breadth, improve customer frequency, and increase store profitability. The
company was able to develop and implement a learning plan across the regions that gave
sales managers the tools they needed to execute on that goal.

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 Benefits and Outcomes

Business or Social IT Human Empowerment

The company is in a highly cost- Plotting of BI metrics into Prior to the project, sales
competitive market where sales Learning Analytics platform managers were not well versed
and operational performance is enables managers to see trend on using the operational metrics
mission critical. The following lines and evaluate impacts on provided by new SAP ERP data
outcomes have a major impact: performance. to run the business and the
• Translating QBR objectives store.
into sales coaching and Competency maps for
personalized learning programs The training they received on
training actions
were created by integrating data knowledge, its performance
• Identification of training gaps
multiple data sources. impact, and how to coach front-
and their impact on KPIs
line account representatives
• Personalized training plans
SAP Cloud Platform, SSO, and completely transformed their
based on performance vs
mobile access enable fast, ability to confidently achieve
highest impact targets
consistent, and broad their operational goals and be
Results include expansion of deployment of SAP Jam successful in their jobs.
product breadth into each learning and coaching initiatives.
account and a 122-basis-point Training has been rolled out to
increase in pricing for trained 49% percent of population 800 managers.
associates compared to peers. utilize SAP Jam social learning
tool monthly.
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 Architecture

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 Deployment

Deployment status Live

Date 2017 and June 2019 Number of users 300 SCMs, 32 RMs

SAP technologies used:

Deployment status
SAP product (live or proof of concept [POC]) Contribution to project

1 SAP HANA/ECC/BI Live Data backbone for sales and performance KPIs

2 SAP SuccessFactors Suite Live SSO, credentials, LMS, Employee Central

3 SAP Cloud Platform Live Data extensibility

4 SAP Jam Live Social learning and engagement measurement

5
If you have used one of the services or support offerings from SAP Digital Business Services during the implementation or
deployment phase, please select with X one or more of the following offerings:

SAP MaxAttention™ SAP ActiveAttention™ SAP Advanced Deployment

SAP Value Assurance SAP Model Company X Others: SAP PreferredSuccess
SAP Innovation Services SAP Innovative Business Solutions
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 Advanced Technologies

The following advanced technologies were part of the project.

Technology or use case Yes or No Contribution to project

1 3D printing no

2 Blockchain no

Coaching, competency, and ERP use data gathered external from LMS/HRIS
3 Internet of Things (IoT) yes
using xAPI and Learning Record Store

4 Machine learning or AI yes Search results and learning recommendations provided to user/manager

5 Conversational AI no

6 Robotic process automation no

7 Data anonymization yes Performance data anonymized to understand/plot benchmarks

8 Augmented analytics yes Competency mapping vs. performance KPIs to identify gaps

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 Additional Information

▪ Using learning analytics at Applied (video) to understand performance and coach front line
managers.
▪ Future plans include AI to suggest user-specific learning when metric thresholds trigger related
content where associates need assistance

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