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July 2013 Delivering Real-Time Business Value for Engineering, Construction, and Operations SAP Business Suite Powered by SAP HANA Public

Delivering Real-Time Business Value for Engineering, Construction, and Operations

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This deck is a SoH Executive positioning document in 3 parts for Engineering, Construction, and Operations

Text of Delivering Real-Time Business Value for Engineering, Construction, and Operations

  • July 2013

    Delivering Real-Time Business Value

    for Engineering, Construction, and Operations SAP Business Suite Powered by SAP HANA

    Public

  • 2013 SAP AG or an SAP affiliate company. All rights reserved. 2 Public

    The real-time opportunity

    Construction projects carry ever higher risk because

    of increasingly demanding customer requirements.

    Engineering, construction, and operations (EC&O)

    companies need to continuously innovate business

    operations in order to meet their customers needs

    Maximize project performance and profit margin

    Find new ways to run projects more collaboratively

    Reduce risk with predictive financial forecasts

    Respond rapidly to evolving trends

  • 2013 SAP AG or an SAP affiliate company. All rights reserved. 3 Public

    Becoming an-innovation driven enterprise Align business operations with customer needs

    Ensure project

    performance and

    increase margins

    Monitor construction projects constantly to maximize the margins for the individual projects

    Get real-time visibility into project financials and the planned vs. actual values of projects

    Drive profitability

    by running

    projects in an

    integrated way

    Use building information modeling benefits for engineering along with cost comparisons

    Simplify project execution by using new technologies such as mobile and integrated 3D viewer

    Respond to market

    dynamics in real

    time

    Control complex multilevel supply chains

    Create flexible business models, accessing real-time detailed data and historic business data

    Respond to bursting material prices

  • 2013 SAP AG or an SAP affiliate company. All rights reserved. 4 Public

    SAP Business Suite powered by SAP HANA The next-generation business platform

    Real-time business

    In-memory

    Business

    transactions

    Digital

    connections

    Collaborative

    business

    Cloud Social

    Big Data Mobile

    One platform bringing it all together

    Advanced

    analytics

  • 2013 SAP AG or an SAP affiliate company. All rights reserved. 5 Public

    Industry value map for EC&O Grow with the project-centric enterprise

    Asset Management

    Commercial Real Estate

    Optimized Asset Maintenance

    and Facility Operations

    Equipment and Tools

    Management

    Bid to Contract Award

    Opportunity and Proposal

    Management

    Collaborative Virtual Design

    and Construction

    Project Delivery

    Commercial Project Management

    Project Issue and Change

    Management

    Subcontractor Management

    Environmental Health and Safety

    Compliance

    Revenue Optimization and

    Project Profitability

    Invoice to Cash

    Subcontractor, Owner, Engineer,

    and Architect Collaboration

    Performance Analytics for Construction Projects

    and Portfolios

    People and

    Talent

    Core Human Resources

    and Payroll Talent Management

    Time and Attendance

    Management

    Workforce Planning and

    Analytics

    Finance Financial Performance

    Management

    Accounting and Financial

    Close

    Treasury and Financial

    Risk Management

    Collaborative Finance

    Operations

    Enterprise Risk and

    Compliance Management

    Procurement Supplier Discovery and

    Lifecycle Management

    Strategic Sourcing and

    Contracting

    Procurement and Order

    Collaboration

    Collaborative Invoice

    to Pay Commodity Management

    IT Management Application Lifecycle

    Management

    IT Infrastructure

    Management

    IT Portfolio and Project

    Management IT Service Management

    IT Strategy and

    Governance

    Technology

    Solutions

    Analytics Consumer Experience Data Management Enterprise Mobility

    SAP HANA Platform

    Application Development

    and Integration

  • 2013 SAP AG or an SAP affiliate company. All rights reserved. 6 Public

    Industry value map for EC&O Grow with the project-centric enterprise

    Asset Management

    Commercial Real Estate

    Optimized Asset Maintenance

    and Facility Operations

    Equipment and Tools

    Management

    Bid to Contract Award

    Opportunity and Proposal

    Management

    Collaborative Virtual Design

    and Construction

    Project Delivery

    Commercial Project Management

    Project Issue and Change

    Management

    Subcontractor Management

    Environmental Health and Safety

    Compliance

    Revenue Optimization and

    Project Profitability

    Invoice to Cash

    Subcontractor, Owner, Engineer,

    and Architect Collaboration

    Performance Analytics for Construction Projects

    and Portfolios

    People and

    Talent

    Core Human Resources

    and Payroll Talent Management

    Time and Attendance

    Management

    Workforce Planning and

    Analytics

    Finance Financial Performance

    Management

    Accounting and Financial

    Close

    Treasury and Financial

    Risk Management

    Collaborative Finance

    Operations

    Enterprise Risk and

    Compliance Management

    Procurement Supplier Discovery and

    Lifecycle Management

    Strategic Sourcing and

    Contracting

    Procurement and Order

    Collaboration

    Collaborative Invoice

    to Pay Commodity Management

    IT Management Application Lifecycle

    Management

    IT Infrastructure

    Management

    IT Portfolio and Project

    Management IT Service Management

    IT Strategy and

    Governance

    Technology

    Solutions

    Analytics Consumer Experience Data Management Enterprise Mobility

    SAP HANA Platform

    Application Development

    and Integration

    Highest real-time

    business value

    for EC&O

    3

    2 4 5

    1

  • 2013 SAP AG or an SAP affiliate company. All rights reserved. 7 Public

    Today

    KPI improvements are high-level estimates and will have to be validated for each customer situation.

    With SAP Business Suite on SAP HANA

    Financial performance management Business value for financial performance management

    Inability to adapt (plan, replan, monitor, and control) the business model, operations, product, and services provided in volatile market environments

    Need to quickly adapt finance and business operations

    Long performance-management cycles with complex consolidation

    landscapes

    Inefficiencies due to multiple disruptions between planning and

    closing

    Real-time simulations of planning and costing scenarios

    Real-time enterprise profitability with large volumes of item-level data

    Real-time modeling and simulation of product costing

    No latency through heterogeneous consolidation landscapes and

    quasi-instant response times (even

    with large number of very

    complex calculations)

    Real-time closing activities

    Integrated planning for new and customer-defined scenarios

    Increased efficiency, reducing operating cost and improving

    stakeholder satisfaction

    Reduce

    Reduce

    monthly end-

    closing time by

    4%

    operating costs by

    4%

  • 2013 SAP AG or an SAP affiliate company. All rights reserved. 8 Public

    Today

    KPI improvements are high-level estimates and will have to be validated for each customer situation.

    With SAP Business Suite on SAP HANA

    Subcontractor management Business value for strategic purchase optimization

    Unclear what sources of supply should be negotiated and used

    Long cycle time to secure new sources, and significant overhead to

    manage suppliers

    Real-time access to high volumes of purchasing data

    Fast and complete search across all related business documents

    Increase process

    efficiency by

    3%

    Optimize working capital by

    5%

    Lack of visibility into organization-wide demand

    High volume of maverick buying

    Need for greater efficiencies and savings from purchasing

    Real-time calculation of savings and simulations

    Visibility into supplier relationships, performance, spend, and savings in

    place to reduce supply risk and

    missed savings opportunities

  • 2013 SAP AG or an SAP affiliate company. All rights reserved. 9 Public

    Today

    KPI improvements are high-level estimates and will have to be validated for each customer situation.

    With SAP Business Suite on SAP HANA

    Performance analytics for construction projects and portfolios (1) Business value for enterprise portfolio and project management

    Long wait times along business processes that hinder project

    execution

    Time consuming maintenance and analysis of data for complex projects

    Today the engineer-to-order process is a tight combination of controlling

    and logistics processes. The

    integration into ERP logistics is key

    but is also a challenge due to the

    need to load huge data volumes.

    Inability to monitor and analyze all aspects of large projects

    simultaneously and drill down into

    relevant details

    Improved run time of critical project management transactions

    Real-time access to large volumes of data

    Higher end-to-end process efficiency and improved employee productivity

    On-the-fly analysis and calculation

    Complete progress monitoring along the project lifecycle

    Analysis and calculation of data directly on SAP HANA database

    Enhanced process transparency that improves quality of work

    Increase efficiency by

    3%

    Decreas

    Improve

    lead time from

    development to

    delivery of product by

    2%

    project

    profitability by

    6%

  • 2013 SAP AG or an SAP affiliate company. All rights reserved. 10 Public

    Today

    KPI improvements are high-level estimates and will have to be validated for each customer situation.

    With SAP Business Suite on SAP HANA

    Performance analytics for construction projects and portfolios (2) Business value for enterprise portfolio and project management

    Time-consuming analysis and progress monitoring of complex and

    long-lasting projects

    Poor resource productivity and project profitability

    It is impossible to monitor all aspects of a project due to high volume of

    data and detached analytics

    Project progress monitoring cannot be done sufficiently to support

    decision processes

    Deviations in costs, time, resources, or quality are detected too late in the

    process

    Decisions to mitigate risks and opportunity costs are taken too late

    Improved run time of project monitoring reports

    Combined analysis of financials and logistics data

    Real-time access to large volumes of data

    On-the-fly analysis, calculation, and decision making

    Early insight into deviations and risks, enabling timely corrective measures

    Increase efficiency of work on

    large projects by

    5%

    Improve

    Reduce

    transparency of

    project related

    resources by

    6%

    project failure

    rate by

    4%

  • 2013 SAP AG or an SAP affiliate company. All rights reserved. 11 Public

    Today

    KPI improvements are high-level estimates and will have to be validated for each customer situation.

    With SAP Business Suite on SAP HANA

    Equipment and tools management Business value for asset operations and maintenance

    Maintenance scheduling that consumes a great deal of time.

    Manual and error-prone process of preselection of maintenance plans

    Potential to miss necessary objects for maintenance calls

    High number of maintenance plans that need to be scheduled frequently

    Accelerated mass transactions

    Instant analysis on top of transactions

    Preselection of due plans, which speeds up the process significantly

    Real-time analytics on all data, including machine sensor data

    Scheduling of all maintenance plans within a specific timeframe

    Planning several times a day (instead of once a week) results in

    up-to-date scheduling information in

    maintenance operations

    Faster response times lead to more accurate maintenance scheduling

    Increase asset utilization and

    reduce unplanned

    asset downtime by

    15% Maximize

    Improve

    asset uptime by

    5%

    scheduling information

    on maintenance

    operations by

    3%

  • 2013 SAP AG or an SAP affiliate company. All rights reserved. 12 Public

    Next step Business scenario recommendation and value discovery workshop

    SAP offers a proven methodology and approach to discover the customer-specific business

    improvement areas and quantify value potential.

    We suggest such a workshop with your line-of-business and IT experts.

    As starting point, we recommend a performance and usage analysis of your current system.

  • 2013 SAP AG or an SAP affiliate company. All rights reserved.

    Thank you

    Contact information:

    Michael Quadt

    Solution Management EC&O

    D-69190 Walldorf Dietmar Hopp Allee 16

    +49-6227-764394 M: +49-170-8555610

  • 2013 SAP AG or an SAP affiliate company. All rights reserved.

    Appendix with detailed customer cases

  • 2013 SAP AG or an SAP affiliate company. All rights reserved. 15 Public

    Customer case: construction company in Canada Summary validated scenarios

    Feasibility

    Bu

    sin

    ess v

    alu

    e

    Legend

    Lo

    w

    Hig

    h

    Low High

    SAP Business

    Suite on

    SAP HANA

    SAP HANA

    applications

    SAP HANA

    Platform

    Predictive analytics

    (US$1.5 million)

    Automated

    reporting

    (US$477 ,000)

    Optimized asset

    maintenance

    (US$1.2 million)

    Financial

    performance

    management

    (US$477,000)

    Phase deployment road map Annual revenue: US$1.2 billion

    1 Short term

    Optimized asset maintenance: Increase asset

    utilization, reduce equipment cost

    Financial performance management:

    Reduce operation cost

    2 Medium term

    Automated reporting: Reduce operation cost

    Predictive analytics: Increase project margin

    3 In evaluation

    Other functions To be discussed in future discovery workshops

    SAP HANA use cases mapped to industry value map end-to-end solutions

  • 2013 SAP AG or an SAP affiliate company. All rights reserved. 16 Public

    Customer case: construction company in Canada SAP HANA Platform

    2176 2176

    1943

    0

    500

    1000

    1500

    2000

    2500

    3000

    3500

    4000

    4500

    2013 Phase 1 Phase 2

    Costs SoH Applications Platform

    SAP HANA Platform: Anything built on the platform that is customer specific new business processes and business models

    SAP HANA products: SAP NetWeaver BW on SAP HANA, high-performance apps (HPAs), applications powered by SAP HANA

    mapped to IVM E2E solutions

    $000

    Currently available functionalities (SP0, 1, 2) 23 scenarios mapped to IVM E2E solutions, and planned functionalities (all of the end-to-end solutions on the IVM are in scope)

    Based on actual SAP

    customer business case

    Annual benefits, SAP HANA

    Platform

    Annual benefits, SAP HANA

    applications: US$1.9 million

    Annual benefits, SAP Business

    Suite on SAP HANA: US$ 2.2 million

    Estimated deployment costs

    Total transition cost

    SAP HANA Platform

    SAP HANA products

    SAP Business Suite on SAP HANA

  • 2013 SAP AG or an SAP affiliate company. All rights reserved. 17 Public

    Note: Use cases in the global use case repository are captured directly from customers and internal SAP innovation

    sessions and may not be completely validated.

    A construction and industrial services company- financial

    performance management Engineering, construction, and operations

    Business context and goals

    Managing performance from a financial perspective is becoming more crucial every day. On-time

    results for all audit- and analysis-related inquiries and an ability to react to risks and opportunities

    exemplify the need for a transparent and efficient process to deliver financial information on time

    and accurately. You need to manage operations and related performance successfully in todays volatile business conditions.

    Business challenges

    You need to plan, replan, monitor, and control the business model, business operations, the

    products and services offered, the markets served, and the technologies brought to your

    customers in volatile market environments. At the same time, you must increase efficiency, reduce

    operating costs, and improve stakeholder satisfaction.

    Process innovations

    Real-time financial close ensures accelerated closing activities through faster processes, reporting

    without data latency within an heterogeneous financial consolidation landscape.

    Contribution of SAP HANA

    SAP HANA offers features for custom planning with dimensions and at the aggregations level for

    real-time simulations. Critical-path processes and reports are accelerated in a central,

    comprehensive, and real-time consolidation environment. You can achieve almost instant

    response times even with a large number of calculations for products or across companies. An enlarged analytical footprint for enterprise profitability is also available.

    Value drivers/KPIs

    Service-level performance. Staff alignment. Transaction-to-analysis time

    Innovation scope

    SAP Business Suite on SAP HANA

    (now and future)

    End-to-end (E2E) solution

    Engineering, construction, and operations -

    financial performance management

    Value potential 2

    Feasibility 4

    Low High

    1 5

    Low High

    1 5