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ONE TEAM ONE DREAM with SAP Business Innovation Platform

Happy New Year 2014. I just finished meetings w thousands of my colleagues and partners around the region in lovely Marina Bay Sands as we wrapped up Field Kick Off Meeting (FKOM 2014) for SAP APJ. I must say the excitement that I experienced this year is higher than ever before and this is my 9th FKOM.  It also featured for the first time a very targeted and impactful enablement to get ready to execute in 2014.  Its indeed a new dawn.

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New Dawn to 2014 from my room in Marina Bay Sands, Jan 13, 2014

Clear strategy coupled w focus and targeted enablement were key highlights of the FKOM this year.  Bill, Jim, Vishal ,Rob, Adaire, Shawn articulated key strategy for SAP this year and  the celebration was quite something on both nights. I was privileged  to present our Business Innovation Platform strategy on Day 2 as part of the FKOM.

Let me summarize my presentation here for you.

World is changing Rapidly around us, Just look at the macroeconomic shifts in Asia e.g. FX fluctuations, wage inflation, 40% GDP moving to asia, but accompanied by a slowdown in economic growth in India & China. All of this accompanied by a concern around tightening of credit in markets like China and inflation concerns in India.  World has increasingly become interdependent e.g. Australia resources sector and the China construction industry are interlinked. Huge amounts of Inflation concerns, increased regulatory environment becoming a norm.  Each day Companies are faced w new regulations.  CFOs have ‘No Easy Day’ in this environment.

This is coupled with a with a DIGITAL TRANSITION

  1. There are now more mobile phones than people. A business can now exponentially expand its reach in a flash.
  2. More than 1 billion people are engaged in social networks, with the power to instantly make or break brands.
  1. There are already 15 billion devices connected to the internet. By 2020 this will reach 50 billion – from cars, to washing machines, to the clothes we wear.
  2. All of this mobile and social connectivity is generating a huge amount of data. More data has been created in the last five years than in the entire history of mankind. Unlocking the secrets inside this data presents breakthrough opportunities for businesses (At least 200 Terabytes of stored data per company with more than a 1000 employees)

Customers have a huge business opportunity, but the ocean of information is becoming an increasing challenge to manage.

SAP is a strategic enabler of today’s global economy, SAP is uniquely positioned to deliver on Business Innovation via the SAP Platform. We have the Business Innovation Platform, which is (1) enabling modern applications, (2) Delivers Real Time Insight & (3) Empowers consumers

Introducing The Business Innovation Platform – Principles & Key Drivers

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3 Key principles for Business Innovation Platform:

  1. 1. Enabling Modern Applications:

RevitalizeRecharge your applications to meet new demands from the business

TransformEnable new business models & revenue streams

Deploy – Accelerate time-to-value with lowest TCO

  1. 2. Real Time Insights

Financial Excellence – The foundation of your reporting, enabling the CFO and providing a rock solid financial foundation for a “best run” company

Critical Moments – Empowering EVERY decision maker with insights at the critical moment in time

Predict & Act – Move from historical “rear-view” analysis to a platform that can predict to enable real-time decision making…

  1. 3. Empowering Consumers

BYOD->CYOD – “The best of both worlds”, consumer choice but with minimal IT risk

Agility – Respond to the consumer expectation that they can access information anytime, anywhere on any device – a consumer can be a customer, partner or employee….ANYONE!

Consumer Experience – Redefine consumer engagement to create new interaction and business models

Let us examine each of these in some level of details:

Enabling Modern Applications

Revitalize – this is all about modernizing your SAP applications or starting from fresh with a new innovative apps platform

–          Re-invent your business with SoH – focus on value creation for your customers-customer

–          Removing unnecessary barriers through operational analytics to become a real-time business

–          Single unified platform for SAP and non-SAP apps including edge and custom built solutions (e.g. NW BPM, HANA Agile Apps etc)

Transform – take advantage of “big data” into existing and new business applications to offer new business solutions and customer services

–          Ingest new sources of data (M2M/mobile/sensor/social etc) into yourenterprise to create new business opportunity

–          New SAP Big Data applications for customer engagement intelligence, fraud etc

–          A platform to acquire (any source), accelerate (fast access to enable timely decisions) and analyze (understand it) massive amounts of new information but also govern the information effectively

Deploy – deliver business functionality as quickly and as cost effectively as possible, your choice, on-premise or cloud!

–          Enable the most cost effective deployment model, for example, moving to an operational expense model vs. capital expense

–          Virtualization to reduce cost and risk of deployment

–          Hybrid deployment model (on-prem+cloud) integration

–          Optimized IT tooling to enable fast, low risk, simplified landscapes

Real Time Insights

Financial Excellence:

Achieve Financial Excellence with end-to-end Finance Process. In the face of sustained market volatility, increasing regulatory compliance and growing pressure on margins, finance organizations must put in place best practices that enable them to excel.

Outperform Financial Objectives

Ÿ  Outperform corporate financial objectives and create sustainable value

Accelerate Financial and Regulatory Reporting

Ÿ  Provide timely and accurate financial and regulatory reporting

Manage Treasury and Financial Risk

Ÿ  Seize and fund business opportunities as they arise, while avoiding financial risks

Deliver Superior Service While Reducing Costs

Ÿ  Improve finance efficiency and deliver superior service at reduced cost

Manage Enterprise Risk and Compliance

‘Financial Excellence’ Driven companies:

Best-run Finance companies  are able to close books in < 7 days as oppose to average 20 days

Best-run Finance companies  are  have 0.4pc finance cost as percent of revenue as oppose to average 2pc finance cost as percent of revenue.

Finance Transformation SAP Run SAP Video: http://www.youtube.com/watch?v=gtNlgvlHuJg

HP Story: http://online.wsj.com/article/PR-CO-20130829-908749.html

UnderArmour Video: http://www.youtube.com/watch?v=nt4ab4APd2I

Critical Moments of Engagement:

Real time insights is all about getting information contextualized and in the hands of decision makers fast enough to influence outcomes during  those critical moments of engagements.

Nobody likes ‘flying blind’ – having to make decisions on the basis of a partial view where the implications are significant. For senior executives, their management decisions carry fiduciary responsibility and can change company performance and stock prices; but there are many  employees each making dozens of decisions every day and these also critically move their organization.

Best run analytics companies have been measured by McKinsey to consistently deliver 6+% higher profitability than their peers – breaking that down, that means over the course of a decade companies which effectively compete on analytics deliver twice the profit than the rest of the field.

Improving  response time for critical moment of engagement for MISC converting unstructured content into insight

In the case of Asian Paints, it was by building insights into customer segment purchasing intent by analyzing social media engagement (a ‘Big Data’ solution) and adding it to the stock level trends that Asian Paints’ mobile sales force shared with their retail distributors as they made sales calls.

Improving productivity by 2 hour /day for every consultant at large professional services company in India by deploying Enterprise BI

Predict & Act: (eg Predictive) is looking at sensing what customers’ needs would be and responding to their needs and preferences in a way that create differentiated outcome. Stop looking at looking at ‘Rear View mirror’.   Focus on leveraging guided predictive w built-in predictive embedded with in the business process.

Agile Predictive Analytics that reduces the Predictive Analytics Modeling and Deployment process from 7-8 weeks to 1-2 weeks by leveraging pre-build predictive models. By predicting the likelihood of customer churn and operationalizing treatment programs to avoid the churn; by calculating profitability at an individual customer level and implementing lower cost-to-serve channels for marginally profitable customers; by modeling predictive asset maintenance and servicing supply chain assets before they cause downtime; by optimizing SKU assortments in retail to reduce end-of-season discounting.

SAP’s approach is to take what until now has been a cottage industry – data scientists slowly building an analytical model and training it against the data to improve its prediction accuracy, with manual adjustments over time – and industrialize it so analytics insights can be produced at scale. Most companies have yet to really leverage analytics applications that have already been productized through early adopters. SAP’s approach is threefold – low touch analytics for the productized analytics applications (SAP InfiniteInsights aka KXEN, which has pre-built models and therefore accelerates the deployment and management scale of analytics teams), high touch analytics for the models that still need bespoke build (where a data scientist can do that in R open source modeling language and integrate to SAP), and no touch analytics (fully automated analytical processes).

To give you an idea, one of the biggest challenges faced by most heads of data science in organizations is access to skilled people, because an experienced data scientist carries an eclectic skillset of deep statistics, plus coding and data integration, plus business acumen. The low touch analytics model – improves the output of a single data scientist from 10-15 models per year to 1,500 per year: you can build a model in SAP to develop analytical insights almost as fast as you can ask the business question that requires the insights.

We can now build more targeted offers. We offer In-database Modeling & Scoring capability for Teradata, Oracle, DB2, Netezza, SQL Server & Sybase IQ helps customer leverage existing investments in their Enterprise Data Warehouses. Our offering is Complementary to customer investments in SAS and SPSS in terms of people and technology

Customers like Bangalink Identified 55% of future churners within 5% of all subscribers and another Telco customer like XL could cut Churn on Prepaid Subs by 15% $750K return per month

Let us also examine a story of Disbank, headquartered in Istanbul, Disbank (acquired by Fortis) is one of the leading financial institutions in Turkey, operating an advanced distribution network with 162 branches, 254 ATMs, 94 kiosks, 65,000 POS’s, 6 Web portals, Internet banking, and a call center.

Challenges

·         Fierce competition in the credit card business forced banks to grow their customer bases and target lower value segments, but the cost of fraud grew with an increasing number of issued cards.

·         The manual process in place only allowed the bank to review at most 13% of new credit card applications.

·         The bank needed solid analytical and prioritization skills in order to reduce the number of fraudulent applications.

With help of SAP Infinite Insight (KXEN)  they achieved 200% Reduction in Credit Card Fraud Saves $25,000 a Day In just one day, we identified 92% of fraud cases with a high degree of reliability.”

Solution:

Disbank partnered with KXEN to aggressively grow their customer base, while reducing fraud rates.

·         In less than 15 days, the bank proceeded to implement a system which created fraud models on a Windows desktop and scored all the individual applications.

·         The resulting reports include a fraud score for all individual applications and are forwarded to 13 fraud agents.

Benefits:

·         Each credit card transaction is scored individually in real time; in just one day the Credit Card Security Team was able to identify 92% of fraud cases.

·         Increased the number of identified fraudulent applications by 200%, from 7 to 21 per day.

·         Savings of $25,000 per day, which returned more than the entire software investment in the first week.

·         Reduced the number of alerts from 300,000 to around 30,000 per quarter by fine-tuning known fraud rules and discovering unknown patterns.

CISCO: http://www.youtube.com/embed/HLg9L-2bkec/?autoplay=1&rel=0&feature=youtu.be

Overall I would recommend that you get arm around your Analytics strategy:

  1. What’s their analytics strategy? What are the priority business problems they are looking to solve with analytics / Big Data capability?
  2. How are they currently leveraging analytics and how do they operationalize the insights that come from their data scientists?
  3. If they had real-time insights what real time decisions would they want to make?
  4. What is their strategy to achieve Financial Excellence ?

Empowering Consumers:

SAP has comprehensive Mobile strategy which has “SAP” Mobile Platform– Mobile Secure (Afaria, Mocana, SAP Box), Apps (Syclo, EAM/EFS), Platform (Enterprise development platform).

BYOD->CYOD

–          The industry is moving from BYOD to CYOD, this continues to allow consumer choice but puts back control to IT to minimize business risk given the diversifying mobile devices types

–          SAP is the BEST WW example and is endorse by IT analysts as a leader in deploying mobility to the business:

•       CYOD: More than 40,000 iOS devices, more than 5000 Androids, 15000 Blackberrys!!, Windows 8 expanding

•       SAP SECURED with Afaria

•       SAP Box for content management!

•       Over 65% of SAP Emplyees use smartphones or tablets for work

•       Operational forecasting gone from weekly cadence to Real-time Insights

Agility

–          Time to value and agility is best accelerated when the platform has pre-build applications, for example, solutions for Enterprise Asset Management & Field Service (formally Syclo)

–          SAP platform also accelerates the ability to engage with customers in new transformative ways, Asian Paints for example deploys mobile applications that allows a customer to take a picture of any colour they might see and take that picture to any Asian Paints retailer and have the paint made-to-order, this really differentiates the services provided by Asian Paints but is providing additional market research on what paint colours are trending and this has also been integrated into social media and customer (CRM) process!

–          Enterprise mobile agility can fundamentally transform the customer relationship, the entire value chain, and the ecosystem as a whole

–          Finally, SAP provide the BEST integration to partner solutions like OpenText allowing the integration of unstructured documents in the application process

Consumer Experience

–          At the heart of empowering consumers is the “EXPERIENCE”, you have all experienced the power of mobile apps in your personal life, we all have high expectations based on the apps we all use like facebook, linkedin etc, we WANT information access anytime, anywhere in our business with the same ease of use!

–          Lets remember, we talk about a “consumer” we mean anybody or any thing….so it could an employee, customer partner or an automated sensor for example proximity detection on a vending machine or detective a customer as they walk into a shop just like Burberry (use video or use example for industry your supporting)

–          Finally we have renovated the SAP applications to enable a massively improved consumer experience, take Personas for example, provides a simple, drag and drop approach to modify many common SAP GUI screens to make them really easy to use, a solution that has been adopted by companies like Ryoka

–          At SAP, we appreciate the importance of sizzling mobile apps, with our innovation and platform-based solutions, we can build mobile apps with consumer grade UI that is enterprise ready and meets enterprise standards for security, scalability and manageability.

Burberry Story

http://www.forbes.com/sites/sap/2013/10/28/how-fashion-retailer-burberry-keeps-customers-coming-back-for-more/

To Recap SAP is a strategic enabler of today’s global economy, SAP is uniquely positioned to deliver on Business Innovation via the SAP Platform

With ONE TEAM, ONE DREAM, I truly believe that we would be able to provide ONE integrated and simplified platform to customers to modernize applications, deliver real time insight and empower consumers.

All the Best for a Successful 2014.

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