The Digital Configuration Lifecycle in the Intelligent Enterprise
The next era of enterprise computing will be defined by intelligent technologies. They will drive a next-generation value economy. Through advances in machine learning, algorithms have become highly accurate, and in some areas will surpass humans. Today, image recognition accuracy is at 97%, which is already better than the 95% accuracy of humans. In 2020, voice and video recognition will work with a 99% accuracy. Recent studies predict that by 2025, 60% of human tasks will be automated with the help of intelligent technologies.
Intelligent technologies will drive a next-generation value economy
Successful businesses are already leveraging these capabilities. Nine out of ten business leaders see artificial intelligence (AI) as critical for their companies’ survival over the next five years. According to a survey of 2,500 executives conducted in Australia, France, Germany, United Kingdom and the United States, business leaders are ready to act: six out of ten have already implemented or are currently planning to implement intelligent technologies and will spend considerable budget.
Responding to individual customer needs, engaging talent in new ways, and creating disruptive business models are today’s critical business imperatives. Businesses have started to understand that only by leveraging new technologies they can sustain their success and market relevance, turning their business into an Intelligent Enterprise.
The Intelligent Enterprise
Intelligent Enterprises effectively use their data assets to achieve their desired outcomes faster and with less risk. Intelligent Enterprises create personalized and unique customer experiences using artificial intelligence, chatbots, and voice technologies. They can anticipate and proactively respond to the needs of their customers. They continuously deliver best-in-class customer experience and customer service. Intelligent Enterprises are agile. They continuously improve their ability to respond faster to changes in the marketplace or the business. They pivot their business processes towards the right outcomes for their customers. Intelligent Enterprises have end-to-end visibility. They have found efficient and effective ways to collect and connect data that was previously siloed. Through intelligent analytics algorithms, they can recognize unseen patterns. Intelligent Enterprises automate complex processes, such as the classification of products based on unstructured information, invoice and payment matching, quote and pricing approvals, engineer-to-order processes, and more, to free up employee time and empower them to do more meaningful work. Intelligent Enterprises apply the new possibilities through intelligent technologies to their core business competencies in innovative ways. Thus, they invent new business models and generate new revenue streams by monetizing on data- and intelligence-driven capabilities.
Enhanced capabilities will empower SAP customers to achieve three critical outcomes
faster, more effectively, and more completely than ever before
With Variant Configuration, SAP has a track record of more than 25 years of continued success on Product Configuration. Variant Configuration is an integrated solution embedded in SAP’s ERP solution, our customers’ Digital Core. Many thousand manufacturers are leveraging Variant Configuration to create individualized products and offerings for their customers and have created highly flexible, variable and customizable products as their key differentiator in their markets.
Within S/4HANA, SAP’s most advanced Digital Core ERP offering, S/4HANA for advanced variant configuration takes Variant Configuration to the next level. S/4HANA for advanced variant configuration offers an integrated set of functions to manage Configurable Products from the point-of-view of R&D/Engineering, Manufacturing and Supply Chain, Procurement and Sales Order management. S/4HANA is SAP’s most modern Digital Core intelligent ERP system and reaches new levels of productivity, efficiency, and business insight while maximizing resources and operational agility.
S/4HANA for advanced variant configuration
For best Customer Experience both in Commerce and Sales, the Line of Business sales requires a dedicated set of specific solutions. Line of Business sales requires easy configuration of products and bundles of multiple elements, automated pricing, and needs to manage promotions and discounts. Proposals and quotes need to be generated in an intelligent and semi-automated way. Sales forces need to be empowered to engage with customers in more meaningful and helpful ways. To give sales teams the insights they need to make better business decisions thus boosting productivity and sales performance on configurable products, SAP offers C/4HANA Sales Cloud Configure, Price, Quote (CPQ). For a multi-channel commerce strategy enabling sales of configurable products both to businesses and consumers on a single platform, SAP offers C/4HANA Commerce Cloud.
C/4HANA Sales Cloud Configure, Price, Quote (CPQ) – overview
C/4HANA Sales Cloud Configure, Price, Quote (CPQ) – differentiators
C/4HANA Commerce Cloud
After the configured product has been manufactured and shipped to the customer, it becomes a connected asset which is managed through the Internet of Things-based network of digital twins. As a connected asset, it senses telemetry and usage data. Together with its as-is configuration, the collected data is analyzed to provide feedback and discover insights, enhancing the generative design process, essentially augmenting the design options that designers, R&D, and engineering have as they go through their ideation process.
SAP Asset Intelligence Network introduces the digital twin to represent each physical machine or product along its asset lifecycle. It provides a digital representation of all industrial equipment used in the field with secure and controllable sharing rights across business partners to enable customer insights, performance analytics, and new digital services. For configurable products, the telemetry and data of each serialized product asset represented by its digital twin are leveraged.
SAP Asset Intelligence Network – overview
Intelligent Enterprises which leverage Product Configuration are building out offerings and services differentiating themselves with unique selling propositions to their customers and partners. SAP’s Digital Platform facilitates the integration and extension of processes in SAP’s integrated applications. To best leverage their product configuration models along the Digital Configuration Lifecycle, Intelligent Enterprises use SAP Product Configuration on SAP Cloud Platform, a cloud-based and scalable microservice making available their Variant Configuration models and pricing conditions to any custom-specific and market-differentiating offering.
S/4HANA for advanced variant configuration and C/4HANA Sales Cloud Configure, Price, Quote (CPQ) cover the entire Digital Configuration Lifecycle
With the Intelligent Suite, SAP enables automation of day-to-day business processes and better interaction with customers, suppliers, and employees through applications that have intelligence embedded.
Embedded Analytics in S/4HANA for advanced variant configuration, Product Configuration Intelligence on SAP Cloud Platform, together with SAP Predictive Maintenance and Service and SAP Predictive Engineering Insights on SAP’s Digital Platform facilitate the collection, connection, and orchestration of data. Intelligent Technologies enable leveraging this data with the goal to detect patterns, predict outcomes, and suggest actions. Answers can now be provided to the following questions along the Digital Configuration Lifecycle:
What product configuration options are commanding most revenues?
How do these revenues vary over time? Over geographies, countries or even in certain regions?
What trends can be identified and leveraged to forecast popularity of options?
Which custom-specific options are becoming popular and should be included in the standard offering of a configurable product?
Which configuration options, or combinations of options create the most challenges in product quality, the supply chain, or in manufacturing and production?
Which configuration options, or combinations of options create the highest number of customer service incidents and highest maintenance?
How can the overall price of a complex configurable product be predicted with more than 90% accuracy based on just a few simple questions?
Identifying the right answers to these questions leads to a much deeper understanding of the customers. Customers’ needs can now be predicted and proactively met.
Opportunities along the Digital Configuration Lifecycle
Product Configuration Intelligence – Enabling the next generation
digital customer experience for configurable products
SAP is uniquely positioned to deliver the Digital Configuration Lifecycle in the Intelligent Enterprise. The Intelligent Enterprise is more than just automated business processes. It’s a vision about how SAP sees the future of business for our customers, the future of work for our customers’ employees, and the future of experience for our customers’ customers. The Digital Configuration Lifecycle is more than Variant Configuration and Configure, Price, Quote (CPQ). It is an integrated, end-to-end view of Product Configuration over all relevant Lines of Businesses, combined with Intelligent Technologies and Intelligent Automation.
Only SAP can deliver the Digital Configuration Lifecycle in the Intelligent Enterprise. SAP has an end-to-end integration across processes that matter most to our customers. Our solutions are and will be built on common master data, domain models, and one platform. SAP has the industry expertise to help make sense of customers’ data in the specific context of their businesses, using insights about their own performance to optimize algorithms. SAP has started to embed intelligence directly into core solutions as part of our customers’ standard road maps, so they do not need to create a separate data lake or purchase additional tools. With Variant Configuration, SAP owns the market-leading solution for Configurable Products in ERP, the Digital Core of any Intelligent Enterprise, and has been the largest player in this market for more than 25 years. With S/4HANA for advanced variant configuration, SAP is massively extending its capabilities within the Digital Core. With C/4HANA Sales Configure, Price Quote (CPQ), SAP owns the market-leading CPQ solutions for the Line of Business sales. With SAP Cloud Platform-based Product Configuration, SAP provides a microservice-based integration approach facilitating the integration and extension of processes around Product Configuration. With Product Configuration Intelligence, a machine learning-based analytics toolset focusing on product configuration-related aspects is provided.
SAP’s top priority is enabling the vision of the Digital Configuration Lifecycle in the Intelligent Enterprise for all our customers and to turn it into an omnipresent reality. We will continue to build on existing products, solutions and end-to-end scenarios, deploying them within a unified Digital Platform, enhanced by embedded intelligent technologies. Our primary goal is to make every business of our customers an Intelligent Enterprise.
Vice President, Digital R&D and Engineering – Configure