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Author's profile photo Paul PINARD

NEOM: Building a Futuristic, Cognitive Urban Area That Reimagines Urban Life with Built-in AI in SAP S/4HANA

NEOM is a region in northwest Saudi Arabia being built from the ground up as part of the Vision 2030 master plan envisioned by the leadership of Saudi Arabia. NEOM will be a new, multi-city model with exceptional livability, thriving businesses, and focus on environmental conservation. The region will include hyperconnected, cognitive towns and cities, ports and enterprise zones, research centers, sports and entertainment venues, and tourist destinations.

To succeed in this mammoth undertaking, NEOM’s management team needed to digitally transform how it manages day-to-day operations.

The team deployed SAP S/4HANA® as its digital foundation and rolled out a full set of cloud solutions from SAP.

Objective: Planning and Building the Future Now in a Desert Along the Red Sea

Funded by Saudi Arabia’s public investments, the region of NEOM will be home to two million people.

“It will be a cognitive, green region that fully exploits robots and produces zero carbon,” explains Abdi Jibril, director of corporate applications at NEOM Company.
“Everything will be
automated, digitalized, predictive, and autonomous. For example, a residential refrigerator can be equipped with intelligent sensors to monitor when food supplies fall below a specified threshold and a new order is needed. A fully digitalized operation can supply products and arrange delivery to the resident’s door by robot.”
It will also include “The Line” – a city concept that pushes all infrastructure underground and uses high-speed rapid transit to move people citywide – and Oxagon, the region’s industrial city.

NEOM Company oversees the planning, sourcing, and execution of every aspect of a region for which there are no models. “We do things no one has ever done before every day,” comments Jibril.“NEOM is the procurement and management organization that finds the expertise, labor, and materials to build everything.”
NEOM quickly outgrew its manual processes.
Finance needed a single system of record with full transparency for investors and the government. Procurement needed efficient, end-to-end processes to work with 8,000 global suppliers. And employees needed to be onboarded quickly, paid and reimbursed on time, and empowered with modern, mobile processes. This would require unified, real-time data, an intelligent, next-generation ERP, and connected, end-to-end unified processes.
In other words, NEOM needed to make
the leap to an intelligent enterprise.

Solution: Harnessing SAP Solutions to Drive the Beating Heart of NEOM

NEOM chose to deploy cloud solutions from SAP to begin its transformation. “SAP solutions are truly automated, intelligent, and integrated and run off a single, real-time digital foundation with centralized data,” adds Jibril. “This foundation drives every machine, order, and action. It allows systems and robots to predict, sense, and respond.”

NEOM deployed SAP S/4HANA as its new ERP system with built-in AI and machine learning. It allows NEOM to adopt new business models, manage business change, orchestrate internal and external resources, and use the predictive power of AI. Native integration between processes and an in-memory data model enables financial transparency, operational efficiency, and data-driven intelligence.

To support procure-to-pay operations, NEOM runs SAP Ariba® solutions for sourcing, contracts, supplier lifecycle management, commerce automation, and catalogs. Now, global sourcing of specialized suppliers takes minutes, and collaboration is automated.
SAP SuccessFactors solutions accelerate recruiting
and employee onboarding and improve the employee experience. And SAP Concur® solutions for travel and expense management provide hassle-free travel management and timely reimbursements.

To enable operational reporting – for example, to track billions of dollars of construction – NEOMdeployed the SAP BW/4HANA solution to stage data from SAP S/4HANA and SAP Ariba solutions innear-real time. Data is available through interactive dashboards in the SAP Analytics Cloud solution.

SAP SuccessFactors solutions have provided an integrated employee lifecycle to process hundreds of transactions per day and provide the foundation for downstream systems across the NEOM organization. It continues to facilitate NEOM’s accelerated growth plans by bringing innovation and simplification to our people strategy.“Arron Patel, HR Systems Manager, NEOM Company

Results: Delivering on the NEOM Vision as an Intelligent Enterprise

In less than a year, NEOM deployed SAP S/4HANA as its foundation and cloud solutions from SAP for human resources, procurement, finance, travel and expense management, and reporting. And in doing so, NEOM has evolved from inefficient, manual operations to a truly intelligent enterprise.

The business impact has been transformational. For example, in procurement, efficiency has increased more than 70%. In addition, NEOM is able to process vendor invoices faster than before.With SAP Analytics Cloud, procurement can check the status of orders instantly. In addition, reporting of company financials to government bodies and investors is much easier, as all company data is centralized, trusted, and real time.

Amal Alsomali, procurement manager at NEOM Company, explains, “Introducing our new chatbot as part of our move toward digitizing procurement has brought greater transparency and helped enhance communication. Using SAP Analytics Cloud, we can easily track our KPIs while delivering insights and analytics across NEOM.”
All of this has vastly improved the employee experience as well. People can work smarter and more efficiently without burdensome manual tasks. Information is trusted and always at their fingertips.Approvals for time off are handled digitally and happen quickly. And filing for expenses is a fast, paperless effort that results in reimbursement in two days, instead three or four months.

“SAP S/4HANA is at the core of our financial delivery model. It enables us to build trust with our business partners and execute our goals of harnessing intelligent automation and realizing greater operational efficiencies through digital workflows and smart payment systems.”
Cecilia Dascalu, Director Finance Shared Services, NEOM Company

Future Plans: Replicating the Intelligent Enterprise to SupportNEOM’s Growing Region

Preparing to megascale

To meet its aggressive goal of completing the region by 2030, NEOM will need to spin off more than 100 independent companies focused on manufacturing food, hotels, and more. Each company needs its own instance of SAP S/4HANA and line-of-business solutions.
“The first few splits
took months – but we’ve used them to create a best-practice model SAP system. Now, we can spin off a brand-new company in four weeks that starts off as an intelligent enterprise,” explains Jibril. “These organizations truly have a flying start.”

Running faster, smarter, and leaner

To help managers stay on top of expenditures, contracts, POs, employee time off, travel, expense reports, and more, NEOM is creating a universal mobile app that brings all approval requests together from across SAP applications. It is also using SAP Conversational AI services to develop the chatbot that gives business users instant answers to standard procurement-related questions, such as order status.

Creating an operating system for cognitive cities

Integrated SAP solutions will be the core enabler of NEOS, a new operating system being developed to run the region. “Data-driven intelligence and forecasting will drive everything. Organizations running NEOS will be able to detect who is staying where, what will be needed and when, and plan accordingly so we can eliminate waste of food and water, power, and other resources,” explainsJibril. “SAP systems will sense and respond in real time to drive every machine, order, robot, and more.”

Key Results

  • 1-5 days for employees to receive expense reimbursement, compared to three to four months before implementing SAP solutions
  • ~80% reduction of overall supplier registration duration
  • ~70% increase in overall operational effectiveness
  • ~3,000 out of 8,000 global suppliers already fully integrated with Ariba Network, with instantly searchable information on products and services
  • 100% of employees using a chatbot for instant answers to procurement-related questions

Next steps

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