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Transform Procurement

with SAP

The Business Value for Procurement with


SAP S/4HANA, Cloud/ Line-of-Business
Applications and SAP Leonardo

PUBLIC
Ariba Supply Chain Collaboration and SAP Integrated Business
Planning (SAP IBP) live at Microsoft Corporation

Hear from Microsoft executives why they selected


both solutions to improve supplier onboarding
times, achieve tremendous reductions in inventory
and working capital, and gain complete supply
chain visibility through multi-tiered orchestration
into inventory status and location.

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 2


White Paper Background
and Key Definitions
The information outlined below will help you understand the contents of this value proposition white
paper. It gives details on the objectives and scope of the paper. Key definitions are also provided.

DELIVERABLE OBJECTIVE Business Benefits

Provides information on the value in moving from an ERP on a Key value drivers that are impacted by the adoption of
traditional database to SAP S/4HANA, Cloud/ Line-of-Business SAP S/4HANA, Cloud/ LoB applications, and SAP
Leonardo solutions.
(LoB) applications and SAP Leonardo solutions.

With the value proposition section, all quantified

KEY DEFINITIONS benefits are conservative, estimated improvement


ranges tied to the top value drivers. They are based on
Within the process and subprocess deep dives, there is detailed
early adopters or new developments and enhancements
content in table format articulating the following:
of SAP S/4HANA, Cloud/ LoB applications, and SAP
Typical Pain Points
Leonardo solutions that can drive value. Keep in mind
Major customer business and IT challenges. that these benefits should be used as a guide. We
recommend working together to assess your current
Current State with ERP on Traditional Database maturity and the value of moving to SAP S/4HANA,
ERP capabilities that are available on a traditional database. Cloud/ LoB applications, and SAP Leonardo solutions to
develop a personalized business case.
SAP S/4HANA (including standard SAP Leonardo capabilities)
Last Update
Capabilities shipped with the latest release of SAP S/4HANA,
SAP S/4HANA 1709 release.
including apps that are optimized for SAP Leonardo, such as an
app for contract consumption. All Leonardo capabilities are
highlighted in bold.
*Detailed road map available on SAP.com
(customer login required)
Cloud/ LoB and SAP Leonardo Solution Capabilities
This document and SAP’s strategy and possible future
Solutions that can be integrated with SAP S/4HANA and provide
business value ‒ for example, SAP Integrated Business Planning developments are subject to change and may be
solution or SAP Connected Goods software. These solutions are changed by SAP at any time for any reason without
not embedded in SAP S/4HANA but they can be integrated. notice. This document is provided without a warranty of
any kind, either express or implied, included but not
limited to, the implied warranties of merchantability,
2018: Planned Innovations*
fitness for a particular purpose, or noninfringement.
New functionalities planned for the 2018 release of SAP
S/4HANA, Cloud/ LoB applications and SAP Leonardo solutions.

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 3


Agenda

Procurement Overview 5

End-to-End Business Scenarios 8

Process Deep-Dive 13

Digital Priorities 23

Value Proposition Summary 24

Customer References 25

Appendix 27

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Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

Procurement in a Digital Economy


TRANSFORM PROCUREMENT WITH SAP

The procurement organization is evolving from a support function to a strategic advisor. Beyond negotiating lower rates and managing suppliers, it plays Sabre Corporation
an important role in driving innovation, and managing risks across the supply chain and to the brand. Procurement is becoming more actively involved in Adopting a cloud-first approach to
delivering value to the end-customer by working more closely with other LoBs, including R&D and HR, and more collaboratively with suppliers. enable faster response to changing
market dynamics and business needs
Our industry-leading portfolio of solutions is uniquely positioned to enable our customers’ digital transformation across all key aspects of their business value by integrating its core ERP system on
chain by offering total spend management. SAP S/4HANA covers operational procurement processes such as purchase requisitioning, order processing, SAP S/4HANA with SAP Ariba, SAP
invoice processing, order confirmation, and operational contract management. These core processes are enhanced by real-time embedded analytics across all Fieldglass, SAP SuccessFactors, and
SAP BusinessObjects BI solutions.
spend categories, thereby improving performance and visibility. SAP Ariba solutions extend these core processes with guided buying, collaborative sourcing
and contracting, and networked-based, end-to-end supplier collaboration to deliver a new, guided, simplified user experience that meets the expectations of “It’s been exciting to see how we can
better access data and reporting,
millennial users. SAP Fieldglass solutions provide access to external skills by supporting the entire process from sourcing to managing the contingent
which is changing how we think about
workforce, enabling the organization to be nimble and competitive. SAP Concur solutions help streamline business travel expense processing and connect
our products and business. SAP
employee-paid spending data for complete visibility and proactive management. SAP Leonardo capabilities add intelligence to make processes autonomous S/4HANA is a significant part of this
and unbiased. Together, these provide a comprehensive solution to help organizations meet the diverse spend needs of the enterprise for a total spend huge cultural transformation.”
management, providing scalability, agility, and choice. Steve Strout, Senior Vice President of Strategy and
Operation, Sabre Corporation

Avery Dennison
Corporation
Redefining procurement for the digital
age with SAP Ariba solutions by
centralizing, standardizing, and
automating processes.
Total Spend Consumer-Grade Predictive Holistic Supplier Flexible Skills
Management Ordering Experience Analytics Evaluation Sourcing “With SAP Ariba solutions, we have
completely transformed procurement
Native integration between Easy-to-navigate, smart- Embedded, machine Real-time KPI monitoring Streamlined processes
at Avery Dennison. Previously, paper
SAP S/4HANA and Cloud/ search-based, and rules- learning-based analytics based on transactional for discovering, sourcing,
invoices and purchase orders would
LoB solutions to enable total driven requisitioning as to predict contract and employee survey data, and managing external
be sent back and forth between
spend visibility across all well as guided sourcing consumption for better flexible configuration of workers and service
offices for approval and payment.
categories, and to build and for items not in catalogs negotiation capability weights and categories, providers for wider
Now, everything is done digitally,
optimize sourcing pipelines for efficient and and proactive material and integration into market access to critical skills,
saving us considerable time, money,
for more saving compliant procurement management reviews to enable a more and greater
and effort.”
opportunities complete supplier evaluation responsiveness
Maarten Eddes, Global Business Process and
Systems Manager, Avery Dennison Corporation

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Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

SAP PROCUREMENT VALUE PROPOSITION SUMMARY


SAP solutions enable companies to substantially enhance, simplify, and visualize the entire procurement process from sourcing to
purchasing to settlement.

Lower average unit price Increase process efficiency

Rationalize the supply base through spend visibility and Drive sourcing productivity through deep spend analytics
centralized sourcing, and negotiate better pricing based on and seamless access to supplier and external information.
consumption history and contract visibility. Save on ad hoc Reduce cycle times and increase procurement and
purchases through demand management and spot buying. productivity in accounts payable (AP) through invoice
process automation and supplier collaboration.

Reduce noncompliant spend and leakage


Improve cash management
Control maverick spending by guiding employees to the
appropriate buying channel using a consumer-like interface. Avoid unintended cash flow constraints with a formalized
Ensure supplier compliance to preferred terms by payment-terms strategy. Realize early-payment discounts
reconciling invoice, PO, receipt, and contract. or take advantage of supply chain finance margin-sharing
by reducing duration of invoice processing cycle.

Maximize revenue from products and services


Improve control over services budgets
Reduce sourcing cycle time, and manage fulfilment risks
associated with stock-outs, supply chain incidents, and non- Roll up all aspects of a service engagement into an overall
compliant materials. budget and implement budget controls at the project level
and individual level.

Decrease inventory carrying costs


Effectively manage external workers
Achieve optimal inventory requirements through seamless
transparency, effective collaboration, and enablement of Enhance visibility of and control over an external workforce
processes like supplier-managed inventory. through onboarding, offboarding, and worker tracking, to
increase success rate of achieving goals.

Optimize total cost of ownership

Rationalize ongoing source-to-settle system costs associated with software maintenance, application management, upgrades, help
desk, and supplier connectivity by adopting a modern platform to deliver innovations at a rapid pace.

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 6


Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

SAP’s Digital Business Framework for Procurement


SAP solutions enable organizations to drive business value across their end-to-end digital value chain.

WORKFORCE ENGAGEMENT
SUPPLIER COLLABORATION S/4HANA DIGITAL CORE ASSETS AND SUPPLY CHAIN CUSTOMER EXPERIENCE
AND SERVICES MANAGEMENT

Ariba Network • Operational Purchasing


• External Workforce Management • Supply Chain Collaboration External collaboration (supply-
• Collaborative Sourcing and
• Services Procurement • Inventory Search & Reservation side) with SAP IBP integrated
Contract Management
• Integration with • Receiving to Ariba Network
• Integrated Business • Supplier Management
• Integration with • Supply Chain Finance
Planning • Procurement Analytics
• Freight Order
Management Ariba Network for Sellers
• Ariba Discovery
• Integrated Business Planning • Ariba Sourcing
• Freight Order Management • Ariba Contracts
Concur Travel & Expense
• Ariba Receivables Financing

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Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

End-to-End Business Scenarios


Some organizations measure value by the impact to their end-to-end processes. Outlined below are the primary end-to-end processes that
are important to the procurement organization.

END-TO-END SCENARIO DESCRIPTION RELEVANCE

Strategic procurement involves determining the To meet their objectives, procurement organizations
sources of supply that deliver the most savings require capabilities to analyze spend in great detail, gain
and manage supply risks. It includes analyzing timely visibility into supply market and supplier
STRATEGIC
the marketplace, defining sourcing strategies, information, predict demand variances and contract
PROCUREMENT identifying suppliers, putting a contract in place, exhaustion, negotiate better prices and terms, and
and managing supplier performance and risk. monitor continuously and engage collaboratively with
suppliers.

The objective of operational procurement is to To meet their objectives, procurement organizations


execute and deliver on purchase requisitions in require capabilities to enable consumer-grade user
the most efficient and compliant manner. It experiences, faster and compliant purchasing, error-free
OPERATIONAL
encompasses managing requests and creating processing, a transparent and collaborative platform with
PROCUREMENT orders in compliance with policies, procuring trading partners, and timely settlements.
from suppliers, verifying delivery, matching
invoices, and settling payments.

Flexible skills management covers activities To meet their objectives, procurement organizations
associated with the hiring-to-retiring lifecycle of an require proper controls at every step of the process,
FLEXIBLE SKILLS
external workforce to ensure their gainful and risk- complete visibility into the work and effort of external
MANAGEMENT free engagement. workforce, and support for efficient selection and
onboarding practices.

Organizations must manage employee-paid To ensure that money spent is put to the best use
spending across various expense categories and possible, technology should connect travel, expenses
EMPLOYEE-PAID payment methods. It extends beyond processing and settlement processes in a manner that gives the
SPENDING business travel and expense to include managing organization more control over compliance and costs.
such employee-paid spend and ensuring
compliance with policies.

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Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

Reimagine Strategic Procurement


Gain spend insights, accelerate savings, and ensure compliance through a closed-loop strategic sourcing application suite.

Spend Identification Bid


Analysis of Supply Management Contracting
Sources

Traditional Procurement

Multiple disconnected data Manual identification of sources E-mail-based collaboration and Mismanaged and misplaced
sources of supply manual evaluation of supplier paper-based contracts
responses
Disparate and disconnected data Manual and time-intensive supplier Inefficient bid management with RFx Manual authoring, longer cycle times,
sources, and inability to extract discovery and qualification process coordination through e-mails; limited and high legal costs
meaningful insights buyer-supplier collaboration; and
manual processing and analysis of
supplier responses

The New World with SAP

Increased visibility into Automated supplier evaluation and Streamlined, tool-based bid Automated contract
internal and external data qualification management process collaboration and compliance

360-degree view of spend and Access to global supplier pool with ready Comprehensive RFx management with Contract lifecycle management

supplier and market data through visibility into preferred and qualified reverse- and forward-auction capabilities including authoring,

business network integration sources of supply capabilities that enables value- negotiation, execution and digital

Embedded capabilities to view additional optimized cost savings and faster signature

supplier data for a better informed sourcing cycle


decision

TOP VALUE Accelerate cycle for sourcing and


Increase spend under management Reduce procurement function cost
DRIVERS contracting

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Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

Reimagine Operational Procurement


The procurement business network enables effective buyer-supplier collaboration and compliant and efficient processes by connecting trading
partners electronically.

Pay and
Request Order Receive
Settle

Traditional Procurement

Significant effort needed to search for Paper- and e-mail-based approval Manual and error-prone receiving and Proliferation of different payment terms
items workflow and supplier communication, matching processes and low acceptance of discount offers
No guidance to preferred suppliers, resulting in slow, error-prone processes Inefficiencies caused by paper and e- Check-based payments with low visibility,
resulting in lost savings opportunities Inability to easily consult buying policies, mail invoices, resulting in delays or and ad hoc and cumbersome payments
Manual creation and updates to catalogs leading to poor compliance missed discounts process, leading to reconciliation issues
by e-mail or telephone Manual PO processing and administrative redundancies

The New World with SAP

Access to an online marketplace that Simple and streamlined policy-based Electronic tracking of all purchasing- Small set of standard payment terms for
provides a consumer-grade experience approvals from any device related documents for greater seamless settlement
Guided buying that navigates users Relevant purchasing documents that are compliance Electronic payments for complete visibility
through proper buying channels to automatically created and integrated into Automated three-way match for into related invoices and POs
leverage preferred suppliers, negotiated the relevant systems efficient, error-free processing Holistic working capital strategy for terms
pricing, and in-context policies Automated, faster, and consistent Invoice exception handling through extension, static and dynamic discounts,
supplier connections policy-based approval process supply chain finance and payment channels

TOP VALUE Improve compliance on supplier and price Improve cash flow with faster invoice
Reduce procurement function cost
DRIVERS policies, taxation, and regulations approvals and payments

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Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

Reimagine Flexible Skills Management


Streamline the process of identifying, procuring, and managing the contingent workforce, thereby enhancing organizational agility.

Traditional Procurement

Resource requests by Manual, time-intensive Manual and ad hoc onboarding Manual time entry, limited Spreadsheet-based reporting
e-mail and phone without candidate review and and offboarding processes, at visibility into work completed, for external workforce and

formal sourcing strategy selection hiring manager’s discretion and paper-based invoicing limited visibility into data

The New World with SAP

Standardized templates, Streamlined candidate Systems-driven onboarding and Web-based time and expense Powerful reporting and
pre-approvals, and routing comparison, interview offboarding processes to ensure management, visibility into work analytics for better workforce
to preferred suppliers scheduling, and worker compliance, clarity, and control completed, and automated planning and optimization of
selection with invoicing opportunities
in-platform hiring

TOP VALUE Increase compliance savings across


Lower cost of external workforce Improve quality of external workforce
DRIVERS external workforce

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Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

Reimagine Employee-Paid Spending


Connect all employee-paid spending data, for complete visibility and proactive management.

other ways to pay


(ghost cards, virtual cards, checks, cash, and p-card)
Traditional Procurement
expenses invoices
Manual and disparate systems cannot provide a consolidated view of
employee spending. Invoice capture and processing are slow and not
integrated. Out-of-program travel spending is hidden and
unmanageable, while many expenses are incorrectly categorized.

in program travel out of program travel

The New World with SAP


invoices
SAP Concur solutions automate key parts of the spending process and
key categories of spending, such as T&E and Receipts-based expenses, out of program travel
making the process simpler for your employees. As a result, companies in program travel
can capture and manage more of what they are buying. In addition, SAP
expenses
Concur solutions automatically connect employee-paid spending
through different systems and directly with suppliers, enabling business other ways to pay
to see and manage all spending.

TOP VALUE Increase compliance with internal


Reduce time on expense reports
DRIVERS report and travel rules

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Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

PROCUREMENT CAPABILITIES
Outlined below are the primary capabilities for procurement where value can be achieved through SAP S/4HANA, SAP Ariba, SAP Fieldglass, SAP Concur,
and SAP Leonardo solutions.

Guided Buying
• Guided services and materials requisitioning • Policy configuration • Category buying channel management

Strategic Sourcing and Contract Operational Supplier


Management Procurement Management
• Sourcing pipeline management • Self-service requisitioning • Supplier discovery
• Sourcing strategy planning and execution • Purchase order processing • Classification and segmentation
• Savings pipeline tracking • Purchase order collaboration • Third-party risk and data
• Contract lifecycle management • Managed catalogs (internal and external) augmentation
• Supplier discovery • Price validation, and content enrichment • Supplier evaluation
• Bill of materials, workflow, and syndication • Requirements processing

Procurement Analytics
• Spend visibility • Real-time reporting and monitoring • Supplier data enrichment

Invoice and Payables Management Services Procurement External Workforce Management


• Invoice workflow and exception management • Sourcing and bid management • Guided work sourcing
• Invoice collaboration • Collaboration and contracts • Rate management and automation
• Invoice processing • Services management and evaluation • Worker onboarding, management,
• Contract invoicing • Time and expense tracking and offboarding
• Dynamic discounting and supply chain finance • Analytics and reporting • Time and expense tracking
• Accounts payable • Invoice, discount, and taxation • Invoice, discount, and taxation
• Worker profile management • Analytics and live insights

Supply Chain Collaboration

• Collaboration with • Real-time supply • Inventory • Actionable


trading partners chain visibility optimization intelligence

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Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

Guided Buying

TYPICAL PAIN Current State with ERP on SAP S/4HANA Cloud/ LoB and 2018 Planned Business
POINTS Traditional Database (including standard SAP Leonardo Solution Innovations Benefits
SAP Leonardo capabilities) Capabilities

• Low business • Self-service • Self-service requisitioning • Portal for consumer-grade • Contract and project • Higher business
user satisfaction requisitioning through an using SAP Fiori apps with buying experience tracking for project- user satisfaction
due to lack of a open catalog interface in cross-content and catalog based spend
consumer-grade purchase requisitions or search, type-ahead for free- • Single interface for all • Improved spend
ordering and purchase orders, or text items, and review and spend types • Automatic commodity compliance
order tracking through a separate SRM confirmation of goods and classification based on
• Policy-based end-user description of ad hoc • Increased
experience implementation or services sourcing and guidance for tactical sourcing
single-client deployment requests
• Significant • Native integration to SAP contract and supplier risk savings (on non-
procurement Ariba solutions for spot requests in one place • Invoice, service entry contracted
spend occurring buying sheet, and user profile spend)
• Configurable workflow and approval (native
outside of approvals • Increased
established experience)
collaborative
contract terms • Spot buy capability to • In-application capture of sourcing savings
and procurement manage long-tail and ad hoc net promoter score (services spend)
policies spend
• Policy support for • Continuous
• “Three bids and buy” mobile devices improvement in
functionality available to spend under
users, with • Sourcing collaboration e-procurement
recommendation for and quoting status
preferred suppliers
• Integration with shared-
• Functionality for distributed services application
policy, category, and
supplier management • Product reviews and
ratings
• Supplier performance
management for broader • Live chat
user and supplier • Web analytics to track
participation user behavior
• Workflow to display
approved questions
from users

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Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

Strategic Sourcing and Contract Management

TYPICAL PAIN Current State with ERP on SAP S/4HANA Cloud/ LoB and 2018 Planned Business
POINTS Traditional Database (including standard SAP Leonardo Solution Innovations Benefits
SAP Leonardo capabilities) Capabilities

• Manual, repetitive • One-time search for • New SAP Fiori apps to • RFx and sourcing event creation, • Central contract management in • Higher sourcing
tasks and multiple contract documents, manage and perform mass management, collaboration, and SAP S/4HANA Sourcing and savings from
requests that but change of search updates on sourcing analysis Procurement connected to unit-price
extend cycle times parameter requires documents multiple back-end systems reduction
user to go back from • Supplier collaboration for contract
• Difficulty in contract list to search • Management of RFQ and creation, signing, management, and • Situation handling for contract • Improved
identifying the best screen every time supplier quotation, and syndications consumption supplier
sources of supply direct execution of simpler compliance
with data spread • No possibility of quick requests • Supplier and end-user collaborative • Commodity price escalation
across disparate action, such as workspaces and workflow based workflows • Enhanced supply
sources validity extension, out • Native integration to SAP chain planning
Ariba Sourcing solution to • Material master, services, and bill of • Artificial intelligence and productivity
of search result list material (BOM) integration support machine learning for smarter
• Lack of robust initiate sourcing events out
sourcing execution • No visibility into or of SAP S/4HANA and for sourcing and contract contract authoring • More flexible
process that information about receive back sourcing award pricing (rebates),
• Sourcing award and contract • Low-touch or No-touch enabling more
reduces realized contract utilization with follow-on documents integration using material master operational sourcing and
savings updated or created targeted
• Separate searches by data to create PO and outline contracts execution interface business models
automatically agreements (OA) through the SAP Ariba guided
• Difficulty in getting user in purchase
data to plan and information records • Ability to simulate source of buying capability
• Visibility about preferred and
forecast spend, and (PIR), contracts, supply assignment for qualified suppliers • New sourcing and contract user
to manage supply scheduling checking which sources of experience interface for category
chain events agreements, and info supply are valid for a certain • BOM upload and integration in PDX buyer persona
proactively records to identify material, plant, and date format
source of supply • BOM versioning and comparison
• Poor contract • Configuration of scheduling • Enhanced BOM costing and rollup
management • Availability of data for agreement releases at • 360-degree material view: price
• Placeholder for parts management trend, contracts, PIRs, events
resulting in analysis on a single header and item level, and
negotiated savings system but impossible notification of expiration • Price by time in strategic sourcing • Integration of PIR and OA in
leakages and to get an aggregated and contracts
• Embedded and predictive strategic sourcing with complex
compliance issues and enriched view of
analytics for contract • PIR integration for contracts and price conditions related to time
the spend data across
• Disintegration and multiple systems consumption sourcing award • Support for commodity index-
poor traceability
• Management of legal • Enhanced contract authoring based pricing
between legal
documentation and content with integration of features, like in-application • Legal content assembly to
procurement contract-related legal redlining, drag-and-drop generate, process, and archive
transaction transactions and RFQ into capabilities, and Microsoft Word legal content based on pre-
the core application navigational view approved clauses & templates

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Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

Operational Procurement

TYPICAL PAIN Current State with ERP on SAP S/4HANA Cloud/ LoB and 2018 Planned Business
POINTS Traditional Database (including standard SAP Leonardo Solution Innovations Benefits
SAP Leonardo capabilities) Capabilities

• Time-consuming • Time-consuming search • Integration with the Ariba • Purchase order workflow • Situation handling for • Higher
and complex for existing purchase Network for sending purchase and compliance purchase requisition transactional
process for orders with limited pre- orders and receiving governance processing productivity
buyers and filled content and confirmation and other
suppliers to provisioning of existing standard output documents • Demand aggregation and • Integration of SAP • Lower cycle
collaborate on documents compliance check against Ariba Buying solution times
purchase order • Faster execution with approval contract and hosted with SAP S/4HANA
• Required notifications enabled, and with catalogs • Improved spend
• Cumbersome implementation of the ability to redistribute • Machine learning for compliance
manual processes separate add-on on top workload after simulation • Consumer-grade search purchase requisition
that extend of ERP to exchange capability for managed processing
transaction cycle messages with the Ariba • View follow-on documents and and external catalogs
collectively apply changes or • Multi-accounting in
Network • Mobile shopping cart, purchasing
• Inconsistent copy attributes to purchase
application of • Manual, separate checks requisitions approvals, and tracking documents
contract by user of existing • More efficient shared- • Team shopping cart
compliance sources of supply, • Easy setup of flexible approval
workflow with dynamic rules, services operations with
information records, and better collaboration • Support for buying
• Decentralized agreements with back- and separately configured at stocked items
operations that header and item level between casual users and
and-forth changing of shared-services
result in non- • Validation and
search parameters • Setting of overall value limits professionals
standard enrichment of API for
practices and • Setting of rules and for procurement of unplanned goods receipt and
services • Integration to third-party
redundancies limits only at a category tax engines invoice
level without being • Ability of requisitioning process
• Item reservation and • Support for asset
varied to run on a centralized hub
service master support for management
connected to multiple back-end
systems MRO catalogs • Specification of
• Real-time inventory check vendors (condition
• Integration of freight order vendor) for logistics
management with SAP and other services
Purchase Order Execution for
SAP S/4HANA • Modelling of vendor
partner functions
(such as, ordering
addresses, goods
supplier, invoice
presented by)

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Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

Supplier Management

TYPICAL PAIN Current State with ERP on SAP S/4HANA Cloud/ LoB and 2018 Planned Business
POINTS Traditional Database (including standard SAP Leonardo Solution Innovations Benefits
SAP Leonardo capabilities) Capabilities

• Inability to • Supplier management • Addition of a purchasing • Spend visibility powered by • Integration of SAP • Increased
manage, segment, based on material category as a new business SAP HANA with integration S/4HANA and SAP supplier
and classify groups only entity to streamline to D&B products to enrich Ariba solutions for compliance
suppliers along classification and segmentation data supplier performance (spend
purchasing • No external data activities management)
categories, leading enrichments for supplier • Supplier profiles on Ariba • Supplier audit
to wasted effort by master • Segment and classification of Network and supplier self- management and • Improved
undermining the suppliers and provision of service-based registration phaseout capabilities spend under
• Display of vendor master evaluation results based on capability e-procurement
differences in the mainly with control • Supplier
relative purchasing categories
parameters and data • Creation and maintenance of segmentation • Enhanced
importance • Integration into Dun & supplier master record in the business processes supplier
• No direct availability of Bradstreet (D&B) products to cloud with new supplier data selection
• High cost of supplier evaluation • Upgraded supplier
developing and review latest reports about model and two-way sync with process based
questionnaires supplier performance the SAP ERP application, performance on real-time
maintaining management
multiple • No real-time supplier SAP S/4HANA, and the SAP performance
• Flexible configuration of Master Data Governance experience data
integration points evaluation based on weighting and scoring each
purchasing documents application • Integration of risk
• Limited capability criteria for supplier evaluation • Better supplier
• Matrix-based supplier assessments with risk mitigation
to identify and • Limited criteria for • Addition of “quality” to the list contracts, sourcing,
evaluate low- supplier evaluation, and qualification and
of evaluation criteria, all of segmentation guided buying
performing equal weighting to all which can be manually adjusted qualification, and
suppliers by to reflect the actual situation • 360-degree view of suppliers certificate repository
• Limiting of supplier risk
questionnaires
management initiatives • Real-time monitoring of • Real-time supplier risk • Built-in risk-domain-
• Limited or no to a select set of supplier evaluation using KPI insights and alerts specific
information to suppliers only questionnaires
determine supplier • New SAP Fiori apps for supplier • Engagement risk assessment
risk management for purchasing and issue tracking at • APIs for financial
category and task and activity engagement level criteria,
• Inaccurate, management with automatic environmental, social
incomplete, or reminder configuration • Forced-labor risk exposure, and governance
unqualified built-in sanctions, and watch (ESG) criteria, and
supplier data list tracking diversity risk
information

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Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

Procurement Analytics

TYPICAL PAIN Current State with ERP on SAP S/4HANA Cloud/ LoB and 2018 Planned Business
POINTS Traditional Database (including standard SAP Leonardo Solution Innovations Benefits
SAP Leonardo capabilities) Capabilities

• Cumbersome and • Extraction of data into • Live calculation of KPIs to analyze • 360-degree visibility into • Analytics for • Continuous
time-consuming business warehouse to managed and non-managed spend, spending, suppliers, and scheduling improvement in
process to analyze perform spend analysis contracts, purchase requisitions, and related market agreements spend under
procurement supplier performance information e-procurement
information • No insight-to-action • ABC classification of
capabilities • Instant insight-to-action capabilities • Aggregation and spend • Better-informed
• Delay in the ability by easily filtering, and navigating to classification of spend business
to act due to other SAP Fiori apps and object data across the enterprise • Analytics for decisions with
separate systems pages services spend live analytics and
for operational • Enriching and real-time
• Procurement overview page to benchmarking of supplier • Analytics for central
and analytical procurement hub reporting and
information monitor business-critical situations information monitoring
using analytical cards or worklists with SAP S/4HANA
• Use of outdated • Unified view across
• Dynamic supplier evaluation scoring categories and suppliers • Analytical reporting
information as API
basis for decision- based on procurement documents in
real time • Supplier data enrichment
making through integration with • Next-generation
• Embedded analytics in contracts D&B products reporting platform
• Limitation on the
impact of supplier and source of supply determination • Spend classification
• Spend data benchmarking
evaluation due to • Dynamic analysis of purchasing services and supplier
inability to factor spend with multidimensional enrichment
in unstructured reporting capabilities and variance • Pre-packaged reports and enhancements
data limits tracking, and predictions based on ad hoc reporting based on artificial
open purchase requisition and intelligence and
• Lack of timely machine learning
visibility into schedule lines
contract • Analytical monitoring of various
consumption purchasing documents using SAP
Fiori UX for better visualization and
drill-down capabilities

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Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

Invoice and Payables Management

TYPICAL PAIN Current State with ERP on SAP S/4HANA Cloud/ LoB and 2018 Planned Business
POINTS Traditional Database (including standard SAP Leonardo Solution Innovations Benefits
SAP Leonardo capabilities) Capabilities

• Manual processes • To identify erroneous • Ability of business user to view • Reimagined persona-specific • Approval for • Increased
that extend invoices, user must go draft invoices coming from process flows for accounts supplier invoices discount capture
transaction cycle back and forth to change Ariba Network, create the payable users not based on – net-new
times and inhibit search parameters, and supplier invoice directly using purchase orders discounts
the ability to take an administrator is the available data, and correct • Native integration with the
advantage of needed to resolve inaccurate e-supplier invoices Ariba Network for supplier • Multi-accounting • Reduced
opportunities for business issues with directly invoices, status, and payments in purchasing procurement
discounts suppliers documents function costs
• Invoice collaboration • Network-based rules engine for
• Paper-based • A separate add-on has to enhancements to send price, tax, tolerance, and • Material limit • Improved invoice
supplier invoices be implemented on top messages to and from Ariba process compliance check in supplier processing
and delayed of ERP to exchange Network, including carbon copy invoice efficiency
• Global e-invoice validation and
invoice updates, messages with the Ariba invoice, payment advice, e-archiving • Increased invoice
leading to limited Network payment proposal, and update automation with
visibility of in- • Demand aggregation, machine learning
transit material in • Invoices in any form are • Invoice processing evaluated receipt settlement
captured and uploaded enhancements such as invoice and efficient
back-end and recurring payments, and invoice
planning systems manually reduction, output management real-time budget check
adoption, and creation of monitoring for
• Absence of a supplier invoices or draft • Good-receipt-based invoicing exception
flexible rules- invoices from uploaded paper- handling in
• Collaboration between buyers SAP S/4HANA
based framework, based invoices
and sellers for Invoice
causing end-user
• Standard integration to SAP reconciliation
dissatisfaction
and policy non- Fieldglass solutions for
• Form-agnostic (paper or
compliance receiving invoices and sending
electronic) capture of T&E
invoice status update back to
invoices
the supplier
• Flexible workflow for
• Ability to set up flexible and
processing PO and non-PO
dynamic workflow rules for
invoices
supplier invoice
• Invoice monitoring and
• Integration with asset systems
exception handling based on
by creating supplier invoices
machine learning
against assets

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Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

Services Procurement

TYPICAL PAIN Current State with ERP on SAP S/4HANA Cloud/ LoB and 2018 Planned Business
POINTS Traditional Database (including standard SAP Leonardo Solution Innovations Benefits
SAP Leonardo capabilities) Capabilities

• Lack of control • Complex service entry • Simplified service entry and • Streamlined sourcing and bid • Granular rate • Improved
over sourcing and invoice consolidation of services and management processes for management for control over
process reconciliation process material master services providers SOW services spend
with rate
• Siloed processes • Complicated user • Integration of invoices from • In-platform collaboration on • Enhanced multi- management
for building and interface and structures SAP Fieldglass solutions with contracts with service bid SOW that
negotiating to define the type of SAP S/4HANA providers allows in-platform • Higher number
contracts with services needed negotiation and of SOW-based
service providers • Procurement of unplanned • Category-specific SOW collaboration projects
• Ownership of the service services (limits) management and evaluations meeting
• Inability to is not managed in ERP • Integration of SAP milestones and
manage worker • SAP Fiori app “Service Entry • Web-based time and expense Ariba Contracts
Sheet” sheet functions such as completed on
deliverables and solution time
performance workflow, time entry, expense
based on entry, and budgetary controls • Support for service • Greater control
statement of work hierarchies over program
• Automated invoicing, taxation,
(SOW) and discounts based on • More-specific budgets
• No integration of location of services delivered category-based • Fewer services
time sheets to SOWs invoice errors
• Robust analytics and reporting
accounts payable tools that help identify • Addition of KPIs to
system, and to • Better process
program trends and anomalies analytics to manage
invoice based on dashboards in SAP
them services spend
Fieldglass efficiently
• Complex taxation solutions
especially when
services are
rendered across
multiple roles and
geographies
• Lack of visibility
across all services
spend, historic
and current

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Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

External Workforce Management

TYPICAL PAIN Current State with ERP on SAP S/4HANA Cloud/ LoB and 2018 Planned Business
POINTS Traditional Database (including standard SAP Leonardo Solution Innovations Benefits
SAP Leonardo capabilities) Capabilities

• Cumbersome • Temporary labor • Simplified service entry and • Guided work sourcing • Flexible workflow • Lower non-
requisitioning processes that are consolidation of service and for service entry compliant spend
process and managed outside ERP material master • Segmented and tiered supplier sheet for external
deviation from distribution rules engine workforce
sourcing strategy • No logon options for • Integration of invoices from • Talent engagement
external workers in ERP SAP Fieldglass solutions with • Rate management and across multiple • Greater control
• Inefficient to report working hours SAP S/4HANA automation channels through over external
candidate for services • SAP Fieldglass Live Insights platform workforce spend
comparison • Procurement of unplanned with rate
services (limits) service for market benchmarks • Machine learning-
powered by machine learning management
• Lack of visibility based resume
into market rates • SAP Fiori-based “Service Entry matching and • Higher goal
Sheet” application • Robust analytics and reporting
and options tools that help identify program candidate ranking achievement
trends and anomalies success rate by
• Inability to • Combination of temporary
effectively • Worker onboarding, tenure and rate workers
manage rate, management, and offboarding management
tenure, and • Fewer errors on
worker • Web-based time and expense • Simplification of invoices for
performance sheet functions such as time tracking and external workers
workflow, time entry, expense invoicing for
• Inefficient invoice entry, and budgetary controls workers on multiple
reconciliation concurrent
• Automated invoicing, taxation, assignments
• Complex taxation, and discounts based on
especially when location of services delivered
services are
rendered across • Integration of SAP Fieldglass
multiple roles and solutions with SAP
geographies SuccessFactors solutions for
total workforce management

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Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

Supply Chain Collaboration

TYPICAL PAIN Current State with ERP on SAP S/4HANA Cloud/ LoB and 2018 Planned Business
POINTS Traditional Database (including standard SAP Leonardo Solution Innovations Benefits
SAP Leonardo capabilities) Capabilities

• Lack of supply • No system to capture all • Availability of good receipts. • Integrated collaboration with • Enhancements for • Faster time to
chain visibility and the documents and data including for stock-in-transit open, comprehensive and collaborative order market
collaboration, needed for collaboration and blocked stock intelligent B2B network response, quality
leading to stock- control, and inventory • Less revenue
outs, missed • No platform for efficient • Process transparency and • Integration with ERP and supply management, loss due to
shipments, and collaboration collaboration with partners chain planning systems including supplier- fulfillment issues
inflated inventory to identify and address managed inventory
• Multiple communication issues with in-transit • Supplier onboarding services • Fewer days in
channels, ranging from (SMI) inventory
• Interactions using tracking • Collaboration with trading
e-mails and electronic data • Supply chain
interchange (EDI) and partners for forecast, advanced • Higher supply
spreadsheets, supply chain procurement, intelligence, reports, chain planning
resulting in longer Web portals to e-mail alerts and exception
and fax quality control, and inventory efficiency
cycle times management management
• Improved supply
• Multiple • Real-time status information on • Replenishment order chain risk
communication orders, shipments, and enhancement and mitigation
channels, leading commits with the SAP Ariba approval process for
to delivery errors, Supply Chain mobile application inventory
quality errors, and optimization
supply chain • Network intelligence, data, and
complexity insights associated with supply • Advanced packaging
chain with handling units
• Platform, scalability,
and performance
improvements
• Advanced logistics
collaboration

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Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

Digital Priorities in Procurement


Emerging digital technologies are helping companies reimagine the way they create their business models, run operations, and execute work. Below are
several digital priorities that will help procurement lead the organization’s evolution and enable its transformation.

Cognitive Procurement Intelligent and Transparent Supply Chain

Cognitive technologies and market dynamics are setting the stage “Smart contracts” based on distributed ledger or blockchain technology
for more intelligent procurement enabled by tighter connections can drive significant efficiency, transparency, and risk mitigation in the
between people, markets, systems, data, and context. This will set movement of goods and services. This level of trust will enable
the stage for autonomous procurement processes. procurement to drive sustainability and corporate social responsibility
goals of the organization.
SAP and IBM are collaborating on leading-edge source-to-pay
applications, with an initial focus in two areas: SAP has announced a partnership with Everledger Ltd. to leverage
• Transformation of sourcing events with a digital procurement blockchain across its cloud-based applications and business network to
assistant enabled by machine learning upend the way goods and services are traded. Amongst first applications
• A more comprehensive and smarter contracting process of blockchain, SAP sees potential in the tracking and tracing of goods.
This will help drive higher savings, greater efficiency, and better This will provide buyers and sellers with increased visibility and control
decision-making based on the total relationship value. from sourcing to settlement, which reduces risk of fraud, aids faster and
smarter supply chains, and enables procurement with a purpose.

Predictive Analytics for Contract Consumption Machine Learning Drives a Faster, Smarter
Procurement Function

Predictive capabilities are empowering business users with insights Machine learning (ML) is enabling a new era of automation and analytics
that are relevant to the present as well as the future, instead of allowing people to work faster and make smarter decisions.
based only on the past. This enables proactive decision-making
SAP Fieldglass Live Insights service leverages ML algorithms to enable
and timing actions at the most opportune moment for the
organizations to benchmark and simulate external workforce scenarios.
organization.
ML algorithms will also be applied to analyze user’s actions when engaging
SAP S/4HANA software already analyzes actual contract service providers to help accelerate the Statement of Work creation
consumption for quantity and value contracts. Together with SAP process. These capabilities will help reduce cycle times and make
Predictive service, part of SAP Leonardo Analytics capabilities, it processes agile.
further enhances negotiations with new insights on contract
A digital procurement bot, or a digital assistant, offers a next-generation
consumption dates. With the ability to forecast contract exhaustion,
experience by enabling buyers and suppliers to interact naturally with
organizations can improve contract (re)negotiation, reduce
SAP Ariba applications. Leveraging ML algorithms, the bot will process
overall costs, and enhance vendor management.
POs and invoices based on its “training” on policies, user preferences, and
transactions, to help ensure compliant and error-free execution.

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Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

SAP’s Value Proposition for Procurement

STRATEGYENABLEMENT BUSINESS BENEFITS*


• All spend categories, including invisible spending, across all regions and • 15%–20% reduction in procurement function costs
departments
• Early payment discount option on 90% of invoices and/or 25%
• Live business-to-business collaboration payment term extension
• Deeper insight into supplier performance and identification of new • 60% improvement in worker quality
sources of supply
• 1.5 %–2.5% reduction in external workforce cost
• Open ecosystems to connect buying channels and allow policy to be
• 1.0 %– 1.5% compliance savings across external workforce
applied to direct sourcing
• Improved compliance delivering between 5%–10% contracted
• A total spend management portfolio (SAP Ariba, SAP Fieldglass, and
savings
SAP Concur solutions) providing scalability, agility, and choice.
• Sourcing event price and total cost of ownership savings averaging
10%–15%
• 5%–6% reduction in accounts payable errors
• 2 to 5 day improvement in days payable outstanding (DPO) on
Business targeted spend
Strategy
Enablement Benefits • 15%–20% improvement in supply chain planning productivity
• 68% less time processing invoices#

RISK MANAGEMENT Risk Employee EMPLOYEE ENGAGEMENT


Management Engagement
• Live calculation of KPIs to analyze managed and non- • High level of automation, leading to more capacity for strategic
managed spend, contracts, and suppliers tasks for purchasers
• Dynamic, in-the-moment supplier evaluation scoring • Reduced FTE effort on reporting and analysis
• Improved employee productivity with intuitive requisitioning
tools and business-to-consumer-grade shopping experiences

* Benefits are based on early adopters of SAP or conservative outside-in benefits due to moving from a traditional ERP to enhanced SAP S/4HANA, LoB/ Cloud and SAP Leonardo solution
capabilities. As each enterprise is at a different level of maturity, our recommendation is to work with you to determine the value proposition for your enterprise.
# “The Business Value of Concur Invoice,” IDC, April 2017

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Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

Customers are Achieving Value from SAP


SABRE CORPORATION Company
Sabre Corporation
• 1.5 trillion transactions processed each year
• Real-time information for accelerated decisions Industry
• Faster financial close cycles, from 6 days to 5 days Travel and transportation

• 35% higher user productivity


SAP Solutions
As one of the leading technology solution providers to the SAP S/4HANA
travel industry, Sabre is evolving its business intelligence SAP Ariba solutions
approach in order to accelerate response time to customer SAP Fieldglass solutions
SAP SuccessFactors solutions
needs and innovate faster in a competitive marketplace. SAP BusinessObjects BI solutions
With a cloud-first approach in partnership with SAP, Sabre put
in place simplified data models and integrated processes Customer Web Site
providing the necessary agility. www.sabre.com

Click here for Sabre Corporation source reference

AVERY DENNISON CORPORATION Company


Avery Dennison
• 87% purchase orders managed through SAP Ariba solutions in Corporation
North America
• 5 days to process invoices, down from 23 days
• 400 hours estimated time saved per week by buyers and Industry
accounts payable Mill products

A global leader in labeling and packaging materials, Avery


Dennison struggled with multiple systems, disparate
processes, inconsistent practices, and low transparency. SAP Solutions
To centralize, standardize, and automate procurement SAP Ariba solutions
processes, Avery Dennison introduced a single platform
based on SAP Ariba solutions, resulting in standard workflows,
greater visibility, and fewer errors. Automation and paperless Customer Web Site
processes are saving considerable time, money, and effort. www.averydennison.com

Click here for Avery Dennison source reference

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Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

SIAM CITY CEMENT Company


Siam City Cement Public
• Automated, streamlined, and connected business processes Company Limited
• Real-time reporting and analysis based on single source of truth
• On-time delivery
Industry
To stay ahead of the competition, innovate more quickly, and Mill Products
provide more value to stakeholders into the future, Siam City
Cement is using a full range of SAP products, including SAP
S/4HANA and SAP Ariba solutions, to power digital SAP Solutions
SAP S/4HANA
transformation across the enterprise. SAP Ariba solutions
This helped the company keep its promise of timely order SAP Cloud Platform

fulfilment of quality products and services to customers, by


enabling efficient and transparent direct procurement of
Customer Web Site
materials in bills of materials needed by manufacturing. www.siamcitycement.com

Click here for Siam City Cement source reference

SIEMENS Company
Siemens
• $17 million cost savings due to implementing SAP Fieldglass
solutions
• Gained external workforce visibility, streamlined manual Industry
processes Manufacturing

Headquartered in Germany, Siemens is Europe’s largest


electronics and electrical engineering company as well as the SAP Solutions
world’s largest provider of environmental technologies. SAP Fieldglass solutions

With a fragmented management process and multiple


technologies in use, Siemens turned to SAP Fieldglass
Customer Web Site
solutions to enable visibility into its workforce. www.siemens.com

Click here for Siemens source reference

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Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

Your Path to Digital Transformation


Every enterprise is unique, with different starting points and end points. Whether you are starting a net-new implementation or undergoing a digital transformation in an
existing SAP solution landscape, SAP can help. We have been working with enterprises of all sizes and ¡n all industries. Based on the depth of our experience, we offer a
robust portfolio of services.

Customer Engagement Methodology Innovate with SAP Leonardo


No matter which path applies to your enterprise, SAP has a structured four- SAP Leonardo is SAP’s digital innovation system that makes it easy to innovate
phase approach to ensure success – executive alignment, value discovery, with new technologies, integrate them into your business, and scale as your
validation and executive readiness, and value delivery. company grows.
Get started today with SAP Leonardo
For more details, please see the brochure Driving Value in a Digital Economy.
Explore SAP Leonardo Capabilities
SAP Value Assurance Service Packages
Learn more about SAP Leonardo capabilities and see how customers in a variety
Take advantage of SAP Value Assurance service packages for SAP S/4HANA to
of industries are using the system to realize the promise of new technologies,
quickly and safely harness the power of next-generation software and in-
such as the IoT and Big Data analytics.
memory processing.
For details, read the e-book
For all value assurance packages and for the successful transition to SAP
SAP Leonardo customer stories
S/4HANA, please visit Transition to SAP S/4HANA.
Get an Expert Take on Digital Transformation
SAP S/4HANA Road Map
What are the benefits of blockchain, machine learning, and other
With a three-year detailed road map, SAP gives customers the transparency to
transformational technologies, and how are they impacting business?
accelerate their transition to SAP S/4HANA. See SAP S/4HANA Road Map.
Get answers from experts and analysts in this e-book
Start Today with a Trial
Assess your Procurement Digital Maturity
SAP S/4HANA Trials
Want to understand your Procurement digital maturity?
Key Assets for Next Steps with SAP S/4HANA
Click here to participate and see how you compare to peers in real time
www.sap.com/s4next
Lay the Foundation for an In-depth Digital Transformation Engagement
Design the Future with Integrated Solutions for Total Spend Management
Get clear guidance on SAP S/4HANA-centric product map through a free self-
Together, SAP S/4HANA, SAP Ariba solutions, and SAP Fieldglass solutions
service for customers and partners.
cover the global, integrated, end-to-end, source-to-pay process. Drive greater
www.sap.com/TransformationNavigator
value with seamless integration to business networks.
Integration Solutions
Design the Future of your Supplier Relationship Management

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© 2018 SAP SE or an SAP affiliate company. All rights reserved.

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