Business Network Transformation Example in CP-Retail

Closed Loop Trade Promotion Management between Retail-CP

Steve Winkler – GEPG Standards Management & Strategy Amit Sinha – Business Network TransformationJulio Navas – Live Enterprise TechnologyGary Adams – CP Industry Business Unit, Superior Customer ValueMark Osborn – Industry Marketing - CPVince Rouleau – Field Services - Retail

September, 2008

sample for a

picture in the title

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Industry Boundaries Are Being RedefinedValue Chains Are Evolving into Business Networks

Value chain

Company-centric

Command and control

Ownership-driven

Self-contained risk

Business network

Customer-centric

Connect and collaborate

Relationship-driven

Shared risk

Competitive Advantage will go to companies that collaborate across their network for better customer results

Competitive Advantage will go to companies that collaborate across their network for better customer results

Internet of Things OverviewThe Business Internet

KraftMixing Center

DistributionCenter

Retailer ADistribution

Center

Supplier

DSDDistribution

Center

Retail Store A

Retail Store B

Mfg Plant

BW

Legacy

Live Enterprise

Custom

Live Enterprise

Live Enterprise

Live Enterprise

Live Enterprise

Live Enterprise

Live Enterprise

Custom DB

The Internet of Things is a conceptual framework where information about physical items is shared across company boundaries on an open architectural platform

The primary driver is increased visibility in the supply chain

Uniquely identifiable products is a prerequisite for such a system

The creation of an Internet of Things platform that ties together business systems would enable SAP to deliver a new breed of applications and value to our customers

SAP should take a thought leadership position on the IoT

Live Enterprise technology can be used to create the network

IOT: The Distributed Model

Live EnterpriseConnecting Enterprise Systems

Department Enterprise Trusted Partners

SAP Applications Web ServicesDatabases

Live Enterprise

Business User Applications

BPC Analytics GRC

Direct

Push to User

Live Enterprise is an SAP server component that creates a network overlay

It propagates business information to other LE nodes, similar in fashion to DNS, but in real time

The distributed nature enables discovery of events across a business network

LE originated as an Imagineering project

GRC was the first to take advantage of LE by creating new applications that can detect risk events.

4x faster implementation

$5.4M cost savings

LE will be released as a GRC product in Q1 2009

LE is a viable option for SAP to take a thought leadership role in developing the IoT, and can serve as a platform for new types of SAP applications

Standards Are Critical The Key to Success

IOT Cloud IOT Cloud

Company A Company B

Opportunity SAP Position

SAP has a large worldwide install base that contains the core business data needed for an IoT

SAP has emerging technologies like Live Enterprise that can be used to build the IoT

SAP application knowledge enables us to derive new apps leveraging the IoT

The IOT enables discovery of events and data about objects across a business network

Most companies today have poorly integrated system landscapes

Companies want to track uniquely identifiable data across their business network

Accessing data across company boundaries requires an agreement on common interfaces

1. Trade Promotion Management

Demonstrate LE capability of sharing operational data across company boundaries

Not an obvious affront to GS1/EPCglobal or our customers that support them.

3. Master Data Synchronization

Create a LE based MDS system to augment / replace GDSN

2. E-Pedigree

Regulatory requirements are driving RFID adoption and are the primary focus for the RFID standards Body EPCglobal

Proposed Standards StrategyCreate Market For New CP/Retail Applications

Live Enterprise

Business User Applications

TPM Pedigree MDS

Develop Consumer Products and Retail focused Internet of Things applications to drive adoption of the Live Enterprise technology and create a de facto standard

Trade Promotion ManagementThe 1st BNT Application

© SAP 2008 / Business Case – Warp 10/ 7

Placeholder for an overview slide describing the TPM scenario in

more detail. - Gary Adams

© SAP 2008 / Business Case – Warp 10/ 8

Placeholder for an tech overview

Trade Promotion ManagementThe CP Value Proposition

© SAP 2008 / Business Case – Warp 10/ 9

Placeholder for an overview slide describing the value prop for our

CP customers. - Gary Adams

Trade Promotion ManagementThe Retail Value Proposition

© SAP 2008 / Business Case – Warp 10/ 10

Placeholder for an overview slide describing the value prop for our

retail customers. - Vince Rouleau

Trade Promotion ManagementNext Steps

Bring together stakeholders to determine viability

Define the scenario scope and value proposition for CP and Retail customers.

Define high level technical architecture for the scenario.

CP side: Colgate – already have a LE POC that is realizing significant benefit

Retail side: PetSmart – has demonstrated strong belief in BNT vision

Use a 3rd party to do a rapid prototyping of the solution.

Involve SAP teams to facilitate an easy transition from prototype to SAP product.

Demonstrate that BNT is real at SAP

Invite more CP/Retail customers and prospects to participate in defining enterprise services for TPM

Roll requirements in and build solution for delivery late next year

Standardize portions of the IP to create a product advantage for both the CP and Retail Industry, just like we did in Banking

© SAP 2008 / Page 12

Appendix

Strategic Engagement – Banking ExampleStandards Create Markets

© SAP 2008 / Business Case – Warp 10/ 13

Banking Definition Group

Enterprise Services for Banks

Global Banks & SAP Banking

Credit Suisse

Deutsche Postbank

ING

Nordea

Standard Bank

ABN AMRO

ABSA

Barclays

BBVA

Banca Intesa

Phase I: Create a community of customers and prospective customers to define basic community goals, under SAP control

Phase II: Open the community to other vendors, still on SAP terms, and determine an architectural approach

Phase III: Once SAP has established its leadership position, move the results to a neutral standards organization – in this case the organization had to be created

BIAN – Global Banks, SAP Banking, & Other Vendors

Credit Suisse

Deutsche Postbank

ING

Nordea

Standard Bank

ABN AMRO

ABSA

Barclays

BBVA

Banca Intesa

Industry Standards for Banking

Banking IVN

© SAP 2008 / Page 14

Banking – SAP Teams with Customers to Give Birth to a New Market Provides Industry Architectural Leadership - BIAN

Seventeen founding members have launched BIAN.

“Being an active member of the Industry Value Network of Banks, Credit Suisse sees the creation of this association as significant milestone for not only ourselves, but for the industry as a whole,” said Claus Hagen, head of Integration Architecture, Credit Suisse. "The association will create an open environment of members that begins with an idea and takes it all the way through to execution.”

Description

SAP spearheaded the creation a standards organization called the Banking Industry Architecture Network (BIAN), which focuses on application to application interoperability.

Opportunity

The market for banking applications is currently wide open, because the vast majority of banks’ enterprise software today is home grown. SAP is actively stimulating the expansion of the market for packaged banking software by providing a framework architecture for the banking industry.

Benefits

For Customers1. Lower Integration Costs2. Standard Packaged Software (Lower TCO)3. Higher Reliability

For SAP1. SAP will assume a firm position in a

battleground industry.2. New revenue streams and growth.