IgniteSAP is attending the online sessions for SAP Sapphire Virtual Event 2022, and providing our community with a summary of the day’s sessions. Here is Day One.
On the first day of the SAP Sapphire Virtual Event we saw a kick off event with a panel made up of supply chain specialists from SAP and other companies.
This was followed by the keynote session with Christian Klein, Julia White and other guests from SAP and Lenovo.
The final session of the day was a look into the future challenges for innovators tasked with transforming corporations into intelligent, sustainable enterprises.
Speakers:
Scott Luton, Founder and CEO, Supply Chain Now
Peggy Gulick, Dir, Digital Transformation Operations and Smart Factory, Kohler Co.
Mindy Davis, Vice President, Global Marketing, SAP Digital Supply Chain, SAP
The days discussions were introduced by Katie Linendoll. The initial panel discussion focussed on one of the key themes for the virtual event: supply chains.
She introduced the contributors to the discussion, Scott Luton of Supply Chain Now and Peggy Gulick of Kohler Co.
The first point that was brought up was that with the impact of macro-economic events such as Covid-19 and the war in Ukraine it is becoming increasingly harder to meet demands and create profits.
Consumers are seeing empty shelves and companies are dealing with a shortage of skilled labourers. Each industry faces its own particular problems as well those affecting everyone.
For example the automotive industry is short of semiconductors for electrical systems in cars. Businesses have been forced into a situation where they are having to explain that orders will be late because of supply problems further up the chain.
Scott Luton shared how the new economic climate means business is changing. Companies now have to take environmental responsibilities seriously along with climate change, but it is not all restrictive. They are seeing demand from consumers for sustainable products and brands have to act on that.
The global supply chain is evolving to new expectations from various customer demographics, and a widespread willingness to spend extra on sustainable products is fuelling the reaction from business and industry.
Peggy Gulick explained as an example how Kohler had made public commitments to dramatically reduce the amount of material sent to landfill as a result of manufacturing, and like other large corporations had a target to get to net zero, in their case by 2035.
She pointed out that while innovation was key to this process the drive to achieve these goals needed to come from the top down and from the bottom up. The culture at Kohler encouraged every employee to contribute to that aim.
When asked about what is happening on the factory floor, she said that what was previously
a “dirty, dangerous and dark” environment was becoming more of a digitally supported environment: bring information to employees to help them in their work.
With the adoption of automation and robotics employees can be redistributed to more complex and less repetitive tasks, and so the data connection makes the most difference to that environment.
Scott Luton asked Peggy about innovation, and Peggy replied that innovation execution is the toughest part, where is the most progress to be made. This is because companies come up with great ideas to help achieve ESG responsibilities but on the whole never scale to build true value from these innovations.
Peggy Gulick suggested that the remedy was to change the culture: that sustainability initiatives and other innovations must be allowed to fail until the right solution was found.
Scott says pointed out that profit and sustainability should not be seen in opposition, and that it facilitated investment in environmentally responsible and sustainable innovations.
Peggy agreed, giving the example of Kohler’s investment in vitreous plants. These incorporate heat recovery systems which drive power efficiency and also reduce gases. She commented that Kohler was already 45% of the way toward their sustainability goals but that energy efficiency becomes increasingly hard to achieve after the easier aspects are dealt with. One particular area that she drew attention to was the use of byproducts form the manufacturing process as raw materials for other products.
She also added that sustainability and environmentally responsible manufacturing and distribution is expected by customer now, it is no longer just an option.
Scott Luton wanted to highlight other examples of companies who were excelling in their sustainability transformations.
He spoke about the Cisco business model, as a channel partner model, so that in the ecosystem 85% of the company revenue came through partners.
This means that they engage the supply chain partners upstream and downstream in a holistic way so that they can achieve wide ranging cultural change across company boundaries.
Another example he gave was Smartpress Shop, an automotive parts manufacturer, who have
digitised their operation to drive out massive amounts of waste in manufacturing, and also Colgate-Palmolive, who have addressed their emissions as a corporation by focussing on reducing their enterprise-wide global carbon footprint from company building because they identified that buildings account for some 40% of emissions worldwide.
The discussion then moved on to discuss supply chain. It was pointed out that currently 94% of companies experience problems and that 42% of chief supply chain officers are experiencing pressure to resolve these problems.
Mindy Davis, SAP’s Vice President of Global Marketing for SAP Digital Supply Chain, was interviewed on the subject and she began by pointing out that most analysts are reporting that supply chain knots are here to stay for a while as it will take a period of time for the supply chain to catch up with global demand.
It was discovered as a result of the pandemic that the outsourcing of supply chains had left them vulnerable to economic and political change.
She said that a large proportion of manufacturing materials are ultimately derived from Asia, and in
South East Asia, a major manufacturing hub for consumer products, companies are getting fined for delayed production.
She suggested that it was necessary to picture supply chains as living, breathing things, with primary, secondary and tertiary suppliers, and this means they get complex very quickly. This can be mitigated with clear information about the supply chain.
She said SAP believes that by taking data from the past we can extract data and use that to inform operational decisions so you only manufacture what you need: reducing pressure on the chain.
It was also suggested that it is still possible to make a profit while operating a sustainable supply chain. The easy thing to do is monitor carbon consumption, then track and trace materials from sources
Research is showing many companies are increasingly only doing business with companies who can be transparent with their sustainability data, so that they can demonstrate their own sustainability credentials. By tracking carbon footprints resulting from a supply chain companies can build consumer trust and differentiate themselves from their competitors.
Gartner reports within four years companies will share assets and carbon information within digital ecosystems. The same report also predicts that businesses have good intentions but will fall behind these sustainability goals, particular in reduction of plastic packaging.
Speakers:
Christian Klein, CEO and Member of the Executive Board, SAP
Julia White, Member of the Executive Board Chief Marketing & Solutions Officer, SAP
Arthur Hu, SVP & CIO, Lenovo and CTO, Solutions and Services Group, Lenovo Group Ltd.
Susanna Hasenoehrl, Head of Sustainability, APJ, SAP
Etosha Thurman, Chief Marketing and Solutions Officer, SAP
After a short introduction to the keynote session by Julia White, SAP’s CEO Christian Klein began by saying that after three years it was good to have a live event again.
Before getting into the main themes Klein took the opportunity to express SAP’s solidarity with all the people in Ukraine. He said that they stand by the people of Ukraine and that donations during the conference to a UNICEF fund for Ukraine will be matched by SAP.
This year SAP turns 50. Klein said for 50 years SAP has revolutionised how businesses run and they will continue to deliver market making innovations, because their purpose is more relevant than ever: “to help the world run better” because they can overcome widespread problems with technology.
From here he began outlining the three key challenges of the next decade.The first of these is that
industries are changing faster than ever.
“the life span of fortune 5000 companies will shrink by 50% this decade, but to respond to such an industry transformation and subsequently change how a company runs, including the DNA, and the culture, is the most difficult part of any transformation, especially when your existing business model is still financially successful”
So the first challenge is future-proofing businesses and organisations so they are ready to respond to new economic demands.
The second challenge is the disruption of the supply chain network.
“Recent research has stated that over 75% of companies worldwide are facing supply chain disruptions”
Over the past decade outsourcing has increased complexities and now, with recent changes we see how fragile they are. Our supply chains lack transparency, and as a result, resiliency and agility
The third challenge:
“we can’t act on sustainability without transparency”
According to McKinsey 70% of profits “can be at risk” when a company is not running sustainably so the green line is as important as top and bottom line. Customers and investors will follow those companies who run sustainable enterprises.
In order to run sustainable enterprises we require transparency, Klein said:
“you can’t manage what you cant measure”
He said SAP is ready to show you how, with SAP innovations, to change these challenges into significant opportunities. Klein went on to say that SAP would do this with the help of their ecosystem of more than 23,000 partners.
At this point Christian Klein announced a development of SAP’s partnership with McKinsey, into an alliance so that joint customers would be able to access the best of both firms capabilities to support them in their cloud transformations.
Christian Klein went on to outline the first business opportunity: transforming each enterprise into an intelligent enterprise.
There followed a summary of the introduction of Rise with SAP over the last year.
“A true business transformation will not happen just with a technical IT migration to the cloud. Rise with SAP will take you on a transformation journey, no matter in which industry you play, no matter the size of your company, no matter if you are an existing or new customer to SAP. We are going to tailor your transformation journey exactly to your needs”
He then illustrated some of the stages of the transformation journey, starting with Signavio, SAP’s processes management and data mining solution. Klein described how Signavio allows the existing business landscape to be analysed and compared against the best practices in each sector in order to reveal new potential business models and uncover hidden inefficiencies in the existing landscape, and discover new growth opportunities.
By simplifiying and potentially automating via AI and RPA, Signavio allows business processes to be “harmonised” which facilitates a move to a clean and modular application landscape in the cloud. This means the business organisation will then have access to automated updates and continuous innovations.
The SAP Business Technology Platform serves as the integration and extension layer, removing data silos, and allowing a company to be run in realtime with a 360 degree view of the business, with end-to-end accountability for mission critical processes.
After 1 year SAP has 2000 Rise with SAP customers and 60% of these are new to SAP. Of these brands, they range from hundreds to hundreds of thousands of users. These include huge customer like Microsoft, Accenture, HCL, Atos and Wipro. Other examples he gave included Philips domestic appliances, IBM and AMD.
Julia White then gave several examples of how other SAP solutions are helping companies meet continuous change, and its effects on their workforce.
Since the pandemic companies have had to cope with a much more fluid workforce and several solutions by SAP, such as Successfactors, and Fieldglass make it possible to manage this new reality. She gave the example of mitigating employee attrition rates by offering extended skills development with SAP Successfactors Opportunity Marketplace, which also provides a greater pool of skilled workers. She also explained that Fieldglass allows companies access to a massive external workforce.
After a brief discussion of how Vodafone uses SAP to manage its employee experience Julia went on to describe how a selection of SAP solutions can help companies manage their customer experience so that they increase customer engagement and satisfaction.
Using the example of Trilogy Jeans she described how. the SAP CX solutions achieve this while protecting customer privacy. The SAP Customer Platform allows companies to get a comprehensive profile of each customer’s interactions and purchasing activities, and how this in turn leads to a clearer understanding of demand. If there is a surge in demand as a result of a social media or advertising campaign SAP Data Warehouse Cloud can sees these changes in demand and relay this information produce more items for sale.
At this point in the presentation Christian Klein went into some detail regarding how SAP is addressing the critical supply chain issues facing companies with the expansion of the SAP Business Network.
He referred to the SAP Business Network as the LinkedIn in of the B2B world. It was expanded last year with the inclusion of the Ariba Network, SAP Logistics Business Network, and SAP Asset Intelligence Network. Creating a community of 5.5 million connected organisations.
The sheer number of organisations involved in the network means that others joining it have increased transparency across their supply chain: allowing them to trace every asset down to the lowest level, and match demand and supply.
He gave the example of the health ministry of Ukraine, who got free access to SAP business Network, which connected them with 4000 suppliers sourcing of medical equipment and first aid kits with a value of 130 million US dollars.
Julia White then introduced a discussion of how small process improvements using SAP solutions can make big improvements.
She outlined the example of ordering a Lenovo laptop to her specifications using the Ariba shopping app.
After receiving an order Lenovo uses SAP Integrated Business Planning to understand what components are required to build it, then sources laptop components through SAP Business Network, specifying recycled plastic where possible.
During the laptop’s assembly, augmented reality helps workers with extra information, allowing quicker and error free construction with clear visual instructions and automatic data capture.
SAP warehouse robotics is a new solution announced at the Sapphire event which enables people and robots to work seamlessly together.
SAP and Apple have partnered to bring new apps to warehouse floor and at the event SAP announced the first two of these state of the art innovative apps for IOS devices. The first is SAP Warehouse Operators for IOS, which optimises the main warehousing tasks: picking packing and putting away. It uses AI for efficient barcode scanning, and uses indoor location functionality fo warehouse navigation. With S/4HANA Warehouse Integration all these systems and functions are connected.
To ensure reliable delivery the second of the two new apps: SAP direct distribution, helps drivers on their delivery route with a paperless delivery with camera and location management and offline IOS capabilities. These apps are available today and there are more in development.
There followed a short presentation by Lenovo about how Lenovo uses SAP solutions to power their supply chain. Then Julia White interviewed Arthur Hu, SVP & CIO, Lenovo and CTO, Solutions and Services Group, Lenovo Group Ltd.
Etosha Thurman, SAP’s Chief Marketing and Solutions Officer, then made a short presentation about the extended business network
She covered how SAP had created the world’s largest business network since then SAP has combined that asset intelligence capability with external workforce management to optimise work order collaboration: minimising costs and improving worker safety.
Now companies can buy goods from Amazon Business marketplace through SAP Business Network, and this year logistics business carriers are being added to the network.
“The network creates value for all partners and allows suppliers to have more visibility into the needs of their buyers: to be more collaborative and efficient in their customer interactions, and ultimately to be more agile, so that they too can adapt and adjust, and build stringer, more resilient relationships.”
This section was followed by a presentation illustrating how Boxprint uses the network to create a more resilient supply chain.
SAP said their goal is to extend beyond buying and selling, to include providing working capital management solutions for buyers and suppliers. This will be achieved using Taulia, a company which was acquired in March.
This allows SAP to now offer supply chain financing, receivables financing and cash forecasting solutions.
After a section of the Catena-X Automotive industry network Christian Klein took the floor again to describe how SAP is addressing the third challenge facing businesses. The lack of transparency in business processes and how this is preventing them from addressing their sustainability goals.
SAP has taken many steps recently to help businesses with this challenge, and they believe sustainability and profitability are not mutually exclusive.
“we are going to provide you with reliable and compliant data sources to measure ESG, which means we are going to add a green ledger in our ERP so that you can account for carbon as you account for financials today”
SAP are providing carbon accounting for business travel in Concur. In success factors SAP are providing all social inclusivity and diversity data. The Business Network brings together data from your enterprise as well as the carbon footprint across the supply chain.
With SAP Sustainability Control Tower customers can aggregate ESG data from SAP and non-SAP sources. Based on this transparency businesses can take action to achieve their carbon accounting and sustainability goals.
Susanna Hasenoehrl, SAP’s Head of Sustainability, for the Asian-Pacific region then made a presentation on how this data can be translated into action. In summary comprises of collecting data from all business areas, incorporating that data into every process of business, and extending sustainability practices throughout the business and on to affect the business practices of suppliers and other partners.
A short video presentation outlined how Unilever was applying these principals to sustainable palm oil production.
Christian Klein then had a conversation with Julie Sweet, CEO of Accenture about how the partnership between SAP and Accenture is adapting to the new challenges of helping companies achieve their own sustainability targets.
Julie Sweet said she was excited about sustainability as one of the forces that will shape the next decade.
Accenture became first in the sector to report on the big six ESG metrics in their 360 degree value reporting experience.
They recently just announced their Rise partnership: though Accenture already utilised SAP in the cloud with Rise they can operate even more efficiently, and this frees resources to create sustainability strategy.
Christian then asked “what can SAP and Accenture do for our joint customers?” and Julie Sweet replied that joint clients are spending 100 millions of dollars on transformation, and during that transformation Accenture and SAP can embed sustainability from the start.
Accenture worked to create industry specific solutions to embed sustainability, for example with a global fashion brand, building in the ESG KPIs, and a digital twin for product development. Also they use block chain to trace materials and products. The resources released by these actions can be redirected toward further sustainability specific modules like reducing packaging and plastic via the circular economy.
After more discussion of joint aspirations for the future with Accenture, Christian Klein concluded the keynote session with thanks to those who were involved in its production and said he looked forward to another 50 years of SAP changing the way people run their businesses for the better.
Speakers:
Juergen Mueller, Chief Technology Officer, Member of the Executive Board, SAP
Kange Kaneene, VP, SAP.iO Foundries North America, SAP
Nino Marakovic, Founder and CEO, Sapphire Ventures
Stefani Pellinen-Chavez, COO, Ivaldi Group
Jan Gilg, President and Chief Product Officer, SAP S/4HANA
The keynote session was followed by a discussion panel on what to expect from tech innovation over the next few years. Kange Kaneene, SAP’s vice president for SAP.iO Foundries North America introduced and led this session.
She described SAP.io Foundries as an external startup accelerator. It finds promising companies innovating in areas of interest to SAP and brings them into the SAP ecosystem.
To begin the discussion she asked Nino Marakovic, Founder and CEO of Sapphire Ventures what their relationship is to SAP.
Nino said that Sapphire Ventures is a venture capital offshoot of SAP which has been independent now for twelve years, though SAP remains one of the largest investors in the organisation.
Through Sapphire Ventures SAP is one of the largest investors in startups, and has invested in over 3000 companies to date.
Prompted by Kange, Nino shared what trends he was expecting to see post-pandemic. He said that it had induced massive acceleration in digitisation and cloud adoption, increasing investment which drives revenue growth in startups.
Many startups targeting improvements in the supply chain were seeing vastly increased investment, (roughly 60 billion American dollars). The areas of AI and machine learning were also seeing increased interest.
Concerning the future of working habits, he said that there had been a move from centralised office work pre-pandemic to remote and then to hybrid working. This change was also complicated by a great wave of resignations as workers reassessed their lives and their priorities.
Jan Gilg, (President and Chief Product Officer, SAP S/4HANA), contributed to the conversation with an assessment of the current state of supply chains: how resiliency and adaptation were now crucial, as well as refocussing on sustainability.
Using the example of coffee he illustrated some of his points, pointing out that it takes a great deal of effort with so much disruption and complexity, for the product to get from the grower to the cup. This can mean that a coffee company has to deal with 29 other companies across 18 countries for a typical coffee supply chain. A larger corporation like Nestle has 250,000 suppliers globally.
This degree of complexity made it clear why the SAP portfolio helped in management of supply chains. Visibility and transparency are derived from the SAP Business Network and managed with SAP Integrated Business Planning, along with Warehouse Management, and Warehouse Cloud. This also contributes to the management of information on the impact on the environment of a supply chain: allowing business managers to understand the carbon footprint. This sustainability measurement now caters for a market of investment in sustainable enterprises, so that now one-third of investors have some sustainable investment in their portfolio.
Juegen Mueller described how SAP Business Technology Platform fit into this changing business landscape as the “business operating system” allowing tailored integrations and extensions of existing business processes.
Currently SAP BTP has 13000 live customers, using it for supply chains (for example). It can help businesses with supply chain planning, so where materials are unavailable, the business can even plan to manufacture products for which there are materials available, rather than just closing a line of business. This has implications and causes shifts in the supply and logistics network, causing positive impacts on financial planning and cashflow.
Stefani Pellinen-Chavez, is COO of the Ivaldi Group: a SAP.io startup. She was asked about her company’s business model.
Ivaldi provides a service for companies that de-risks the supply chain. They analyse supply chain data within an SAP ERP system and use that analysis to make recommendations on where companies can make improvements to their supply chain reliability.
These can include finding local suppliers and manufacturers so that a supply chain is shorter and less complex (also helping a more local economy).
They can also measure and make improvements to the sustainability of the supply chain and other related costs. By reviewing how far the shipping goes and how hard it is to source they can assess how long delivery times will be and what the carbon footprint will be.
Ivaldi have developed an API which is able to plug into S/4HANA and SAP inventory data and quick find savings where companies did not even know they were losing money unnecessarily. Ivaldi is currently available on the SAP app store.
Kange then asked the panel members what they thought was next for technology in the ERP space.
Nino of Sapphire Ventures said he was excited about blockchain as an alternative tech platform.
Jan Gilg said software is becoming much more modular and AI will be embedded in everything.
Stefani pointed out that companies would find increasing advantages to finding more ecological ways of running their businesses, and this would growth their customer bases.
Juergen said that SAP research and development was looking at “three horizons: now, new, and next” or short, medium, and long term developments.
Some of these developments included smart contracts, and quantum computing. There was also a lot of work on “the composable enterprise”: this is because companies now need more flexibility from their ERP: to run SAP and non-SAP systems in conjunction.
The new ERP will also have augmented cross-planning and logistics: systems which not only monitor but recommend improvements and solutions to business operations. Using Signavio SAP is creating industry specific solutions, and tailored solutions for specific scenarios.
The session was rounded up with a look towards what was scheduled for the next few days at the Sapphire event and she finished with the phrase “when people and technology come together, amazing things happen”.
IgniteSAP will bring you another summary of the sessions running at the Sapphire event tomorrow and the following day so you can catch up on any content or information you may have missed.
If you are an SAP professional looking to reposition yourself in the SAP ecosystem to take advantage of new developments in supply chain and other areas of ERP, then get in touch with IgniteSAP and our team will give you summary of the opportunities open to you.
