For those of our community who were unable to view the SAP Sapphire Now 2021 keynote presentation, IgniteSAP has created this transcription of the event.
The presentation, called “The Enterprise in an Age of Networks” was mostly co-hosted by SAP CEO Christian Klein and SAP Chief Marketing and Solutions Officer and member of the executive board, Julia White, with notable contributions from SVP and Global Head of Business Network Paige Wei-Cox and Professor Hasso Plattner, the Chairman of the SAP Supervisory Board and also one of the founders of the company.
Several intriguing new products or extensions to existing solutions were announced through the course of the presentation including:
The creation of the world’s largest business network: “Buyers, multi-tiered suppliers, logistic providers, manufacturers and banks will be able to respond to any disruptions real-time through their connections in the network.”
An entirely new business sustainability portfolio to: “drive sustainable practices, not only inside your organisation but across your entire value chain… make carbon footprint tracking available in the business network so that you can go to net-zero… [and] turn your circular economy vision into reality.”
SAP Upscale Commerce: “an online commerce no-code solution that allows you to create an omnichannel shopping experience in minutes. With built in AI you can provide personalised offerings based on a 360-degree view of your customer from their social sentiment to their purchase data.”
New S/4HANA capabilities in configure price quote, and billing and revenue innovation management.
HR and procurement capabilities, along with SAP S/4HANA Cloud, in the Rise with SAP modular cloud SAP solution and a dedicated package for human experience management.
So dig in to our full transcription, and check out the interview with Hasso Plattner towards the end.
Sapphire Now 2021 Keynote Presentation Transcript
Welcome from across the world. Today kicks off SAPPHIRE NOW that runs over the next several weeks. This year, SAPPHIRE NOW offers eight different audience tracks running across three regions in nine languages. So there’s literally something for everyone. Today, I’m thrilled to be joined by Christian Klein and Hasso Plattner to talk about business insights and technology trends spanning today and tomorrow. So without further ado, let’s get started. Christian, take it away.
Thank you, Julia.
And let me first say, a big thank you to all of you, our customers, partners, and more than 100,000 colleagues from around the world. During this terrible COVID pandemic, we truly showed how special the SAP communities together, we are reinventing how businesses run, but we are also demonstrating the big heart of our community.
Any crisis is ultimately solved by people. And that’s what’s happened with COVID.
Our souls go out to everyone who has been affected by the pandemic, and our thanks to all those who are making extraordinary contributions in our communities.
Like last year, Sapphire, once again, needs to be virtually held. But we see the light at the end of the tunnel. In many parts of the world, I see people coming back to the office, lockdowns getting less restrictive, and everyone is so eager to meet and spend time together.
Over the last year, we have seen how fragile many businesses and societies can be.
What’s clear is that the way we work, the way we learn, the way we consume will never be the same again.
Personally, two years ago, I never would have thought that in my small hometown, all kids would do would be doing homeschooling from one day to the other, that our local supermarket would offer online shopping, and home delivery. And that everyone, including my grandpa would be using a mobile app to play COVID infection chain.
Technology has helped communities and families together and help businesses quickly adapt.
And let’s not forget COVID is only one of the challenges we are all facing. Just think about geopolitical tensions, social injustice, inequality, loss of biodiversity, climate change. Since the pandemic hit, SAP has been working hand in hand with you, our customers across the globe.
Whether it was helping you to make your supply chains more resilient, to reimagine your business model, to create new customer experiences, or to enable remote work together with goddess.
Over the last year, we learned how companies weathered the storm, and how the best did it.
Today, we want to focus on three key insights we’ve learned over the last year.
The first insight is that the most resilient companies were those who embraced technology to transform their business processes. Let’s face it. Digital transformation is a pretty overused term these days. And some people tend to call every IT project a digital transformation.
But migrating an IT landscape to a cloud infrastructure alone doesn’t change a single business process. In reality, the COVID-19 crisis has underscored the urgent need for every company to become an intelligent enterprise.
So what do we mean when we talk about the key characteristics of an intelligent enterprise?
First and foremost, to have the courage to leave traditional business models behind and radically change how your business wants.
Intelligent enterprises AI enabled by integrated digitised agile business processes powered by data and with embedded AI.
To give you a real life example, let’s have a look at Braces. A b2b food delivery services catering to the future service sector in the UK.
Let’s move on to insight number two. No business does business alone. We win together as a community. One intelligent enterprise alone can already achieve great things. Because we live in an interconnected world.
I’ve talked to many CEOs, and it became clear, many of the issues companies faced during the pandemic came from the reliance on global supply chain.
Just take the western semiconductor shortage as one example. First, with the outbreak of the pandemic, companies reduced the semiconductor orders to adjust to lower market demand. Now, the demand for semiconductor orders has exploded. And the very same companies are now facing severe production shortages as suppliers and manufacturers didn’t have enough lead time to ramp up production again.
And this is just one of many examples. In fact, almost 75% of all companies reported supply chain disruptions as a result of COVID. When we look at how enterprises run today, many still manage the complex relationships between suppliers and buyers, logistic providers and manufacturers aesthetic one to one connections
COVID showed us just how crucial it is to have real time transparency across your entire supply chain is, by the way, a clear parallel with our daily lives using social networks, such as Facebook, or LinkedIn, or Twitter.
The value comes from the network and the millions of interconnections it facilitates in real time.
But nobody has done this yet for businesses doing business together.
Today, we are announcing the next part of our strategy to create the world’s largest and most comprehensive business network.
We believe that industries will be revolutionised when businesses turn into communities. We want to connect every company across your entire supply chain, and in doing so, provide you with immense value from being a member of this community.
Buyers, multi-tiered suppliers, logistic providers, manufacturers and banks will be able to respond to any disruptions IN real-time through their connections in the network.
This may sound like a bold vision. And it is. But let’s not forget, we already run the world’s largest supplier network with more than 5.5 million connected enterprises. And because our applications run supply chains across every industry, we have the most relevant data and expertise.
Later on, we will show you how game changing the network will be.
The third insight is the most important one for the future of our planet and our families.
We must act now on sustainability with the goal of zero emissions, zero waste and zero inequality.
When we look at the news during the pandemic, one could easily think that things improved during 2020 with the massive reduction in carbon emissions. But the reality is far more complex than that.
At the macro level, carbon emissions this year are set for the second biggest increase in history.
Individual product development is also not straightforward. Just take one example: the electric car. Nobody yet fully understands the supply chain emissions impact of an electric car over its complete lifecycle.
This is the decade we must act. It’s time to build sustainability into the fabric of how we do business.
It’s time to make sustainability a standard dimension of corporate management, just like productivity or growth.
But you can’t act on what you can’t measure. As part of this commitment, SAP will provide standard reporting and analytics on all sustainability metrics of the World Economic Forum with the intention to help establish them as the global standard. And what’s exciting is part of the solution is in our hands.
Given the significance of global supply chains in tackling sustainability, the SAP community truly has the power to protect our planet and create a future our children want to be part of.
We have created an entirely new sustainability portfolio to help you drive sustainable practices, not only inside your organisation, but across your entire value chain.
We will make carbon footprint tracking available in the business network so that you can go to true net zero.
We will let you turn your circular economy vision into reality.
We will jointly build networks with you that champion diversity, inclusion and human wins.
You will hear from Allbirds in a few minutes: just one of many exciting examples. There’s so much opportunity here. And we worked hard to make this ideas a reality for you, our dear customers.
Together with you, we can reinvent how businesses run by holistically transforming every enterprise into an intelligent enterprise.
We can reinvent how industries one by connecting intelligent enterprises into an industry wide business network. And we can even reinvent how the world runs making profitability sustainable and sustainability profitable. And this will ultimately help us to turn our mission into a reality to help the world run better and improve people’s lives.
Christian these ideas are so important to every business. Let’s talk about how we’re delivering the innovations that will make this a reality supported by over 30,000 SAP engineers.
Indeed Julia. I mean, our innovations enable our enterprise to become an intelligent enterprise.
An intelligent enterprise is fully integrated to deliver seamless customer and employee experiences from the front and the back office mission critical processes. Only SAP can enable that. Let’s take a look at two examples of what this looks like.
Every company wants to provide a delightful customer experience across multiple channels from the first interaction to the ongoing services. For many of the retailers we work with the customer experience starts with an easy engaging personalised shopping experience spanning digital and in-store interactions. Now enabled by our new product SAP Upscale Commerce.
Upscale is an online commerce no code solution that allows you to create an omni channel shopping experience in minutes. With built in AI you can provide personalised offerings based on a 360 degree view of your customer from their social sentiment to their purchase data. And with a headless API architecture. You can provide customers real time information about their purchase and delivery through any channel. And we know that companies are shifting to deliver everything as a service, not just sell products to support these new offerings and the business models behind them. We have new S/4HANA capabilities in configure price quote, and billing and revenue innovation management. Now combining products and services into one quote, it’s no problem and combining upfront payments and ongoing subscriptions in one order and one invoice, no problem.
And with each customer order, the finance team, it’s real time revenue, realisation and predictive accounting, allowing them to accurately predict how much revenue they’ll make based on incoming sales orders, even if no goods receipt or invoice is booked. And since upscale is integrated with SAP supply chain planning, the fulfilment is fast, because the inventory has been automatically verified with the customer’s order, and the customer shipment is automatically sent from the closest point to minimise emissions.
For companies that are offering built-to-order products, where the production of an item begins only after the customer order is received. SAP’s synchronised planning capabilities gives you visibility to anything that could affect your planning, and adjust the planning in real time to accommodate the situation.
Every process from shopping to purchase to payment to supply chain and planning is integrated and ready to drive the new product offerings and business models you need to grow your business.
But it’s not just your customers that want a great experience: your employees expect a seamless and personalised experience, starting from the hiring process all the way to their retirement or departure process, particularly during COVID-19, capturing employee feedback and understanding their sentiment at any time.
It gives you the key to knowing the right actions to take to support your employees. Now, with the integration of SAP Successfactors and Qualtrics is employee understanding is available anytime. From a new hiring on-boarding experiences to performance management to mentoring programmes. This ongoing employee experience data identifies what is going well, and also areas for improvement with the ability to take actions immediately. And it’s all done in a data driven way, taking out the guesswork.
Now, to enable these end to end business processes, multiple solutions from SAP and our ecosystem are working together behind the scenes to enable you to become an intelligent enterprise.
So let’s unpack how SAP enables these integrated business processes.
First, we offer the most comprehensive set of business applications, and the world’s largest business network. And across all solutions, we provide our huge collection of industry specific applications built by SAP and our global partner ecosystem. All of these solutions are integrated with the SAP Business technology platform or BTP, and can be easily extended to enable any range of customisations. All the solutions share one data model running on the business technology platform. So you get the critical data and insights across all of your business applications. This gives you a company-wide foundation for data-based decision making in nearly real-time.
The business technology platform also provides industry leading database services, enterprise-wide analytics, application development and integration with pro-code to no-code tools, and business specific AI and robotic process automation.
But technology innovation is not enough on its own. For many customers, the biggest challenge is how to best use the technology to transform their company.
To address this need, we introduced Rise with SAP earlier this year, bringing together our technology and business processes know-how to provide you with business transformation as a service. We have seen incredible customer interest so much that today, we are expanding our initial offering beyond SAP S/4HANA Cloud because we heard loud and clear that many customers want a holistic, modular cloud DLP solution.
That’s why we are now including HR and procurement capabilities along with SAP S/4HANA Cloud, in our Rise with SAP modular cloud SAP solution and as business transformation relies on people, we are also launching dedicated package for human experience management. This is all delivered with one data and security model and the business poses intelligence to ensure your processes are fully optimised and wanting at the industry best standard.
But we’re not stopping there. Because SAP knows best the each industry is different and has unique needs. I am very excited to introduce rise with SAP for industries. We’re starting with five industry specific cloud offerings focused on retail, consumer products, automotive, utilities, and industrial machinery and components or IMC. We are bringing together the best of SAP is 50 years of deep industry expertise, and the best of our partner ecosystem to provide industry specific cloud based solutions as a service. And these solutions are built on the business technology platform. So you get the benefits of integration extensibility analytics, and the one data model. These new rise with SAP industry solutions work natively with S/4HANA Cloud, so every customer can get the full set of industry-specific solutions needed in their cloud deployment.
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In our retail cloud offering, we have multiple retail specific products including SAP omni-channel promotions, pricing, retail, merchandising, management, and intelligent returns management. And we’re also co-innovating with retailers including the selling group on the sustainable replenishment to keep store shelves stocked, while also reducing food waste towards zero. For industrial machinery and components cloud, we have over 15 specific applications, including SAP Enterprise Product Development, and SAP Asset Management. And we’re also developing a new solution to enable outcome based business models with our customers like Tetra-pack, a world leading food processing and packaging company.
For automotive customers, we provide over 20 applications from digital manufacturing to product lifecycle costing. And we’re also co-innovating with the Scheffler group, along with many other automotive suppliers and manufacturers to manage packaging, to reduce supply chain costs, and also lower environmental impacts.
Now, of course, for all of these solutions, you buy just what you need. They’re completely flexible. So you can choose from the best of SAP and our ecosystems offerings to custom tailor to your specific needs.
These five rise with SAP industry cloud offerings are just the start. SAP has deep expertise in over 20 Industries. Now today, the pharmaceutical and life science industry is certainly top of mind for all of us. AmerisourceBergen is a leader in pharmaceutical distribution, and is relied on SAP industry innovations to run their business, and recently also assist with the delivery of COVID-19 treatments. I had the opportunity to talk to Jeff Denton of AmerisourceBergen earlier, let’s check out our conversation now.
AmerisourceBergen was recently awarded SAP innovation award which is fantastic for the work you did innovating around pharmaceutical and Life Sciences. So tell me about that. It is a great story and very much an honour for us to receive an award like that.
We went to SAP maybe six years ago and said, You know what, we have this regulation that’s going to be quite onerous for us. And we were looking for solutions. And we did it we have with SAP’s help.
In 38 years, I’ve never come together with a group to develop and design a solution such as this, with the collaboration that we had, everyone was in the room manufacturers AmerisourceBergen Life Sciences resources from SAP you never knew while you were sitting in that room who worked in what space. But what you did know is everyone had a singular focus. Now out of this collaboration, we were jointly able to develop the Advanced Track and Trace capability as well as the Information Collaboration Hub solutions, Advanced Track and Trace for pharmaceutical that we’re using was the first delivery. But beyond that we’ve we determined we needed to find ways to share all this large transactional information between AmerisourceBergen and our trading partners and indeed soon will be our pharmacies. So we worked with SAP to develop a cloud solution that allows us to have one pipe as I call it, of all data coming in, and all data going out that’s related to this regulatory action.
Now one of the specific solutions we co-created really is helping around particularly around sustainability… about making sure you’re not putting more waste into the system.
And so tell me more about that.
In our particular instance, we have returns that come back to us that are sellable from the pharmacies: about two and a half percent of our sales, which is two and a half billion dollars a year. So we are able to take the product back in and resell it to the other pharmacists that would want or need it later. The alternative to that is it would have been returned to the manufacturer and destroyed.
Now AmerisourceBergen played an important role around COVID-19 recently, and I would love to hear that story.
Yes, AmerisourceBergen’s primary involvement with COVID-19 in the US in particular, was around treatment drugs. So drugs that are used for the sickest of patients in the hospitals to help get them through it. I can remember a story of where the first treatment drugs came into our warehouse for distribution. And the employees on the floor actually getting very emotional, knowing that they had a role in what we hope to be a cure for, I wouldn’t say cure, but a treatment at least for the majority of patients and across the country.
Well, thank you for all the work you’re doing to help around COVID-19 is obviously very top-of-mind for all of us.
AmerisourceBergen is a compelling example of an intelligent enterprise powered by SAP’s Industry Cloud solutions. It also demonstrates how we succeed when working together as a community.
As we have seen with COVID-19, your business network is essential to your resilience, growth and success. For example, our customer Aldora: a large agribusiness was faced with massive shipment delays and storage problems when the pandemic hit. With the help of our business network, they were able to find 140 suppliers in just three days solving the problem with minimal disruption.
And the more companies that join, the more benefits the network offers to each of them. Step by step, these networks of intelligent enterprises become industry networks.
Let’s look at the automotive industry as one example.
Joining forces with some of the world’s leading car manufacturers and suppliers, we founded the Catena-X automotive network. This business network enables an industry-wide secure data exchange for all participants of the automotive value-chain and fosters innovations for collaboration.
The benefits of such networks are countless, providing end-to-end transparency, to reduce inventory and increase precision in forecasting and intelligent decision-making. In fact, our customers are getting 80% better forecasting and 95% faster material plan, end-to-end visibility to provide more seamless customer experiences. End-to-end carbon tracking across the value chain to lower emissions for all of us.
And thess industry networks connects across multiple industries to become a network of networks across the globe.
To enable this, we are converging our existing procurement, logistics, asset and industry specific networks, bringing together our business network capabilities into one single, integrated Global Business Network.
We will create the world’s largest and most comprehensive business network and enable a networked economy across every industry.
But as always, action speaks louder than words. Let’s see how this looks like in real life.
Please welcome Paige Cox, Chief Product officer for SAP’s Business Network.
As Christian mentioned, we’re replacing fragmented one-to-one connections with the many-to-many network-of-networks that brings all points of collaboration together in one place.
How will this help all of you? You will be part of a vibrant business community to connect and extend your existing ecosystems. You can also search and discover new trading partners for new business opportunities onboard once, and connect to many. We aim to provide you with unified role-based experiences. Our SAP Business Network serves as a platform with open API’s for integrated network of networks connected to third party networks, industry networks and other value-added services.
At our very core, we bring together the Ariba network, Asset Intelligence network, and Logistic Business network in the best-of-suite unified network, interlinking business processes and workflow beyond a company’s four walls.
Together with you, we will reinvent multi-enterprise commerce flow by connecting procurement, manufacturing operations, and logistics, all under one umbrella for the entire supply chain visibility and digital resiliency.
With our collective network intelligence, you can then better understand results together with your trading partners, acting in real-time and even predict opportunities and risks, guiding decisions to adapt and to improve before change even happens.
Now, let’s take a look at an example. With a unified, collaborative and intelligent SAP business network. How a high tech consumer company can effectively introduce a sustainable line of product and power the green line.
So Aiman, Rachel, over to you.
[Aiman and Rachel]
Hi, I’m Aiman…
…and I’m Rachel.
Today we’re going to show you how SAP Business Network can help your business extend collaboration to your network of trading partners to see into your supply chains, all while helping your company accomplish its sustainability initiatives.
Now, imagine I’m a procurement and supply chain manager at a company called New Headphones. On SAP Business Network, I have a full view of all the business metrics that matter to me, like shipment statuses, purchase orders, and supply chain alerts. Now, my company has tasked me with introducing sustainable packaging into our new line of eco-friendly products, as well as ensuring I meet our company’s commitments to carbon-neutral operations.
My first problem is that I don’t have a sustainable packaging trading partner. But with SAP Business Network, we’re bringing companies around the world closer than they’ve ever been, by allowing them to discover each other across industries and geographies. And in my case, that means that I can search for packaging trading partners.
Read more: SAP and the sustainability partnership
When searching for trading partners, companies can choose from commodity types and delivery locations all around the world. And they can select quality certifications they require as well as trading partners that are aligned to the diversity and sustainability initiatives.
I already have certifications and sustainability filters created for my needs. And with these applied, I can see a great match: Sustainable Plastics Inc. I can get more information about this company and connect and collaborate with them seamlessly through the network.
Let’s show you how the network benefits trading partners like Sustainable Plastics Inc.
After connecting with Aiman from New Headphones and SAP Business Network, we’ve been able to collaborate and product specifications and agree on demand plans. And it looks like our first order just came in, I can see the order details, so I’ll go ahead and confirm it and have it shipped immediately. Meanwhile, my account receivable department is wondering when we’ll be getting paid for a previous invoice with another customer. And because of the network, we don’t need to call, we can easily see that our last invoice is approved. So we should be getting paid any day now.
As you’re seeing Rachel and I have been able to seamlessly collaborate thanks to the network. But we’re not just connecting businesses, we’re connecting processes across the supply chain. Now I need to know if the shipment of packaging will arrive on time for our next production run of headphones. And thankfully, our carrier is also connected to the network. And with SAP Business networks integration capabilities, we can access data from visibility providers to see into the movement of our goods. All I need to do is type in the purchase order number on SAP business network. Click tracking detail. And I can see exactly where the order is in real time. And that is on time.
So we can be sure that production won’t be delayed. And remember that I needed to ensure carbon-neutral operations. Well, we can’t do this without knowing what we’ve emitted. But thanks to our visibility provider, I can see the actual logistics carbon emissions to ensure that we’re capturing our carbon footprint across the supply chain.
This has been just one example of how SAP Business Network can help your business. Extend collaboration with your trading partners, allowing you to see into your supply chains, all while helping your company accomplish its sustainability initiatives. Back to you, Paige.
Thank you Aiman and Rachel. Now, we just caught a glimpse of our brand new trading partner portal in the demo, understanding the significant role trading partners play in keeping supply chains moving in this network economy we’re so excited to announce a new offer with our brand new business network launch. If you purchase SAP Business Network Solutions, we will fast track your top 100 suppliers, your top 100 carriers onto SAP Business Network within 90 days of go live.
And now let’s go to Julia to show how our customers are co innovating in the network areas.
Over to you Julia.
We’ve all become much more aware of the clinical trials process due to COVID-19 vaccine development. Working together, we’ve seen that pharmaceutical manufacturers were able to move incredibly quickly through the clinical trials to provide the world a much needed COVID-19 vaccine.
What if every clinical trial could run this quickly and effectively?
I’m thrilled to be joined by David Volk, from the Roche group, the world’s largest biotech company, and Michael Schmidt from Tenth Pin management consulting, focused on life sciences, who have been working closely with SAP over the past year to enable an industry wide clinical trials network to make this possible.
Welcome, David. And, Michael, thank you so much for being here today.
Now, before we jump into the solution, and the work we’re doing, let’s first set the stage for people who aren’t deep in life sciences on what’s the challenge. What makes clinical trials difficult today, David, why don’t we start with you?
Sure, it’d be happy to. And I think we’ve all gotten some new awareness, as you mentioned, over the last couple of years as we’ve followed the progress of vaccine development. But in general, pharmaceutical development, biotech developments, can take up to 10 years or even longer sometimes to bring a product from initial ideation out to market. And that’s 10 years of testing in human studies and clinical trials from phase one to phase three. And then in terms of supply, we’re seeing globalisation, we’re seeing increased complexity around cold-chain materials. And especially as we look at these advanced medical products like biotech, or personalised medicine, it’s become increasingly complex over the years, which has added time and cost and uncertainty throughout the entire supply chain.
Now, Michael, you’ve certainly been invested in this process for a long time. From your perspective, what are the challenges you see today?
We see a lot of challenges in the technology space. So, most of the large pharma companies are using very scattered landscapes, systems that are not really interconnected, that obviously puts significant pressure on those companies in order to enforce external collaboration and improve, also collaboration and networking.
That makes a lot of sense. Now, David, the Roche group, obviously is large and has lots of resources, you could have set out to try and solve this just yourself, but you didn’t. So why is that?
We are large, and we as you mentioned, we have a lot of resources. But we’re only one part of the whole supply network, we have to work with many other companies. And the idea is, how do we connect with those other companies in the supply network seamlessly and efficiently?
Michael, we’ve been working with you for a number of years, maybe you’d like to share your perspective as well on this?
Sure. So as David mentioned, technology has improved, and there is a lot of new opportunity to improve the clinical supply process. So we jointly decided to form this consortium, which is now consisting of 20 plus of the largest pharma companies in the world, who are all engaged, we’re all very excited about what we are doing there. But most and foremost, this is deep industry transformation. This is not just surface level based process reengineering. I love that. And now that we have this consortium in place, and then coupled with the reality that, based on COVID-19, in the general, consumers’ expectations have certainly been raised of how quickly we can move around clinical trials.
What can we expect moving forward in this area?
I think expectations have clearly been raised. There was a great example for us. And Roche during the pandemic, where we had a product that was in clinical trials for COVID-19. And we were trying to get the product to an underserved population in New Orleans at a clinic in New Orleans. And we move the product from Germany, to the US through customs and out onto the trucks to get it to the clinical site in two days. And that’s a process that normally takes two months. So the question is, and the expectation now is, how do we do that on a consistent basis? And how do we avoid all the information flows, the manual human interventions that allow us to seamlessly flow information and data across all of our partners, that’s what our expectation is going forward.
You know, as Christian said, we will all win as a community. And this is just a beautiful example of exactly that. So thank you both for being here and for sharing the story and for being such fantastic partners with us on this journey.
You just saw the power of the network to fundamentally change how innovation happens. Now, imagine what we can achieve when we extend the power beyond just accelerated growth and productivity. Imagine what we can achieve. When we are establishing sustainability as a new dimension for doing business. We can make a positive impact to the whole world.
Sustainability driven organisations not only meet requirements, and exceed commitments.
They also find new efficiencies and create new business models for long term costs.
And who better than SAP to pave the way?
Because we want business processes, hundreds of 1000s of companies worldwide manage their supply chain, their workforce, or their business networks with our software. Now, they can use this data not only to control and optimise sales and operating results, but also to make climate protection, measurable, diversity and inclusion visible, and ethical responsibilities transparent.
First, it starts with a commitment to one sustainably, then it’s supported and enabled by technology.
There is no better company to show what this looks like than Allbirds.
Completely committed to delivering sustainable shoes and clothes, reducing environmental impact has been top priority since day one. I had a chance to talk to the founder of Allbirds earlier. Let’s take a look.
Joey, thank you so much for being with us today. I really appreciate it. Thanks for having me. Now, Joey, the story of you and your co founder coming together is kind of remarkable and unusual story. And I’d love to hear about that.
Yeah, you know, Tim Brown and I have really different backgrounds. Tim was actually a professional athlete. And he was playing soccer all the way up to the World Cup for his for his home country, New Zealand, and was dabbling in design on the side making shoes that he thought were better for consumers, while I was actually combating the petroleum economy, and working at a biotech company to bring algae based oils to replace petrochemicals and petroleum for fuel.
What we found was, when our wives happened to bring us together, (they were best friends from college), that we could actually bring these individual pieces and make something that was much more substantial and meaningful for a company for our customers.
Eventually, once we started making the wool runner and other innovations and other products, and build a company that was really special and stood for something more.
Now, Allbirds has been dubbed the world’s most comfortable shoe. And I can certainly attest to that. And you had remarkable growth selling over 1 million pairs in your first couple years. So tell me about what it’s like to grow at that scale.
Yeah, it obviously growth has some pains, when it’s at pace, and you know, we tried to do it in the right way, which is somewhat the hard way. You know, we set up a real global infrastructure with warehouses around the world, teams on the ground in various countries in Asia and Europe, and as well as our core team in North America. And all that complexity, different channels to sell through and different geographies to contend with is really quite challenging and straining on a small young team.
Now, I know there can be a misperception that SAP systems are only for big companies. But obviously, you chose SAP early in your journey to help support that growth. So how has that worked?
Yeah. So you know, when we made the decision to build a robust ERP system for the company, we were thinking, we were thinking 5 to 10 years down the future. So we didn’t want to run out of steam, because if we thought too small and then we’d run through a big implementation down the road. And so for us, this investment was an investment in our future, and our ability to take our sustainable inventions and give them to people around the world and do so do so deliberately and with minimal waste.
Now, I know that your SAP S/4HANA system: it’s giving you that transparency across your entire supply chain and serving customers. How is that showing up as you’ve gone from online into bricks and mortar as well?
Yes, you know, retail has been changing pretty rapidly and the model of retail where there’s really immersive experience that’s cross channel, serving customers where they want to be served with a great experiential engagement with our associates or with our digital products. We can only do that if we have incredible accuracy and visibility into our inventory, and can personalise that experience for our customers, we wouldn’t be able to do that if we didn’t have a system that was robust and real time. And S/4HANA has been fantastic, and fuelling our ability to deliver that kind of immersive and great experience to our customers.
That’s awesome. And it’s also providing transparency as it comes to your sustainability promises as well, and what you’re delivering with your product. So how is it helping in that area?
Yeah, so for us, sustainability is is not only something that’s important morally to do, but it’s why our company is great. It’s why our products are great. And that’s why our customers love us. So we have gone so far as to label every single product that we make with the carbon footprint of that product. And and what we do is that transparency to the customer, make sure that accountability is shown right back onto us.
Now, Jay, what advice do you have for other companies who are looking to reduce their carbon footprint, improve their sustainability? And then of what you know, what ideas have you had in your journey here?
I’d say a lot of the things that I’m most proud of is when we didn’t take shortcuts. And I have found that our consumers, our customers reward us for doing things that are that are consistent with our values. And when we’ve said that we are going to do something that’s better for the world and also better for our customers. When we take shortcuts, it never works.
I love that. And I just love the idea that you’re showcasing for everyone what’s good for business, is also good for the planet. It’s not about making those trade offs. So thank you for being a role model, and an example for that in the industry. Thank you.
All birds is one of many customers working with SAP to run a sustainable business. And today, I am very excited to announce innovations around our sustainability portfolio that will help all of our customers run their businesses more sustainably. And in the upcoming months we’ll release several solutions that embed sustainability insights into business processes tightly integrated with the S/4HANA.
SAP product footprint management empowers you to measure carbon emissions, not just within your company, but across your entire business network. With SAP Responsible Design and Production, we enable you to take sustainability into consideration from the beginning of product design.
Our integrated solution for sustainability reporting and performance management, maps operational data, environmental, financial and social metrics. Let’s take a look at some of this technology in action with our Green Token solution.
[SAP Sustainability Team Member]
Our customisable sustainability management dashboard helps us gain transparency and improve on financial and non-financial metrics across our business network. This dashboards provides us with the right insights including: Scope One, our direct emissions, Scope Two our indirect emissions from purchase energy, and Scope Three, our indirect emissions related to up and downstream operations.
Here we see that from April to May, our emissions related to packaging decreased, and our recycled materials like plastics increased. But how do we prove that we are sourcing sustainably with a low carbon footprint?
Therefore, we want to be able to map the chain of custody of our material flows in an audit-able manner. In the past, it was incredibly cumbersome to show this relationship. But now with Green Token by SAP, enabling visibility got much easier and faster.
Green Token is a multi-commodity supply chain transparency platform for tracing the most complex of material flows that have commingled raw materials. For new packaging, we’ve increased the use of recycled plastics coming from numerous picker locations and recycling facilities. This recycled plastic feeds so gets commingled with non-sustainable feedstock and goes through a series of complex processes leading to the production of our new circular packaging materials.
With Green Token, we can provide visibility into the detailed information about any one of these commodities in our commingled raw material supply chain from its origin all the way to the end customer.
Green token enables this by leveraging three innovative concepts:
A digital twin of our supply chain using tokens to represent raw materials, must balance to account for all these sustainable raw material flows in our supply chain, and chain of custody.
Using blockchain for data security and strengthening trust across supply chains. On average, 80% of a company’s emissions are indirect and reside in Scope Three.
Since most Scope Three emissions occur at our supply chain partners. The only way to accurately report this data is by creating transparency across the supply chain.
With green token this can security be achieved by providing us with the full visibility on origin and co2 data coming from our upstream supply chain partners. At our plant we add our own actual Scope One and Two co2 data related to the new packaging material: meaning that we can accurately report on the carbon footprint of our new packaging as well as the portion of circular materials used.
All data is maintained on an immutable blockchain, even as our materials are transformed from raw feedstock to finished packaging. Green Token allows us to more accurately report on the end-to-end sustainability data of our new packaging and manage our raw materials.
Back to you Christian.
We will try multi-year innovation roadmaps to ultimately provide you with end-to-end visibility around sustainability, integrated with your core business processes to get to our vision of chasing zero emissions, civil waste, civil inequality.
[there follows a brief audio visual piece on chasing zero carbon emissions]
Thank you very much for joining us today. And thanks for your trust in SAP.
I feel truly honoured when I look at all these fantastic customer and partner stories. It’s so special to serve this amazing SAP community. And I can promise you that all of our 100,000 employees across the globe are committed to the success of you, our customers.
We wish you exciting Sapphire sessions in the days and weeks to come. We are looking forward to your feedback and to helping the world run better together with you.
Stay safe, stay healthy.
Over to you Julia
Now let’s go to someone everyone enjoys hearing from: Hasso Plattner.
I had a chance to catch up with Hasso recently. Today, I’m thrilled to have a conversation with Hasso Plattner: the founder and chairman of SAP. And today our conversation will centre on the technology advances bringing together people, processes, systems and data, to create transformational outcomes.
So Hasso, business process intelligence: now what’s your take on this area?
Well, this is around for many years. When we became successful in the 90s, and built R3, we were asked to have a documentation for the system, and we had different modelling approaches. We did one for the technology part of the system with the modelling system by Professor Vindt. He was a professor in Kaiserslautern nearby, our headquarters and I studied at his chair.… So his modelling tool, FMC was very successful for modelling the functions of our basis system are so successful that with the description of the models and some text. IBM was able to transfer our system which was built on Unix to the AS400.
Within six months with one SAP engineer, one of the best engineering projects I have ever seen, didn’t work for business processes. So, for business processes, we did something else with Professor Shere from the University of … that was called Event Driven Process Chains. We got into this, and when we built the product by design new product from scratch, we completely modelled it with this modelling technique: [it was] helpful to look at it, helpful in decision making, but not helpful when the system was running, because it was just presentation documentation. We never made it to make these documents active.
So that is the long story till basically not today. But the recent two years, we still have the models in in S/4HANA. We acquired and then spun off again but worked with a company Qualtrics to get back the feeling and the impressions and recommendations, and probably the negative comments from our users, and digest them.
So we [now] have an active input component. And recently we acquired process management company Signavio.
We will talk about this later, that we can [now] have active models.
We develop the models out of the data streams itself. And therefore they are the real models of what is happening in the system. And with the static models, what the system could do, should do, and what’s really happening, and the feedback from the users, we believe that we have a different world for the many thousands of companies, which will move now, from the on-premise systems, or the R3-type systems that called ECC 602, the S/4HANA Cloud basis. And there is a huge process transformation possible.
We should not carry forward the processes we developed together with the customers in 2010, or five years ago, without looking at them and analysing them.
I think the best thing is, if we look at the demo SAP prepared and how this could work. This is probably faster than me explaining what the software does. And then we can have a discussion about what we have seen and how we go forward from there.
Let’s do it. Alright, well, let’s take a look at what’s possible, as you said, with business process intelligence now, and the demo I’m about to show you is a solar panel company, but the situation they face is a common one across the industry, introducing new business models, new offerings to provide more customer value. So why don’t you take it away Amy?
[Amy from SAP]
Thank you Julia. For the purpose of this demo, I’ll be the customer strategy lead of solar power solutions.
We sell solar panels and related services. Like many companies, they need to manage a transformation of our business model from a product company into an energy management as a service provider.
Though we have this ambition currently struggled with operational issues. I’ll show you how I analyse the declining revenue and customer satisfaction. Later, we will see how to improve the situation and continuously monitor our transformation.
Let’s start the analysis. I opened the… cash dashboard in SAP process insights. You can access both operational and experienced data. On the top I see a decreasing trend of our sales volume. We use Qualtrics for measuring customer employee satisfaction.
Unfortunately, I read negative comments from customers complaining about panel delivered installation being misaligned. But also from our employees, I see comments about internal misalignments What is happening?
To find out more I opened the process flow fully to cash. This gives me a quick overview of the overall process from sales to delivery and to invoice. In addition, I see blockers and context information. All of this just out of the box.
For sales order I see a high order cancellation rate. Hmm, let’s compare this cancellation rate against industry benchmarks. Unfortunately, we are clearly worse than the average. Before the cancellations I see that changes are made to the sales documents. Why are there so many changes?
Let’s use process mining to dig deeper, I loaded the data into Signavio. On the left side, I see those orders containing only solar panels, my order handling seems to be straightforward. On the right-hand side, I see orders for solar panels and services combined. These are the orders for which Megabit cancellation rate goes up.
Looking closer, the automatically discovered process map shows me a back and forth and loops within these orders. So clearly the struggle is when customers needed sales and service orders to be managed together.
We found the root cause and we need a better way to handle these combined orders. To document our campaign of working I simply convert the via process variance discovered from the data into a visual process model. I can later use this as his model to simulate improvements.
I now know what my current process looks like and how it performs. What can I do to improve it? In SAP process insights, I cannot only analyse my business process but also get tailored recommendations based on my system data. These recommendations go beyond the technical root cause and they include solution capabilities and pre-configured improvements as we are struggling with different order types, products, and services. But the top recommendation for us is solution order management in SAP S/4 HANA Cloud. Let’s look at it.
The new capability offers a single order that manages combinations of sales and services: so solar panels and services in one combined order. This could solve our current problem. I could even add subscriptions into the mix for selling as a service. This prepares us for our future direction to what is subscription based business model.
Now, do you remember the complex as-is process model I created earlier from our data? I compare it with the streamlined SAP S/4HANA Cloud process to find out how much simpler we could operate. For that I use the simulation capability in Signavio and the simulation also provides me with all I need for a compelling business case.
I show this to our management, and it convinces them to move forward with SAP S/4HANA Cloud.
This will solve the problem we currently face and prepare us for really becoming an energy management -as-a-service provider in the long term. However, it cannot wait and I urgently need to tackle some of the issues already today. So how do we find the quick fix?
I return to Nick from the order processing team, as he has an idea on how to automate the process. As a citizen developer, he proposes a combination of SAP intelligent robotic process automation, and sap workflow management. Nick built a bot that synchronises the sales and service orders, and he adds a back flow that notifies his team immediately whenever one of the delivery date changes.
This sorts the alignment issue, the team then adjusts the related order and ensures the on-time delivery of solar panels and services.
After a few months, the new submission audit capability has finally been rolled out. My priority is now to enable the workforce and make sure they execute the solution orders following the best practices, so I published the process model and all work instructions on the SAP Process Collaboration Hub by Signavio. Here the colleagues can find information on the process, and they can exchange on how to handle complex situations. Now, they have put in place our improvements.
Let’s go back to where we started and monitor the impact of these changes. So we are back at our … cash dashboard. Indeed, the sales volume as well as our customer and employee satisfaction has increased. Great!
We could end the demo here on a dashboard with improved numbers. But as we’re talking process, I would like to take you one step further and show you the next level of Process Management.
By enriching the static process model with the real execution data marked in blue, we enable our business to really have the finger at the pulse of our operations, a major step forward.
We can now continuously monitor and react to process changes instantly. This means process transformation is no longer a one-off project, but a continuous discipline.
So now let me close this out for you. By combining experience and operational data, we were able to deeply understand our business processes and identify the root cause of our problem. Based on intelligent recommendations, we improved the auto-handling process by moving to S/4HANA. At the same time, this put us on the path towards becoming an energy management-as-a-service company. So we really evolved towards an intelligent enterprise.
Thank you. And back to you, Julia.
Yeah, so I think to your words, living business process that we saw there, it can kind of feel like magic. I’d love to understand you know how you think about it and how you see it working?
There’s still a few questions which have to be worked on. Where do we start? Do we analyse the existing customer system first? Or do we transfer the data into an S/4 system and let it run simulation there and analyse that I’m in favour of the latter one. But that implies that we can very easily take the data over into S/4HANA, not only the configuration data, the master data, but also the transactional data, and then run the analysis.
I think this is the way to go. But the consulting teams and SAP and the Rise teams, transfer the existing on-prem customers to the cloud, they have to make this decision. So I I’m only a bystander. But what we saw is for the first time, we can build models automatically by the system and models as they’re used, and not our ideal set of business processes we sell to the customer. And then the consulting teams are working hard to achieve that.
And the second was that we can monitor them. Now we can. Once we have the models when we see how the data flows in reality and where the interaction points are with the users. We have a quantified version of the analysis of business processes. That’s how we think it is… and when I remember when I did consulting in the 70s and 80s, then with the start of the 3 development, they did not go to customers anymore.
I always went to the office spaces and ask users whether I could stand behind them for a while and look how they work, to get an impression. And exactly for both: How does the flow work and how is their emotional reaction when somebody slams to him, or expresses it shrieking, or whatever happens. Things we never thought are this impactful in development.
When we went for, I think 20 languages simultaneously (is many more today), when we were not complete in the translations, and we thought that the English text is not there, then we [substituted the text] with a German text people even in Canada flipped out: they could not understand what we are doing. A much better solution would have been to take the French text because they all speak French. But we didn’t think about this enough.
So we get now this feedback: but not by monitoring the people because this is very difficult to do.
Customers are all over the world, but we can do this now with programmes automatically. So both
the Experience component with the help of Qualtrics, and the process component with the help of the SAP Business Process Intelligence and the newly acquired Signavio software: So we have now a whole concert of functions with which we can analyse a a running system, and then start the consulting. Got it?
But you have the data at scale, right where you go and watch as many customers as you could. But now you’re being able to get that insight in a quantitative way.
And we can compare it with other customers, and we can see whether some installation is a complete outlier, or partial outlier. And then we can ask “is this necessary? Or is that just the history?”
What happens when companies move from one system to the other system, is that they fight hard to carry forward with their experience of the past. This is just our nature and suffering, is a service.
So the software should do what they want. So many companies at the beginning of a project, the entrance of a project, they asked the system to do exactly what they did in the past, it is hard to learn “Oh this is better and we [should] get rid of this!”
Therefore, I recommend that we do this phase of exploration of functionality, new functionality already in the new system. Not on flip charts, not on documentation, but in reality: and monitor that.
All these existing editions… the existing habits carried forward: they create the cost of standard software implementation. Because if we have to develop something which was not, or is not there,
especially if it doesn’t really fit, because it’s a retro fit there’s a cost and adds cost continuously over the next 10 to 15 years, with every single major maintenance.
Maintenance is now ongoing in in the cloud system. It’s a permanent cost, the more we can drop of these habits, the better. Management always wanted that. Companies as they are. So we want to be as close to standard as possible, right?
The operational departments, they’re a little bit different. And they people they want to carry on what they’re used to. It’s just this just natural, I hope with these new ways to visualise business processes, to get the feedback to play with them, to change them. But we have a better chance to move forward faster. And SAP is not a passive bystander. SAP can the development can also monitor and see what is missing and make the changes in the software.
And now comes probably the next biggest topic here: this is SaaS. We can make the changes basically on the fly. So the feedback loop is much faster.
Well, I think that’s why the humans would resist the change so much because it used to be where once you picked it, you’re stuck with it. And so there was so much, you know, it was so important to get it exactly how they want it. But now, you say it’s learning, it’s agile. We can actually adapt it and it doesn’t have to be the same structure for years and years.
The important point is the fear. If we don’t get it done, we will never get it done right. “If only now we have a handle on the supplier, on the manufacturer of the software in the installation. If we don’t poke SAP now, we will never get it and we’ll be stuck with this forever. Right?”
I hope the whole interaction between the customer between our service organisation partners, (and it’s very important for me) our own Development Organisation that development can see in a quantitative way.
Where we have a bottleneck, where we have a manual interaction which probably is not necessary, we could have a bot there answering 95% of the questions or moving the process forward, not just as an emotional discussion with a winner and a loser. Right? But based on data, and then the feedback from the users, because they see utterly differently.
There’s one thing in the system in the software system. And there’s another thing how the user sees, and there might be that it comes in with the whole UI story into play. “Is that good enough? Is that convenient enough?” Or is that, like it sometimes is a “hassle?”
We are responsible as the manufacturer. SAP is responsible for the most effective implementation of the system with regards to the functionality we bring to the table, and how we implement it.
Yep, Agreed. And I like that you can in the capabilities now you can you learn what it’s actually doing. And then you create this, this digital twin, where you can actually run the analysis on it and get it smarter and smarter. And then with the cloud delivery, of course, you can actually do you know, take and actually adjust that real time. So it again, back to that living idea of you don’t be so fearful when you know, you can learn and adapt from it as well.
In the days when I did installations, we were very fast, we had only a few days, probably 20 days or 30 days of consulting and the customer when productive with a larger system, the systems are so much bigger today. It takes so much more time all the external systems which have to feed in and other systems which have to be fed by the SAP system. So it takes much more time.
And from start of the project ,to it’s running productively an on-prem installation could easily reach one and a half years. And now you can understand the users how eager they are to get their stuff in read least committed by the SAP, and then it goes on and they have amendments and they have additional ideas.
With the rapid implementation in the cloud, even in the test system, we have a different situation.
First of all, the customer sits on the latest software. Okay, when we do a new installation on prime minutes, it’s the same that sits on the latest software. But 14 days later it starts ready to be updated. Right? So this permanent update helps when we say yeah, this is in the next release, probably in three months, you will see this. And once they develop the trust, and now this whole circle starts, right they can give input we measure, we do a prototype, we confirm. And three months later is in the system already. So the discussion, “this has to be in the standard. We don’t want to pay for maintenance forever!”, can be erased and become an engineering project and not a sales and marketing fight
And then the updates too because in the cloud, there are smaller updates. They’re not big monolithic. And that’s the other thing of people who’ve grown fearful of that, but it’s so big and so disruptive. Like when the cloud it just comes in small increments, it doesn’t have the same disruptive nature to it.
Yeah, and we have a different… it’s not that we do nothing on-prem, but we have a different deployment strategy. We do it for a small number of customers and see is there any… like a little bit like the pharma companies, they do clinical trials. And then we do 100 and then probably 1000 then and the rest but we do this all with a rapid frequency.
You see, the whole notion of the cloud systems is such a gigantic improvement if we do it right and that is the success you see it the customers and the companies who embarked on this road and I’m proud that SAP, despite we were an early bird but we failed we had a project together with Intel
which is forgotten now, we had I think 15 companies already up in the cloud, mainly smaller companies in the Bay Area and it was too expensive. So our partner Intel said no, we cannot make money.
We’d brought the service back then we developed by design, and now we have basically rewritten the whole major SAP system, rewritten for the cloud. And it is now finally I see the hockey stick, and new customers. It took us some while. The rewrite was much longer than I thought. But now we can harvest what we see in in the last five years.
We have some great reports about companies now deploying the new functionality… refurbished business processes. We still do the same thing! I mean, sometimes I asked myself, do we still do the same what we did in the 70s? In principle, yes, in detail, it’s completely different.
And the speed with which we improve in the cloud is now really.. this is impressive, since we are so …for 90% we are done with the rewriting and transformation. We have some industry issues still to solve, but in general, we can consider it done. And now we see how we improve.
And therefore, it’s so important that we get as quickly as possible the information back to the development. And I’m very optimistic that this additional acquisition of Signavio together with the stuff we already had, the use of Qualtrics and the BPI functions, we will we have built with our analytics.
To mention one reason why it is now so much easier than before is with our database, the HANA database is extremely fast. So these additional search and mining functions do not really hurt us, and we can do them again and again. And that’s a great contribution of HANA to the further development of the systems,
It’s a nuance, but it’s such an important one because of the capability of Hana you are mining all of this data right not just from SAP systems from other systems to feed into your business process and then getting a repeat that and iterate on it.
As large as SAP is, we always focus on SAP and these business process analysis component, they have to work outside SAP. Qualtrics has to work outside SAP and inside SAP. This is hard for SAP to do. This is easier to do for outside company. And we have to keep them as independent as possible, because they have to run on, probably, systems built by our competitors. Sure. But it’s important that the whole business process not just the part SAP does is under mechanical observation, digital observation.
Well, I think that’s where the fantastic insight comes because it really then is a holistic business process, not just pieces of it. And that’s what I see in both the BPI and the Experience Management part. You’re trying finally really getting that holistic enterprise wide process understanding.
We will see whether this is a real winner when we look at some of our bigger customers, I have one in mind when I look at you, because there is a company that is very sceptical, like I was always sceptical about this. And, and they to look at themselves and see our super business processes are they really super SAP run for I don’t know, 20 plus years, the best run businesses run SAP.
Assuming that we have the best business processes might have been true at some point in time. But you have to prove this again and again. This is not something which happens and then you carry it forward. So you have to do every, every year, every quarter. You have to reevaluate, evaluate yourself.
Things are changing, massive changes now with COVID in business processes, massive changes. And we have to adapt, actually, I’m asking and I got feedback that some of the pharma companies involved in the in the COVID anti-COVID campaign that they were very successful with S/4HANA, because they could change quickly could adapt different volumes. And this is all pretty encouraging.
Where do you think we go from here?
We have the the on-boarding from on-prem customers to the cloud with Rise. I hope we can use all this in the area. And we have a project now for… I forgot the name, where a pilot customers can come and we work with them in the business process innovation. With these tools, we always work in this area but with these tools and try to demo that we can improve this significantly and make this a mainstream component in our services.
Yeah, it’s been great to see the Rise with SAP customers. The excitement around this the BPI technology specifically to get that learn and get that insight as they’re moving too
This is helpful for the project managers on our customer side that they have something with which they can go to their internal customers and say, Look, we have something it is not just SAP, blah, blah, blah, what we heard or PowerPoints, it is in the system, and we can monitor and we can see ourselves in an intelligent mirror.
Right! That reflects the real business process. Not that theoretical one.
Well, Hasso thank you. Thank you for your insights and your perspective today. I found it fascinating.
I hope you enjoyed that conversation with Hasso as much as I did.
Thank you again for joining us today. I invite you to take advantage of everything SAPPHIRE NOW has to offer over the days and weeks to come. We look forward to continuing our journey with you becoming an intelligent enterprise connecting into a community of networks and running every business sustainably. I wish you incredible success moving forward!