The Future of Wholesale Distribution

- 1 - SAP Digital Economy in the Wholesale Distribution Industry Whitepaper (01/16) © 2016 SAP SE. All rights reserved Embracing the Digital Economy in the Wholesale Distribution Industry Survive and Thrive Secure Your Leadership Position in the Value Chain - 2 - SAP Digital Economy in the Wholesale Distribution Industry Whitepaper (01/16) © 2016 SAP SE. All rights reserved Dear Customers, Innovator or follower? Disruptor or disrupted? Growing or stagnant? Digital predator or digital prey? The choice is yours. Today’s competitive markets demand that wholesale distributors evolve faster, become more efficient, and provide memorable customer experiences. For decades, distributors have thrived primarily on great, existing customer relationships. In the new millennium, simply breaking bulk and having great relationships are not enough. Today, leading distributors are using digital technology to create, deliver, and sustain new and meaningful customer experiences. If you’re not thinking about how to incorporate technologies like drones, 3D printing, smart vending machines, customer-facing apps, and more into your strategy, you will be left behind. To survive, companies must rethink business processes and models and use of their vast wealth of data to remain relevant and leapfrog their competitors. Disruptors are making headway in markets traditionally served by distributors, and customer and employee expectations are changing rapidly. Big change always comes with risk, but also offers untold opportunity for innovators. Leading distributors are: • Reimagining business models to find new revenue and profit sources. Can you become a distributor primarily focused on value-added services, or a real-time distributor, or perhaps an infinite inventory distributor? • Reimagining business processes by using digital technology to optimize business outcomes by implementing bold initiatives to completely automate core, highly administrative processes. Are large, highly manual departments like accounts payable destined to become extinct? Can business networks be utilized to automate the processes to become completely touch-less? • Reimagining the role and structure of their workforce to support their current and future business. This can, and may, include the elimination of certain departments and up-skilling those employees to be customer-focused and revenue-generating. Can current accounts receivable departments be transformed into organizations that are highly customer-centric with personal-banking-like services? Reimagining business requires guts, determination, and a digital framework that underlies both internal business processes and models as well as external customer interactions. All stakeholders – customers, suppliers, and employees – will use digital innovation. This paper will show you how you can begin to execute on this vision by providing examples of how you can survive in the present and thrive in the future. This will require a focus on customer engagement opportunities, new services, integrated cloud-based business networks, tapping into an extended workforce, and building the bridge to advanced solution landscapes using new technologies. This document offers our perspective on where the industry will go and how SAP can help in the evolution of the digital economy. We thank you for your interest and look forward to your feedback. Karen S. Lynch We envision the digital framework for wholesale distribution as one that will enable you to win through innovative new business models, that will simplify and improve the way you work with your customers and suppliers, and enable your employees to grow their businesses. Karen S. Lynch Vice President, Global Head, Wholesale Distribution Industry Business Unit SAP KAREN’S POINT OF VIEW - 3 - SAP Digital Economy in the Wholesale Distribution Industry Whitepaper (01/16) © 2016 SAP SE. All rights reserved Executive Summary The Digital Economy Complexity is an Obstacle Digitizing Your Business 4 4 5 6 Top 5 Technology Trends 7 Reimagining Digital Innovation is Real Reimagine Business Models Reimagine Business Processes Reimagine Work SAP HANA: The Great Simplifier 8 9 10 11 12 13 Digital Business Framework Digitization Across Key Pillars The Digital Core Customer Experience Workforce Engagement Business Networks and Supplier Collaboration Assets and the Internet of Things SAP HANA Platform, a New Computing Paradigm How Does It All Come Together? 14 15 16 17 18 19 20 21 22 Why SAP? SAP is Committed to Innovation End-to-End Digital Business Solution SAP Services and Support SAP Ecosystem 23 24 25 26 27 Additional Resources 28 TABLE OF CONTENTS - 4 - SAP Digital Economy in the Wholesale Distribution Industry Whitepaper (01/16) © 2016 SAP SE. All rights reserved EXECUTIVE SUMMARY Big picture: The digital economy is real and will continue to transform wholesale distribution business The Digital Economy Five technology trends are shaping the digital economy – hyperconnectivity with customers and suppliers, super computing, cloud computing, cyber-security, and a smarter world focused on outcomes. The pace of change is staggering. In the next 10 years, 40% of the S&P 500 will no longer exist if they do not keep up with these technology trends.1 Leading wholesale distributors are preparing to use digital tools to find new answers to questions such as: • What are the profitable new business models and trends like marketplaces, 3D printers, drones, smart vending, and data science? • How do we capitalize on the demand for more and new services in a hyperconnected world? • Which trends and technologies from adjacent industries are influencing distributors (retail, consumer products, and life science manufacturers)? And, does it matter, or are the new market disruptors the real threat? Disruptors are emerging quickly, and from unexpected places The wholesale distribution industry boundaries are already blurred. Large players like Amazon, Alibaba, and others provide personalized, B2C-like services that customers have come to expect. Key questions include: • How do we ensure that our customers are at the center of everything we do? And how do we sustain and grow customer relationships with new digital services? • Which market spaces are most attractive for new disruptive competitors, and how do we defend our position and win or keep the business? • Who are the right partners on our journey? Aware but unsure Executives know the world has changed. Research shows, 90% of CEOs believe the digital economy will have a major impact on their industry, but only 25% have a plan in place, and less than 15% are funding and executing on the plan.2 Early adopters are winning Research shows, companies that embrace the digital world and execute on a digital strategy grow shareholder and stakeholder value faster than their peers.3 The nature of the digital framework forces participants to synchronize and collaborate to deliver quality products at a fair price, at the exact moment the customer needs them, with the value-add services they expect. • What business segments allow market leadership and differentiation? • Which tasks are better allocated to a partner in the network? • How do we continuously adapt to changing market conditions? Digital business models are disruptive. The rules have changed. • W.W. Grainger, Inc. is a Fortune 500 industrial supply company that heavily emphasizes online distribution. The online sales channel has grown at double the company’s overall growth rate and now represents nearly 40% of total sales.4 • Fastenal boosted its FAST Solutions vending total 15.7% to 50,620 smart vending machines for the quarter compared to the same quarter a year ago. “The vending machine is a sign of engagement with your customer. If you are truly engaged with your customer, you should be able to put vending machines out there, and it makes the business stickier.”5 • National DCP is an exclusive cooperative for more than 8,000 Dunkin’ Donuts establishments that recently implemented a number of SAP solutions. “This was an unprecedented amount of change at one time, touching every system, every process, and the underlying platform. At the same time, it was the fastest way to accelerate our business progress with the least amount of risk from a technology perspective.”6 WHAT DOES THIS TELL US? The road map to relevance is to reimagine business models and proactively evolve before new digital competitors emerge. Leading distributors are: • Reinventing and digitizing the business • Cooperating with partners to achieve economies of scale • Digitizing the engagement with customers Today, every business is a technology business. - 5 - SAP Digital Economy in the Wholesale Distribution Industry Whitepaper (01/16) © 2016 SAP SE. All rights reserved EXECUTIVE SUMMARY Complexity alert Complexity is the most intractable issue of our time, an epidemic of wide-ranging proportions, affecting our lives in many different ways. It often prevents us from focusing on the real tasks and priorities. Complexity exerts negative pressure on the collective bottom line. The 200 biggest companies in the world lose over 10% of their annual profit because of complexity – over $237 billion.7 Productivity growth in almost every advanced economy is slowing or declining.8 For years, wholesale distributors have been striving for operational efficiency, especially in supply chain management processes. It continues to be vital, but in today’s climate, efficiency needs to be extended to all business operations. Distributors should closely examine optimization and simplicity as they relate to delivering premium, consistent customer service. But still, complexity exists with the proliferation of products, business networks, customer demand, regulations, etc. How do we pull ourselves out of this quagmire of complexity? $50 billion Incremental revenue available through simplification in United States, United Kingdom, and Germany combined9 81% believe simplification is important for their organization and 88% admit IT investment is important to achieve simplification10 36 enterprise apps per billion dollars in revenue for the average company. This is driving most of the technical complexity10 The answer is simple To get the most out of this new world of digital business, you need to run simply. Finding ways to run simply matters more than ever in order to drive business innovation. Running simply is when you reimagine business models based on real insights, not trends. It’s when you can serve customers, not your process. It’s when technology works for you, instead of the other way around. This needs to be added to the business agenda. When you use SAP’s Run Simple operating principle, you can unify the customer experience across channels, weave together a seamless partner and supplier network, empower and engage your workforce, and make business processes work together. Running simply is contagious. When you run simply, customers are enabled to run simply too. At SAP, we don’t “do” simple – we create simple. We delivers simple, and we engineer simple. Run Simple integrates digital systems and orientates you toward reimagining so innovation isn’t restricted. SAP HANA is the great simplifier. At the foundation of digital business is a flexible, secure, real-time innovation platform that makes all this possible – SAP HANA. Burning platform: Complexity is an obstacle to digitization FROM: STANDARDIZATION TO: SIMPLIFICATION AND INNOVATION - 6 - SAP Digital Economy in the Wholesale Distribution Industry Whitepaper (01/16) © 2016 SAP SE. All rights reserved REIMAGINING Do you have the right strategy? Start by reimagining your business with business outcomes and customers at the center. EXECUTIVE SUMMARY REIMAGINE BUSINESS PROCESSES Change or eliminate fundamental business processes to dramatically change the way you can do business. Move from being reactive and slow, to agile, proactive, and insight-driven by becoming easier to do business with and using predictive analytics, for example. REIMAGINE WORK Step-change in improvements to existing processes based on real-time information given to make the right decisions and drive immediate impact. Digital solutions can improve productivity and enable you to enhance your workforce by selectively using contingent labor where and when needed. REIMAGINE BUSINESS MODELS Drive competitive advantage by expanding beyond traditional industry boundaries. Take steps to transform from a warehouse of products for serving demand to an information-centric company that finds advantage in leveraging product, customer, and supplier data for competitive advantage. Explore how to become a value-added services, real-time, or infinite inventory distributor. PLATFORM In order to reimagine your business, you need to have the right platform in place. Leaders are investing in digital capabilities that are congruent with their strategy. The right technologies ensure agility and a rich environment for innovation. In addition, the platform should align to desired outcomes. SAP’s digital business framework is based on the five key pillars of a digital plan and architecture: 1. A consistent customer experience across all channels, whether in a branch location, with a service agent on the phone, or on your Web site 2. Supplier collaboration across all spend categories (products, services, and T&E) to ensure the lowest prices to your customers and the greatest impact to your bottom line 3. Core business processes (finance, supply chain, analytics, …) become automated and enable business users to be proactive and customer-focused, versus reactive and internally focused 4. Workforce engagement, including employee and contingent workers to provide the ultimate service to your customers 5. Assets and the Internet of Things to drive real-time insights and new business models by creating new customer experiences that will differentiate you from the competition ROI drives this significant phase of the transition to digital. It’s not about any one of the five pillars, but rather how they all interconnect to achieve business outcomes. Roadmap to Run Simple: Steps to digitize your business We leverage Design Thinking as a our key approach to the reimagining phase. - 7 - SAP Digital Economy in the Wholesale Distribution Industry Whitepaper (01/16) © 2016 SAP SE. All rights reserved EXECUTIVE SUMMARY We are witnessing an unmatched era of market change and true business innovation. Industry lines are becoming blurred, thus offering new opportunities – but also creating new competition. Companies need to innovate and adapt, or they will lose market share. Breakthrough technologies have been driving and enabling some of these trends. Now they have matured and hit scale together, enabling five defining trends: Perfect storm: Five technology trends changing everything In a digital economy, we are witnessing an explosion in connections at the business, individual, and machine level, and the numbers continue to grow at an impressive speed. This enables new insights and new, agile business processes across the complete value chain (e.g., more accurate forecasts, predictive maintenance, tailored customer offers, or proactive service). HYPERCONNECTIVITY The limits of 20th century computing power are gone. In-memory computing enables true real-time business and eliminates the separation of transactional and analytical applications. Contextual information is available to help make informed decisions, identify challenges and solve them before they become a problem, as well as optimize business operations, and provide supreme customer service. SUPER COMPUTING In a highly competitive market, wholesale companies need to be able to adopt new technology and drive business innovation at lightning speed. Cloud computing and hybrid deployment models will accelerate time to value, drive higher adoption of new technologies, and connect value chains in real time. For wholesalers, this enables, for example, business collaboration with SAP Ariba, rollout of agile business processes in the cloud, or innovation via the SAP HANA Cloud Platform. CLOUD COMPUTING Smarter robots, smarter printing, artificial intelligence, and smarter products will completely reshape value chains, enable new business models, and ultimately the entire world. For example, smart vending machines at a customer site not only open a new channel, but also increase customer loyalty. Drones enable not only a different delivery method, but also completely new service and maintenance models. SMARTER WORLD Several recent high-profile and massive data breaches have made securing customer and financial data a top priority for CIOs. Contrary to popular perception, hackers are not the primary culprits in the majority of security incidents. Often the threat comes from within the company. Technology and proper governance are required for all data, interactions, identities, and business partners – any vulnerability could lead to catastrophe. CYBER SECURITY 1 2 3 4 5 1.9 million companies connected to the SAP Ariba Network11 7x faster throughput and 10x smaller data footprint with super computing. 1,800x faster analytics and reporting 65% reduction in resource consumption12 Global SaaS software revenues are forecasted to reach $106 billion in 2016, increasing 21% over projected 2015 spending levels 13 The economic implications of 3D printing are significant, with up to $550 billion a year by 202514 Five out of six large companies were targeted by cybercriminals, a 40% rise over the previous year15 - 8 - SAP Digital Economy in the Wholesale Distribution Industry Whitepaper (01/16) © 2016 SAP SE. All rights reserved REIMAGINING THE DIGITAL ECONOMY OFFERS INFINITE OPPORTUNITIES In a connected world where every company is becoming a technology company, smarter products and services will refocus commerce on business outcome and blur industry lines. 5 - 9 - SAP Digital Economy in the Wholesale Distribution Industry Whitepaper (01/16) © 2016 SAP SE. All rights reserved DIGITAL INNOVATION IS REAL REIMAGINE EVERYTHING Any process can and will be modernized and digitized. The time to plan and execute is now. • Become easier to do business with by providing multiple channels, from call centers, Web sites, text messages, and in-person interaction. The customer experience constitutes a lifecycle, not a collection of isolated interactions • Establish detail-driven customer engagement and segmentation to transform marketing, personalization, and customer loyalty • Enable predictive analytics to react to trends in real time based on up-to- the-minute insight • Proactively address operational efficiency and bottom-line results by negotiating the best deals with suppliers while optimizing charge backs, pricing, and inventory levels • Use business networks to automatically order and pay for goods and services – both direct and indirect – by predefining suppliers, pricing, and safety stock or reorder points to enable touch-less and automated processing REIMAGINE BUSINESS PROCESSES REIMAGINE WORK Distributors must reinvent themselves from a warehouse of products for serving demand to information-centric companies that utilize new business models to gain competitive advantage. • Value-added services create new revenue sources – everything from light manufacturing and kitting, to ad hoc virtual training, to automated tracking of sensors for maintenance, to predicting future demand patterns based on long-term weather forecasts • Become a real-time distributor by using drones or Uber drivers to deliver within hours. Use predictive analytics to track demand patterns and recommend order items/ quantity. Incorporate social media feeds into your customers’ apps for immediate feedback • Provide infinite inventory by using 3D printing in-house or at a customer’s location. Master the art of spot buying to provide an infinite catalog of products. Make full use of the business network to become a “master” distributor Employer of choice status goes beyond recruitment and retention to fundamentally revolutionizing the way people engage. • Eliminate work by digitizing manual process steps so employees can be re-assigned to activities that are more customer-facing and provide more value. • Improve productivity and profitability by enabling users to access the right information at the right time on any device • Employ a flexible, lower-cost workforce to address customer demands in real time by onboarding part-time, temporary workers to fill gaps or spikes in business demands • Use predictive and self-learning software to improve collaboration, productivity, and engagement to optimize business decisions • Use interactive technology to improve user experiences, including voice recognition, visualization, and gaming Wholesale distributors understand that hyperconnectivity and Big Data are the keys to value creation. Based on our collaboration with thousands of businesses worldwide, we have seen that winning companies are moving quickly in three strategic areas by reimagining business models and processes and the work itself. REIMAGINE BUSINESS MODELS - 10 - SAP Digital Economy in the Wholesale Distribution Industry Whitepaper (01/16) © 2016 SAP SE. All rights reserved REIMAGINE BUSINESS MODELS REIMAGINE EVERYTHING Distributors must reinvent themselves from a warehouse of products for serving demand to information- centric companies that utilize new business models to gain competitive advantage. It will no longer be possible to survive by simply breaking bulk and having great, legacy customer relationships. The time to digitally transform is now. Value-added services distributors For years, most distributors have been providing value-added services, many of which have been free of charge. Leading distributors will take these value-added services to the next level and leverage them to significantly increase revenue and bottom-line profitability. Consider providing your customers with a menu of a la carte options, such as: • Light manufacturing and kitting on orders • Ad hoc virtual training for restaurant operators on how to prepare new entrees to installing and maintaining equipment • Using sensors embedded by the manufacturer in products that will notify your customers of their own customers’ equipment downtime • Predicting future demand patterns based on long-term weather forecasts and recommend reorder quantities based on this information • Acting as a financial institution by providing lending services Infinite inventory distributor By becoming an infinite inventory distributor, you will significantly reduce inventory carrying costs, yet still give your customers access to an unlimited number of products and services. • Use 3D printing in-house to print non-stock parts, or give your customers a 3D printer and sell them the specs so they can print parts in-house, on demand. The specs can be limited by number of prints or a certain timeframe • Effectively use spot buying to provide an infinite catalog of products • Become the “master” distributor for a group of products or for a geography by fully leveraging the business network. Real-time distributor All customer touch points can and will be in real time: logistics, ordering, payment, marketing via social media, and even training. • Use drones or Uber drivers to deliver orders within hours, not days • Use up-to-the minute predictive analytics to track demand patterns and automatically recommend order items/quantity • Incorporate social media feeds into your customers’ apps for up-to-the-minute feedback from their customers on processes and programs • Install smart vending machines at your customers’ locations or job sites so they can access what they need, when they need it NEW TECHNOLOGIES Prime Air – a future delivery system from Amazon designed to safely get packages into customers’ hands in 30 minutes or less using drones 16 SUPERIOR CUSTOMER EXPERIENCE Fastenal has 50,000 industrial vending devices installed at customer sites. Vending has quickly become a core part of Fastenal's business and an important growth driver.17 - 11 - SAP Digital Economy in the Wholesale Distribution Industry Whitepaper (01/16) © 2016 SAP SE. All rights reserved REIMAGINE BUSINESS PROCESSES Any business process can and will be modernized and digitized. The time to plan and execute is now. REIMAGINE EVERYTHING Ingram Micro achieved 50% greater business-to-business order entry utilization in specific channels19 8–14% sourcing savings with integrated strategic sourcing and a supplier management solution18 Become easier to do business with Become easier to do business with Provide a vast variety of ordering channels from call centers, Web sites, text messages, and in person interaction to deliver the exact products and services your customers need, when they need them. The customer experience today constitutes a lifecycle, not just an interaction restricted to the front end of the enterprise. Customers expect a consistent experience during each and every touch point with your organization. Establish detail-driven customer engagement Segmentation and stratification of your customer base and those individuals within the customer who interact with you will transform marketing, personalization, and customer loyalty. This will enable you to focus on improving and nurturing relationships with your most profitable customers, and to take insight-driven action to improve business operations with your least profitable customers. Enable predictive analytics Data should be used to forecast and predict, not reminisce. Enable the business to react to trends in real time. Imagine being able to tell your customers which products they will need and when they will need them, well before they are even aware of a potential shortage. Proactively address operational efficiency and bottom-line results Negotiate the best deals with suppliers to increase margin, optimizing charge backs, pricing, and inventory levels. Handle complex, high-volume financial processing in your own company or as a service for business partners. Today, many companies are leaving significant revenue on the table as rebate and chargeback processes are still manual. With digital solutions, the process can be completely automated to ensure that every opportunity to collect is captured. Use business networks to automatically order and pay for goods and services – both direct and indirect Predefine suppliers, pricing, safety stock, or reorder points to enable touch-less and automated processing. Automation of these highly manual processes will enable employees to focus on customer-centric activities, which will help to improve loyalty and ultimately increase sales. - 12 - SAP Digital Economy in the Wholesale Distribution Industry Whitepaper (01/16) © 2016 SAP SE. All rights reserved Employer of choice status goes beyond recruitment and retention – to fundamentally revolutionizing the way people engage with their peers, your customers, other business partners, and the organization itself. REIMAGINE WORK Every substantial business transformation automates manual tasks, enriches jobs, and drives efficiency. Eliminate work all together by digitizing manual steps in the process (e.g., invoice and payment processing). This will enable your employees to focus on true value creation and customer service. It will also enable you to reallocate your employees to tasks and responsibilities that are more customer focused/facing to help drive additional revenue and bottom- line results. Improve productivity and profitability by enabling users to access the right information at the right time on any device. Employees will have immediate access to what they need, where and where they need it, to quickly and easily complete simple and complex tasks. Employ a flexible, lower-cost workforce to address customer demands in real time by onboarding part-time, temporary workers to fill gaps or spikes in business demands. This contingent workforce can be used to provide additional services to customers if and when you don’t have the skills in- house. For example, a temporary service technician can be called upon to train your customers on how to service and maintain equipment they have purchased from you. People continue to be key assets in the wholesale distribution digital economy. Their roles will change, but their value to each area of the business will grow. Al-Futtaim has realized $433,232 USD savings to date by delivering learning online.20 As the Wholesale Trade sector can expect a substantial exodus of workers in the forthcoming years, employers may face tensions in matching workers to jobs. This may require rethinking longstanding workplace practices. 21 REIMAGINE EVERYTHING Use predictive and self-learning software to improve collaboration, productivity, and engagement to optimize business decisions. Employees will have the power to learn on demand, enhance their skills, and become more productive and effective. Use interactive technology to improve user experiences, including voice recognition, visualization, and gaming. The lines between work and personal experience have blurred, so enable your employees to use the tools and technology at work in much the same way they use them at home. - 13 - SAP Digital Economy in the Wholesale Distribution Industry Whitepaper (01/16) © 2016 SAP SE. All rights reserved SAP HANA: THE GREAT SIMPLIFIER In order to reimagine everything in the digital economy, agility and flexibility are required to adjust course at any time. This involves two key concepts: simplification and innovation. • Simplification is all about doing what we are already doing, but better, faster, and cheaper • Innovation is all about reimagining business models and customer value by leveraging the five technology trends The diagram below is at the heart of the digital business transformation. The idea is very simple, but it took years to make it a reality: bringing together transactions and analytics on the same platform. Uniting structured data (e.g., finance) and unstructured data (text, video, voice) will change the way businesses plan, scale, and innovate. In-memory computing is a concept brought to life by the breakthrough SAP HANA platform. While relatively young by commercial standards, SAP HANA’s rapid adoption across multiple industries validates its massive potential for digital businesses. With in-memory computing, we can now finally: • Run MRP in real time, allowing business users to react to potential bottlenecks and out-of-stocks faster by triggering action at least one business day earlier • Optimize orders and issue resolution based on up-to-the- minute information and simulation capabilities • Enable real-time customer order support using contextual information related to stock availability, credit limit checks, and delivery options These capabilities open infinite new ways of optimizing business, driving business digitization, simplifying everything, reducing cost, and providing the agility required in a rapidly changing world. SAP constructed an innovation road map designed to bring in- memory computing together with cloud computing and mobility. This strategy has been embraced by early adopters who are leading the transition to digital. SMARTER DECISIONS + SMARTER TRANSACTIONS = SMARTER BUSINESS - 14 - SAP Digital Economy in the Wholesale Distribution Industry Whitepaper (01/16) © 2016 SAP SE. All rights reserved DIGITAL BUSINESS FRAMEWORK A SIMPLE AND PROVEN APPROACH TO VALUE CREATION THROUGH DIGITIZATION Every company in the wholesale distribution industry requires a simple digital approach to build a pragmatic and executable vision on its digital strategy 5 - 15 - SAP Digital Economy in the Wholesale Distribution Industry Whitepaper (01/16) © 2016 SAP SE. All rights reserved • Ensure premium, consistent customer service across all channels with new insight-based business models • Attracting and retaining a talented workforce is vital. As business models change, skills can be supplemented with contingent workers to meet new, unique business requirements • Supplier collaboration simplifies and eliminates errors from business tasks like invoicing, creating RFPs, order processing, and supplier selection • The Internet of Things fuels new business models like predictive maintenance and more efficient energy consumption at all locations. Forecasts will be more accurate, and it provides opportunities to create new sales channels Wholesale companies are looking to address the digital convergence across B2B/B2C. By realizing the importance of integrating workflows and technology to address each of their five pillars – customer, supplier, workforce core business processes, and the Internet of Things – leading wholesale distributors are transforming, reengineering, and finding hidden ROI within their business. Each of these five pillars plays a vital role in harnessing the profit from dynamic, savvy, empowered consumers that are masters of the marketplace. Every wholesale distributor needs to think about digitization across five key pillars DIGITAL BUSINESS FRAMEWORK - 16 - SAP Digital Economy in the Wholesale Distribution Industry Whitepaper (01/16) © 2016 SAP SE. All rights reserved THE DIGITAL CORE Currently SAP S/4HANA is the only end-to-end solution that covers all business processes across 25 industries and is running in-memory. The real consideration here is how and when to use such a breakthrough in business applications. In addition, the SAP HANA platform can be the single enterprise data source leveraged by SAP S/4HANA and the rest of your solution landscape. With advanced in-memory computing, you can finally free yourself from running the business in batch mode and building complex procedures to get around technology limitations. You can run simply and unleash the full power of the digital business. Real time Real-time optimization of business-based changes will have a massive implication for how we work, how we do business, and how we organize. Power of prediction and simulation Every employee can leverage meaningful business insights with the help of simulation and predictive tools to drive perfect decisions, improve productivity, and significantly increase profitability. Agility The ability to rapidly enter new markets, acquire and onboard new companies, or reflect an organizational change in one-tenth of the time it takes with today’s systems is now possible and will enable the agility required in the digital economy. Deployment choice and lower TCO The consuming solution to run the core has to be simple. Wholesale distributors now have the choice to deploy in-house or in the cloud. In-memory computing will also significantly lower TCO and free up more budget for innovation. Consumer-grade user experience User experience is key to success. It drives adoption, user engagement and, ultimately, productivity. Simplify with SAP A new generation of ERP solution running in real time, integrating predictive, Big Data, and mobile, will change how we work, how we run our businesses, and how information is consumed. The future is here. 87% of finance executives agree that meeting growth targets requires faster data analysis, but only 12% are able to respond to information requests in real time22 33% of the top 20 market share leaders in most industries will be significantly disrupted by new competitors and “reinvented” incumbents24 51% of wholesale distributors indicated they need to innovate and update outdated ways of doing business23 - 17 - SAP Digital Economy in the Wholesale Distribution Industry Whitepaper (01/16) © 2016 SAP SE. All rights reserved 41% of wholesalers surveyed call e- commerce their top sales channel, an increase from 31% in the same survey a year earlier27 A single platform that brings together marketing, sales, services, and commerce (includes the SAP Hybris omnichannel solution) to ensure seamless digitization of the entire customer experience. Seamless support of B2B, B2C, B2B2C, marketplaces, and services scenarios on a single platform. SAP customer engagement and commerce solutions powered by the SAP HANA platform enable a 360-degree view of your customer, real-time interaction, and sophisticated, predictive analytics, fully integrated to the core transactional system. • Orchestrate business processes across marketing, commerce, sales, and service • Enables business model innovation and expansion for competitive differentiation • Deliver personalized experiences in context with each interaction • Create a single, harmonized experience for your customer, while reducing the burden on employees • Be prepared to engage your customers on the channels they choose, at any moment in their journey • Achieve full integration with your core business processes Three key trends are reshaping the customer experience: Outcome economy: The outcome economy requires a deep change in the business model, new organizational capabilities, and new business process capabilities. It also requires a much different approach to customer engagement and service offerings. Consumerization of the B2B customer experience: Customers choose their own buying experience in multiple channels at their convenience – the pattern that emerges is not linear, as in the past. Big Data and marketing in near real time: Big Data allows companies to sense and respond to customers’ needs in real time and predict the next, best step for engaging with them. CUSTOMER EXPERIENCE Digitize your end-to-end customer experience with SAP 57% of the buying process is completed before a first interaction with sales26 86% of customers are willing to pay more for a better customer experience25 Digital technology has changed the game, but customers changed the rules, making it necessary to interact with them on their terms. The quality of their experience is directly related to the quality of the product or service they intend to purchase. B2B customers demand simple, seamless, personalized experiences across any channel, anytime, anywhere, and on any device. - 18 - SAP Digital Economy in the Wholesale Distribution Industry Whitepaper (01/16) © 2016 SAP SE. All rights reserved 83% of executives indicate they’re increasingly using contingent workers ‒ at any time, on an ongoing basis29 34% of executives feel that they’ve made progress in building a workforce that can meet future business goals29 Digitize your workforce with SAP. SAP S/4HANA + SAP SuccessFactors + SAP Fieldglass + SAP Fiori provide the tools for total workforce engagement and advanced analytics. • Attracting the best workforce Recruit and onboard the best workforce, simplify their work, and ensure that regulatory and compliance requirements are met. • Managing the total workforce lifecycle Manage the total workforce lifecycle from recruiting and onboarding, to performance, compensation, and learning – all in one place. • Smarter apps with greater user experience Enable the workforce to easily access the right information across any device and through a dramatically simplified user experience. WORKFORCE ENGAGEMENT Complexity is the enemy of workforce engagement. People are working harder than ever but not necessarily accomplishing more. Workers do not have access to smart, consumer-grade technology to work faster, better, and more efficiently. Organizational complexity is driving cost and slowing down progress. Four forces need to be addressed : Changing of the guard Over 50% of the workforce will be millennial by 2020.28 This will require a workforce strategy to address the new reality. Contingent labor is on the rise To drive agility, lower-fixed-cost companies are turning more and more to contractors and services providers. Constant reorganization Reorganizing to adjust to the new reality is becoming a regular occurrence. Complexity is on the rise Companies do business in more countries across many more channels. Products and services are becoming more complex. Regulations are changing by the day. Layer upon layer of management is hindering speed and agility. Improve your total workforce productivity: Simplify with SAP 30% of executives say their companies give special attention to the particular wants and needs of millennials29 The world is getting smarter in the digital economy, but complexity is one of the workforce’s biggest obstacles in this pursuit. - 19 - SAP Digital Economy in the Wholesale Distribution Industry Whitepaper (01/16) © 2016 SAP SE. All rights reserved BUSINESS NETWORKS AND SUPPLIER COLLABORATION SAP S/4HANA gives you incredible capacity to digitize business processes across your internal business operations. It is the connections to our customers’ global partner ecosystems that enable you to extend those processes externally beyond the four walls of your business. • Today’s cloud solutions from Concur, SAP Ariba, and SAP Fieldglass for travel and entertainment, direct and indirect material, and labor and services: connected, effortless, and at scale • Business networks operate on a global basis, meet data security standards, and operate at industry best standards • Leverage services from partners to vastly extend the value of core offerings. Wholesale distributors have to reimagine business processes to remain competitive and best serve customers in the digital economy. From sharing data in real time and securely, to providing personalized and contextual insights, to changing how companies exchange and offer products and services by using spot buying to provide an infinite catalog of products to your customers, collaboration across entire vertical markets is key to value creation. Several trends are redefining the game: Customer buying experience Business applications must be effortless to learn and use, such as with iTunes, Amazon, or Google. Low adoption rates due to solution complexity drive users to find alternate channels that cost the distributor money from bad spend and lost opportunity. Network of networks An open network serving a single market (such as travel, suppliers, labor) is valuable to its ecosystem. But a vertical network that connects to other vertical networks in real time is revolutionary and can only be accomplished through a shared set of cloud-based services built on top of the SAP HANA Cloud Platform. Business connectivity at scale Exponential data growth generated and consumed by the network is both the greatest challenge and the greatest opportunity in connecting vast ecosystems. Become an infinite inventory distributor by connecting thousands of partners and processing petabytes of data in real time. 50% of networked companies are more likely than their peers to have increased sales, higher profit margins, and be a market leader. 30 25-50% of travel bookings are “out of compliance” with limited corporate control or visibility. 32 50%-75% faster transaction cycles are being achieved with the Ariba Network. 31 Connect businesses to the world and the world to your business Trillions of dollars of commerce moving in silos + millions of companies attempting to innovate on their own = lost opportunity to improve the lives of billions of end users. - 20 - SAP Digital Economy in the Wholesale Distribution Industry Whitepaper (01/16) © 2016 SAP SE. All rights reserved . $4–11 trillion estimated potential economic impact of the Internet of Things per year by 202536 3 billion Internet users and an expected 30-50 billion connected devices by 202033,34,35 2 million smart vending machines in operation by 201837 ASSETS AND THE INTERNET OF THINGS With SAP HANA, Internet of Things (IoT) edition, companies can now monitor data from embedded devices to notify customers of failure or downtime and recommend products and corrective action. Companies are finally understanding the full potential of the interlock between physical and digital assets and the Internet of Things. We are witnessing new use cases across industries with breathtaking results. Below are some key trends: Smart products drive new business models Since many companies are embedding sensors in their products, distributors can use this data to better service customers by identifying a product’s end of life, service, and maintenance requirements, as well as create automatic replenishment orders as products are used. Data-driven business models Wholesale distributors have a wealth of data in-house. This data can be used to better understand true customer profitability, predict future demand patterns to better collaborate with your most important suppliers, and help your workforce manage the business instead of simply reacting to it. Technology-driven marketing Marketing is becoming more prevalent in wholesale distribution as customers expect their business transactions to have the same ease of use as their personal transactions. Technology can now be used monitor customers’ digital footprints to better understand what they need and when they need it – ideally, even before the customers know they will need the product or service. New alliances The industry is starting to see seamless collaboration around new business models involving partnerships that may not have made sense few years back. Just one example is creating a network of distributors who would historically view themselves as competitors, yet join together to better service customers in locations and with products that the other network members may not be able to serve Connect, transform, and reimagine with SAP The most dramatic change in the digital economy will be driven by hyperconnectivity and Big Data science. These will transform nearly every business model, thereby providing service, quality, and convenience in ways that benefit customers, employees, and the bottom line. - 21 - SAP Digital Economy in the Wholesale Distribution Industry Whitepaper (01/16) © 2016 SAP SE. All rights reserved Dream, develop, and deliver with SAP HANA Cloud Platform SAP HANA Cloud Platform gives you the mobile, collaboration, integration, and analytic capabilities you need to dream big, develop fast, and deliver everywhere. Application extensions Extend your current cloud and on-premise solutions for additional customization, enhanced business flows, and more. Real-time analytics Engage customers, optimize business processes, and unleash new revenues with real-time analytic apps powered by SAP HANA. New cloud apps Quickly build innovative consumer-grade industry apps for today's mobile, social, and data- driven world. Extended storage capabilities Holistically manage all data streams with flexible combinations of data stream processing, in-memory technology, disk-based columnar storage, and Hadoop-based storage solutions. Data footprint reduction Significantly reduce memory footprint and TCO. In ERP systems, we have seen ~6x reduction by SAP HANA's dictionary compression. Removing aggregates and actual and historical data separation further reduces the footprint to ~10x. The SAP HANA platform is… Real-time, in-memory platform • 10x data footprint reduction for ERP • Extended storage including Hadoop open architecture • Developer-friendly • Embeds mobile and analytics • Secure • Cloud-ready Trusco Nakayama Manufacturers and construction companies in Asia depend on Trusco Nakayama for tools and equipment to power their businesses. Trusco must make sure it has stock of exactly what customers need, when they need it. The SAP HANA platform allowed Trusco to analyze three years of historical sales transactions, helping them optimize inventory across 50 distribution centers, This lead to a 20% increase in inventory turnover with only a 7% increase in costs. With better-optimized inventory, their inventory hit rate has increased to 86.8%, which means more immediately satisfied customers. Trusco is also using SAP HANA to drive a better online customer experience by giving customers real- time price and stock information, leading to 10% more online orders.38 SAP HANA PLATFORM – A NEW COMPUTING PARADIGM SAP HANA is the ultimate simplifier and the platform for innovation and digital business - 22 - SAP Digital Economy in the Wholesale Distribution Industry Whitepaper (01/16) © 2016 SAP SE. All rights reserved HOW DOES IT ALL COME TOGETHER? Example: The process flow described on this page portrays how leaders in the wholesale distribution business can integrate their operational technology and information technology to better serve their customers. These two technology platforms are typically owned and operated by two different parts of the business. In the new digital framework, the value will come from the interoperability of these environments.. In this example, a sensor was embedded in a pump during the manufacturing process. Because the distributor has collected the data from the sensor, a service technician can now be signaled, via text message, that the pump is malfunctioning. The service technician can view, on any device, where the malfunctioning pump is located, and then evaluate whether to repair or replace the pump based on labor hours and total cost. He determines that the pump needs to be replaced, so he visits the distributor’s Web site to order a new pump. While each of the five digital business pillars delivers significant value as a stand-alone capability, the ultimate goal is to design the next generation of business processes that will span across all the digital pillars. Customer experience will not stop at the channel experience. Supply chain and services have to be aligned with the customer experience strategy if products and services are to be delivered as promised. It becomes clear during the ordering process that the customer needs assistance, so the distributor’s customer service agent launches an online chat. The right pump is selected and ordered for next day delivery. Since this pump is not stocked at the distributor, a spot buy from a pre-approved supplier is executed with a drop ship to the customer’s location. As the service technician begins to install the new pump, he quickly recognizes that he needs assistance. He scans the QR code on the pump and is directed to the distributor’s site where he sees, in graphic detail, the step-by-step process required to install the new pump. The benefits of this scenario are significant: • Increased customer satisfaction and loyalty • Zero downtime for the distributor’s customer • Higher productivity • New services and new revenue streams USE SENSOR DATA, OMNICOMMERCE, AND BUSINESS NETWORKS TO PROVIDE CUSTOMERS WITH THE EXACT PRODUCT THEY NEED WHEN THE EXISTING PRODUCT IS AT THE END OF ITS LIFECYCLE. - 23 - SAP Digital Economy in the Wholesale Distribution Industry Whitepaper (01/16) © 2016 SAP SE. All rights reserved WHY SAP? BUSINESS DIGITIZATION IS A NATURAL NEXT STEP FOR THE #1 BUSINESS APPLICATION COMPANY It took years of innovation, strategic investment, and the forging of new strategic relationships to build the end-to-end digital business platform. 5 - 24 - SAP Digital Economy in the Wholesale Distribution Industry Whitepaper (01/16) © 2016 SAP SE. All rights reserved SAP IS COMMITTED TO INNOVATION Vision Mission Strategy Help the world run better and improve people’s lives Help our customers run at their best Become the cloud company powered by SAP HANA BETTER SERVICE THROUGH IMPROVED INSIGHT To accelerate growth and give customers what they want, when they want it, Avnet needed improved insight into its data. With SAP® Business Warehouse powered by SAP HANA®, Avnet is bringing its solutions to market faster, allowing its customers to do the same, while achieving a 4:1 data compression rate and simplifying its IT landscape. Brian Chan, Vice President of IT, says, “We are paving the way to provide Avnet with game-changing analytics that accelerate the success of our customers.”39 GLOBAL PRESENCE AND RELEVANCE DIGITAL ECONOMY - READY INNOVATION LEADER • 80 million business cloud users • 1.9 million connected businesses • $800 billion+ in B2B commerce • 97%+ of mobile devices connected with SAP messaging • 75K employees representing 120 nationalities • 295K customers • SAP operates in 191 countries • Solutions for 25 industries and 12 LOBs • 98% of top-valued brands are our customers • 74% of the world’s transactions are managed on SAP • 2011 SAP HANA launched • 2012 SAP Cloud launched • 2014 SAP business networks the largest marketplace in the world • 2015 SAP HANA Cloud Platform • 2015 SAP S/4HANA: most modern ERP system INDUSTRY AND LOB FOCUS ENERGY SAVINGS To reduce energy consumption, Billa measured and benchmarked stores across different factors, identifying candidates for improvement and optimization. With this insight, it was possible to implement a set of measures including intelligent sensors, new energy-efficient bulbs, and optimized utilization, thereby reducing consumption by 30%. “Often it is the small things that have a big impact,” says Markus Sarg, Billa’s project lead.40 - 25 - SAP Digital Economy in the Wholesale Distribution Industry Whitepaper (01/16) © 2016 SAP SE. All rights reserved END-TO-END DIGITAL BUSINESS SOLUTION Through our innovations and over $30 billion in strategic acquisitions, SAP has the best solution portfolio and the expertise required to enable your digital business strategy. SAP is the largest cloud company with 80 million+ users and has the fastest growing solution portfolio to support the entire digital value chain. With 74% of the world’s transactions running through SAP, 7,200+ customers leveraging SAP HANA, and 1,600+ customers leveraging our Internet of Things technologies to drive new business models, SAP is the preferred choice to turn your digital vision into reality.  Experts in 25 industries and 12 lines of business  6,000+ Design Thinking experts – sales, services, development  User experience of the future  Enterprise architecture  Data scientists  Business case methodology  Design Thinking  Benchmarking  Value partnership framework  60+ business process benchmarking and best practice assessments  600+ industry-focused innovation scenarios  Innovation case studies by industry  Infrastructure to drive proofs of concept  13+ co-innovation and living labs with 470+ customer co-innovation/Design Thinking discussions from 2014 to date METHODOLOGYEXPERTISE ASSETS SAP will bring expertise, assets, and the proven methodologies required to support the development of your digital business strategy. These capabilities will be leveraged throughout SAP’s collaborative value and innovation framework. - 26 - SAP Digital Economy in the Wholesale Distribution Industry Whitepaper (01/16) © 2016 SAP SE. All rights reserved SAP GLOBAL SERVICES AND SUPPORT TO DRIVE YOUR SUCCESS In the digital economy, simplification and business innovation matter more than ever. SAP has a broad range of services to cover the end-to-end digital transformation journey, ranging from advising on a digital innovation road map and plan, to implementing with proven best practices, to the ability to run across all deployment models and ultimately optimizing for continuous innovation across your digital journey. SAP provides both choice and value within our services, allowing you to tailor the proper approach based on your needs and approach. Turn to the 30,000 consultants and support professionals who can bring your digital strategy to life. The Global Services & Support (GSS) model provides a consistent experience – on premise, cloud, or hybrid. GSS provides the expertise, assets, and the proven methodologies required to accelerate business innovation, reduce TCO, and run a stable platform (on premise or in the cloud). SAP Activate is a new, simplified consumption experience introduced for SAP S/4HANA and cloud adoption. It provides a combination of SAP Best Practices, methodology, and guided configuration. In addition, we provide leadership in learning to drive quick time to value realization and a solid engagement foundation with SAP MaxAttention, SAP ActiveEmbedded, and SAP Value Partnership across the end-to-end customer lifecycle. - 27 - SAP Digital Economy in the Wholesale Distribution Industry Whitepaper (01/16) © 2016 SAP SE. All rights reserved Our comprehensive ecosystem for wholesale distribution offers: • A wide range of business services (OEM suppliers, banks, key vendors) • Open architecture: choice of hardware and software • Complementary and innovative third-party solutions • Reach – partners to serve your business of any size, anywhere in the world • Forum for influence and knowledge • Large skill sets SAP COMPREHENSIVE ECOSYSTEM Orchestrating the world to deliver faster value - 28 - SAP Digital Economy in the Wholesale Distribution Industry Whitepaper (01/16) © 2016 SAP SE. All rights reserved 1. “A decade to mass extinction event in S&P 500” CNBC, June 4, 2014, http://www.cnbc.com/2014/06/04/15-years-to- extinction-sp-500-companies.html 2. “Don't Be A Dodo: Adapt To The Digital Economy” Forbes, 2015, http://www.forbes.com/sites/sap/2015/08/27/ dont-be-a-dodo-adapt-to-the-digital-economy/ 3. “Value Creation in Digital Energy Network” by Henry Bailey, Global VP, Utilities IBU, SAP , CIO Review http://webcache.googleusercontent.com/search ?q=cache:njbs10akC5AJ:www.cioreview.com/cxoi nsight/value-creation-in-the-digital-energy- network-nid-10811-cid- 41.html+&cd=1&hl=en&ct=clnk&gl=in 4. Grainger's wide moat remains intact despite macroeconomic challenges to growth, Morningstar, by Kwame Webb, July 2015 http://analysisreport.morningstar.com/stock/res earch/c- report?&t=XNYS:GWW®ion=usa&culture=en- CA&productcode=CAN&cur= 5. “Vending Growth Underscores Fastenal's Focus” : Modern Distribution Management, July 2015 http://www.mdm.com/blogs/1-management- strategy/post/34034-vending-growth- underscores-fastenals-focus 6. Rise and Shine: ”Project Freshstart” Energizes Distributor, Darrell Riekena, CIO, National DCP https://www2.deloitte.com/content/dam/Deloitt e/global/Documents/Technology/gx-cons-tech- sap-national-dcp-distributor-supply-chain.pdf 7. Global Simplicity Index, 2013 and European Business Review http://www.europeanbusinessreview.com/?p=31 05 8. “Compendium of Productivity Indicators 2015”, OECD, May 4th, 2015, http://www.oecd.org/std/productivity- stats/oecd-compendium-of-productivity- indicators-22252126.htm 9. S+G Global Brand Simplicity Index 2013 http://simplicity.siegelgale.com/2013/why- simplicity/index-highlights/ 10. SAP Benchmarking 11. SAP investor presentation November 2015 http://www.sap.com/bin/sapcom/en_us/downlo adasset.2015-11-nov-05-01.sap-2015-11-05-debt- call-presentation-pdf.html 12. Source: SAP, S/4 HAHA, 2015 http://www.sapevent.ch/landingpagesfr/Manage r/uploads/1543/HANA2.pdf 13. “Roundup Of Cloud Computing Forecasts And Market Estimates” Forbes, 2015, http://www.forbes.com/sites/louiscolumbus/201 5/01/24/roundup-of-cloud-computing-forecasts- and-market-estimates-2015/ (Soundbite used is from Forrester) 14. “3-D printing takes shape”, McKinsey Global Institute, 2014, http://www.mckinsey.com/insights/manufacturi ng/3-d_printing_takes_shape 15. “Internet Security Threat Report (ISTR), Volume 20” , Symantec, 2015, http://www.cioinsight.com/security/slideshows/ how-cyber-criminals-infiltrate-the-enterprise.html 16. Amazon Drone Delivery: Watch How Prime Air Could Work, Robotics Trends, December 2015 http://www.roboticstrends.com/article/amazon_ drone_delivery_watch_how_prime_air_could_work /fun 17. Fastenal Now Has 50,000+ Industrial Vending Devices Installed at Customer Sites, August 2015 http://investor.fastenal.com/releasedetail.cfm?R eleaseID=927626 18. SAP Benchmarking 19. Ingram Micro Mobility: Improving the customer experience and increasing revenue with SAP HYBRIS Consumer Suite, SAP Business Transformation Study, April 2015 https://hybris.com/medias/sys_master/root/h81 /h57/8808599388190/Case-Study-Ingram- Micro-EN.pdf 20. Al-Futtaim: Providing Anytime, Anywhere Learning with SuccessFactors® Learning https://dam.sap.com/dam- ws/download?id=pl8POJ%2FvxCjeMlo1%2Fhc0T nm8gqJmfT7D7lKnyc1%2BeJhuG1e6WpphFPKYC QICHuSD 21. “Talent Pressures and the Aging Workforce: Responsive Action Steps for the Wholesale Trade Sector”, Stephen Sweet, PhD and Marcie Pitt- Catsouphes, PhD, The Sloan Center, page 3 https://www.bc.edu/content/dam/files/research _sites/agingandwork/pdf/publications/TMISR08_ Wholesale.pdf 22. “New Technologies Transforming The Finance Function”, HBR, 2015, https://hbr.org/resources/pdfs/comm/sap/Rep ort_SAP_new_technologies_transforming_the_fina nce_function.pdf 23. “Embracing Change in Wholesale and Distribution: Who (or what) is your change agent?” Aberdeen Group, 2014, http://www.aberdeen.com/research/9656/rr- distribution-change-innovation/content.aspx 24. “IDC Predictions 2014: Battles for Dominance – and Survival – on the 3rd platform”, 2014, http://vumissociety.weebly.com/uploads/2/6/7/ 7/26771881/idc_-_2014_predictions.pdf 25. “2014 Global Consumer Barometer Index, American Express and Ebiquity”, 2014, http://about.americanexpress.com/news/docs/2 014x/2014-Global-Customer-Service-Barometer- US.pdf 26. “The Digital evolution in B2B Marketing” Customer Executive Board, 2012, http://www.executiveboard.com/exbd- resources/content/digital-evolution/pdf/Digital- Evolution-in-B2B-Marketing.pdf 27. “Wholesalers call e-commerce their top sales channel for 2015” internet RETAILER, 2015, https://www.internetretailer.com/2015/03/02/w holesalers-call-e-commerce-their-top-sales- channel-2015 28. “Millennials at work, Reshaping the workplace” PwC, 2011, https://www.pwc.com/en_M1/m1/services/cons ulting/documents/millennials-at-work.pdf 29. “Workforce 2020: Building a strategic workforce for the future” Oxford Economics, 2014, http://www.oxfordeconomics.com/workforce202 0 30. “The rise of the networked enterprise: Web 2.0 finds its payday” McKinsey, 2010, http://www.mckinsey.com/insights/high_tech_tel ecoms_internet/the_rise_of_the_networked_enter prise_web_20_finds_its_payday 31. 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SAP Estimates 33. “ITU releases 2014 ICT figures “ UN International Telecommunications Union, 2014, http://www.itu.int/net/pressoffice/press_release s/2014/23.aspx#.VaaCmaPD_IW 34. “Seize New IoT Opportunities with the Cisco IoT System” Cisco, http://www.cisco.com/web/solutions/trends/iot /portfolio.html 35. “EMC World 2015: '30 billion connected devices by 2020” , ITPro, 2015, http://www.itpro.co.uk/storage/24560/emc- world-2015-30-billion-connected-devices-by-2020 (Soundbite is from EMC) 36. “Unlocking the potential of the Internet of Things”, McKinsey Global Institute, 2015, http://www.mckinsey.com/insights/business_tec hnology/the_internet_of_things_the_value_of_digi tizing_the_physical_world 37. “Vending Machines Get Smart to Accommodate the Cashless”, Bloomberg Business, 2013. http://www.bloomberg.com/bw/articles/2013- 08-29/vending-machines-get-smart-to- accommodate-the-cashless 38. Trusco Nakayama: Increasing the Inventory Hit rate to Over 86% with SAP HANA, SAP Business Transformation Study, 2015 http://www.sap.com/bin/sapcom/en_us/downlo adasset.2015-06-jun-10-23.trusco-nakayama- corporation-increasing-the-inventory-hit-rate-to- over-86-percent-pdf.bypassReg.html 39. Avnet: Delivering to Customers More Quickly with SAP ®HANA https://dam.sap.com/dam- ws/download?id=IZInehvsHp5OLA%2Fme%2FKV 2%2ByJhGgbE5CrMRhKIuDAA%2FZAhYLdQCbE %2B%2FbPOA7M0jTL 40. Erhöhte Energieverbräuche erkennen und beheben: Flächendeckendes Energiemonitoring über das gesamte Filialnetz ShopInsight Anwenderbericht http://www.google.de/url?sa=t&rct=j&q=&esrc=s &source=web&cd=1&cad=rja&uact=8&ved=0ahU KEwjk-K7D- abKAhXEZg8KHd5AD80QFggcMAA&url=http%3A %2F%2Fwww.shopinsight.de%2Findex.php%2Fa nwenderberichte.html%3Ffile%3Dfiles%2Fshop_i nsight%2Fcontent%2Fpresse%2FAnwenderberic ht_BILLA.pdf&usg=AFQjCNG54gCrSwWadRnYW_ _Z5CZMp2YdtA&bvm=bv.111677986,d.ZWU Note: All sources sited as “SAP” or “SAP benchmarking” are based on our research with customers through our benchmarking program and/or other direct interactions with customers Note: Some images used under license from Shutterstock.com ADDITIONAL RESOURCES Outlined below is additional external research that was used as supporting material for this white paper. - 29 - SAP Digital Economy in the Wholesale Distribution Industry Whitepaper (01/16) © 2016 SAP SE. 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