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Driving Value through Business Networks

Eric Washer, Vice President January 2016

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Megatrends

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Digital Economy Fueled By Hyperconnectivity

$65 trillion Global business

trade by 2020

2.5 billion Connected people on

social networks by 2020

75 billion Connected devices

by 2020

The Digital Economy requires a shift to a Real time Business Collaboration.

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Business demands are driving business collaboration technology innovations

1980 1990 2000 2010 2020+ -1970

Mail Phone Fax EDI

Vans Direct B2B

Connections Email

@

Corporate Portal

Single Process

Solutions Business Networks

MANUAL COMMUNICATIONS

EARLY ELECTRONIC COMMUNICATIONS

INTERNET

COMMUNICATIONS

COLLABORATVIE BUSINESS

APPLICATIONS

COLLABORATIVE BUSINESS

COMMUNITIES

8.0 trillion dollars are exchanged through eCommerce annually*

2X self-reported expected increased usage of B2B Networks in 12 months

25% of eCommerce volume is conducted through business networks ”

“ More than 60% of CEOs expect 15-50% of their earnings growth in the next 5 years to come from technology-enabled business innovations. – McKinsey study, 2013

*“Bullish on digital: McKinsey Global Survey results” August, 2013

5

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Changing business environment increases pressure on companies

Increasing Globalization •  Expansion into new markets •  Global process standardization •  International supply chains •  Increased off/near shoring

Economic Volatility •  Volatility in markets •  Decreased stock valuation •  Slow economic growth •  High expense ratio

More Competition •  Pricing pressures •  New sources of competition •  Decreased budgets and spending

Greater Risk •  Supply chain disruption •  Financial risk and fraud •  Commodity risk

Accelerating Technological Change •  Changing business models •  Faster innovation cycles •  Expanding partnerships and channels •  Leveraging big data for decisions

Regulatory Changes •  Increasing disclosure requirements •  Country-specific regulations •  Industry-specific disclosures

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Collaboration inefficiencies between companies is costly

Paper Based Transactions

Leakage Of Value

Too Many Exceptions

Lack Of Visibility Into Spend By Category

“15% of invoices have exceptions adding 6.6 days to the cycle.” -  TAPN, 2010

“$4.6 million in contract leakage per billion in spend on average.” -  The Hackett Group, 2012

“50% of prenegotiated discounts are never captured.” -  Aberdeen, 2012

“Companies are losing $260 billions each year due to a pervasive inability to organize and analyze spend data.” Aberdeen, 2010 90% of companies still use spreadsheets application as their primary analysis tool. Aberdeen, 2010

“Nearly 77% of all incoming invoices are still paper based.” -  Aberdeen, 2012

“70% of payment is still handled via paper checks” - 2013 AFP Electronic Payments

Survey

(1) Basex Research

Collaboration inefficiencies cost companies $650B (1)

annually

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The use of business networks impact the bottom line

41% Improved collaboration across silos

55% Better information sharing

24% increased revenue

77% Increased access to knowledge

63% Increased marketing effectiveness 43%

Greater market share 8%

Higher margins

“Networked enterprises were 50% more likely than their peers to have increased sales, higher profit margins, gain market share, and be a market leader.”

Source: McKinsey & Company, “The rise of the networked enterprise, Web 2.0 finds it’s payday.” Survey of 4,394 executives. December 2010

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Thank You !

Contact

Eric Washer Vice President, Network Strategy eric.washer@sap.com (510) 606 - 0482

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�  Gain process visibility into the interactions between all your trading partners

�  Make decisions based on real-time collaborative information �  Expand your presence geographically without incremental cost �  Collaborate seamlessly to deliver innovative solutions to your customers �  Accelerate the speed in your collaborations driving cost efficiencies and

savings �  And, leverage network enabled insights to create first-to-market

opportunities

What If You Could …

… across your business ecosystem