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Transform

Engineering, Construction,
and Operations with
SAP S/4HANA ®

© 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 1


AGENDA

SAP S/4HANA: Overview for Engineering, Construction, 3


and Operations

Finance Deep Dive 7

Project Control Deep Dive 8

Portfolio of Solutions for EC&O from SAP 9

SAP S/4HANA: Value Proposition for EC&O 11

Customers Are Achieving Value from SAP S/4HANA 12

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SAP S/4HANA: OVERVIEW FOR ENGINEERING,
CONSTRUCTION, AND OPERATIONS

Transform Your Firm’s Digital Core with SAP S/4HANA® Villara


Corporation
US$15 trillion – that’s the projected size of the To execute on this, firms will not only need to reengineer Villara Corporation is using
construction market by 2030, up from $8 trillion today.1 their business processes, but they will also have to SAP S/4 HANA and analytics
solutions to track actuals against
A recent study expects that 75% of the infrastructure evaluate if they have the right technology platform that
estimates in real time on more
that will exist in 2050 does not exist today, and that the can deliver on that vision. This platform requires an IT than 500 simultaneous projects
design and expected outcomes will be transformative. architecture that provides both stability and long-term and report on operational
We will have to double the current infrastructure and reliability for core enterprise processes, and, at the metrics.
then double it again by 2050.2 same time, allows for flexibility in areas where change is
happening on a constant basis. The digital core is the
This is a huge opportunity for the construction industry; foundation for the core processes that need to run
however, projects are getting more complex, and there consistently and flexibly. It provides uninterrupted, real- SWISS
are many inefficient and wasteful practices. Successful time transactions and analytics, the ability to work with PROPERTY
companies will grow by increasing market share, Big Data, and connectivity to line-of-business (LoB) By establishing its digital core
self-performing to a greater extent, expanding extensions that enable supporting processes such as with SAP S/4HANA, SWISS
internationally, and even operating some of the assets sourcing networks. This will enable a real-time coupling PROPERTY is prepared to meet
they build. between project progress and financial controls, its ambitious growth goals and
allowing firms to bring a focus to what is best for the to reinvent the value creation
The construction industry will apply technology project to drive true partnerships versus pitting chain of residential real estate.
and best practices previously proven in the industrial companies against one another, and better enable new
sector. This industrialization of construction will drive models like IPD contracts.
reliable outcomes and improve margins by increasing
productivity and eliminating waste and surprises, SAP S/4HANA® was developed specifically to represent
greatly reducing project risk. Existing business models the digital core in this “bi-modal IT architecture.” It
will collapse as “construction-ready,” disruptive provides construction firms with a proven framework to
technologies like robotics, enterprise mobility, virtual adopt industry best practices while attaining operational
design and construction, and 3D printing redefine design excellence, specifically across core financial and project
and processes. New contract and service models, such controls.
as integrated project delivery (IPD) and public-private
partnerships, will be required to remain competitive. Sources
1. “Global Construction 2030: a Global Forecast for the Construction Industry to 2030”, Global
Construction will experience the dramatic productivity Construction Perspectives and Oxford Economics, sponsored by PwC,
www.pwc.com/gx/en/industries/engineering-construction/publications/global-construction-
gains seen in other industries, while vastly compressing 2025.html

the 50-year evolutionary process that took place in the 2. Aurora Almendral, “75% of the Infrastructure That Will Exist in 2050 Doesn’t Exist Today,”
Next City, October 2014, https://nextcity.org/daily/entry/75-of-the-infrastructure-that-will-
manufacturing industry. exist-in-2050-doesnt-exist-today

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© 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 3


SAP S/4HANA: OVERVIEW FOR ENGINEERING,
CONSTRUCTION, AND OPERATIONS
SAP S/4HANA: sources of value
The value from SAP S/4HANA comes through simplification of the user experience, architecture, and processes.

Simplified user experience: across all devices


SAP S/4HANA empowers front-line users with an user-centric, consumer-grade experience because, for construction firms, it’s the
frontline employees that add value on the sites. SAP is driving simplification and innovation in how business users work, with a role-based,
consistent, user experience available on any device.

Simplified architecture: eliminating surprises (cost and schedule overruns)


The simplified data model of SAP S/4HANA provides an advanced, digital, data architecture that provides, in real time, a single source of the
truth for both transactions and analytics. This enables extensive flexibility to evaluate and adapt to changes, such as simulating the impact
to the projects in minutes rather than weeks or months.

Simplified processes: Key industry capabilities of SAP S/4HANA*

Finance Project control


• Project management and forecasting
• Accounting and financial close
• Issue and change management
• Accounts payable and invoice management
• Risk management
• Collections and receivables management
• Procurement
• Cash and liquidity management
• Equipment and resource management
• Enterprise risk and compliance management
• Collaboration and knowledge management
• Financial planning and analysis
• Building information modelling

*This is a subset of the complete industry portfolio shown later in the “Portfolio of Solutions for EC&O from SAP” section.

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© 2016 SAP SE or an SAP affiliate company. All rights reserved. Public 4


SAP S/4HANA: OVERVIEW FOR ENGINEERING,
CONSTRUCTION, AND OPERATIONS

EXAMPLE: User experience simplification


SAP S/4HANA provides reengineered and simplified business processes that can yield significant benefits, transforming the execution from multistep, batch-driven
processes with latency, in terms of key performance indicators, to real-time processes with actionable insights.

SAP Commercial Project Management


for SAP S/4HANA
Traditional ERP
Multiple screens and transactions
to create and maintain project Project bidding Project Various project Separate process Project reporting | sales reporting
data with staffing and and estimating rates setup screens from project | cost and revenue reporting |
subcontracting separated from definition availability reporting
the project and reporting built per
application area, not across it

Sales and Resource Different setup Separate process Cross-project reporting


billing setup management for cost and from project
revenue rates delivery

SAP S/4HANA
Master
An intuitive user experience on
project
any device, providing a single,
consolidated, source of truth for
all project-related information at
the lowest level of granularity

One single point of entry Project workspace


Project financial planning
Cross-project analytics

More than smarter and faster – reimagining work -5-

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SAP S/4HANA: OVERVIEW FOR ENGINEERING,
CONSTRUCTION, AND OPERATIONS

EXAMPLE: Process simplification


SAP S/4HANA provides reengineered and simplified business processes that can yield significant benefits, transforming the execution from multistep, batch-driven
processes that require manual validation and introduce lengthy delays in reporting issues with real-time processes that can eliminate surprises.

SAP S/4HANA: event-earned


value management
Traditional ERP
Foreman Export to Record Export to Reconcile Calculate End-of-
Multiple batch processes
manually cost tool progress cost tool manually forecast period
and summarized reporting
records reports
at period end
time and
quantities

SAP S/4HANA
Reports available anytime,
in real time, with the lowest
level of detail
Import progress Forecast and
based on sensor data report in real time

Increase Decrease Reduce


user productivity and forecasting time from project failure
end-to-end process months to a day* by eliminating
efficiency by surprises*
20%–30%*
Eliminate surprises with real-time insight – a reimagined process

*Benefits are based on early adopters of SAP S/4HANA or conservative outside-in benefits due to moving from a traditional ERP to enhanced SAP S/4HANA and LoB/cloud capabilities. As each
enterprise is at a different level of maturity, we recommend working with you to determine the value proposition for your enterprise.

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FINANCE DEEP DIVE

Typical challenges Traditional ERP SAP S/4HANA® enhancements Benefits*


Delayed close activities do not begin until Periodic batch processes are required to Foundation for soft close, for example, real- 20%–40% reduction in audit cost
period end. provide realized revenue and margin reporting, time derivation of profitability characteristics,
and not provided at a detailed level. single source of the truth, and extension ledger
Effort-intensive reconciliations and Multiple ledgers and subledgers are utilized, Foundation for soft close, for example, real- 40%–50% reduction in days to close
eliminations are performed, preventing requiring time-consuming and error-prone time derivation of profitability characteristics, annual books
an accurate intraperiod depiction of the reconciliations. single source of the truth, and extension ledger
organization’s performance.
Multiple batch-run dependencies cause Frequent delays in batch processing and post- Real-time processes, such as revenue
bottlenecks that delay downstream close activities create protracted cycle times. recognition, profitability analysis, cash 20%–40% reduction in G/L and
activities. allocation, and working capital analysis financial closing costs

Visibility into reporting is delayed as data Disparate ledgers without integration create Predefined reports and configurable reporting
is stored across multiple ledgers. accounting blind spots. tools to leverage G/L, subledgers, and
consolidation applications; central finance 5%–10% reduction in business and
function that integrates all ledgers and operations analysis and reporting
subledgers into one source of the truth costs
Basic multicurrency support requires A limited number of local currencies are New, freely defined currencies available
manual intervention during the conversion supported. in the universal journal; real-time currency
process. conversion available for all currency types

Manual, inconsistent processes are used Adjustment and correction of invoices require Preview and simulation of legal invoice;
for billing business solutions comprised of the canceling of the legal invoice and creating adjustment of invoice layout, sorting, and
services, products, and projects. High effort another billing run. grouping of items; internal and client approval
is needed to bring all data into one invoice. before sending out invoice
Flexibility for adjusting an invoice to client Batch-driven billing processes directly invoice Combination of different billable data into one
expectations is lacking. billable data available at a given time. preinvoice in an automated way

*Benefits are based on early adopters of SAP S/4HANA or conservative outside-in benefits due to moving from a traditional ERP to enhanced SAP S/4HANA and LoB/cloud capabilities. As each
enterprise is at a different level of maturity, we recommend working with you to determine the value proposition for your enterprise.

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PROJECT CONTROL DEEP DIVE

Typical challenges Traditional ERP SAP S/4HANA® enhancements Benefits*


Inaccurate project estimates often result in Bid estimates are typically managed outside Analysis of previous bids allows comparison of Improve offer win rate by 10%
cost overruns, impacting profitability and of core systems (using Microsoft Excel, for bids versus budget versus actuals, allowing
customer satisfaction. example), with limited visibility of previous bids flexible reuse of previous bids and projects as a
versus final outcomes. basis for reliable bids.
Tracking of project progress and status is Revenue recognition and progress reporting Real-time postings to recognize revenue and Increase bid reliability and accuracy
very time-consuming and often takes place often require batch processes, and reports are self-service analytics provide a view anytime of
after time has elapsed, limiting proactive limited to summary information. project margin and progress on any device.
intervention. Increase user productivity and
Lack of visibility exists across all commercial Various commercial aspects related to projects A single consolidated view of all project-related reduce time to propose
aspects. are contained within different reports and information is provided by a comprehensive,
solutions. next-generation project workspace.
Risk mitigation is poorly managed as Reports are often provided only at period end Status and alerts are provided in a focused
deviations in costs, time, and resources are and require users to analyze reports to user interface available across multiple Increase project manager
detected too late and result in poor project discover issues rather than be proactively devices, giving early insight into deviations and productivity and end-to-end process
performance. alerted. risks and enabling timely corrective measures. efficiency by 10%

Lack of accurate project forecasts results in Forecasts are often completed outside the Flexible forecasting capabilities are available,
margin erosion. system or with limited capabilities. as is the ability to report against forecast
Increase profitability by 0.5%
outcomes and protect margins.
Ability to analyze and understand which It is difficult to report profitability easily across Easy analysis of all services and engagements
services are actually profitable is lacking. all services due to information being held in is possible, as well as identification of profitable
different reports and a lack of reporting service lines and customers with flexible Increase utilization by 2%
attributes. reporting attributes.
It is difficult to match the supply of resources Resource management reports tend to be Visibility of demand and supply of resources is
to demand and predict the demand of skills backward-looking in terms of utilization. enabled, with easy search of resources based
and forecast utilization. upon skills. Reporting and predictive
capabilities of SAP HANA® can be used.

*Benefits are based on early adopters of SAP S/4HANA or conservative outside-in benefits due to moving from a traditional ERP to enhanced SAP S/4HANA and LoB/cloud capabilities. As each
enterprise is at a different level of maturity, we recommend working with you to determine the value proposition for your enterprise.

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PORTFOLIO OF SOLUTIONS FOR EC&O FROM SAP
In addition to financial control and project management benefits provided by SAP S/4HANA, the digital core also provides native. Preconfigured integration to allow
firms to leverage the complete portfolio of SAP® solutions to comprehensively address their needs demanded by today’s digital economy. Processes are designed
from the outset to flow end to end across the cloud based solution extensions, listed in the white bands, and are fully integrated to SAP S/4HANA Enterprise
Management and are optionally deployed to address business needs. The solution capabilities in the dark blue band, the digital core, are delivered as part of SAP
S/4HANA Enterprise Management. The lighter blue band, also in the digital core, is part of S/4HANA Enterprise Management, but added on as needed.

Preconstruction
Business Development and Sales Project delivery Asset management

• Opportunity and proposal management • Purchasing execution • SAP® Predictive Maintenance and Service
LoB • Collaborative sourcing and contract • Business network • SAP Asset Intelligence Network
extensions management • Guided end-user buying

Customize applications | Integrate applications, data, and processes | Build new applications
• Virtual design and construction • Project controlling and forecasting • SAP Real Estate Management
• Project management and engineering • Project change and issue management • SAP Mobile Asset Management
• Enterprise project connection • Incident management • SAP Equipment and Tools Management
Products • Project financial planning • Mobile project execution for Engineering, Construction & Operations
(EC&O)

• Transportation management Invoice and payables management • Asset strategy and performance

SAP Cloud Platform



• Order and contract management • Project analytics • Asset maintenance
• Project and job costing
• Procurement operation and analytics
• Supplier management

Digital Enterprise Management


core
• Accounting and closing operations • Time recording • Operational purchasing
• Accounting • Core human resources and payroll • Collaborative sourcing and contract management
• Cost management and profitability analysis • Invoice and payables management
• Invoice management and accounts payable • Supplier management
• Procurement analytics

• Financial planning and analysis • Multiresource management


• Accounting and financial close
• Treasury management
Products • Receivables management
• Invoice management
• Consolidation

• Business planning • Travel management • Supplier collaboration


LoB • Governance, risk, and compliance for finance • Talent and learning management • Business networks
extensions • SAP Time and Attendance Management by • Guided end-user buying
WorkForce Software • External workforce management
• SAP SuccessFactors® Human Capital Analytics
Finance Human resources Procurement excellence

© 2016 SAP SE or an SAP affiliate company. All rights reserved. - 9- Public 9


PORTFOLIO OF SOLUTIONS FOR EC&O FROM SAP
An end-to-end solution for engineering, construction, and operations (EC&O) firms
EC&O firms need to manage the end-to-end project lifecycle, from the initial bid, design, engineering, procurement, and construction to the handover and
commissioning to the owner and operator. SAP solutions enable EC&O companies to generate and manage the demand for resources by building both internal
and external talent pools, efficiently maintain equipment and tools, resolve issues, manage changes. The solutions with third-party estimating and scheduling
tools to deliver real-time risk management for every construction project.

The capabilities delivered with SAP S/4HANA and the preconfigured, native integration with line-of-business solutions help ensure processes run smoothly and
efficiently across the end-to-end project lifecycle, allowing firms to balance supply and demand and drive sustainable revenue growth and maintain margins.

Demand Core project management Supply

Unified supplier network and talent record


Opportunity integrated with integrated into SAP S/4HANA resource
bid in SAP S/4HANA management process Manage
Pipeline Manage
Client insight subcontractors
management talent
and assets
Manage Track real-time Develop Leverage
accounts and sales Schedule, Billing and talent based supplier
opportunities performance Project Project
Bid Design estimate,
execution insight
revenue upon needed networks for
and gain a and plan recognition
360-degree
skills efficient
customer view Analyze Liberate Schedule Deliver work Monitor Bill accurately
resourcing and
previous bids engineering activity linked packages progress and and properly procurement
and resulting data from to estimate and efficiently and forecast recognize
projects proprietary budget for manage outcomes revenue
CAD formats complete changes
to create visibility effectively
comprehensive, throughout
3D-model the project
engagement lifecycle
budgets

Enterprise Management
Business development Supply chain
Digital Core

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SAP S/4HANA: VALUE PROPOSITION FOR EC&O

SAP S/4HANA provides EC&O firms a proven framework to adopt industry best practices while attaining operational excellence across financial and engagement
management processes.

Strategy enablement Business benefits*


• Accelerate creation of new business models • 10% improvement on bid/hit rate
• Enter new markets and industries • Increase in on-time projects delivered within budget
• Accelerate M&A synergy • 35% reduction of efforts for planning and forecasting
• Run Live (SAP Digital Boardroom) • 53% lower accident frequency
• Enable business networks for local talent • 20% higher equipment productivity
and suppliers • 21% reduced rework time
• Run Simple (master project complexity) • 29% fewer days to close books quarterly
• 5%–10% lower audit cost
Strategy Business • 50%–70% improved productivity for operational reporting
enablement benefits • 100% compliance with regulatory reporting requirements

Empowered employees Empowered IT benefits IT benefits and TCO


employees and TCO
• Role-driven, user-centric processes
• One single version of truth
and self-service BI for user
• Reduced data footprint
empowerment
• Merging of online analytical and transaction processing
• Actionable insights on unified, real-time
(OLAP and OLTP)
data and processes, with built-in
• Elimination of many desktop clients
suggestions for decision support
• Lower testing costs
• Mobile engagement to increase
• Simplified landscapes
productivity and user adoption through
• Native integration
a tailored SAP Fiori® user experience

*Benefits are based on early adopters of SAP S/4HANA or conservative outside-in benefits due to moving from a traditional ERP to enhanced SAP S/4HANA and LoB/cloud capabilities. As each
enterprise is at a different level of maturity, we recommend working with you to determine the value proposition for your enterprise.

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CUSTOMERS ARE ACHIEVING VALUE FROM SAP S/4HANA

SWISS PROPERTY Villara Corporation


SWISS PROPERTY builds better homes that provide a better living experience by Villara Corporation offers building services, from heating and cooling to home
design. Built to the highest standards and with an eye to the future to provide theaters and solar installations, for residential and commercial properties.
their clients investments of lasting value. By establishing its digital core with SAP Villara Corporation has to track actuals against estimates in real time on more
S/4HANA, SWISS PROPERTY is prepared to meet its ambitious growth goals than 500 simultaneous projects and report on operational metrics. The
and to reinvent the value creation chain of residential real estate. The key to this powerful combination of SAP S/4HANA and SAP BusinessObjects™ Lumira
is a future-proof platform that can be extended quickly to support the most- software plus SAP BusinessObjects business intelligence (BI) solutions helps
modern and personalized property solutions for customers. Villara deliver actionable, real-time reporting instead of finding out what
happened weeks later.

Company Company
SWISS PROPERTY Villara Corporation

Industry Industry
Engineering, construction, and Engineering, construction, and
operations – real estate operations

SAP solutions SAP solutions


SAP S/4HANA SAP S/4HANA Finance
SAP Fiori SAP BusinessObjects Lumira
SAP BusinessObjects BI solutions
Customer Web site
www.swiss-property.ch Customer Web site
www.villara.com
Click here for the source reference
Click here for the news article Click here for the source reference

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Studio SAP | 49293enUS (17/04)

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