Tap Into New Business Models With SAP Leonardo

At the SAP Leonardo Symposium, GEA and Hilti gave informative insights into use cases for the technologies in the SAP Leonardo portfolio.

Since the days of the Roman Empire, people have relied on written receipts – now known as bills of lading – to make shipping goods from party to party as secure as possible. Bills of lading are important because they serve as documents of title, which means that the person who is rightfully in possession of the bill of lading also has the right to the goods. On production of the original document at the destination, the carrier transfers the transported goods to the next party. The weaknesses of this system are obvious and criminals are known to exploit such vulnerabilities to get their hands on the goods, constantly putting trade at risk.

But help is at hand in the form of blockchain technology. This open, distributed ledger records transactions securely and is inherently resistant to modification. It’s therefore the ultimate evidence of ownership rights.

Last month, Tanja Rückert, president of IoT & Digital Supply Chain at SAP, presented a proof of concept whereby a digital version of a bill of lading is generated using blockchain technology. At the event hosted by the German-speaking SAP User Group (DSAG) and SAP as part of the SAP Leonardo Symposium in St. Leon-Rot, SAP customers had the chance to find out what the “digital innovation system” SAP Leonardo could do for them.

Increased Efficiency or New Business Models: Both Are Possible

Rückert also looked at other examples of the many ways technology from the SAP Leonardo portfolio is already being used across industries. Brazilian mining company Vale S.A. contacted SAP in a bid to reduce its high rejection rate of purchase requisitions. “Within just four weeks, we managed to reduce the rejection rate by 86% using a prototype based on machine learning,” says Rückert.

The biggest benefits of SAP Leonardo lie in the creation of new business models

But SAP Leonardo is about more than merely increasing efficiency. Its biggest benefits lie in the creation of new business models. Andreas Buchdunger, management consultant for Digital Transformation at the industrial process measurement and automation experts Endress+Hauser, illustrated this by means of SAP Asset Intelligence Network. The collaboration solution based on SAP Cloud Platform enables the company to offer its customers real-time wear-and-tear data and predictive maintenance analyses with the help of the Internet of Things (IoT). At the same time, the software gives the company valuable insights into the use of its end devices, which can then flow back into product development.

GEA: From Products to Modular Service Offerings

GEA Group, one of the biggest system providers for the food industry and many other process industries, told a similar story. Anselm Schoenmakers, senior director and head of Service Product Management for Extended Life Services at GEA, reported how new service offerings had arisen for the company from predictive maintenance and condition monitoring for special equipment such as separators and decanters.

“We can offer customers benchmarking to measure their equipment’s efficiency and productivity,” Schoenmakers said. He added that this will make modular service level agreements possible, depending on customers’ desired level of engagement. Customers will then be able to choose among various options: from the simple provision of machines with regular reporting to comprehensive customer care by GEA for entire facilities and processes. Schoenmakers also praised the user-friendly SAP Fiori interface, saying, “Convenience is a factor that shouldn’t be underestimated.”

Anselm Schoenmakers explains GEA Group’s digitization strategy.

The project circumstances were difficult, to say the least. As an internationally operating company, GEA used dozens of different IT systems. However, the initiative quickly became a success, Schoenmakers explained. The technical side was not the only decisive element. A cultural transformation within the organization was crucial to realize all the benefits of digitization. In particular, networks for cooperation across company borders and customer-focused methodologies such as design thinking came into their own here.

Going forward, GEA plans to produce more smart equipment and also wants to reduce the necessity of local expertise through improved remote maintenance.

Hilti: Making Innovations Available Globally – Fast

Hilti Group, renowned providers of technology for the professional construction industry, also chose SAP Leonardo for its digital transformation. As Dr. Johannes Reichert, head of DRIVE,  Hilti’s digitization project, remarked, the company already opted for SAP Business Suite back in 2001. Hilti recognized the power of cloud solutions early on, and implemented SAP Business ByDesign at various subsidiaries. Today, the entire Hilti Group runs SAP, which plays its part in generating annual sales of around 5 billion Swiss francs.

While a global migration to SAP S/4HANA as the digital core of enterprise resource planning (ERP) is planned for November 2018, the company continues to pursue technological advancements elsewhere in its organization. Around 60 new products require a rapid global rollout every year, and they need a suitable integrated IT infrastructure. Reichert is particularly enthusiastic about the speed at which proofs of concept can be created based on SAP Leonardo: “We have the management on board and the customers are delighted.”

It was possible to introduce innovations that were very simple but very useful for customers at a reasonable price. It’s often a problem to know precisely which Hilti tools are being used on a construction site, because dirt or scratches can make serial numbers illegible. Thanks to an NFC chip in the tool and an app based on SAP software, customers can now scan the tool with their smartphone to identify it uniquely and access all the tool-specific data. Reichert says an interdisciplinary team comprising members from Hilti and SAP has proven to be highly constructive. They meet every week and regularly hold design thinking workshops to discuss the latest developments.

What’s more, the mounds of paperwork required for inventory control on construction sites are becoming a thing of the past. A Hilti app that draws on IoT technology makes it possible to record all the equipment required on a particular site and then ascertain whether tools are missing and where any missing tools are located. And, thanks to the cloud platform, information about tools that are switched off can be updated as soon as they are switched on again.

At the end of his presentation, Reichert recommended that interested companies not just focus on ERP on their journey to digitization. An integrated approach that taps into the value of interfaces with SAP BW/4HANA and SAP Leonardo enables companies to reap the biggest business benefits.

In particular, it’s important to rethink existing IT landscapes and to always follow a “cloud first” principle. Collaboration among SAP, the company’s IT departments, and the business units can bring people with a wide range of skills together and thus foster a sustainably innovative environment.