Value Creation In Digital Circular Economy Business · The Digital Core 18 Customer Experience 19...

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© 2017 SAP SE or an SAP affiliate company. All rights reserved. Value Creation In Digital Circular Economy Business Inspire and shape a digital world that reinvents waste, recycling, and environmental services 2017 Edition

Transcript of Value Creation In Digital Circular Economy Business · The Digital Core 18 Customer Experience 19...

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Value Creation In Digital Circular Economy BusinessInspire and shape a digital world that reinvents waste, recycling, and environmental services

2017 Edition

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Value Creation in Digital Circular Economy Business © 2017 SAP SE or an SAP affiliate company. All rights reserved.

Dear Customers and Partners, 

The global environmental services industry is transitioning into a “circular economy” of zero waste, with Internet-connected sensors on waste bins and a state of raw material scarcity. Citizens and enterprises are becoming aware that waste components are valuable and can be reused so as to reduce to the consumption of natural resources. This will replace the current “take, make, consume, dispose” linear economy approach that creates massive waste.

A circular economy transforms us into closed-loop material consumption without waste. One example is “closed supply chains,” which challenge the classic business model of collecting, processing, and depositing waste. Second, manufacturing companies are entering the waste market by extending the lifecycle with “products as a service” and therefore avoid generation of waste. Third, digital disrupters like Rubicon Global have entered the market with an e-commerce marketplace, forcing incumbents to try to differentiate through pricing and unique service offerings.1

New technology also transforms classical business models. Examples include Internet-connected waste bins, smart devices, and real-time route optimization. Innovators create new business practices with full transparency of execution status, reduce service execution costs, minimize environmental impact, and increase recycling efficiency. Technology can help save natural resources, but it can also help incumbents to avoid price wars and prevail against new competitors with better services and new solutions.

We find that leading players in the new circular economy are companies that are reevaluating their markets and key strengths to:

• Reimagine business models to find new revenue and profit sources capitalizing on omnichannel customer engagement and commerce, hand in hand with their asset management competences

• Reimagine business processes and use digital technology by converging all types of operational data to optimize business outcomes

• Reimagine the role and structure of their workforce to support their future business

Digital technology will be a key enabler to transform new business models, business processes, and ways to work into sustainable revenue and profit drivers.

This document offers our perspective as to where the waste, recycling, and environmental services industry will go and how SAP can help innovators to develop their business in a digital circular economy.

We are looking forward to your feedback.

A MESSAGE FROM HENRY AND RAIK

2/22 

Henry Bailey Global Vice President Utilities Business Solutions SAP

Raik Kulinna Global Lead for Waste, Recycling, and Environmental Services SAP

The “digital circular economy” offers opportunities for leading players to use digital technology to create new customer experiences, manage demand and supply in real time, optimize service execution, and deliver new business outcomes in a resource- constrained world.

Henry Bailey Global Vice President Utilities Business Solutions SAP

Raik Kulinna Global Lead for Waste, Recycling, and Environmental Services SAP

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TABLE OF CONTENTS

Executive Summary 4

Top 5 Technology Trends 7

Reimagining the Circular Economy 9Reimagine Business Models 11Reimagine Business Processes 13Reimagine Work 14SAP HANA: The Great Simplifier 15

Digital Business Framework for Circular Economy 16The Digital Core 18Customer Experience 19Workforce Engagement 20 Business Networks and Supplier Collaboration 21Internet of Things for the Circular Economy 22SAP HANA Platform, A New Computing Paradigm 23How Does It All Come Together 24Digital Reference Scenarios 25

How to Start 26

Why SAP? 28SAP Committed to Innovation 29Complete Digital Business Solution 30Digital Business Services to Drive Your Success 31 SAP Comprehensive Ecosystem 32

Appendix Additional Resources 33Definition of Terms 34SAP Comprehensive Digital Industry Portfolio 35

♻�

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EXECUTIVE SUMMARYBig picture: The digital circular economy is real, and it will continue to disrupt classic waste management concepts.

Digital business models are disruptive. The rules have changed.• Rubicon Global is a cloud-based

trading platform for consumers of environmental services.1

• Uber offers temporary UberRECYCLE waste collection events leveraging the existing driver network.4

• Amazon is not just an e-commerce platform – it is also a marketplace for reuse of products and therefore is an example for channels to “trade waste” outside the waste industry.7

• France and Italy started to fight against food waste by making it mandatory that food waste is donated.8

• Forum for the Future and Unilever developed a “Circular Business Model toolkit” helping classic product companies to go beyond the “take, make, consume, dispose” business.9, 10

• Apple implemented circular economy business models inside its iPhone Upgrade Program, Apple Refurbished, and Apple Reuse and Recycling.11

• Forrester predicts that 1 million of U.S. business-to-business (B2B) salespeople will be substituted by self-service e-commerce by the year 2020. Today, nearly 75% of businesses are more likely to buy from a Web site than from a sales representative.12

The digital economyFive technology trends have converged into the digital economy – hyperconnectivity, supercomputing, cloud computing, a smarter world based on outcomes, and cybersecurity. The resulting 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. 2

Leaders are emerging quickly and from unexpected placesIndustry boundaries are already blurring. What were previously relatively secure domains owned by waste management and environmental service companies are now being challenged by new market players. For example, “recommerce” marketplaces like Amazon and eBay (secondhand e-commerce) with superior customer experience help already to extend the lifecycle of goods and even broken parts. It is a small step for new market players to enter the market and provide recommerce for goods together with ecological recommerce (reverse commerce for waste including valuable raw materials) at the same time.3 An example of this is Uber, which does not own taxis. Its driver network has already used an UberRECYCLE event to collect e-waste.4 Second, Rubicon Global is a cloud-based environmental services trading platform that uses the analytical insights of customers’ waste streams.1 Outside the waste industry, producers make their own plans – the paper industry has now expanded into the collection of paper waste.5 Circular economy business models will address the full material lifecycle and by definition will make classic linear economic business models obsolete.

It’s not about you – it’s about your customersFor many waste and recycling companies, executing high-quality services is the core focus. Customers now start to expect a new type of experience: one that is frictionless, where commerce is seamless, and where technology is invisible – one that makes their lives easier and that is good for the environment. Customers aren’t concerned about whether this experience is provided by a classic waste company or a new startup in the market.

Early adopters are winning Research shows that companies that embrace the digital world and execute on their digital strategy outperform the average performance of other organizations in their industry by 6%–9%.6 A digitally powered circular economy will force all market players to rethink their role. Some key questions include:• What business segments, trends, and technologies allow market

leadership or differentiation in a new digital circular economy?

• Which tasks are better allocated to a partner in the network?

• What’s the best way to adapt continuously to changing market conditions?

• What are profitable business models based on these new technologies?

• What is the best way to capitalize on the new business models arising from new technology like Internet-connected smart waste bins?

WHAT DOES THIS TELL US?The road map to relevance requires reimagining business models in a digital circular economy and proactively evolving before new competitors emerge.Every business is now a technology business.

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EXECUTIVE SUMMARYThe Past and the Future: The Circular Economy Transitions

20 seconds to complete one truck weighing operation with an SAP® solution at Berliner Stadtreinigungsbetriebe AöR13

70% more agile data-loading processes and 90% faster resolving of data-load issues with SAP Business Warehouse powered by SAP HANA®14

2x increase of cargo handling capacity achieved with optimized logistics using SAP Cloud Platform at Hamburg Port Authority15

27% savings on total cost of ownership when consolidating on a platform from SAP16

Transformation DriversThe value chain in the linear economy is transforming, driven by various global trends.

• Increasing regulations put companies at risk of noncompliance, which can not only cause fines but impact brand, image, and social license to operate.

• Energy and resource constraints are forcing all industry sectors to find new circular economy business models. Zero waste philosophy and circular economy action plans will make linear economic business models obsolete.

• Smart equipment: “Intelligent” Internet-connected waste bins, vehicle telematics sensors, the Internet of Things (IoT) for waste equipment, and traffic data are available now and provide insights into increased efficiency and new business models.

• Lack of skilled workforce: The waste and environmental services industry competes with more traditionally attractive industries for talent.

• Customer expectations: Customers want to be responsible, and they like to interact. They expect instant answers and easy-to-use communication channels, with the user expertise from their private commerce.

New ProcessesThe digital circular economy requires new business processes and new process best practices. Digital leaders are motivated to reimagine their business processes. They are driven by rethinking their internal processes and the transformation of IT, they are searching for business innovations based on new business models, and they want to differentiate at their customer experience. Additionally, leaders are seeing in today’s processes a large risk factor for becoming unattractive for talent and the contingent workforce.

The new digital technologies will increase the operation efficiency based on the new process insights into customer and market demands as well as the real-time insights into operations.

The digital circular economy will establish new best practices with transformed intern processes, with a transformed IT and with differentiating customer experience on all channels.

The Digital Circular Economy EnterpriseFulfilling the volume of services was the core principle for classic waste and environmental businesses in a linear “take, make, consume, dispose” economy. However, this is no longer sufficient, and leading businesses are aiming to design a system that better balances profitability of services execution, using new technology including consumer-grade customer experience and the Internet of Things. Early adopters have already started to establish new digital business models – more environmentally friendly. Digital circular economy enterprises leverage these new real-time insights and control to differentiate in the market.

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EXECUTIVE SUMMARYRoad Map to Run Simple: Steps to Digitizing Your Business

REIMAGININGDo you have the right strategy? Start by reimagining your current enterprise with innovate business outcomes and customers at the center.

REIMAGINE BUSINESS MODELSDigitalization, regulations, and globalization destroy established linear economic business models without a clear road ahead. Alternative business models like recommerce and ecological re-commerce combined with a zero waste philosophy will make their way. Our digital circular economy business model toolkit helps early adopters to find their place in the changing circular economy. This comprehensive toolkit combines:

• Circular business models • Classic linear business models

• Enabling business models

• Digital transformation business models

REIMAGINE BUSINESS PROCESSESChanging business models and digital technology drive business process efficiency and innovation that inspire new business approaches and accelerate breakthrough technology in planning, service execution, recycling, storage, raw material trading, and disposal.

REIMAGINE WORKThe fundamental transformation to empowered consumers – including their role as waste generators – profoundly changes what people do and how they learn, interact, engage, and grow. Many tasks in commerce and planning processes will be automated, but engaged employees will become an even greater asset in shaping the customer experience as their roles change.

PLATFORMDo you have the right platform?

Leaders are investing in digital capabilities that are congruent with their strategy. The shift to digital business will provide all participants the right platform to drive efficiency, accelerate energy innovation, and develop new business models.

We help ensure solutions align to desired outcomes. SAP’s digital business framework is based on the five key pillars of a digital strategy:

1. Customer experience across all channels2. Supplier collaboration and business networks across

all spend categories (maintenance, repair, services, and expenses)

3. Core business processes (finance, procurement, supply chain, and work management)

4. Workforce engagement, including employees and contractors

5. Assets and the Internet of Things to drive real-time insights and new business models

ROI drives this significant phase of the transition to digital. It’s not about any one of the above five pillars, but rather how they all interconnect to achieve business outcomes.

We apply design thinking as our key approach during the reimagining phase. Design thinking can be described as a discipline that uses the designer’s sensibility and methods to match business needs with what is technologically feasible and what a viable business strategy can convert into customer value and market opportunity.

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TOP 5 TECHNOLOGY TRENDS

TOP 5 TECHNOLOGY TRENDS THAT ENABLE THE DIGITAL CIRCULAR ECONOMY

© 2017 SAP SE or an SAP affiliate company. All rights reserved.

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EXECUTIVE SUMMARYPerfect storm: Five technology trends changing everything

We are witnessing an unmatched era of true business innovation. Breakthrough technologies have matured and hit scale together, enabling five defining trends:

HYPERCONNECTIVITY

SUPERCOMPUTING

CLOUD COMPUTING

SMARTER WORLD

CYBERSECURITY

01

02

03

04

05

Every participant in the circular economy, every smart bin, every smart truck, every traffic sensor, and every recycling machine is connected, disrupting all the established rules in classic linear consumption models.17, 18 Connectivity drives the new service quality, better service quality, and better insights to breaks in resource cycles.

The limits of 20th-century computing power are gone. Networking and in-memory computing allow for the creation of infinite new business opportunities. In-memory computing drives full transparency and predictive analytics at any time in the flow of materials in a circular economy and in the operations in the field.

Technology adoption and business innovation now move at lightning speed. Technology infrastructure is now rented to eliminate barriers to entry – especially for super-computing. B2B transactions that are moving to new cloud-based collaboration platforms, where millions of circular economy players are connected in a matter of days.

Sensors, smart vehicles, connected recycling machines, and artificial intelligence are the new normal. Businesses will manage products they are selling remotely. Sensors lay at the heart of the circular economy. The new digital circular economy quickly replaces service models in “take, make, consume, dispose” economic models.6, 10, 17, 18

Cybercriminals have expansive new capabilities to attack, undermine, and disrupt businesses. Trust remains the ultimate currency, giving security-focused businesses a significant advantage in brand reputation. Insight into the circular economy is the new gold that needs to be protected.

More details in the SAP white paper “Value Creation in a Digital Economy: Adapt or Die in a Digital World Where

the Consumer is in Charge”:

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REIMAGINING

DIGITAL ECONOMY OFFERS INFINITE NEW OPPORTUNITIESIn a connected world where every company is becoming a technology company, smarter products and services will refocus commerce on business outcomes and blur industry lines.

© 2017 SAP SE or an SAP affiliate company. All rights reserved.

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DIGITAL INNOVATION IS REALDigital circular economy companies understand that hyperconnectivity and Big Data are the keys to value creation. Based on our collaboration with thousands of businesses worldwide, we see winning companies moving quickly in three strategic areas.

REIMAGINE EVERYTHING IN THE CIRCULAR ECONOMY

REIMAGINE BUSINESS MODELS

REIMAGINE BUSINESS PROCESSES

REIMAGINE WORK

The digital circular economy combines the digital business transformation and circular economy into new innovative business models. We developed a toolkit that consists of the following archetypes:

• Circular business models are fundamental alternatives to business models in a linear “take, make, consume, dispose” economy. The goal at production companies is to gain competitive advantages with help of the zero waste philosophy. Circular business models reduce the consumption of natural resources.

• Linear business models are the classic business models from waste and recycling companies. Most of them are based on the assumption that waste is continuously produced – and that will become obsolete with zero waste concepts.

• Enabling business models enable or enhance the classic linear-focused business models and circular business models.

• Digital transformation business models enable and enhance the other business models with help of new software-based innovations. Digital transformation business models are established and have impact, also changing the linear and circular economies to make them obsolete.

Innovative business processes run across the entire value chain and deliver the outcomes of the reimagined business models.

• Smarter customer engagement: In addition to delivering the exact requested quality on time, new environmental services could provide full transparency during the service lifecycle and allow access to detailed real-time services data. New processes in all channels will provide such transparency and will increase the customer interaction with lower costs.

• Operational efficiency: Capturing and analyzing data allows better predictions and decisions to be made in the execution of environmental services, in recycling, and the material trading.

• Real-world sensing of demand: Access to and analysis of real-time demand information will increase planning accuracy and give leaders access to intelligence that supports them in making the right decisions at the right time.

• Manage talent and recruiting: Companies can simplify recruiting, new employee onboarding processes, and training.

• Environmental efficiency and transparency will help companies diversify into business models beyond the linear economy.

Reimagined business models and processes need an adaptive workforce with new skills and competencies.

• Digital business processes: Eliminate manual transaction steps and require “exception handling.”

• The omnipresence of Internet of Things (IoT)-connected assets and mobile-connected customers allows simplified process execution down to a single step.

• The right information at the right time on the right device improves decision quality, profitability, and productivity.

• Predictive and self-learning software improves machine-to-machine collaboration and needs people who orchestrate complex systems.

• Interactive technologies improve user experiences and deliver the right visual, text, and audio information on demand.

• Flexible business-to-people relationships create adaptive businesses that value the specialists who build and run the digital enterprise of the future.

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Internal Processes and IT TransformationStaying competitive and becoming more innovative are core motivations in a changing market. Leading companies adjust their IT landscape and internal business process in order to capably support the company at the required market changes. Examples: • Cloud operations in nondifferentiating internal business

processes free up resources to innovate in differentiating processes with innovative technologies.

• Operational analytics in real time combined with transactional processing on one platform empower the business to make decisions with reduced support from the IT department.

Business Innovation Business Innovation has always been an important aspect of corporate progress, but sometimes innovation gets lost. Innovation accelerates change toward a digital circular economy. Examples: • Companies are using digital assets like smart bins, smart

trucks, smart streets (smart urban traffic sensors), customer Big Data, and weather data in order to gain a higher operational excellence in the waste collection, environmental services operations, and all other kinds of raw material transport services.17

REIMAGINE BUSINESS MODELS

A sustainable society with its zero waste philosophy promotes a shift away from product consumption with waste at the end of the lifecycle. The circular economy combined with the digital transformation forces all industries to rethink their business models. The following overview describes the business drivers that promote waste and environmental services companies to adopt digital technologies in response to the changing market and competitive forces in the digital area.

• Connected recycling machines and improved customer experience optimize processes in drop-off centers and recycling plants’ waste-to-energy facilities, making landfills obsolete.

• The breakdown of silos and industry symbiosis acting together on the insights of Big Data optimize environmental impact to form the new starting point to develop complete new services.

Customer Experience The customer experience has changed in recent years – beyond classic customer relationship management (CRM). Traditional shoppers have transformed into digital consumers. They expect today the same B2B customer engagement without breaks in the customer journey like leading marketplaces in private usage. Examples: • Digital capabilities like business networks, B2B

omnichannel customer experiences, and in-memory operational analytics reduce process costs and help to find better ways for secondary raw material trading.

• Reduced complexity in the customer experience and internal order fulfillment processes enables companies to reach the next level of maturity with the next wave of game-changing innovations and the possibility to create services from the customer’s point of view.

REIMAGINE EVERYTHING IN THE CIRCULAR ECONOMY

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REIMAGINE BUSINESS MODELS

Business models for environmental services companies are influenced directly from circular economy business models. We are using a collaborative toolkit from Forum for the Future and Unilever9 as well as the business models described by the European Environmental Agency10 and combine them with the digital transformation business model and linear-focused business models in a comprehensive toolkit for the industry. The digital circular economy is based on the innovative combinations of these building blocks for new disruptive ways of value creation.

Linear business models describe the logic of classic waste companies, the way they operate, and how they create value today• Linear-focused waste collection and environmental

services

• Drop-off centers

• Trading of waste

• Waste-focused transport services

• Disposal (classic incineration, landfilling)

• Classic consulting services for waste

• Green-washing/green-empathy-washing (imitation circular economy business models)

digital circular economy business model toolkit

Circular business modelsoutline new ways for operations and value creation based on the zero waste philosophy. They can be leveraged across all industries and will make classic linear business models obsolete.9,10

• Closed-loop recycling (material recovery)

• Downcycling (energy recovery, waste to energy)

• Upcycling

• Industrial symbiosis/waste as a resource

• Circular-focused collection services/zero waste environmental services

• Eco-design/sustainable design

• Extending product lifecycle

Enabling business modelsenable or enhance all other business models. Such enabling models are independent of the materials flow philosophy in their nature.9,10

• Product as a service (service- and function-based business models, device leasing services)

• Vendor lock-in

• Local loop/local consumption

• Modularity/separation of concerns

• Personalization/user-oriented products

• Collaborative consumption shareconomy

• Financial optimization leverages financial mechanisms to optimize the complete product lifecycle

• Policy innovation, licenses, certification offer the agility to adapt to changing regulations and similar soft demands from the market

Digital business modelschange other business models through technology innovations. The fundamentally increasing efficiency can make classic ways of operation unprofitable.• Internet of Things (IoT) and smart assets harness

assets and the IoT to drive real-time insights and new, innovative, and “intelligent” services

• Customer experience omnichannel aims at an outcome-based customer experience

• Workforce engagement focuses on a smarter and engaged workforce across all employees and contractors

• Supplier collaboration and business networks leverage new digital alternatives for business collaboration

• Simplified and innovative core leverages an innovative platform for core business processes that is powered by in-memory computing and Big Data collection. Process platforms and analytics are merged and work in real time to become smarter, faster, and simpler.

REIMAGINE EVERYTHING IN THE CIRCULAR ECONOMY

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REIMAGINE BUSINESS PROCESSES

The traditional value chain in waste, recycling, and environmental services is transforming at breakneck speed as a result of massive changes of profitability within business segments, new value chain elements, and highly digitalized customer relationships.

Smarter Customer EngagementInnovative service offerings and processes can have a game-changing impact on customer relationships. All service processes will be digitally connected to the workforce, suppliers, customers, and service equipment for more efficiency, transparency, and customer value.17 New digitally powered services and service bundles for environmental services could provide better transparency during service execution and allow access to detailed service consumption data. Joined service planning across the circular economy could ensure in-time availability to the customer and better planning for the service workers and subcontractors. To sum up, smarter customer engagement will transform beyond classic sales processes leveraging all channels, 24x7 availability, and casual user experience similar to commerce in private life. 19

Operational EfficiencyCapturing and analyzing data from Internet-connected equipment, vehicles, or smart devices allow better predictions, simulations, and decisions to be made. Connectivity of all devices with the back office and process automation on top can reduce error rates, add speed, and cut operating costs. For example, analyzing sensor data from equipment including Internet-connected waste bins helps predict possible service times and equipment failures early with increased service-level agreement (SLA) fulfillment. Augmented reality may allow workers to safely maintain equipment without the need to call skilled technicians. And integrated planning of service times, recycling capacity, and transportation capacity help optimize throughput and asset utilization with higher profitability.

Real-World Sensing of DemandThe access and long-term pattern analysis of real-time information will provide more transparency of market demands and increase planning accuracy. It provides managers access to real-time service demand information that will support them in making the right decisions at the right time. Big Data analytics allows understanding end-consumer behavior, so companies will be able to predict the demand for services in the field. It will also provide greater insight about raw material consumers in the secondary raw material market.

Managing Talent and RecruitingThe waste, recycling, and environmental services industry is not automatically the top address for new talents. The negative perception of environmental problems caused by linear business models makes the competition for new employees more challenging. Use of digital and circular economy innovation helps to reduce that challenge and makes it easier to attract and retain new workers and contingent labor. Simplification of several basic processes for new employee onboarding is one starting point. Furthermore, interactive training and modern change management can increase the likelihood of user acceptance of new processes and quickly have new employees comfortable in their roles.

Environmental EfficiencyUsing fewer natural resources for the same service execution while achieving the requested service quality has been a target for some time. With sensor data being collected and correlated with business data in real time, new ways of running waste collection, recycling, and environmental services are now much easier. The analysis of Big Data brings the economy to new maturity levels of environmental efficiency.

REIMAGINE EVERYTHING IN THE CIRCULAR ECONOMY

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REIMAGINE WORK

The fundamental transformation from historical structures to digital circular economy business profoundly changes what people do and how they learn, interact, and grow.

Every substantial business transformation automates manual tasks, enriches jobs, and creates new work.

Digital business processes replace manual transaction work in procurement, data collection within services execution, recycling production planning, inventory management, invoicing, and payment processing. Digital processes have access to real-time analytics to support rule-based decision making.

The right information at the right time on the right device. People who need the knowledge have digital access on demand and in real time – regardless of if they are part of the core or the extended workforce.

Predictive and self-learning software accelerates the delegation of business processes and decisions from people to equipment. Service execution and recycling processes are supported or controlled by predictive and self-learning systems that interact with equipment and business processes.

Interactive technologies reflect the transition of people’s roles from transaction workers to exception workers who engage when the digital rule book needs human creativity and ingenuity.

Flexible business-to-people relationships are required as environmental services companies operate high volumes of technical assets. However, the transformation to a digital circular economy also creates hundreds of millions of new people interactions: between customers and service teams, between the core and the extended workforce, and with the public over social and broadcasting networks. Real-time digital information on the right devices is critical to advance the business agenda through interaction between people.

People continue to be key assets in the digital circular economy. Their roles will change, but their value to each component in the network will grow.

REIMAGINE EVERYTHING IN THE CIRCULAR ECONOMY

GARTNER“SAP Fiori user experience is a radical rethinking of

the way people should interact with an ERP system. Based on these factors, Gartner believes that SAP Fiori UX is invaluable.”20

KEOLIS“While other software providers were

answering our request with complex solutions, [SAP] SuccessFactors came to us with an easy-to-implement suite of solutions.”21

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In order to reimagine everything in the digital circular 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 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 (such as finance) and unstructured data (text, pictures, audio, video) 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, the platform’s rapid adoption across multiple industries validates its massive potential for digital businesses.

SAP HANA: THE GREAT SIMPLIFIER

With in-memory computing, we can now finally:

1. Leverage Big Data from vehicle, smart waste bin, weather, and urban traffic sensors, social media, geospatial processing, and raw material market insights. Bringing all data signals together leads to the perfect service predictions and autonomous service optimizations, which can be instantly acted upon in transactional systems via human and machine-to-machine interfaces.

2. Extend the business process to interoperate with all players in the circular economy in near-real time via advanced cloud-based business networks.

3. Modernize business processes from finance to service execution, running them in real time with no data replication, no batch programs, and advanced predictive analytics.

These capabilities open infinite new ways of optimizing business, driving business digitalization, simplifying everything, reducing cost, and providing the agility required in the fast-changing circular economy.

SAP has constructed an innovation road map designed to bring in-memory computing together with cloud computing and enterprise mobility. This strategy has been embraced by early adopters who are leading the transition to digital circular economy.

SMARTER DECISIONS + SMARTER TRANSACTIONS = SMARTER BUSINESS

SAP S/4HANA®Business process

Business intelligence

(data and information)

Marketplace

Travel network

B2B payments

Logistic services

Service and labor

Supplier collaboration

. . .

Social

Big Data source

Web services

Geospatial

Machine data

Third-party data

. . .

SAP HANA® Platform

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DIGITAL BUSINESS FRAMEWORK

A SIMPLE AND PROVEN APPROACH TO VALUE CREATION THROUGH DIGITALIZATIONEvery company across all industries requires a simple digital approach to build a pragmatic and executable vision on its digital strategy.

© 2017 SAP SE or an SAP affiliate company. All rights reserved.

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DIGITAL BUSINESS FRAMEWORK FOR DIGITAL CIRCULAR ECONOMY Every company needs to think about digitalization across five key pillars

SAP understands the five pillars of business digitalization, and we also understand that these ever-changing requirements are big challenges for businesses. The reimagining process helps crystallize the future business model.

As a result, we have built a structured framework to think through how to develop and execute on your digital business strategy: the digital business framework. With this framework, the entire value chain will be digitalized, including the core, which serves as the platform for innovation and business process optimization. Every company can develop a digital strategy across these five pillars:

1. Outcome-based customer experience

2. Replatforming of core business processes and bringing together business processes and analytics in real time to be smarter, faster, and simpler

3. Smarter and engaged workforces across all employees and contractors

4. Supplier collaboration to accelerate growth innovation

5. Harnessing of assets and the Internet of Things to drive real-time insights and new business models

Customer Experience

Workforce Engagement

IoT & Supply Chain

Spend Management

Digital Core

Business Transactions

Intelligent Insights

SAP HANA SAP Cloud Platform

BLOCKCHAIN

MACHINE LEARNING

INDUSTRY

APIs

SECURITY

SAP Digital Boardroom

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A new generation of enterprise resource planning (ERP) solutions running in real time, integrating predictive analytics, Big Data, and mobile, will change how we work, how we run our business, 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

45% of enterprises are building direct-to-consumer fulfillment capabilities23

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 Simple and unleash the full power of the digital business.

Real timeReal-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 simulationEvery employee can gain real business insights with the help of simulation and predictive tools to drive smarter decisions, improve reliability, and reduce outages.

AgilityThe ability to rapidly enter new markets, acquire and onboard new digital circular economy business models, or reflect an organizational change in one-tenth of the time it takes with today’s systems will yield the agility required in the digital economy.

Deployment choice and lower total cost of ownership (TCO)Accessing solutions to run the core has to be simple. Companies now have the choice to deploy in-house or in the cloud. In-memory computing also has a significant impact on TCO, and it will free up funds for infrastructure investment.

Consumer-grade user experienceUser experience is key to accepting digital change. It drives adoption, user engagement, and people productivity.

SIMPLIFY WITH SAPCurrently 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 do you 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.

SAP S/4HANA®

Procurement Manufacturing Supply chain

Finance

SAP HANA® PLATFORM

Order management

THE DIGITAL CORE FOR THE CIRCULAR ECONOMY

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Digital technology has changed the game. But customers changed the rules. Customers demand simple, seamless, personalized experiences across any channel, anytime, anywhere, and on any device.

68% of customers are willing to pay more for a better customer experience24

60% of consumers intended to conduct a business transaction or make a purchase, but decided not to due to a poor service experience25

Three key trends are reshaping the customer experience:

Customer journeyCustomers choose their own journey in multiple channels at their convenience – the pattern that emerges is not linear, as in the past. Customers expect the full context of the service execution on each channel in real time.

Big Data and marketing in near-real timeBig Data allows companies to sense and respond to customers’ needs in real time and predict the next best step for engaging with them. 

Smarter customer engagementThe new digital customer expectations require a new business model, new organizational capabilities, new business process capabilities, and a strategy beyond direct sales engagements on all channels. They also require a much different approach to reach customers to convert them over the preferred channels.

DIGITALIZE YOUR END-TO-END CUSTOMER EXPERIENCE AND COMMERCE PROCESSES WITH SAP A single platform brings together: marketing, sales, services, and ecological recommerce (based on the #1 omnichannel SAP Hybris® solutions) to help ensure seamless digitalization of the entire customer experience. SAP solutions for customer engagement and commerce, powered by SAP HANA, 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

• 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

• Enable full integration with your core business processes

$

open

TVVideo

sharing Social media

Mobile

Meter to cash

Execution

TradeRetail

E-commerce

Phone SMS

Self- services

Call center

CUSTOMER

SAP HANA® PLATFORM

CUSTOMER EXPERIENCE FOR THE CIRCULAR ECONOMY

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WORKFORCE ENGAGEMENT FOR THE CIRCULAR ECONOMY

The world is getting smarter in the digital circular economy. But complexity is overwhelming the workforce in this pursuit.

Complexity is the enemy of workforce engagement. People are working harder than ever but are accomplishing less. People do not have access to smart, consumer-grade technology to work smarter, faster, and better. Organizational complexity is driving cost and slowing down progress. Four forces need to be addressed:

Changing of the guardOver 50% of the workforce will be a millennial by 2020.25 All companies in the circular economy have to devise a workforce strategy to make work in this industry attractive for the digital generation.

Contingent labor on the riseCompanies are turning more and more to contractors and services providers to drive agility and to lower fixed cost. Firms can outsource work but not the responsibility for safe and compliant operations. The contingent workforce must be digitally integrated in all business processes.

Constant reorganizationReorganizing to adjust to the new reality is becoming a constant affair and can’t disrupt efficient operations.

Complexity on the riseRegulations are changing by the day. Layers over layers of management are hindering speed and agility.

41% of executives indicate they’re increasingly using contingent workers26

34% of executives feel that they’ve made progress in building a workforce that can meet future business goals26

30% of executives say their companies give special attention to the particular wants and needs of millennials26

Digitalize your workforce with SAP. SAP S/4HANA + SAP SuccessFactors® solutions + SAP Fieldglass® solutions + SAP Fiori® apps provide the tools for total workforce engagement and advanced analytics.

• Attracting the best people: Recruit and onboard the best workforce, simplify their work, and help 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

SAP Fiori +

EMPLOYEE LIFECYCLE FLEXIBLE WORKFORCE LIFECYCLESMARTER APPS WITH IMPROVED USER EXPERIENCERecruiting/onboarding

Performance and goals Succession and development

Compensation Employee record and payroll

Travel and expense Workforce analytics

Learning

Recruiting/onboarding Time and expense Invoicing/payment Statement of work

Performance management Workforce analytics

Contextual Intuitive

Adaptive and predictive Anywhere/anytime

Secure

SAP Fiori® + SAP Jam™

IMPROVE YOUR TOTAL WORKFORCE PRODUCTIVITY: SIMPLIFY WITH SAP

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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.

Companies have to reimagine business processes to remain competitive and to 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, collaboration across entire vertical markets is key to value creation. Several trends are redefining the game:

Consumer buying experience Business applications must be effortless to learn and use. There is no user manual for iTunes, Amazon, or Google. Low adoption rates due to solution complexity drive users to find alternate channels that cost money from bad spend and lost opportunity.

Network of networksAn open network serving a single market (external 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 SAP Cloud Platform.

Business connectivity at scaleThe greatest challenge and opportunity in connecting vast ecosystems is the exponential data growth generated and consumed by the network. Connecting millions of partners and processing petabytes of data in real time is the core requirement to becoming the de facto standard. Only SAP offers the platform to meet this challenge.

50% of networked enterprises are more likely than their peers to have increased profit margins and market share27

50%–75% faster transaction cycles are being achieved through networked business28

80% of spend is managed with automated processes to drive contract spending and compliance16

SAP gives you incredible capacity to digitalize 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.

• Solution already at scale and covering all spend categories (direct and indirect material, labor and services, travel and expenses)

• Business networks that operate on a global basis, meet data security standards, and operate with near-zero downtime

• Extensive offerings by leveraging services from many partners such as supply chain, financing, payment, supplier certification, and more

Manage expenses Direct and indirect material Labor and services

BUSINESS NETWORKS AND SUPPLIER COLLABORATION

CONNECT BUSINESSES TO THE WORLD AND THE WORLD TO YOUR BUSINESS

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With SAP Leonardo solutions and SAP HANA, organizations can now take embedded device data, analyze this data into information in real time, and apply this information across the value chain to drive business insights and create new business models. The SAP Leonardo IoT platform provides the connectivity to operation technology (OT) systems either directly or through partners. The data is stored and processed in the platform, which provides basic functions such as data services (like operations on time series), predictive analytics, and others. Based on this platform, applications are developed by SAP, partners, and customers that enable the relevant digitally powered circular economy use cases. A connected fleet and the SAP Vehicle Insights application provide the specific enhancements for moving Internet-connected assets.

CONNECT, TRANSFORM, AND REIMAGINE WITH SAP

The most dramatic change in the circular economy will be driven by the Internet of Things and Big Data science.

Early adopters in the circular economy are finally starting to understand the full potential of Big Data and the Internet of Things. We are witnessing new use cases across all industries with breathtaking initial results. Here are some key trends in this space:

Smart services driving new business models Companies and cities are embedding Internet-connected sensors in their waste bins, vehicles, and recycling machines, and giving smart devices to all field workers. As a result, they are becoming technology companies that rethink the value delivered by their products and that hire hardware and software engineers to implement their ideas. The Internet of Things for waste bins and vehicle telematics (“Internet of Bins”), connected recycling machines (Industry 4.0 for recycling ), mobile, urban traffic sensors, and weather data, combined with in-memory processing, enable new business models for waste and environmental services with unique operational efficiency.

Data-driven business modelsThe transformation in the industry is enabled by Big Data analytics and the computing power to process massive amounts of data in real time. Insights into the circular economy will provide competitive advantages and the pole position in the zero waste economy.

Technology-driven customer engagement and engineeringCustomer sales/services and engineering are spending more and more on Big Data and sensor technologies as their functions are the most transformed by these new technologies. Circular economy business models require insights to keep the natural resources in cycles.

New alliancesSeamless collaboration around new business models involves partnerships that may not have made sense a few years back. There will be completely new alliances in comparison to classic “take, make, consume, dispose” economic models.

By 2020: 3 billion Internet users and an expected 30–50 billion connected devices29, 30, 31

58% of organizations worldwide see the Internet of Things as strategic to their business32

Up to 2x more container-handling capacity within the same land area at the Port of Hamburg with a connected logistics solution based on SAP HANA33

INTERNET OF THINGS FOR THE CIRCULAR ECONOMY

ConnectedMarkets

ConnectedPeople

ConnectedInfrastructure

ConnectedProducts

ConnectedFleet

ConnectedAssets

Product insights

Goods and equipment

Supply networks

SAP Leonardo for edge

computing

SAP® Leonardo Bridge

SAP Leonardo Foundation

SAP Cloud Platform and SAP HANA® Platform

Mobile asset insights

Logistics safety

Logistics networks

Building insights

Construction

Energy grids

Market insights

Rural areas

Urban areas

People and work

People and health

People and homes

Fixed-asset insightsManufacturing asset insightsManufacturing

networks

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SAP HANA PLATFORM, A NEW COMPUTING PARADIGM

Dream, develop, and deliver with SAP Cloud PlatformSAP Cloud Platform gives you the mobile, collaboration, integration, and analytic capabilities you need to dream big, develop fast, and deliver everywhere with the following capabilities:

Application extensionsExtend your current cloud and on-premise solutions for additional customization, enhanced business flows, and more

Real-time analyticsEngage customers, optimize business processes, and unleash new revenues with real-time analytic apps, powered by SAP HANA

New cloud appsQuickly build innovative consumer-grade and industry apps for today’s always-on, mobile, social, and data-driven world

Extended storage capabilitiesHolistically manage all structured, unstructured, and infinite data streams with flexible combinations of data stream processing, in-memory technology, disk-based columnar storage, and Hadoop-based storage solutions

Data footprint reductionSignificantly 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

Hamburg Port Authority “The smartPORT logistics platform running on SAP Cloud Platform will help us to achieve our goal of doubling cargo-handling capacity. The more partners that participate, the more effectively the port will run.”15

FCC “With SAP HANA, our data-loading processes are over 70% more agile, and resolving data-load issues is 90% faster. We have eliminated performance-related issues in SAP BW and SAP BusinessObjects Planning and Consolidation. Now we can dedicate ourselves to the business, which is really our key focus.”13

United Energy “For us, SAP HANA made the impossible become possible.”35

The SAP HANA platform is …• A real-time, in-memory platform • A 10x data footprint reduction for ERP • Extended storage including Hadoop open architecture • Developer friendly • Embedded mobile and analytics • Secure • Cloud ready

New apps and services NEW APPS EXTENSION INTEGRATION

Open programming containers (XS advanced: Java, Node.js)

Platform User experience (UX) (Mobile/SAP Fiori®)

Analytics (SAP® BusinessObjects™

solutions/SAP BusinessObjects Lumira)

Integration (SAP Cloud Platform, integration service)

Security Security (single sign-on, identity)

Data platform (SAP HANA DB, SAP ASE)

SAP HANA Libraries (graph, predictive, geospatial)

Big Data (Hadoop, Spark)

InfrastructureInfrastructure delivery

SAP data centers Partner data centers Customer data centersElastic deployment

SAP HANA is the ultimate simplifier and the platform for innovation and digital business.

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HOW DOES IT ALL COME TOGETHER

Executing commoditized environmental services with small insights into profitability, focus on market expansion based on cost leadership, and a decentralized low-budget IT strategy is a common model for waste collection companies. But the classic “take, make, consume, dispose” business model is under pressure and will change soon with closed-loop supply chains and a zero waste philosophy. While the five digital business pillars deliver significant value as stand-alone capabilities, the ultimate goal is to design the next generation of business processes that will span across all the digital pillars.

Internet of Things sensors are used everywhere in a digitally powered circular economy:• Internet-connected waste bins and classic container

identification systems

• Smart (semi-/autonomous) waste trucks including Internet-connected vehicle telematics

• Industry 4.0 with recycling machines and waste-to-energy power plants

• Field workers with smart devices

• Traffic sensors in smart cities

• Weather sensors for services prediction

• Smart data from raw material markets

• Sensors that measure the usage of interactions in all channels for all participants (customer profiles)

The correlation, analysis, and predictive analytics based on such Big Data in real time, in memory, enables:• Predictive service and prediction of service-level fulfillments

• Real-time operational insights and key performance indicators (KPIs)

• Predictive maintenance

Digitally powered circular economy – IoT sensors omnipresent and customer experience omnichannel

Urban traffic prediction

SLA failure prediction

Circular economy service execution

Real-time operational insights and KPIs

Omnichannel service

traceability

Agile demand- driven service

planning

Raw material demand capturing

Internet of waste bins

Co-developed

circular economy business models

1-to-1 marketing: acquire, convert,

retain

Omnichannel sales/

cross-selling

Industrial Internet of Things (IoT)

Digital core and workforce engagement

Customer experience and commerce, collaboration, and business networks

TIME

$

• Predictive planning specific for customers, the raw material market, resource availability, traffic, and the weather situation

• Profitability analysis and up-front simulation in real time and in detail

• (Semi-)automatic planning of operations up to self-learning assistant systems in the future

• The agility needed to adapt to fast market changes, new legal requirements, and sustainability expectations

All elements together yield tangible business benefits for more sustainability in the circular economy:• Environmental excellence with conserved natural resources

and maximized use of resources already available within the economy

• Clear insights into the operations, the market, and the changing environment with high agility to adapt for a better sustainability (profitability, environment, social)

• Guaranteed fulfillment of environmentally friendly service-level agreements

• 1-to-1 marketing with tailored circular economy services

• Better acquisition rate, conversion rate, and retention rate compared to completion and high customer satisfaction

• New revenue streams from new business models inside the digitally powered circular economy

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DIGITAL REFERENCE SCENARIOS

The digitally transformed circular economy will not only disrupt the way of work in today’s waste collection and environmental services companies, it will also produce more disruptive types of environmental services business. The following reimagined digital reference scenarios for future waste and environmental services companies go beyond classic borders and innovatively assemble the five pillars of digital business.

First, “ecological recommerce” will be the next logical step through which today’s recommerce vendors and shopping comparison engines enter the circular economy. New market players open marketplaces for trading of secondary raw material or trading environmental services. On one hand, it will decouple nondigital waste management companies from their customers because waste generators and raw material buyers will be connected over the commerce marketplaces. Ecological recommerce will put more pressure on the waste material prices and the prices for services, toward a premium omnichannel customer experience. SAP Hybris solutions offer all types of customer engagement including ecological recommerce

– for trading or selling of waste and services. The omnichannel experience also connects adopters with the world’s business commerce network and largest supplier network, Ariba® Network.

The second reference scenario is a connected future city that offers all citizens self-service and e-commerce Web sites and city apps with all services of all municipal companies on one platform. Such a city fundamentally improves user satisfaction based on a single access point for users for all the services inside the city, removing all the different city Web pages that confuse citizens today. The central citizen engagement portal is a single platform for commercial services, including environmental services, and it provides service for all citizens as well as for one-time customers such as tourists. Such a city strategy protects municipalities against commercial service providers and helps citizens to better fulfill nonfinancial goals. It simplifies the marketing of new offerings, it enables 1-to-1 campaigns specific to the needs of each citizen, it simplifies cross-promotions like city-specific bonus programs for environmental protection and sustainability, and it helps tourists to enjoy their visit. SAP Hybris solutions provide such a smart platform and are able to combine all city holdings into an integrated omnichannel services and commerce experience.

The third reference scenario for a digital transformed business is an omnichannel e-commerce operation business for waste collection and environmental services similar to Rubicon Global’s. UberRECYCLE-like algorithms and new business models are endangering the traditional planning processes in the waste collection business. UberRECYCLE empowers independent drivers to collect e-waste, and similar new market players will empower small waste companies in the same way as Uber today. There is very little entry barrier to become a large environmental services company very fast. SAP provides the SAP Leonardo, predictive capabilities in SAP HANA, high-volume subscription billing in the SAP Hybris Billing solution, and the omnichannel customer engagement and commerce based on SAP Hybris solutions.

The fourth innovative scenario is a spin-off of an IT department of a classic waste company starting a business and technology consulting company. Such business services can fill the gaps of the shortage of circular economy–specific knowledge in large IT consulting companies and could differentiate with digital circular economy knowledge from classic business consulting companies. Furthermore, such specialized service and consulting companies can include software in their services and bundle it in a comprehensive software-as-a-service and outcome-based service offering. References for such a scenario are AOK Systems as an IT consultant for the insurance industry, T-Systems as a subsidiary of Deutsche Telekom, and Porsche Consulting as a consulting arm of an automotive company. SAP can enable such digital circular economy consulting with its proven record at other IT service providers and strong SAP partner program.

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HOW TO START

THE JOURNEY BEGINS WITH A CAPABILITY ANALYSIS THAT RESULTS IN THE TRANSFORMATION AGENDA

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HOW TO START

THE JOURNEY TO DIGITAL CIRCULAR ECONOMY

The journey to define future business models involves all disciplines of a modern company and requires a systematic approach to identify and capture business opportunities.

STRATEGY ALIGNMENT

OPPORTUNITY ASSESSMENT

GOVERNANCE

SOLUTION ROAD MAP AND ROI

VALUE REALIZATION

1. Strategy alignment: Understand company and SAP strategic direction and identify initiatives

2. Opportunity assessment: Perform an opportunity deep-dive based on strategic initiatives and prioritization based on value

3. Solution road map and ROI: Document the end-state solution and business case including benefits, TCO, ROI, and the strategic road map

4. Value realization: Deliver transformation on time, on budget, and on value

5. Governance: Maximize investments and accelerate value creation with governance based on executive engagement, value delivery, and continuous innovation

1

3

4

5

2

The collaborative value and innovation framework

Companies embarking on the transformation journey to the digital business typically start to reimagine their business with a focus on business outcomes and customers.

Answering the key questions “What role will we play in the value chain?” and “How will we make money?” will provide direction for reimagining your business processes and operational model.

For innovation today, a new level of collaboration is required. As a result, we have developed a framework that will be a continuous and holistic partnership model designed to drive true collaboration and engagement. Outlined below are the five steps of our collaborative value and innovation framework:

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WHY SAP

BUSINESS DIGITALIZATION IS A NATURAL NEXT STEP FOR THE #1 BUSINESS APPLICATION COMPANY

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SAP COMMITED 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

• 80K employees representing 120 nationalities

• 320K customers • SAP operates in 191

countries

Fire and rescue New South Wales is now able to have a comprehensive view of fire and disaster risk to manage 133,000 incidents per year. Over 30 years of experience available in real time in SAP HANA ensures the right people are addressing emergencies at the right time.36

Flood prevention in Buenos AiresUsing the SAP HANA platform to analyze real-time sensor data from storm drains and SAP Mobile Platform to ensure streets and drains are clear, the City of Buenos Aires is well prepared to mitigate risks caused by heavy rains.37

Paperless waste collection in BerlinSAP helps the city-owned municipal waste management company Berliner Stadtreinigungsbetriebe to ensure full data consistency for operational processes. It helped the company to implement paperless processes with the low average stopping time of 20 seconds for waste trucks at the weigh bridge in its own facilities.34

• Solutions for 25 industries and 12 lines of business

• 98% of 100 most- valued brands are our customers

• 76% of world’s transactions managed on SAP

• 110 million business cloud users

• 2.2 million connected businesses

• $820+ billion in B2B commerce

• 99%+ of mobile devices connected with SAP messaging

• 2011 SAP HANA launched

• 2012 SAP Cloud launched

• 2014 SAP business networks largest marketplace in the world

• 2015 SAP Cloud Platform

• 2015 SAP S/4HANA: most modern ERP system

GLOBAL PRESENCE AND

RELEVANCE

DIGITAL ECONOMY

READY

INNOVATION LEADER

INDUSTRY AND LOB FOCUS

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COMPLETE DIGITAL BUSINESS SOLUTION

EXPERTISE ASSETS METHODOLOGY

Through our innovations and over $30 billion in strategic acquisitions, SAP has the best solution portfolio and 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, 6,400+ 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.

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 our collaborative value and innovation framework.

• 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

• 60+ business process benchmarking and best-practice assessments

• 600+ industry-focused innovation scenarios

• Innovation case studies by industry

• Infrastructure to drive proof of concepts

• 13+ co-innovation and living labs with 470+ customer co-innovation/design thinking discussions from 2014 to date

• Business case methodology

• Design thinking

• Benchmarking

• Value partnership framework

Customer experience Omnichannel

Supplier collaboration Business networks Digital Core Workforce

engagementBig Data and Internet of

Things

SAP S/4HANASAP Fiori SAP Jam SAP HANA

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DIGITAL BUSINESS SERVICES 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 and running across all deployment models, to implementing with proven best practices, and ultimately to optimizing for continuous innovation across your digital journey. SAP provides both choice and value within our services, allowing you to tailor the proper approach to meet your needs. Turn to the 30,000 consultants and support professionals who can bring your digital strategy to life. The Digital Business Services organization from SAP offers a consistent

The Digital Business Services organization provides the expertise, assets, and proven methodologies required to accelerate business innovation, reduce TCO, and run a stable platform (on premise, in the cloud, and hybrid).

Simplify and innovate• Digital innovation road

map and plan

• Co-innovation by industry

with proven best practices

Implement with SAP® Activate• Simplified consumption

experience for SAP S/4HANA®

• SAP-supported best practices, methodology, and guided configuration

all deployment models

Run with one global support• One global, consistent

experience

• End-to-end support – on premise, cloud, or hybrid

for continuous innovation

Optimize to realize value• Continuous capture and

realization of the benefits of digital transformation

experience – on premise, cloud, or hybrid. This organization provides the expertise, assets, and proven methodologies required to accelerate business innovation, reduce TCO, and run a stable platform (on premise or in the cloud). The SAP Activate methodology is a new, simplified consumption experience introduced for SAP S/4HANA and cloud adoption. It consists of a combination of SAP-supported best practices, methodology, and guided configuration. In addition, we offer leadership in learning to drive quick time to value and a solid engagement foundation with the SAP MaxAttention™, SAP ActiveEmbedded, and SAP Value Partnership services across the end-to-end customer lifecycle.

ADVISE

IMPLEMENT RUN

OPTIMIZE

Learn | Extend/Innovate | Engagement Foundation | Support

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SAP COMPREHENSIVE ECOSYSTEM

Our comprehensive ecosystem offers integration into: • A wide range of business services (banking, travel,

suppliers, key vendors, and more)

• Open architecture: choice of hardware and software

• Special technology services with a focus on Internet of Things enablement: IT/OT convergence, geospatial integration, asset health management, predictive analytics, and more

• Complementary and innovative third-party solutions

• Reach – partners to serve your business of any size, anywhere in the world

• Forum for influence and knowledge

• Significant digital expertise and skill sets

BUSINESS NETWORK• 2.2 million suppliers

• 200 major travel partners (air, hotel, car)

• 50,000 service and contingent labor providers

IMPLEMENTATION SERVICES• 13,000 partner companies

• 3,200 service partners with 300+ utilities and waste-specific service partners

• Delivering 1,300+ industry-specific solutions

PLATFORM AND INFRASTRUCTURE• 1,400 cloud partners with 450+

utilities and waste-specific cloud partners

• 1,500+ platform partners

CHANNEL AND SME• 4,800+ channel partners

• 800+ utilities and waste-specific channel partners

INNOVATION• 1,900+ OEM solution partners to

extend SAP solutions

• 3,750 startups developing SAP HANA apps

INFLUENCE FORUMS AND EDUCATION• 32 user groups across all regions

• 40+ industry councils including SAP Advisory Council for Waste and Environmental Services (WECO)

• SAP community with >24 million unique visitors per year

• 2,650 members of the SAP University Alliances program DRIVING

CUSTOMER VALUE

Our partner ecosystem includes, among others:

Orchestrating the world to deliver faster value

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ADDITIONAL RESOURCES

Outlined below is additional external research that was used as supporting material for this white paper.

1. “Rubicon Global,” Wikipedia, 2016 https://en.wikipedia.org/wiki/Rubicon_Global

2. “A decade to mass extinction event in S&P 500,” CNBC, June 2014 www.cnbc.com/2014/06/04/15-years-to-extinction-sp-500-companies.html

3. “Recommerce,” Wikipedia 2016 https://en.wikipedia.org/wiki/Recommerce

4. “Uber,” Wikipedia, 2016 https://ja.wikipedia.org/wiki/Uber

5. “Value Creation in the Digital Paper and Packaging Business – Inspire and shape a digital world that reinvents quality and productivity,” SAP, 2016 https://go.sap.com/cmp/dg/crm-xf16-soc-014/index.html

6. “The Digital Advantage: How digital leaders outperform their peers in every industry,” Capgemini Consulting and MIT Sloan Management, 2012, p. 7 www.capgemini.com/resource-file-access/resource/pdf/The_Digital_Advantage_How_Digital_Leaders_Outperform_their_Peers_in_Every_Industry.pdf

7. “Amazon Marketplace,” Wikipedia, 2016 https://en.wikipedia.org/wiki/Amazon_Marketplace

8. “Gaspillage alimentaire,” Wikipedia, 2016 https://fr.wikipedia.org/wiki/Gaspillage_alimentaire#Politiques_de_lutte

9. “A collaborative toolkit from Forum for the Future and Unilever,” Forum for the Future and Unilever, 2016 www.forumforthefuture.org/project/circular-economy-business-model-toolkit/overview

10. “Circular economy in Europe — Developing the knowledge base,” European Environment Agency, 2016 www.eea.europa.eu/publications/circular-economy-in-europe

11. “iPhone,” Wikipedia, 2016 https://en.wikipedia.org/wiki/IPhone#Apple_Upgrade_Program

12. “Mastering Omnichannel B2B Customer Engagement,” A Forrester Consulting Thought Leadership Paper Commissioned By Accenture Interactive And SAP hybris, 2015 http://go.sap.com/docs/download/2015/10/7061134d-477c-0010-82c7-eda71af511fa.pdf

13. “BSR: Tipping the Scales for Greater Efficiency with SAP Solutions and regio iT’s Weighing Cockpit,” SAP Business Transformation Study, 2015 http://go.sap.com/docs/download/2015/ 11/02110146-4c7c-0010-82c7-eda71af511fa.pdf

14. Rafael Gómez-Acebo, Director of Management Systems, FCC Construction S.A., “FCC: Enhancing Reporting and Planning with SAP BW powered by SAP HANA,” SAP Business Transformation Study, 2014 https://dam.sap.com/mac/download/a.htm?c=46&k=SNCiD17v1YRv0kgv0vCXRSi7nkSvD7D7NNwffNSRD0k0YlNS5N

15. Sascha Westermann, Head of Intermodales, IT Traffic Management, Hamburg Port Authority (HPA), AöR, “HPA: Doubling Cargo Handling Capacity with Optimized Logistics Using

SAP HANA Cloud Platform,” SAP Business Transformation Study, 2015 http://go.sap.com/germany/documents/2015/04/d4104c9f-447c-0010-82c7-eda71af511fa.html

16. SAP benchmarking*

17. Ellen MacArthur Foundation website, 2016 www.ellenmacarthurfoundation.org/circular-economy

18. “Using digital tech to spin the circular economy,” Accenture, 2015 www.accenture.com/us-en/insight-outlook-using-digital-tech-spin.aspx

19. “Omni-Channel Experience is Critical to Fueling B2B Customer Engagement, Finds Accenture and SAP hybris Study,” Accenture and SAP, 2015 https://newsroom.accenture.com/news/omni-channel-experience-is-critical-to-fueling-b2b-customer-engagement-finds-accenture-and-sap-hybris-study.htm

20. “Gartner “SAP Fiori UX: It Is Not a Matter of If, but When and How” Brian Prentice, Jim Murphy, 2015 https://www.gartner.com/doc/3016622/sap-fiori-ux-it-matter

21. “Success Story: Keolis,” SAP, 2014 www.successfactors.com/en_us/customers/keolis.html

22. “New Technologies Transforming the Finance Function,” HBR, 2015 (pp. 1 and 2) https://hbr.org/resources/pdfs/comm/sap/Report_SAP_new_technologies_transforming_the_finance_function.pdf

23. “The Chief Supply Chain Officer Report 2014,” SCM World, 2014, (pp. 4 and 5) www.e2open.com/assets/pdf/papers-and-reports/SCMWorld_Chief_Supply_Chain_Officer_Report_2014.pdf

24. “2014 Global Consumer Barometer Index,” American Express and Ebiquity, 2014, pp. 5 and 13 http://about.americanexpress.com/news/docs/2014x/2014-Global-Customer-Service-Barometer-US.pdf

25. “Millennials at work, Reshaping the workplace,” PwC, 2011 www.pwc.com/en_M1/m1/services/consulting/documents/millennials-at-work.pdf

26. “Workforce 2020: The Looming Talent,” Oxford Economics www.successfactors.com/en_us/lp/workforce-2020-insights.html

27. “The rise of the networked enterprise: Web 2.0 finds its payday,” McKinsey, 2010 www.mckinsey.com/insights/high_tech_telecoms_internet/the_rise_of_the_networked_enterprise_web_20_finds_its_payday

28. “Building the Networked Business of the Future” SAP Insider, 2015 http://sapinsider.wispubs.com/Assets/Articles/2015/April/SPI-building-the-networked-business-of-the-future

29. “ITU releases 2014 ICT figures,” UN International Telecommunications Union, 2014 www.itu.int/net/pressoffice/press_releases/2014/23.aspx#.WCW17_l6R9P

30. EMC World 2015: “30 billion connected devices by 2020,” ITPro, 2015 (Sound bite is from EMC) www.itpro.co.uk/storage/24560/emc-world-2015-30-billion-connected-devices-by-2020

31. “Seize New Product and Revenue Opportunities with the Internet of Things,” Cisco www.cisco.com/web/IN/solutions/trends/iot/portfolio.html

32. “IoT and Digital Transformation: A Tale of Four Industries,” IDC, 2016 http://go.sap.com/documents/2016/ 05/0eea93b3-707c-0010-82c7-eda71af511fa.html

33. “Simpler connections at Germany’s largest seaport,” SAP Customer Snapshot www.sap.com/customer-testimonials /transportation-logistics/hamburg-port-authority.html

34. “BSR: Tipping the Scales for Greater Efficiency with SAP Solutions and regio iT’s Weighing Cockpit,” SAP Business Transformation Study, 2015 https://dam.sap.com/mac/preview/a/46 mFDDBvk5DzmiSCCDDiFV7lvSC0vmNW imvllDN0DNFkvD5iS0N3/39314_BTS_ 39314_enUS.htm

35. “United Energy Embraces SAP HANA to Improve Data Insights – Anna Manojlovic, IT Strategy Manager, United Energy,” YouTube, 2015 www.youtube.com/watch?v=FCl2FqpHxpw

36. “Fire & Rescue New South Wales: Using SAP Business Suite powered by SAP HANA to Help Keep the State Safe,” SAP Customer Success Story, 2014 https://dam.sap.com/mac/preview/a/46 NlmR90fSiv5D7FsDkSfiiSRFI1fNlEkFl m01SDkt1fDCzfi11R/fire--rescue-new-south-wales-using-sap-business-suite-powered-by-sap-hana-to-help-keep-the-state-safe.htm

37. “Customer Journey: City of Buenos Aires,” SAP, 2015 www.sap.com/customer-testimonials/public-sector/city-of-buenos-aires.html

*All sources cited 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

• Logos contained in this document are used with the permission of SAP’s partners.

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DEFINITION OF TERMS 9,10

• Linear economic model is the current economic model of “take, make, consume, dispose” that relies on endless natural resources and endless energy.

• Circular economy is the fundamental alternative economic model that respects the planet’s boundaries with its limited natural resources, conserves natural resources, and maximizes the use of resources already available within the economy.

• Linear-focused waste collection and environmental services are field services addressing the needs for disposal at the wasting of natural resources. They are requested as final phase in a linear consumption economy.

• Drop-off centers are service facilities for the disposal of waste. They are requested by linear consumption models and support the last phase in a “take, make, consume, dispose” model.

• Trading of waste is a commercial brokering service for waste materials.

• Waste-focused transport services are commercial logistics services for transporting waste between different facilities.

• Disposal services are business models servicing the final activity in linear consumption models. Disposal services are, for example, landfills or incinerators that offer commercial services to dispose the waste in a linear economic model.

• Classic consulting services for waste are commercial services of professional environmental consultants to help customers manage their waste.

• Green-washing/green-empathy-washing are imitation circular economy business models to do fake green marketing. Business models are used that follow the linear economic model but are represented as circular economy business models.

• Closed-loop recycling (material recovery) is a business model in which recycled products are used as raw materials to manufacture new products.

• Downcycling (energy recovery, waste to energy) turns materials from one or more used products into a new product of lower quality but still required by the economy.

• Upcycling turns materials from one or more used products into a new product, implying an improvement in quality.

• Industrial symbiosis/waste as a resource is a business model in which services, utilities, and by-products are shared among industries to improve resource efficiency.

• Circular-focused collection services/zero waste environmental services are commercial services to collect old or used products with the primary goal of maximizing the use of resources already available within the economy.

• Eco-design/sustainable design involve services to deliver products made with fewer resources, using recycled and renewable resources and avoiding hazardous materials, as well as with components that are longer lasting and easier to maintain, repair, upgrade, and recycle.

• Extending product lifecycle is an attempt to enable the circular economy by reusing products and repairing them.

• Products as a service (service- and function-based business models, device leasing services) are offers that focus on providing a solution rather than just a product. This leads to a marketable set of joint products and services that are capable of fulfilling a user’s needs together.

• Vendor lock-ins are offers that encourage consumers to carry on using a specific product or service on a regular basis.

• Local loop/local consumption are models in which the production processes are reshored back into the countries where the business has its main markets; the local manufacturing loop becomes smaller and benefits clustering of industries.

• Modularity or separation of concerns is a design that divides a product into smaller parts that can then be independently created, used, and replaced.

• Personalization or user-orientation of products is a design to better fit products to consumers’ needs.

• Collaborative consumption/shareconomy are based on sharing, swapping, bartering, trading, or leasing products and other assets such as land or time.

• Financial optimization leverages financial mechanisms to optimize the complete product lifecycle.

• Policy innovation, licenses, and certification provide the agility to adapt to changing regulations and similar soft demands from the market.

The terms of the circular economy are taken from the collaborative toolkit from Forum for the Future and Unilever9 as well as the business models described by the European Environmental Agency.10

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SAP COMPREHENSIVE DIGITAL INDUSTRY PORTFOLIO

The strength of SAP is the industry portfolio for all types of companies in the circular economy. A specific industry value map for waste, recycling, and environmental services companies contains a preselected solution portfolio and includes:• Enterprise asset management including predictive

maintenance

• Solutions for waste collection and environment services including the Internet of Things

• Solutions for omnichannel customer engagement, self-service portals, ecological recommerce (recycling commerce), interaction centers, classic sales workforce, and more

• Human resources – cloud and on premise

• Finance and billing – simplified with real-time insights

• Solutions for procurement excellence

• Information technology and platform solutions

Asset Management Waste and Environmental Services Operations

Customer Engagement and Commerce

Portfolio and Project Management

Fleet and Container Asset Management

Infrastructure Asset Management

Real Estate Management

Asset Risk, Safety, and Incident Management

IoT for Bins and Vehicle Telematics

Weighing, Treatment, and Disposal

Recycling and Raw Material Trading

Compliance and Stakeholder Engagement

Collection Logistics and Environmental Services Planning Contextual Marketing

Omnichannel Commerce and Agile Billing

Smarter Selling

Customer Service Excellence

SAP offers to our industries a comprehensive digital business solution:

SAP’s Industry Value Map for the Digital Circular Economy

Human Resources

Core Human Resources and

PayrollTalent Management Time and Attendance

ManagementHuman Capital

AnalyticsTravel and Expense

ManagementCorporate

Sustainability

Finance Financial Planning and Analysis

Accounting and Financial Close

Treasury Management Finance Operations Governance, Risk, and

Compliance for Finance

ProcurementCollaborative

Sourcing and Contract Management

Operational Purchasing

Guided End-User Buying

Supplier Management

Invoice and Payables

ManagementProcurement

Analytics

Inventory and Basic

Warehouse Management

External Workforce

Management

Information Technology

and PlatformAnalytics Application Platform

and Infrastructure Data Management IT Management Security Software Internet of Things

Customer Experience

Workforce Engagement

IoT & Supply Chain

Spend Management

Digital Core

Business Transactions

Intelligent Insights

SAP HANA SAP Cloud Platform

BLOCKCHAIN

MACHINE LEARNING

INDUSTRY

APIs

SECURITY

SAP Digital Boardroom

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Value Creation in Digital Circular Economy Business

www.sap.com/contactsap

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