Matt Chan
Director, Industry Value Engineering
SAP Asia Pacific Japan
25 February 2016
Digital Transformation for
Manufacturing Industries

By 2017,
manufacturers will
actively channel 25%
of their IT budgets
through industry
clouds that enable
seamless and flexible
collaboration models.
By 2018, 75% of
manufacturers will be
coordinating
enterprise-wide
planning activities
under the umbrella of
rapid integrated
business planning.
By 2016, 70% of
global discrete
manufacturers will
offer connected
products, driving
increased software
content and the need
for systems
engineering and a
product innovation
platform.
25% 75% 70%
Trends that Drive Discrete Manufacturing (by IDC)
By 2018, 40% of the top
100 discrete
manufacturers and 20%
of the top 100 process
manufacturers will
provide Product-as-a-
Service platforms.
40%
vestments that enable
digitally executed
manufacturing will
increase 50% by the
end of 2017, as
manufacturers seek to
be more agile in the
marketplace.
50%

The Digital Economy
Disruption and Business Opportunities are Everywhere
Uber is not just another taxi company – It
is transforming into an “urban logistics”
company with 200,000 drivers, roughly
double the size of the UPS delivery workforce
• Who will stay in the business
In the next 10 years 40% of the S&P 500 will no longer exist, if
they do not keep up with technology trends
• Leaders are emerging from nowhere
90% of CEOs believe the digital economy will impact their industry,
but less than 15% are executing on a digital strategy*
• Industry boundaries are blurring
Every company is expanding beyond traditional industry boundaries
and also becoming a technology company
Siemens is not just an industrial powerhouse
– It is a software company connecting its
industrial assets in the cloud and enabling
customers to generate new revenue streams by
selling services, not products

THREE GEARS OF CUSTOMER ENGAGEMENT
Closing-the-Loop with Customer
Engagement & Commerce Gears
1. BUYING:
From products to solutions
2. OWNING:
Predictive Maintenance, Usage-Billing
3. ENGAGEMENT:
Moving beyond sales force automation
BUYING
EXPERIENCE
OWNING
EXPERIENCE
ENGAGEMENT EXPERIENCE

BUYING SOLUTIONS
From Selling products to Solutions
Sell
Products
 Product lifecycle management / Engineering collaboration
 Make to stock / Make to order manufacturing networks
 Direct & indirect sales
Augment
with Parts &
Services
 Service operations
 Service parts management
 Product usage, maintenance and safety training
 Risk resilient financing
 Operations monitoring
 Performance based billing
Provide
Performance
Manage
Contracts &
TCO
 Value based solution selling
 Predictive maintenance
 Service level agreements

DIGITALLY-ENABLED CONSTRUCTION & MINING EQUIPMENT
For the Mining Industry
Mining Company:
• Investment Cost
(Capex →Opex)
• COGS
(Training, Maintenance…)
• Productivity
• Land Rental
• Margin
Re-Imaging Business Model for Construction and Mining Equipment Manufacturer
From Selling Product to Solutions:
Selling Equipment Up-time, Equipment Operating Services, and Sharing the profit
Mining Company/
Contractor
Dealer /
Contractor
Manufacturer/
Dealer/3rd Party
Operators Parts Services
Owned By
Mining Company
AS-IS
Managed By
Manufacturer
Managed By
Manufacturer
Managed By
Manufacturer
Operators Parts Services
Owned By
Manufacturer
TO-BE Key Benefits

ENRICH OWNING EXPERIENCE
Connected Devices (IoT) are changing the
paradigm of delivering after-sales service
• PUSH Service Notifications
• How is your asset health?
• How is your asset usage?
• Predictive/ Preventive Maintenance
• Break-Down Assistance
• Usage-based Billing
• Service Order Routing
• Spares Fulfilment
IT / OT
Connectivity
Condition Monitoring
Remote Service
Fault Pattern
Recognition
Machine Health
Prediction
Create Service Order Schedule Order
Execute Order
on mobile device
Visual Support
Kaeser Compressors is one of the largest providers
of compressed air systems and compressed air
consulting services.
Situation: changed the business model from selling compressors to
selling compressed air through the Sigma Air Utility service.
Company

NEW ENGAGEMENT PARADIGM
• Sell Anywhere, anytime
• Get Insight into your business
• Accelerate productivity
• Know your customers
• Track and score interactions
• Progress leads from anonymous contacts to buying
customers
• Discover right audience by segmenting data
• Nurture Communities
• Crowd-source

THANK YOU