The Innovation-Driven Enterprise

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1 Summary Supporting Facts and Figures Segment Summary The Innovation-Driven Enterprise High Tech OEM The Innovation-Driven Enterprise High-Tech OEM Overview For high-tech OEMs, the ability to innovate is more important than ever. To respond rapidly to evolving trends in today s connected marketplace, high-tech companies need a powerful platform for innovation. They must be able to analyze huge data volumes to identify new customers and patterns, adapt promotions to new opportunities, and adjust their processes to maximize flexibility while minimizing cost. Business Priorities Product innovation and sourcing Supply chain Manufacturing and delivery Multichannel sales and marketing Customer service and field repair Benefits Increase in new products that meet revenue targets Faster time to market for new products Lower inventory carrying cost Increase in on-time delivery Shorter manufacturing cycle time Increase in operating margin Increase in customer satisfaction Successful Companies Bring enticing and relevant products and solutions to market rapidly Drive growth through customer intimacy and flexible business models Manage agile and responsive supply chains Learn More Call your SAP representative, or visit us online at Benchmark your performance by visiting valuemanagement.sap.com Join your community of practice visit 1 / 2

2 Summary Supporting Facts and Figures Benefits Potential 113% Higher number of new products launched annually (per $100 million of revenue) for top 25% high-tech companies vs. average 1 Average Top 25% Business Priorities Product Innovation and Sourcing Drive innovation to meet customer needs and desires Supply Chain Become more agile and responsive when operating across a volatile global network to service ever-more demanding customers Manufacturing and Delivery Increase the flexibility of manufacturing and fulfillment operations Multichannel Sales and Marketing Meet the demands of highly connected customers Customer Service and Field Repair Build profit and loyalty by meeting customers high expectations 47% Lower customer churn for top 25% high-tech companies vs. average 1 Average Top 25% Industry Coverage 10 of top 10 high-tech electronic companies run SAP 8 of top 10 semiconductor companies run SAP 8 of top 10 component manufacturers run SAP 9 of top 10 software companies run SAP Best-Run Customers 1) Source: SAP Performance Benchmarking Studio SAP ǀ 31552enUS (14/05) 2 / 2

3 Reference Lenovo Group: Streamlining Worldwide Customer Service Operations with SAP CRM Company Lenovo Group Limited Headquarters Beijing, China Industry High tech Products and Services Personal computers and mobile Internet devices Employees 26,341 (September 2011) Revenue US$29.6 billion (March 2012) Web Site The company s top objectives Consolidate and insource customer service operations to cut operating costs Streamline business processes and provide new capabilities Integrate customer service with the company s core strategic platform The resolution Implemented the SAP Customer Relationship Management application to build a worldwide customer service platform Standardized business processes Leveraged expertise from previous implementations for fast deployment The key benefits Reduced ratio of customer service operating expenses to revenue while maintaining customer satisfaction level Unified business processes and increased visibility into business performance Gained capability and flexibility in service innovation for new offerings -17% Ratio of customer service operating expense to revenue 130 Countries on the aftersales services platform 3 days to 3 seconds Reduction in cycle time for service order change Partner SAP Consulting Successfully implementing the CRM aftersales services functionality from SAP changed our mind-set. Now, our people are thinking of new services, new capabilities, and continuous improvements. Tom Capotosto, Vice President, Global Services, Lenovo Group Limited Back Internal

4 Reference Varian Detects Continuous Improvement with SAP Product Lifecycle Management (SAP PLM) Company Varian Medical Systems Inc. Headquarters Palo Alto, California Industry High tech Products and Services Medical devices Employees 5,100 Revenue US$2.4 billion Web Site Challenges and Opportunities Need to reduce throughput time in bottleneck areas such as drafting Need to gain greater visibility into new design projects and progress of projects in development Need to replace manual processes with automated workflows Objectives Access data globally across all engineering groups Implement a flexible, worldwide standard for engineering change management processes across business units of all sizes Continue to reduce time to market Why SAP Direct interface with SolidWorks software Single database and single source of the truth Flexibility to implement with other CAD systems as required Benefits Leveraged investment in SAP software Increased efficiency in drafting and document coordination Improved visibility of design projects and engineering changes Increased support for continuous process improvement Gained flexibility to implement in smaller bites and at business units of different sizes Implementing the CAD interface between SAP PLM and SolidWorks helped decrease our time to market. That easy success has led us to pursue our improvement goals further by rolling out SAP PLM 7.0 to our other business units. Cynthia Allington, EAS Enterprise-Wide Analyst/Programmer, Varian Medical Systems Inc. Back Internal

5 Reference Celestica Optimizes Inventory Across the Extended Supply Chain with SAP Software Organization Celestica Inc. Location Toronto Industry High tech Products and Services Delivery of end-to-end product lifecycle solutions Employees 33,000 Web Site Partner SmartOps Corporation Objectives Optimize inventory using a proactive, global tool across a large, complex, multistage, and multienterprise supply chain Enable optimal service levels for every product, location, and combination Replace spreadsheet-driven process for calculating inventory reorder points Why SAP Supports Celestica s overall strategy for supply chain transformation Enables company goal to deliver most effective supply chain solutions by connecting manufacturing and design facilities worldwide Improves service levels to customers with the SAP Enterprise Inventory Optimization application by SmartOps Benefits Facilitated the drive to eliminate waste at Celestica Enhanced reorder target determination by improving reorder point sizing Implemented the solution in more than15 supply chains worldwide Reduced inventory throughout Celestica s globally connected supply chain by offering inventory optimization as a service to its customers Improved implementation time and costs, with ability to optimize a customer s inventory processes in 6 to 12 weeks Optimized reorder point sizing across 27,000 SKUs, valued at US$335 million When Celestica was using spreadsheets to determine reorder points, it was like driving a family sedan. Now, all of a sudden, we find ourselves sitting at the wheel of a race car. Luciano Miranda, Process and Applications Consultant, Celestica Inc. Back Internal

6 No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG or an SAP affiliate company. SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG (or an SAP affiliate company) in Germany and other countries. Please see for additional trademark information and notices. Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors. National product specifications may vary. These materials are provided by SAP AG or an SAP affiliate company for informational purposes only, without representation or warranty of any kind, and SAP AG or its affiliated companies shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP AG or SAP affiliate company products and services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warranty. In particular, SAP AG or its affiliated companies have no obligation to pursue any course of business outlined in this document or any related presentation, or to develop or release any functionality mentioned therein. This document, or any related presentation, and SAP AG s or its affiliated companies strategy and possible future developments, products, and/or platform directions and functionality are all subject to change and may be changed by SAP AG or its affiliated companies at any time for any reason without notice. The information in this document is not a commitment, promise, or legal obligation to deliver any material, code, or functionality. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates, and they should not be relied upon in making purchasing decisions.

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