White PaPer On the way tO a hybrid future with SaP · creates hybrid IT landscapes in which a...

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White PaPer On the way tO a hybrid future with SaP

Transcript of White PaPer On the way tO a hybrid future with SaP · creates hybrid IT landscapes in which a...

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Content

DiGitaLiZation BreaKS the rULeS

DiGreSSion: the CLoUD SetS neW StanDarDS

tranSForMation iS the DiSCiPLine oF the hoUr

hYBriD / MULti-CLoUD BeCoMeS CorPorate reaLitY

LeaDerS oF toMorroW antiCiPate inSteaD oF PLanninG

DiSrUPtiVe DeVeLoPMentS ShaKe UP inDUStrieS

SaP ProViDeS the CoUrSe For the MoDern it WorLD

t-SYSteMS aS SaP Partner

PreDiCtiVe MaintenanCe ChanGeS the ManUFaCtUrinG inDUStrY

SUMMarY

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DiGitaLiZation BreaKS the rULeS

DiGreSSion: the CLoUD SetS neW StanDarDS

Digitalization promotes and requires new business models even from established companies. By 2018 one third of the top 20 market leaders in almost every industry will be challenged by the new „3rd platform competitors [1]“, at least that is what IDC analysts predict. This means that established market situations will be put to the test, questioned and revo-lutionized. Only those who go along the digital path can permanently secure their business growth and survive in the market. Digitalization is the new benchmark for deciding the success or failure of companies.

Digitalization could be just a slogan. How does it become a reality? Today real examples and technological opportunities give an impres-sion of what may be the standards of the future: Google and Apple with their virtual stores have introduced de-materialized business models; Uber, DriveNow and AirBnB implement digitalized processes using a community approach; networking and distributed intelligence result in Smart Factories; robots and drones automate production and delivery processes; Big Data analytics provide better customer knowledge and approach to clients; real-time thinking and actions increase a company‘s responsiveness; flexible, inter-company co-operations speed up innovations [2]. All these examples have one thing in com-mon: digitalization accelerates and makes companies more flexible. The time to market is accelerated.

SUrViVaL taCtiC or UniqUe SeLLinG Point?Markets are also put to the test when new competitors with new digital business models (innovations) enter the market. Established players are challenged by new competitors who are more efficient, cheaper, faster, have better market insights and a better understanding of customer needs. Business models need to be implemented with a minimal invest-ment risk so that innovation budgets quicker allow the realization of vari-ous ideas. At the same time, business ideas have to be swiftly reset in case the related targets are not met. In addition, a variety of technologies offer the potential for disruptive changes beyond industry boundaries. In an era of rapid change business agility is paramount for a company.

Also for marketing purposes, it becomes more and more important to generate USPs and differentiators in this digital environment; the Cus-tomer Experience, engaging and retaining clients through better custo-mer knowledge and a user friendly approach is one of the major suc-cess factors. This means that companies are more driven by data analysis („data driven business“) in all aspects of their business.

In the course of this, the pace of change increases continuously. Already today the first generation of digitalization is outmoded: the pre-sence of a company on the internet, the use of web services or IT-sup-ported processes are no longer distinguishing features but necessi-ties.

These challenges further lead to procedural and IT challenges that ulti-mately can only be met with changes within a company at a technical and cultural level. In order to successfully implement digitalization, com-panies not only need the necessary technology but also suitable people, partners and ideas.

Companies wishing to benefit from the digitalization era must develop these four skills:

� The ability to integrate end to end, manage and employ hybrid IT landscapes and processes (Hybridize)

� The ability to continuously transform (Transform) - this applies to the technology as well as the business models and corporate culture

� The ability to anticipate developments (Predict) � The ability to create new disruptive business models (Disrupt)

This has particular implications for SAP as a software for business management. SAP must make an essential contribution to enable a com-pany to develop these four capabilities. Below, a practical approach to these challenges has been outlined.

These questions are important because during digitalization it occurs, only in rare cases, that old IT solutions need to be replaced. Normally it‘s a question of establishing which system is most appropriate for each task. Traditional, monolithic systems may continue to fulfill their tasks, e.g. perform a scheduled billing cycle. Cloud-based services come into play when accelerating the performance is part of the assignment. The sourcing mix then leads to what Gartner[3] calls the „bimodal IT“.

“tWo-SPeeD” itTraditional IT is one component of „bimodality“. It supports processes whose dynamics are largely predictable. The resource adjustments can be made within a few days. The respective applications can be operated in dynamic infrastructures which are more flexible.

Some specific questions about existing technology arise from these challenges: How long will the existing landscapes remain functional? How can new platforms be integrated and IT resources be transformed? What are the new requirements for IT platforms? How can ERP solutions be adapted so that they properly solve old tasks and new ones equally?

Figure 1.

FoUr SKiLLS For the DiGitaLiZation era

These needs can be appropriately served by private clouds. This approach represents an organic evolution of IT.

Agile IT however supports new business models and innovations in the highly dynamic, cloud-native environment. New ideas are tested, initiated or adjusted within hours or even minutes.

The motto for this approach is time to market. Public cloud models are often used in such cases. These two approaches create a „two-speed IT“. The new agile IT for high speed is combined with the traditional esta-blished operational IT base for core applications. The applications conti-nue to exist either unchanged or moderately boosted at the infrastruc-ture level. The bimodal IT sets a framework for the topics Transform and Hybridize.

[3] Gartner Says Worldwide Cloud Infrastructure-as-a-Service Spending to Grow 32.8 Percent in 2015, Gartner, 2015

[1] IDC Predictions 2015: Accelerating innovation and growth on the 3rd platform Digitization drives continuous business growth, IDC, 2015 [2] The time of the lone wolf is over, Mario Brück at www.wiwo.de

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SAP systems are increasingly ordered and budgeted for by the lines of business which need to make well-informed decisions or whose busi-ness processes need to be operationally supported. IT becomes an inte-gral part of business divisions and SAP is no longer solely an IT topic but rather a tool that provides a business added value.

Not only by transforming SAP systems, the private cloud has established itself as a production / delivery model among companies. In addition, companies increasingly access a variety of sources from the public cloud, be it SaaS, PaaS or IaaS. The public and private cloud comple-ment the classic IT sourcing landscape in a company. This automatically creates hybrid IT landscapes in which a system must sometimes be loo-sely or tightly integrated.

This becomes visible in the increase of co-deployments of SAP on pri-vate and public clouds. A choice of the sourcing model is primarily deter-mined by the classical cloud arguments concerning security, privacy, agi-lity and cost. Private clouds offer a high level of security, moderate dynamics and significant cost advantages with more than 40 percent in continuous operation. Public clouds however, offer the highest dynamics for agile innovation and high price advantages for temporary use.

tranSForMation iS the DiSCiPLine oF the hoUr

hYBriD/MULti-CLoUD BeCoMeS CorPorate reaLitY

SaP tranSForMation: FroM LeGaCY into a PriVate CLoUD

Groupe Rocher serves 40 million customers in France and is a market leader in the cosmetics segment. In-house SAP systems support sales planning, procurement, B2B sales, financial processes and business critical processes like warehouse management and distribution. The SAP systems have a capacity of over 30,000 SAPs and 4.3 TB of data.

The digitalization strategy of the company was based on a flexible, sustainable and cost-effective IT environment. However, the existing hardware was at its performance limit. SAP upgrades were no longer possible.

T-Systems helped migrate all of Yves Rocher’s (a Groupe Rocher brand) SAP systems and data into a private cloud (a dynamic SAP platform based in Frankfurt). The cosmetics company not only avoided investments in hardware, but also gained the opportunity to adapt its IT resources to its business needs (up and downscaling). Yves Rocher permanently uses the current version of SAP without the need of their own release or change management.

USe CaSe: USe oF hYBriD SaP LanDSCaPeS

In the brewery industry, acquisitions, takeovers and company spin-offs are on the agenda of every major company. This results in highly dynamic multinational corporations which nevertheless have to meet their reporting obligations in this volatile environ-ment. For reporting obligations SAP is predominantly used. A hybrid cloud scenario in this sector would provide a private cloud operation for the headquarters and the acquired company would receive a SAP template that is operated in a public cloud. Central IT connects public cloud installations to the headquar-ters‘ private cloud SAP.

The central system has access to the financial data of the subsidi-aries and is able to include the data into the company-wide analy-sis and reporting. In a case of a spin-off of the subsidiary, this integration can easily be reversed, as opposed to a full integration in the central SAP system in the private cloud. The hybrid approach gives the company a significant gain in flexibility for its business.

USe CaSe: a BaSe For neW BUSineSS

For one of the world‘s leading automotive suppliers quality issues were the catalyst for SAP transformation. The initial situation, 300 SAP systems and 100 non-SAP systems on different release levels, represented a complex IT landscape with correspondingly high management cost. The transformation should simultane-ously create a base for more flexibility and implement SAP HANA® as the company plans new products and solutions for both autonomous and semi-autonomous driving.

T-Systems migrated the physical systems to its Dynamic Services platform as well as implemented a new SAP template at the same time. The cloud solution not only provides a dynamic adjustment of infrastructure resources but also offers tailored SAP license models for short periods of use. HANA was fully inte-grated into the service and pricing model. Thus, the automotive supplier is able to evaluate new business ideas in real-time and make timely business decisions while reducing costs and efforts.

Since the comprehensive view of data plays a crucial role in digitaliza-tion, companies have no choice but to integrate the various SAP deploy-ments with each other and with non-SAP systems. The decisions for vari-ous cloud deployments lead to hybrid clouds.

Software applications are no longer seen as simple process support but as a pioneer that enables new business models and gains greater insight to support business decisions. A dynamic operation of SAP is therefore no longer the benchmark. Adaptable access to IT applications for business processes (durably dynamic) or projects (temporary) is the norm.

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The transformation of SAP systems and the creation of hybrid clouds are already established within many companies. However, leading com-panies in the industry go a step further. They will tap into new data sour-ces and gain new business prospects to actively develop their own mar-ket. Companies that do not follow the path of prediction will become fellow travelers facing the decline of their market share.

in-hoUSe Data MUSt Be ControLLeDMost companies have not yet created the basis for the forecast era. Their current challenge is to use the company‘s existing data; i.e. to evaluate information sources that have been available across the company for years. On this basis (outdated at the moment of creation) ex-post evalua-tions can be made.

Analysis of additional internal data sources would help such compa-nies by providing a significant increase of knowledge; they face the Big Data challenge of making their unstructured data flood usable. Exis-ting IT systems, however, are not designed for this amount and variety of data. They work at the limit of their capacity. Therefore, in addition to a demand-oriented integration of cloud technology they need new ways to evaluate the existing data sets at a reasonable speed. In addi-tion, the speed of the market increasingly demands real-time evalua-tions.

With its S/4HANA strategic platform SAP relies on an in-memory model that can accelerate the speed of data analysis by up to 1000 times. This allows a wealth of real-time analysis, including those from external sources which gives a more comprehensive and „truer“ pic-ture of reality.

ChanGe oF PerSPeCtiVe: PreDiCtion inSteaD oF retroSPeCtionSAP S/4HANA® can also be used for Big Data analysis for predictions of future development. These give the company a more solid planning basis as pure ex-post considerations. The decisions are therefore based not on the (incomplete) review considerations and assumptions, but on forecasts that take into account a variety of parameters.

taPPinG non-tYPiCaL SaP Data SoUrCeSThese parameters are, however, distributed over different data sources and IT systems. In order to come up with realistic forecasts, companies need to manage hybrid environments. Out of all the IT delivery models hybrid clouds reflect reality the best.

It often happens that data sources are not under a company‘s control e.g. when the data from social networks or measuring data from sensors networks need to be considered. In such cases, the database is hybrid. The existing data from different platforms must be made available and ready for processing in the SAP system; this requires expertise in system integration. The required expertise in systems integration is needed not only for external data sources but also for internal non-SAP systems.

In such hybrid data landscapes, different data formats from different sources are combined, for example, with the „traditional“ ERP data. The world of management and administration is connected with the worlds of production and operation.

LeaDerS oF toMorroW antiCiPate inSteaD oF PLanninG

USe CaSe: SaP S/4hana® For BanKinG

Budgets and ad hoc requests from senior management and regula-tors are on the agenda within the banking sector. In this specific case the existing SAP Business Warehouse (BW) is a bottleneck. The requests could not be answered in time.

The Situation: Various source systems and SAP banking installations deliver data to an SAP Bank Analyzer. It calculates, assesses and ana-lyzes the financial products compliant with the frameworks of supervi-sors and existing standards. It passes the obtained data further to a SAP BW system based on a traditional Oracle database. From there, the user will receive consolidated reports, for example accounts. However the data-load run time is too long to serve the needs of users for timely evaluations. In addition, a real-time replication of data is not possible.

A proof of concept using a cloud-based SAP HANA® from T-Sys-tems replaced the Oracle database for SAP BW with a SAP HANA® database in the cloud. The bank now only needs one hundredth of the time at the individual transaction level. The data load perfor-mance accelerated by 39 times.

This enables finance and controlling to provide various reports, even at short notice, to fulfill the demands of regulating authorities and senior management.

USe CaSe: qUaLitY inCreaSe in GLaSS ProDUCtion

Sensors and real-time analysis optimize production processes. In glass production, for example, the quality of the product is affected by an almost incalculable number of factors. This inclu-des not only the water content and the provenance of the ingre-dients used, such as quartz sand but also the temperature, pres-sure and mixing ratio. The mixing ratio in turn depends on, amongst other things, the speed of the conveyor belts and indi-rectly by the supplied amperage or voltage. In Africa, Latin Ame-rica or Asia this provides glass manufacturers with real challen-ges. By detecting the relevant parameters using sensors and real-time analysis, production can react to changing circumstan-ces such as variations in the amperage. This results in the incre-ase of glass quality as well as permanent reduction of waste pro-duction cost.

hYBriD

The word “hybrid” is used in two contexts. The first meaning of hybrid is the combination of different IT delivery models, such as the combination of private and public clouds or on-premise installations.

The second meaning is related to data of different formats from different data sources. Linking the different data sources and data formats results in a hybrid data basis.

This development paves the way to the Internet of Things. Sensor data and information from networked devices such as robots, connected cars, wearab-les etc. are received and made available for business planning. Hadoop and Azure are examples of typical platforms on which additional data is managed. From there, the data can be transmitted via SDI (Serial Digital Interface) or SDA (Serial Data Line).

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DiSrUPtiVe DeVeLoPMentS ShaKe UP inDUStrieS

SaP ProViDeS the CoUrSe For a MoDern it WorLD

The advantage of predicting is that it provides businesses with a basis to shape their markets. Companies that know the future of their markets and recognize the trends are able to develop and offer new features much earlier. The possibilities of new technologies such as networking, artificial or distributed intelligence play an important role for innovations. These innovations allow them not only to shape their own markets but also have an impact on all associated industries.

eXaMPLe: DiSrUPtion throUGh aUtonoMoUS DriVinGOne of the best examples of a disruptive development that has an impact on several industries is autonomous driving. Both new IT provi-ders and established automotive companies take part in this head-to-head competition. The idea of autonomous cars is not just about incre-ased driving comfort. It also opens up car mobility for new user groups and has implications for public transport and taxi companies. Going further, legislation, liability issues, insurance models and traffic control in smart city concepts are also affected.

SAP sees itself as an integral part of this interconnected world. It states that five trends drive the development of the company for which SAP pro-ducts will offer solutions:

� Smarter World - artificial intelligence and robotics encourage the development of new business areas and models. Technology beco-mes more intelligent and interactive.

� Hyper Connectivity - people and things are more interconnected. Sensors provide constant data to be used in optimal ways (IoT - Internet of Things).

� Supercomputing - increasing the amount of data means that fast computing is a crucial factor. It is no longer only about computing capacity but also new data processing models. Data is processed at source and Big Data is analyzed in memory, achieving significant performance benefits.

� Cloud is hybrid - opting for private cloud or public cloud is not a question of preference but rather an adaptation of IT to different business challenges.

� Cyber Security - in a networked world the importance of security becomes increasingly important. Software regardless of its origin or purpose must address this topic.

Are these just ephemeral exceptional phenomena? A recent McKinsey study [4] strongly denies it; in 2015, for the first time, data streams on the networks (not only the internet) contributed more to the economic growth than classic trade. It is a clear sign that the role of digitalization in the value network is growing relentlessly. At the same time, due to the high percen-tage of digitalization‘s input into the value network, a sudden appearance of disruptive ideas becomes more likely. Business models are freed from physical limitations and gain the digital ability of Hypersprawl. They spread unexpectedly quickly and revolutionize behaviors and practices through- out and beyond their industry, initiating an overall social rethinking.

DiSrUPtion aLSo ChanGeS the SoFtWareIT and telecommunications-based technologies are the basis for such disruption. Paradoxically this expectation for more agility means a radi-cal change for software and software companies. In this respect digita-lization also targets its pioneers. Software and software companies must allow and exemplify digitalization. New types of IT projects (cloud native), new types of IT usage and new software architectures (distribu-ted instead of monolithic) must be possible. Software vendors and solution providers need to offer their customers license and operating models that radically break away from the traditional static era of long-term outsourcing contracts and give users maximum flexibility.

This is reflected, for example, in the promise of ‚Un-outsourcing‘. Rather than being bound with long-term contracts, customers receive special rights to terminate a contract and therefore gain greater inde-pendence from the service provider. Such disruptive service models will increase the competition among IT service providers to a new level and give users freedom and more flexibility.

SaP: FroM MonoLithS into the CLoUD

SAP has become indispensable for many international companies. It serves 300,000 customers. 40 percent of Fortune 1000 companies use SAP for the management of business critical processes. Due to the cloud evolution, SAP positioned itself on the market not only as a software provider but also as a platform operator.

The cloud business, cloud subscription service and software support will make up 60 percent of SAP’s total revenue in 2017[5]. The company expects an annual growth rate of 32 percent during this period. SAP from the cloud is no longer a USP, it is a new standard. In recent years, SAP has created a business network through acquisitions: SuccessFactors, Ariba, Fieldglass and Concur. The corresponding applications will now, for efficiency reasons, be available on a uniform basis. It is likely that they too will be transferred to the strategic SAP S/4HANA® platform. If OpenStack is chosen as the underlying architecture this should give a further boost to the open source approach of cloud computing. One indicator of this was when SAP became part of the OpenStack community in 2014.

SaP tiMeLine

Figure 2.

1973 20001991 2013 2014 2015... .........

first erpsoftware

global 3rd biggest software provider

client/servergeneration r/3

openstack community

software house with sap hana®

jump into the cloud

sap s 4/hana from a public cloud

amount of customers doubled

businesssuite

first private clouds

[5] SAP reported preliminary results for the fourth quarter and the year of 2015, SAP News at www.news.sap.com, January 2016

[4] Data streams contribute more to economic growth than classic trade, Martin Hattrup, McKinsey at www.mckinsey.de

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T-Systems has been working for many years in close cooperation with SAP. It has several SAP certifications, including a global partnership in Build & Run as well as an SAP HANA Enterprise Cloud certificate (gai-ned in 2013). T-Systems is also a member of the SAP Adaptive Compu-ting Council and has won several Pinnacle awards for its SAP projects. Analysts and customers confirm T-Systems‘ SAP and integration exper-tise. According to PAC, T-Systems is operating the largest cloud hosting

tranSForMation With t-SYSteMSWith its SAP offering, T-Systems addresses all four previously mentioned key aspects of a sustainable SAP operation. In 2016, the company‘s long lasting transformation expertise was bundled in the „Cloudifier“ offering. T-Systems provides a complete service based on standardized methods for transformation and installation of SAP applications in the cloud. One possible scenario for ‚Cloudifying‘ is the migration to SAP S4/HANA® to enable marketing, manufacturing and financial forecasts in real-time. In this case the offer includes a complete transformation; from the potential analysis focusing on HANA, through migration to operation on the Dyna-mic Services platform.

reaLiZation oF hYBriD SCenarioS With t-SYSteMS As a vendor-agnostic provider, T-Systems can also implement hybrid scena-rios in which various SAP installations (both private and public) are com-bined and data from non-SAP data sources as well as external applications, such as Office 365, TeraData, Hadoop, Oracle Exadata are integrated with SAP. This enables companies and production lines to connect with SAP sys-tems.

platform for SAP services worldwide with over 60 million SAPs and more than 3.5 million active users. For over 10 years, T-Systems has been pro-viding a private cloud platform, Dynamic Services for SAP Solutions. The company has global delivery capabilities for SAP. Since 2016, T-Systems has been operating a public cloud infrastructure based on OpenStack from its data center in Biere - the Open Telekom Cloud. This infrastruc-ture meets European data protection standards.

PreDiCtion: teStinG anD DeVeLoPMent oF CorreCt aLGorithMSWith Jump Start on SAP HANA®, T-Systems offers its customers a cost-effective entry to the world of real-time analysis. T-Systems can also, with help of its data scientists and its partner network, adjust SAP basic algorithms to the needs of specific industries and customers. Big Data will become Smart Data, which then can be used for operational and strategic issues.

DiSrUPtiVe oFFer: Un-oUtSoUrCinGWith Un-outsourcer, T-Systems underlines its extraordinary SAP operating expertise. Customers who are not satisfied with the SAP services from the cloud have special rights to terminate the contract. Un-outsourcer allows cus-tomers to remain agile and flexible even after the end of an SAP switch-over.

t-SYSteMS aS an SaP Partner PreDiCtiVe MaintenanCe ChanGeS the ManUFaCtUrinG inDUStrY

DeVeLoPMent oF t-SYSteMS aS an SaP ProViDer

Figure 3. Source: T-Systems

2004 20082007 2010 2011 2012 2013 2014... ...

cloud cooperationsap/t-systems

sap certificate in cloud services

1st ddc in frankfurt

run sapglobal

sap adaptive computing council

operationalservices for sap hana®

pinnacle award

1st client on dynamicplatform

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ddc: Dynamic Data Center

neW SerViCe MoDeLS

Figure 4.

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business optimization

reporting framework

basis forprediction

database

maintenance database

maintenanceprotocols

maintenance & inventory

production protocols

sensor data

performance protocols

environmentaldata

optimization

business guidelines

reports & analysis

financial data

predictionmodels

b c

There are plenty of examples of transitions to new flexible business models in the manufacturing industry. Maintenance services ensure in-stallers have permanent revenue through servicing. Digitalization chan-ges production to industry 4.0 or Smart Factory approaches. At the same time new servicing models become possible through predictive mainte-nance. For example, manufacturers of elevators and escalators offer 10-year service contracts. As part of this service contract technicians regularly, in preplanned intervals, check and maintain escalators and elevators even if there are no major issues.

In new service models, sensors report the current state of the lift to a control station at the producer via M2M communication. Once the met-rics approach set parameters, the central maintenance software recogni-zes any potential failure. The service engineer is then sent out in advance for maintenance and repair. The manufacturer can offer its customers new service contracts based on the actual expenses. In addition, the downtime of installations decreases significantly. The manufacturer, on the other hand, can also use collected information throughout the run time of the products in order to optimize future models.

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SUMMarY

SAP is positioning itself as a pioneer for the digital era and offers with SAP S/4HANA® a platform and toolbox full of possibilities. However, the use of SAP S/4HANA® is not enough on its own.

Companies that want to use SAP effectively in the digital age must be aware of four key challenges: transformation, hybridization, prediction and disruption.

Existing IT systems must be made ready for the digital era. New data sources as well as data from other platforms, have to be integrated and the analysis algorithms must be specified. This does not mean that all existing IT needs to be replaced. A new challenge has arisen; how can existing legacy systems be harmonized with SAP S/4HANA®? The key to success in the age of digitalization is a successful integration of exis-ting non-SAP data and new data sources into the existing systems. Help can come from specialized service providers who think beyond SAP and are able to integrate and operate different IT systems.

Going forward, companies have to decide what business processes should be relocated to the new SAP services; Ariba, Concur and Suc-cessFactors, and if they should be placed on a common platform.

FiGUreS

Figure 1 FoUrS SKiLLS For the DiGitaLiZation era

Figure 2 SaP tiMe Line

Figure 3 DeVeLoPMent oF t-SYSteMS aS an SaP ProViDer

Figure 4 neW SerViCe MoDeLS

Digitalization is not just a buzzword. It requires fast and forward-thinking decisions from companies at a time of significant changes in the market.

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ContaCt

T-Systems International GmbHSibylle BeckerIT Solution MarketingMoltkestraße 2-678467 KonstanzE-Mail: [email protected]

PUBLiSher

T-Systems International GmbHHahnstraße 43d60528 Frankfurt am Main

http://www.t-systems.com

Release date: April 2016