SAPD Aguas DIGITAL BUSINESS FRAMEWORK A SIMPLE APPROACH TO VALUE CREATION THROUGH DIGITIZATION Every agribusiness company requires a simple digital approach to build a pragmatic and executable vision of its digital strategy.DIGITAL BUSINESS FRAMEWORK Every company needs to think about digitization across five key pillars ‘SAP understands the five technology trends, and we also understand that these ever-changing requirements are big challenges for businesses The reimagining process helps ‘crystalize the future business model. We have built structured framework to help develop and ‘execute on your digital business strategy. the digital business framework. With this framework, the entire agriculture value chain wal be digitized, including the core, which servesas the platform for innovation and business process optimization Every agribusiness company can develop a digital strategy ‘across these five pillars. Workforce engagement Assets & Internet of Things 1. Outcome-based customer experience: An optimized customer experience is required to market products in the different stages of the agricultural supply chain Supplier collaboration to accelerate growth innovation’ 3. Re-platform core business processes and bring together transactions and analytics in real time to be smarter, faster. and simpler 4. Asmarter and engaged workforce across all employees and contractors 5, Harness assets and the Internet of Things to drive real-time insights and new business models x ‘Supplier collaboration Business networks Customer Experience Omnichannel ‘SAP HANA PLATFORM, SAPD arbusies Wtepve (0316) 2 2016 SAPSE Atv seedTHE DIGITAL CORE A new generation of ERP solution, running in real time, integrating predictive, Big Data, and mobile, will change how agribusinesses work With advanced in-memory computing, you can run simply and unleash the full power of the digital business. Real-time business: Real-time optimization of business-based changes will have massive implications for how we ‘work, how we do business, and how we organize ‘Simplified financials Finance organizations need to embrace the cligital age to keep up with new and evolving business models and provide dectsion makers with instant insight. You can achieve a ‘common view over all financial and operational data as wells flexible, easily consumable reporting and automated processes ~ and instantly evaluate the financial implications of business options with prediction and simulation ‘Commodity trading and risk management With SAP Commodity Management, the digital core provides insight ito the commodity price risk positions. Within a fully integrated suite, you have all the tools to hedge market price risks, including position reporting, mark to market, and financial instruments. Origination ‘With SAP Agricultural Contract Management, food companies and agricultural traders or originators can procure agricultural products from cooperatives and farmers based on ‘contracts. After the recording of quantities and qualities, the loads can be assigned flexibly to existing contracts. Deployment choice and lower TCO ‘The consuming solution to run the core has to be simple. Companies now have the choice to deploy in-house or in the cloud. In- memory computing will also have a significant impact on ‘TCO, as it will free up more budget for innovation, ‘Consumer-grade user experience User experience is key to success. It drives adoption, user engagement and, ultimately, productivity John Deere built innovation on the SAP HANA, plattorm. Larry Brewer: "We believe this wil let us identify problems in the field much quicker. In some cases we've estimated we'll be able to spot prablems two to three ‘months faster than before." Florida Crystals took only four weeks to upgrade to SAP S/4HANA and SAP S/4HANA Finance (formerly SAP Simple Finance) 2.0 That upgrade into fll production was a fst for any SAP customer 2 Manage complexity Don Whittington of Frida Crystals, ‘Our business has grown ino the vvorl's largest cane suger refiner. ‘which means we are managing complex operations amidst the volatile commodities market and ‘ever-changing cost structures (...) SAP S/4HANA Finance (tormerly SAP Simple Finance) enables our financial management 9 un simple, vith instant insight and ease of use, helpingusto stay competitive and retain our industry leadership position ‘Simplify with SAP N ‘SAP $/4HANA is the only end-to-end solution that covers all business processes in the agriculture business and runs inmorory “The SAP Commodity Management solution helps food >I EIWS/4 HANA IX Companstmanage her cotarouy value car and > reduce premgricts SAP Agreulurl Contact Yam a ===> Management lusedby agcuturcorgnators ond traders toctfectively procure their goods from farmers Df ‘SAP HANA PLATFORM SAPD arbusies Wtepve (0316) 2 2016 SAPSE Atv seedCUSTOMER EXPERIENCE. Digital technology has changed the face of agribusiness. But farmers have also changed. In addition to products and services, agricultural solutions are also sold. These key trends are reshaping the customer experience’ ‘Sell through a network Ina network of networks, the agricultural producer will sel products with high visibility on ‘quality and price through a farmer portal. The agricultural plattorm enables farmers, farm machinery and equipment producers, and agrichemical companies to collaborate and ‘conduct business ina standardized way. Mobile sales of products and servicas in rural areas Inruralareas, especially n Africa, the farmer is included in the agricultural value chain in a fair manner. In this win-win situation, food companies and the praduicer bene fram sustainable ‘and high-quality food. Mobile technology (e g.. payments via SMS, mobile services through SAP HANA Cloud Platform mobile services, or SAP Mobile Services) play an increasingrole. Big Data, services, and market prices BBy gathering Big Data from fields and sheds, the farmer will enter into a completely new, profitable business, Other partners in the network provide servicesin exchange for knowledge, such as farm field data ‘Sales channels, Cloud technology leverages sales processes into various channels (SAP Hybris solutions) ‘This optimizes sales processes and boosts the sale of products, data, and services, 86% of customers are wiling to pay more for a better customer experience!! 57% of the buying process is completed before a first interaction with sales © 1 Million Spare parts are available to order in catalogue on a 828 platform directly connectedto BayWa's SAP system. This intemational trading and services group runs an integrated 828 platform based on SAP Hybris in cooperation with machine manufacturer Claas to faclitate the ordering of spare parts for farming equipment. * Digitize your end-to-end customer experience with SAP Xv single platform brings together marketing, sales, services, and commerce (including SAP Hybris omnichannel solutions) to ensure seamless digitization of the entire customer experience SAP customer engagement and commerce solutions, powered by SAP HANA, enable a 260-degree view of your customer, real-time Interaction, and sophisticated predictive analytics, fully integrated to the core transactional system. With adcitional agribusiness specific applications, such as SAP Rural Sourcing Management and a farmer portal for agricultural food companies, there s a Unique customer experience for farmers and originators SAP Hypbris (¥) SAP Cloud for Customer + 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 an employees + Be prepared to engage your customers on the channels they choose at any moment in their journey + Achieve full integration wrth your core business processes sales SAP HANA PLATFORM AP Ot Hrbssint taper (096) @ O16 SP SE Ah asavesWORKFORCE ENGAGEMENT The world is getting smarter in the digital agricultural industry, but complexity is hampering the workforce in this pursuit. Allalong the agricultural supply chain, the required workforce fluctuates heavily ‘throughout the year. driven by harvest seasons and yield. Assuring the right resources are in place while still staying competitive is a mayor challenge for agribusinesses. Organizational complexity is driving costs up in this area and slowing down progress and flexibility. Three forces need to be addressed: ‘Changing ofthe guard Milenniais will make up as much as 75% of the US. workforce by 2025 This will require a workforce strategy to address this new reality. especially since working inthe agriculture sector is losing popularity in developed countries, where, more and more, people are moving into the big cites. Contingent labor is on the rise To drive agility, lower fixed-cost companies are frequently turning to contractors and services providers, Often farmers use subcontractors on a seasonal basis, and tasks are shared among different people. SAP Fieldglass solutions are used to manage the seasonal ‘workforce, both on the farm and along the supply chain when additional resources are required Sustainability and social responsibility Agricultural companies do business on a global scale, with a value chain spanning several ‘countries. This food chain is under scrutiny by NGOs, local governments, and the end. ‘customer, and needs to develop towards a more sustainable and social value chain. Child labor and worker safety and health standards at supplying companies are hot topics, Over 1 billion people are ‘employed in world agriculture, representing Lin3of all workers.“® Around 273,000 farmers were trained by Nestléin 2012, “We have tofocus on the next generation of farmers to make ithappen that we really have long-term ensured supply."*6 ConAgra Foods’ ‘success isits people. With SAP SuccessFactors solutions the company standarcized ts systems tocapture succession planning, talent reviews, and other key data to spur change management and rovtn Conagra's Hit tear now Benefits from more availabe data on Sta more engaged and productive employees, and improved stfeiencies trem standarcized integrated processes #? Improve your total workforce productivity. Simplify with SAP x Digitize your workforce with SAP: SAP S/4HANA + SAP SuccessFactors solutions + SAP Fieldglass solutions + SAP Fiori provide the tools for total rorkforce engagement and advanced analytics. + Attracting the best workforce Recruit and onboard the best workforce, simplify their work, and ensure that regulatory and compliance requirements are met, Fitting the right role with the right skills is mandatory + Managing the total workforce lifecycle From recruiting and onboarding, to performance, compensation, and learning ~ allin 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 SaaRTER apes wait IMPROVED USER EXPERIENCE ‘ners bs ‘SAP Fiori 2a AP Ot Hrbssint taper (096) @ O16 SP SE Ah asaves SAP Fieldgiass \\,BUSINESS NETWORKS AND SUPPLIER COLLABORATION All players in the agricultural industry are collaborating in networks by market segment. With blurring industry boundaries, these will converge into a network of networks. The agricultural industry needs a solution to simplify its networked business. Companies in the agricultural industry need to reimagine business processes to remain competitive and best serve customers in the digital economy. From sharing data securely and in real time, 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 in the agricultural industry are redefining the game’ Farm-to-fork transparency and traceability ‘The digital core provides an enci-to-end view over the whole value chain, with the ability to track and trace products from the farm, through processing, to the end consumer Farmer collaboration Working directly with farmers as customers, vendors, or bath requires close collaboration over the right channels to increase farmer retention. This can be achieved through customized farmer portals to share relevant content ike market information, best practices, trainings, or agronomy advice. In rural areas where connectivity islimited, SMS services can be offered, Gffen an expert team that maintains direct contact and travels ta the farmers is also required Services and consulting ‘Agrichemical companies, machinery providers, and cooperatives are increasingly leveraging Big Data (e g,, livestock health and farm field data) and services (e.g., consulting, planting services, etc.) to provide integrated agricultural solutions to their customers. This requires the selective sharing of useful data, such as expected or actual crop data, or forecasted milk production. Networked companies are 50% more likely than ther peers to have increased sales, higher profit margins, and be amarket leader." 50-75% taster transaction cycles are being achieved withthe Ariba Network. Doles achieving efficiencies wth the Ariba Network andwas able to trimits 16-day purchase order process down to just afew hours.%9 leading consumer food processing company connects to more than 450 suppliers from over 1? countries through the Arioa network With $346 million in annual spend cover the network, the company can keep fs supply chain moving faster than ever 5! The global food traceability market (arm to fork’ had an estimated size of $7.8 billion in2014, and may reach over $19.0 billion in 2022.22 Connect businesses to the world of agriculture and the world of agriculture to your business XN SAP's solutions for procurement give you incredible capacity to ‘end-to-end supply chain visibility from farm to fork. ize business processes across your value chain. Companies have + SAP Global Batch Traceability can track and trace raw materials through processing to finished goods. SAP Commodity Management and SAP Agricultural Contract Management for agricultural traders and originators enable you to extend processes across company borders, + Business networks operate on a global basis, meet data security standards, and operate using industry best standards + Services from partners vastly extend the value of core offerings | Travel and entertainment Direct and indirect material @a-@ e@ 350 oe oe e¢ ‘SAP Aron (NN SAPD arbusies Wtepve (0316) 2 2016 SAPSE Atv seed Labor and services Aa One Se SeerASSETS AND THE INTERNET OF THINGS. The most dramatic change in the digital agribusiness will be driven by hyperconnectivity and Big Data science. Agribusiness companies are finally understanding the full potential of the interconnection between physical and digital assets and the Internet of things. We are witnessing new use cases with breathtaking results, Below are some key trends: Digital sensors and loT Digital sensors that measure humidity, temperature, soil, etc., are providing a huge amount of data ‘Together with GPS-based coordinates, they provide a real-time view of the farm, Big Data and cloud platform Huge amounts of data are collected, analyzed, and retrieved. Data models and algorithms turn ‘such time series data into intelligent application-specific data Mobile technology ‘With tablet PCs, information can be collected on remote fields and on the farm, making it Immediately available in the back office. Electronic steering devices control machines on the field or in the sheds, Intelligent machinery, robots, and drones Self-driving tractors and intelligent machinery use the prescription data calculated by algorithms Robots can both collect data and help replace repetitive, manual work on fields or in the dairy business. Drones collect crop data, such as height of plants or insects and mold, Machinery assets Modern farms have a wide variety of machinery that needs to be documented and have maintenance performed at regular intervals 39% of corn and wheat farmers in the United States are using sensor-driven| technologies. $1.77 Billion Estimated size of Precision Farming Software and Services market by 20204 Up to $1 Billion investments intemore then 150 startups in ‘agriculture and food in 2014.85 8 billion mobie messages are reliably processed by SAP Mobile ‘Services worldwide every day % 97% of world’s mobile subscribers can be reached through SAP Mobile Services Connect, transform, and reimagine with SAP x \Wwith SAP HANA, Internet of Things edition, organizations like agrichemical companies, food processing companies, and cooperatives can now take embedded device data, analyze this data into information in realtime, and leverage this information across the value chain to drive business insights and create nev business models %, ‘SAP HANA Hadoop Predicative analytics AP Ot Hrbssint taper (096) @ O16 SP SE Ah asavesTHE DIGITAL AGRIBUSINESS PLATFORM To survive in a digital world, businesses need to be able to transform innovation into value. In order to reimagine business, agricultural organizations need ‘to have the right platform strategy in place to enable innovation. Innovation can come from your own company or ‘come from others. The challenge isto get value out of innovation and make it consumable for your organization, Agribusinesses need to work smarter using the right sills and tools to make that happen. Building and leveraging innovation ‘often means trying, faling, learning, and trying again, Agribusinesses throughout the supply chain need a digital agribusiness platform so they can dream big, cevelop fast, ‘and deliver everywhere. ‘This can only be achieved with the SAP HANA Cloud Platform, ‘with the simplicity of SAP HANA at its very heart, as the foundation of the digital agribusiness platform, The agribusiness platform must support these new digital business processes for every part of the agricultural value chain. Though provisioning of input materials, farming, origination and trading. ‘and downstream food processing and marketing to the ‘customer require different domain-specific features from the digital platform, it must provide a connected, open, and integrated foundation across all processes, wth no silos or barriers, to empower the business. A digital platform architecture has to follow these key principles 1. Integrated with every necessary system and network, whether on premise or in the cloud 2. Open for you and your partners in the ecosystem 3. Business aware to support the specifics of your segment and every segment you want to disrupt SAP focuses on creating business value for our customers as ‘empowered participants in the agricultural ecosystem instead cof implementing business models where data ownership is transferred away from the agribusiness to the solution provider ‘The digital agribusiness platform ensures agility anda rich ‘environment for innovation that supports functionality and, seenarios that are required in farming Connect your Empower your enterprize to the Deliver open, lines of business igtaleconomy agile, flexible appe Poe = @ eo 0 © O uf OT Mobile Spatial Integration Predictive SAP HANA CLOUD PLATFORM AP Ot Hrbssint taper (096) @ O16 SP SE Ah asaves ‘The digital agribusiness platform supports your applications, SAP's own applications, and partner applications. ‘Security: Data and process security are key to gain your customers’ trust. The platform enables you to safeguard your experience and IP about the specifics of your domain. Full integration: Access large volumes of data from a variety of ‘sources to unlock insights never seen before. The platform allows you to integrate with everything inside and outside your business and facilitate data exchange via standard protocols, APIs, and an open architecture oT scenarios: Many value scenarlosin agribusiness require data that are collected by sensors and machines, whether on the field, in the supply chain, in transportation, oF production ~ the platform makes data easily consumable for applications, smart algorithms, and users to support insight, optimization, and automation to create maximum business value. Mobile: Applications need to be consumable where ‘commodities are produced, processed, transported, and ‘consumed. When connectivity is unstable, the platform ‘supports applications that are offlie-capable by synchronizing, data and transactions ata later time. When farmershave no smartphones available, they can stillbe reached via SMS. ‘Spatial: The platform provides functions to analyze and process geospatial information. For insight and optimizations, ‘weather and sensor data and aerial imagery are mapped and brought into context with spatial data from fields and yield. Users can create interactive, real-time visualizations. ‘Smart algorithms: To transform Big Data into smart data, algorithms that support simulations, optimization, and predictions can run on the platform to create value out of your data, domain experience, and IP. This will help agribusinesses, optimize yield for a specific crop variety, make smarter decisions in commodity trading, and optimize operations in the supply chain. ‘And much more... For example, processing real-time data streams, eg. from market data providers, analysis of unstructured information, and text, 24g, from news feeds or social networks.