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SAP Digital Aerospace and Defense Whitepaper (02/16) © 2016 SAP SE. All rights reserved

Value Creation in the Digital Aerospace and Defense NetworkInspire and Shape a digital world that reinvents A&D products, services, and core processes

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Dear Aerospace Community,

Over 3.7 billion passengers will fly this year,1 and the numbers continue to grow. Boeing forecasts that, within the next 20 years, over 38,000 new airplanes are needed to accommodate passengers and cargo.2 Passengers expect more for less from airlines. Consequently, costs per ticket are expected to decline and on-time statistics to increase. These expectations are passed onto the airplane and engine manufacturers to constantly innovate, reduce operational costs, and increase the uptimes of airlines.

Aerospace and defense (A&D) manufacturers have improved and redesigned their products to enhance performance and reduce fuel costs. In addition to advanced composites which dramatically reduce the weight of the aircraft, software is playing an increasingly critical role in manufacturing, managing, and flying the airplane more efficiently.

The introduction of advanced materials and increased software requirements have led OEMs to change their operations. Guided by the airplane sales cost structure established several years prior to actual manufacturing, OEMs have to address the introduction cost of new innovations. Imagine that an airplane manufacturer would have total visibility and integration between engineering, manufacturing, and supply chain to determine in real time the optimal point to introduce engineering changes by reducing risk and cost across the entire supply chain.

In addition to the introduction of innovations, airplane OEMs have to address the large backlog. Airbus, for example, recently announced a production rate increase from 42 to 60 A320 per month over the next three years.3 This requires additional cost to build out manufacturing capabilities within the OEM as well as improvements within the supply chain. Operational excellence is key to success, and quality compromises are not an option. Imagine A&D companies have real-time visibility and could predict manufacturing, supply chain, or quality issues to effectively manage cost to support market fluctuations, especially production rate increases.

Visibility also plays a big role in managing aircraft efficiency and up-time. In the 1980s Rolls Royce introduced “power-by-the-hour” as a new business model offering a fixed maintenance cost instead of purchasing the engine. Rolls Royce had access to the operational data through sensors in their engines and managed the maintenance data. Combined with engineering knowledge, the company was able to provide higher uptime. This business model has been adopted by many A&D companies over the years. Imagine the next generation of power-by-the-hour, which provides real-time visibility, predictability, and uptime management across many different data sources owned by different stakeholders –airlines, airports, flight operations, MROs, and engine and airframe manufactures. Predicting potential risks will provide real-time feedback to pilots and maintenance in order to reduce unscheduled maintenance events. Technology firms such as SpaceX, Google, and GE Digital are entering the A&D market and creating new revenue streams based on insights.

SAP’s platform and solutions are the foundation for the digital transformation within aerospace and defense, similar to that of a nervous system. Our solutions bring A&D organizations to life by sensing, analyzing, suggesting, and communicating with the entire A&D digital network. This happens by capturing data at a central place, applying complex business rules and offering real-time analytics with optimization, predictive, and simulation capabilities to assemble the necessary information for an informed decision or to better manage risks. Regardless of whether you are within manufacturing, managing aircrafts’ uptime, or establishing new revenue streams based on disruptive services, the SAP platform will enable your real-time business optimization on the ground and in the air.

This document provides more information about our capabilities and how SAP can help A&D companies in their digital journey to address their challenges.

Torsten Welte

We envision the digital aerospace and defense network to help achieve near- zero unplanned downtime for commercial travel or missions, allow aircraft production at the highest rates and lowest cost, and provide superior end-customer experience.

Torsten WelteGlobal Vice President Aerospace and Defense Business SolutionsSAP SE

TORSTEN’S POINT OF VIEW

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Executive Summary 4

Top 5 Technology Trends 7

Reimagining

Reimagining Business Models

Reimagining Business Processes

Reimagining Work

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10

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Digital Business Framework

The Digital Core

Customer Experience

Workforce Engagement

Business Networks and Supplier Collaboration

Big Data and the Internet of Things

SAP HANA Platform, a New Computing Paradigm

How Does It All Come Together?

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How to Start 23

Why SAP?

SAP is Committed to Innovation

End-to-End Digital Business Solution

SAP Services to Drive Your Success

SAP Comprehensive Ecosystem

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29

TABLE OF CONTENTS

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EXECUTIVE SUMMARY

Big picture: The digital economy is real and will continue to transform A&D

The Digital Economy

Technology trends Five technology trends are shaping the digital economy – hyperconnectivity, supercomputing, cloud computing, a smarter world based on outcomes, and cybersecurity. Many A&D companies have extensive experience within these areas. Leading companies have started to evaluate the impact these trends have on their business and are rethinking their answers to questions such as:• What are profitable business models based on new technologies and trends like

predictive maintenance, digital services, and data science?• How can we capitalize on the massive amount of data generated by modern

equipment and machines in a hyperconnected world?• Which trends and technologies (such as smart factories, connected supply

networks, etc.) help A&D manufacturers turn core processes into competitive differentiation, reduce costs, and manage increasing manufacturing rates?

Leaders are fully embracing digital technologies as a strategic priorityKey players have already invested significantly in digital capabilities as part of their products and created transformational roles such as the chief digital officer. They have developed a vision for across-the-board, digitally enabled enterprises reaching beyond their boundaries. Their road map aligns with the key business priorities and includes disruptive technologies as well as incremental improvements by integrating different digital technologies. Digitization extends now from products into supply chains and production. OEMs have utilized digitization to innovate and differentiate their services within the highly competitive aftermarket in order to grow and increase their profits.

Early adopters are winning The introduction of power-by-the-hour by Rolls Royce changed the market for engine producers. This new business model is based on sensors in engines and digital platforms to improve uptime. A new area of digital transformation has begun, and companies embracing the digital world and executing on a digital strategy are growing shareholder value faster than their peers. The nature of the digital A&D ecosystem forces participants to synchronize and collaborate in order to optimize products over their entire lifecycle, improving the end-customer experience.

Digital business models are disruptive. The rules have changed.

• Airbus Defence & Space Optronics is using SAP S/4HANA as a digital core – a major milestone within the group’s digitization initiative to increase the efficiency of financial and controlling processes and move toward a fully digital financial process.4

• Boeing believes the future of the aviation industry lies in “the digital airline” – connecting information from airplanes via technology for smarter airline operations.5,6

• Spirit Aerosystems accelerates production with real-time shop floor dashboards, expecting benefits such as 25% reduction in flow times.7

• Lockheed Martin’s digital vision is an end-to-end initiative using the explosion of the digital transformation in manufacturing (model-based design, additive manufacturing, advanced materials) as a key enabler to shrink cycle times and drive costs down. Its “digital tapestry” approach connects everything from concept to realization.8, 9

TODAY, EVERY BUSINESS IS A TECHNOLOGY BUSINESS

Keys for A&D companies to win in the digital community:• Be a leader in re-inventing and digitizing the business • Cooperate with partners and customers for shared benefits, leveraging digital

product data across the lifecycle and improving product design• Digitize the engagement with customers

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EXECUTIVE SUMMARY

The digital A&D network

The digital A&D network is the nerve system of the next-generation aviation infrastructure. It is the connection of independent but highly collaborative digital data sources (e.g., equipment data, geospatial data, weather data, airline operation data, customer service data, etc.).

Transformation drivers

The A&D industry value chain along R&D, production, supply chain, and service is transforming at breakneck speed, driven by:• Commercial demand: Increasing global airline demand

results in record production backlogs that need to be delivered. Operational excellence in manufacturing and supply chain becomes a key differentiator for OEMs and allows them to address the price and cost issues

• Digital products: Customers demand higher utilization of their high-cost assets. Sensor-based information allows new insights to product details that will be harnessed to reduce unplanned downtimes, provide inside across the value chain, and feedback into engineering

• Future workforce: A radical shift in learning, knowledge management, and information accessibility is needed to address the huge transition of the A&D workforce

• Environmental concerns: Substantial R&D budgets are allocated to design new engine concepts, energy sources, or smarter cockpits that aim to optimize fuel efficiency and reduce pollution

• Diversification: Changing market conditions in defense pushes OEMs to look for new revenue sources, e.g., by utilizing Big Data as a new product

New business models

Leading A&D innovators are reimagining business models, business processes, and job descriptions enabled by the transformation drivers.• Digital factory: Enable operational improvements and

automation based on information exchange between manufacturing equipment, supply chain, and products. Information gathered from manufacturing all the way to the end of life provides insights for engineering and operational improvements. This enables value chain optimization and management by exception with system-based decisions support

• Digital equipment: A&D companies can leverage digitally enabled equipment to create value-added health monitoring and remote maintenance services or enable predictive maintenance strategies

• Digital aviation: Platforms remove boundaries in the commercial market between passenger scheduling, fleet maintenance, or financial analysis. Allow OEMs to host digital content, solutions, and platforms that will seamlessly integrate into their customer business operations

• Cybersecurity: The real-time digital network is a potential target for cyber attacks. Securing this system is one of the top priorities

The future: The A&D industry fully embraces digital transformation

Real-time monitoring

Advanced analytics

Process and visualize

telemetry data

Predictive analysis

Data sourcesDigital aviation

platform capabilities Decision support

Telemetry data, system faults

Maintenance and ops data

Technical publications

Engineering data

OEM

Product engineer“How can I improve my product’s reliability for reduced TCO?”

Program manager“How can I ensure we comply with our contracted availability targets?”

Operator

Mx technician“How can I reduce diagnostic and work execution time to increase equipment uptime?”

Mx control“How do I get advance warning of failures before they impact the mission?”

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REIMAGINING

Do you have the right strategy? The starting point of the transformation journey is to reimagine your business with business outcomes and customers at the center.

EXECUTIVE SUMMARY

PLATFORM

Do you have the right platform?

Successful A&D companies of the future are creating new products and services today. They are transforming their businesses with new processes that fulfill the IoT approach. They are upgrading their technology infrastructure – with Big Data, mobile, cloud, analytics, and other applications – to gain the flexibility they will need to thrive and develop digital capabilities.

We ensure solutions aligned to desired outcomes. SAP’s digital business framework is based on the five key pillars of a digital strategy:1. Core business processes (finance, supply chain,

manufacturing, MRO …)2. Workforce engagement, including employees and

contractors3. Big Data and the Internet of Things to drive real-time

insights and new business models4. Customer experience across all channels5. Supplier collaboration across all spend categories

(materials, services, and expenses)

ROI drives this significant phase of the transition to digital. It’s not about any one of the 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.

Roadmap to Run Simple: Steps to digitize your business

REIMAGINE BUSINESS MODELSThe increasing volume and variety of information accessible along the product lifecycle provides new ways to differentiate with innovative solutions and services, improved customer affinity, and growth in new markets. We see business model developments within revenue generation efforts based on digital aviation, new aftermarket services, and within core product innovations.

REIMAGINE BUSINESS PROCESSESThe use of digital technologies in A&D is already extended beyond the actual products to all core elements of the value chain, converging information and operational technologies. Automation, hyperconnectivity, 3D printing, and artificial intelligence are applied everywhere and support the A&D ecosystem with needed increases in throughput times and cost reductions.

REIMAGINE WORKThe continued introduction of technologies that profoundly impact the A&D world changes what people do and how they learn, interact, receive support, and grow. Many tasks will become automated, but people will be an even greater asset in shaping the customer experience as their roles change.

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EXECUTIVE SUMMARY

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

Fundamental changes: Five technology trends changing everything

Highly connected products, people, factories, and business networks will impact how equipment is produced and serviced, what is sold to the customer and, more importantly, the competitive landscape among A&D OEMs as they are able to stay connected to their products throughout the entire product lifecycle.

HYPERCONNECTIVITY

The limits of 20th century computing power are gone. Real-time in-memory computing is a breakthrough for A&D that collapses transactional and analytical processing as well as information technology (IT) and operations technology (OT) into a single platform, creating infinite business opportunities for A&D companies.

SUPER COMPUTING

Technology modernization, including cloud computing, is a major priority for A&D companies to meet the challenges of increased commercial demand and constrained defense budgets. Most A&D companies will operate within a hybrid landscape where cloud technologies interact with on-premise apps.

CLOUD COMPUTING

Smarter factories with 3D printing, digital mockups, and completely connected robots; advanced analytics leveraging artificial intelligence on top of Big Data; and smarter products will reshape value chains and redefine A&D core manufacturing and service processes.

SMARTER WORLD

With an ever-increasing risk of hacking, spying, and digital theft, cybersecurity is a top priority as A&D companies plan and execute their digital strategy under pressure to safeguard intellectual property for their sophisticated and advanced products.

CYBER SECURITY

1

2

3

4

5

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REIMAGINING

THE DIGITAL ECONOMY OFFERS INFINITE 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

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DIGITAL INNOVATION IS REAL

REIMAGINE EVERYTHING

Successful adoption of new business models also requires a reimagining of your own internal business processes.

• R&D, product design – Integration of sensor-based product data and predictive analytics support reliability programs

• Manufacturing & Quality – Smarter and more connected manufacturing operations reduce cost and improve quality and throughput. Non-conformance management with early warning systems and predictive quality controls to remove waste

• Supply chain management, supplier collaboration – Real-time, responsive supply chains enable global visibility to reduce risk with embedded machine learning, predictions, and simulations

• Customer services and MRO processes are redesigned to become more efficient

REIMAGINE BUSINESS MODELS

REIMAGINEBUSINESS PROCESSES

REIMAGINE WORK

The following reimagined business models illustrate the scope of the transformation.

• “Total lifecycle owner” – Focus on an aftermarket-driven strategy with new services based on real-time operational and engineering data

• 3D printing transforms the A&D value chain and fulfillment models for aftermarket, shortens development cycles, and provides opportunities for new business models by allowing suppliers to print their parts within the plant and create a factory in the factory

• OEM as digital integrator – Develop new strategic partnerships with risk/reward-sharing programs to bring new innovations to market faster; access new geographical markets and technologies

• Information as a product – Pursue other sources of revenue in adjacent markets with customer-tailored Big Data solutions; enable digital aviation platforms

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

• Automation with digital technologies replaces manual transaction work. Exception-based interaction with solution proposals enables efficient decision processing across large volumes of operational data

• The right information, at the right time, on the right device, with role-based presentation to improve decision quality, profitability, and productivity. Remove ubiquity as data is collected from assets

• Predictive and self-learning systems – Big Data becomes accessible by automatically detecting significant signals from noise by using predictive and self-learning software

• Interactive technologies improve user experiences with augmented reality and deliver the right visual, text, video, and audio information on demand; reinvent both learning and daily tasks

• A single source of the truth eliminates data silos and enables cross-departmental optimization

Companies understand that hyperconnectivity and Big Data are the keys to value creation. Business models and processes and even the work itself must be reimagined to succeed in the digital economy.

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REIMAGINE BUSINESS MODELS


The increasing volume and variety of information accessible along the A&D product lifecycle provides new ways for A&D companies to innovate with new solutions and grow in new markets.

Total lifecycle owner

OEMs must realign their organizational structure, global supply chain, and commercial models to position themselves to transition into a digitally powered lifecycle solution provider. . Between the increased sophistication and number of sensors that are designed into modern A&D equipment there is an opportunity to deliver a greater number of high-margin aftermarket services to A&D airline and defense operators.• OEMs can expand into new service markets by leveraging

operational sensor data in conjunction with other data sources. Engine manufacturers can now offer route optimization services, collecting data from engine sensors as well as weather information

• OEM’s can increase the volume and profitability of outcome-based contracts (such as performance-based logistics, power-by-the-hour) as risk associated with these contracts is reduced by complete visibility across program operations

OEM as digital integrator

As A&D OEMs continue to enhance their global presence in order to access additional markets and extent production capacities, product-lifecycle-wide collaboration and distributed product development are becoming the norm. New technologies will enable better coordination of complex value networks and provide agile integration, global visibility, network intelligence, and secure collaboration from design to service.• Broad coverage of digital network collaboration with

suppliers allows OEMs to increase volume and sophistication of outsourcing and gives OEMs flexibility needed to model their preferred global capacity mix

• Information-driven, multi-tier networks with cross-enterprise intelligence and advanced analytics help OEMs to drive process compliance and manage vendors smarter

• Flexible business process platforms accelerate growth strategies by managing consolidation and M&A activities

• Connected manufacturing enables new manufacturing relationships with suppliers3D printing

As 3D printing adoption increases and finds more applications in building new products, access to advanced additive manufacturing technology becomes a key differentiator. The value chain composition will change as professional 3D service factories start obtaining aerospace certifications, and OEMs strategically invest in acquiring specialized 3D capabilities to extend their in-house capacity. Service parts logistics will evolve and disrupt legacy supply chain models as more and more parts can be replenished on demand. Further key innovations are:• Traditional production methods limit the geometry of parts.

With adaptive manufacturing, lighter, more durable, and more complex parts can be produced

• 3D printing will cut down production time for prototypes and will enable earlier testing

Information as a product

A&D OEMs continue to diversify their portfolio to pursue other sources of revenue with innovative Big Data solutions.• OEMs can access technology platforms to build systems that

can process IoT and Big Data with advanced analytics (example, for situational awareness), and increase revenue in adjacent markets and create customer value

• Digital aviation platforms, collecting, enriching, and hosting information (e.g., to help customers optimize flight operations in real-time, extending reach to crews, operations personnel, and even passengers) can be enabled

• OEMs embed more and more software technology from software vendors into their products.

$150 million/yearPotential savings for an airline that manages to increase the airtime for a fleet of 70 aircraft by just 70 hours a week, according to SAP estimates.11

$109 billion According to SAP estimates, aircraft service lifecycle management is a $109 billion industry.11

$3.4 Billion/yr. estimated savings for MRO market in material and logistical costs alone by 3D printing adoption 10

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REIMAGINE BUSINESS PROCESSES

The use of digital technologies in A&D already extends beyond the actual products to all core elements of the value chain – engineering, manufacturing, supply chain, and MRO. Automation, hyperconnectivity, and artificial intelligence are applied everywhere and support the A&D ecosystem with needed increases in throughput times and cost reductions.


R&D, product design

Visualization technologies provide a better understanding of the product design throughout the company. Google-like search and search on geometries increase reuse of part design and decrease the number of design variants. IoT will provide more data from the manufacturing process as well as in service usage in order to improve future design.

A compliant design for a global product is no longer possible without intelligent support to identify relevant regulations and automated generation of compliance reports (e.g. REACH).

Manufacturing and Quality

Pressure to reduce cost and align with the demand has created the need to continuously improve production processes and quality. Advanced automation and integration of shop floor processes (IoT, Industry 4.0) deliver the data that is the basis for optimizing products, processes and proving compliance. This provides substantial potential to improve throughput in order to address the record backlogs. Real-time production dashboards with simulations, recommendations, and predictions for supervisors revolutionize how companies run their shop floor operations, providing quality, scope, and granularity of information that never existed before.

Predictive and root-cause analysis allow OEMs to understand sources of non-conformance and machine failures earlier and more accurately. These new analytical tools help to make early adjustments of products and process definitions to avoid waste, reduce production cost, and stabilize the production flow.

Supply chain management, supplier collaboration

Control towers with early warning systems using real-time alerts for material flow deviations reduce supplier risks impacting production master plans. Digital B2B collaboration natively integrated with core supply chain planning allows for closer integration of critical suppliers and, e.g., better coordination of changes.

Embedded network intelligence and machine learning analyze diverse structured and unstructured supplier data points to assess the health of the entire network and predict future risks to avoid expensive fire-fighting.

Customer services and MRO

Big Data coming from equipment sensors and advanced analytics, combining a multitude of structured and unstructured data points, will become an integral part of MRO, e.g., to evolve maintenance resource planning from preventive to predictive. Field service effectiveness can dramatically improve by equipping technicians with mobile solutions and wearables with 3D product visualization, real-time context data, and virtual collaboration enriching their current work environment to better solve customer problems than ever before.

Airbus uses innovative digital tracking and monitoring RFID technology to help streamline and increase the efficiency of its industrial operations.13

100% of the OEM respondents see digital as a means to transform MRO support.12

53% of aerospace companies expect digital technologies to help reduce manufacturing delays.12

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The continued introduction of technologies, such as smart glasses, 3D printers, and geospatial technologies that impact the A&D world, profoundly changes what people do and how they learn, interact, and grow.

REIMAGINE WORK

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

Automation with digital technologies replaces manual transaction work in procurement, inventory management, invoicing, and payment processing. Digital processes have access to real-time analytics to support rule-based decision-making.

The right information is delivered at the right time on the right device. Shop floor, logistics, or service processes are supported by 3D asset visualization, virtual coaching, voice control, and wearable devices. Big Data and unstructured data sources such as equipment sensors and text documents become natively integrated into business processes. Systems automatically filter signals that matter from noise.

Predictive and self-learning systems interact with machines and business processes and accelerate the delegation of decisions from people to machines. People who need the knowledge have digital access on demand and in real-time –regardless of whether they are part of the core or the extended workforce.

People continue to be key assets in the digital A&D ecosystem. Their roles will change, but their value to each element of the value chain will grow. Digital learning is revolutionized by 3D visualization.

Technicians, mechanics, and supervisors, whether on site or remote, can now use the SAP Mobile Platform to access and complete work orders, review technical documentation and production progress, and raise non-conformance issues directly on a mobile device. 14

Northrop Grumman: “Where SAP 3D Visual Enterprise is used, our delivery times have been reduced by 15-20% due to less rework and more efficient operations.” 15


Interactive technologies: Reflect the transition of people’s roles from transaction workers to exception workers, who engage when the digital rulebook needs human creativity and ingenuity.

A single source of the truth: The transformation to a digital A&D ecosystem creates a substantial need to orchestrate across teams and company interactions. Real-time digital information is critical to enable flexible decision-making on boardroom level based on a unified, up-to-date view of the entire ecosystem and create closed-loop information systems

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The journey towards a digital business entails many challenges. At the core of the transformation, companies must focus on value to their customers. Through the business transformation, technology will be a critical enabler to support the necessary organizational evolution. Agility and flexibility are essential capabilities for a digital business to adjust course at any time. This involves two key concepts: simplification and innovation.

Simplification is all about doing what we are already doing, but better, faster, and cheaper

Innovation is all about reimagining A&D business models and customer engagement by leveraging the five technology trends.

The digital A&D network is resting on one universally connected platform that will enable the insights to all data in real time. There is no need for analytical environments that struggle with data latency and trust. The idea is very simple, but it took years to make it a reality. Uniting structured data (e.g., finance, production) and unstructured data (text, video, images) will change the way A&D plans, scales, and innovates.

During the digital journey, A&D companies need to:• Leverage Big Data from equipment and production machine

sensors and geospatial, text, or image signals. Bringing all data signals together leads to the optimum recommendation, which can be instantly acted upon in transactional systems via human and machine-to-machine interfaces

• Extend the business process to interoperate with business partners in near real time via advanced cloud-based business networks

• Modernize business processes from finance to supply chain, MRO, and manufacturing, running them in real time with no data replication and no batch programs

These capabilities open infinite new ways of optimizing business, driving business digitization, simplifying everything, reducing cost, and providing the agility required in rapidly changing world.

Disruptive technologies are key to the success of the transformation journey. SAP constructed an innovation road map designed to bring technology such as in-memory computing together with cloud computing and mobility. This strategy has been embraced by early adopters who are leading the transition to digital.

SMARTER DECISIONS + SMARTER TRANSACTIONS = SMARTER BUSINESS

Equipment and machine sensor data

Manufacturing operations

Financials and contracts

Geospatial

Text manuals/ records

Third-party data

Electronic logbooks

Business process Business intelligence

(data and information)

Customer service

Real-time supply planning

Design and build

PBL contracts

Supply chain risk analysis

Predictive quality

Predictive maintenance

SAP HANA PLATFORM

Any device

SAP HANA: THE GREAT SIMPLIFIER

DIGITAL INNOVATION IS A JOURNEY

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DIGITAL BUSINESS FRAMEWORK

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

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1. Outcome-based customer experience2. Re-platform core business processes and bring

together transactions and analytics in real time to be smarter, faster, and simpler

3. Smarter and engaged workforce across all employees and contractors

4. Supplier collaboration to accelerate growth and innovation

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

SAP understands the five pillars of digitization, and we also understand that the continuously changing requirements pose big challenges for businesses. The method of reimagining business models, business processes, and work helps develop the digitization road map.

We have built the digital business framework to support A&D companies in developing and executing on their enterprise strategy and transforming so as to fully leverage and contribute to the digital A&D ecosystem.

A&D companies must digitize to grow profits in new markets as well as reduce costs and increase productivity by simplifying their operations. The value of the digital economy is based on how to serve the customer. Value creation often comes from edge solutions that are based on and coordinated by the digital core solutions. It is the platform for innovation and business process optimization, connecting the workforce, the Internet of Things, the supply network, and the customers.

Every A&D company needs to think about the five pillars of a digital strategy

DIGITAL BUSINESS FRAMEWORK

SAP HANA PLATFORM

WorkforceEngagement

Supplier Engagement

CustomerEngagement

Big Data &Internet of Things

Digital Core

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THE DIGITAL CORE

SAP S/4HANA is the only end-to-end solution that covers all business processes and runs in-memory. It helps A&D companies run in real time for fundamentally better performance.

The real consideration here is how and when do you use such a breakthrough in business applications.

In addition, the SAP HANA Cloud Platform can be the single enterprise data source for SAP S/4HANA and the rest of your solution landscape.

With advanced in-memory computing, A&D companies can finally free themselves from running the business in batch mode and building complex procedures to get around technology limitation. They can run simply and unleash the full power of the digital business.

Real time

Real-time optimization of business-based changes will have massive implications 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 productivity, and increase profitability.

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

Deployment choice and lower TCOAccessing solutions to run the core has to be simple. A&D 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 more budget for innovation.

Consumer-grade user experienceUser experience is key to success. It drives adoption, user engagement, and, ultimately, productivity.

Simplify with SAP

A new generation of ERP solutions, running in real time, integrating predictive, Big Data, and mobile, will change how A&E companies work, how they run the business,

and how information is consumed. The future is here.

Optimize schedule and cost performance of complex programs:

• Monitor status at line item level instantly for large-scale programs

• Discover current and future project risks and deviations earlier

Enable fully digitized shop-floor to drive quality and throughput:• Digitize shop floor data

collection with connected manufacturing

• Predict machine failures to optimize production asset utilization

Develop deep integration with critical suppliers and more risk-awareness• Gain immediate insight into

present and future risks• Enable sub-daily, constraint-

based material requirements planning

SAP HANA PLATFORM

Finance

Allow for visibility into the state of the business at any time

Human resources

Manage, develop, reward, and retain a global workforce

Designing and building complex products

Responsive supply networkBusiness capture and

program deliveryAftermarket services

Deliver performance-based contracts and new services with optimal ROI• Manage all facets of outcome-

based contracts in one system in real-time

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72%of B2B buyersrequest self-service for work-related online purchases16

SAP customer engagement and commerce solutions powered by the SAP HANA platform bring together marketing, sales, services, and commerce to ensure seamless digitization of the entire customer experience. The platform enables 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

• Engage your customers on the channels they choose at any moment in their journey

• Achieve full integration with your core business processes to provide a unique platform for omnichannel customer engagement and commerce

Three key trends are reshaping the customer experience:

Customer journey

Competition has never been more fierce. Whether it’s winning the next program, selling a plane to an individual, ensuring your components are included in your customers design, or selling a service part on the Web, it is imperative that your customers’ expectations are met. It is critical that the tools that support all channels of engagement with your customers are aligned and support your sales team.

Outcome economy

The outcome economy requires a deep change in the business model and new organizational and business process capabilities. It also requires a much different approach to product design and product TCO across the lifecycle. Customers are seeking to minimize capital expenditures while delivering their end consumers reliable and affordable mobility. Creating a holistic model offering outcomes vs. assets can open new revenue sources.

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. Whether you are targeting individuals for a business jet purchase, or monitoring equipment performance to predict service needs, insight from your Big Data is crucial.

CUSTOMER EXPERIENCE

Digitize your end-to-end customer experience with SAP

74%of B2B eCommerce platforms must serve multilingual and multinational audiences. 16

66%of B2B customers expect omni-channel capabilities16

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.

SAP HANA PLATFORM

RETAIL

SOCIAL MEDIA

TVVIDEO

SHARING

CALL CENTER

SELF SERVICES

E-COMMERCE

PHONE SMS

MOBILE

TRADE

CUSTOMER

QUOTE TO CASH $EXECUTION

- 18 -


30%of executives say their companies give special attention to the particular wants and needs of millennials18

B/E AerospaceWith operations on three continents and nearly 30 acquisitions folded under onebrand, B/E Aerospace chose the SAP SuccessFactors HCM Suite of solutions to consolidate employee data, accurately track employee development, and measure performance. Now, employees see exciting career paths and stay with the company longer.19

Digitize your workforce with SAP: SAP S/4HANA, SAP SuccessFactors, SAP Fieldglass, and SAP Fiori solutions provide the tools fortotal workforce engagement and advanced analytics you need to digitize your workforce. • Attracting the best people Recruit and onboard the best workforce, simplify their work, and ensure that regulatory and compliance

requirements are met• Managing the total workforce lifecycle Manage the total workforce lifecycle from recruiting to onboarding, performance,

compensation, and learning – all in one place• Smarter apps with greater user experience Engage and enable the workforce to easily access the most relevant business

information, at the right time, through a dramatically simplified user experience

WORKFORCE ENGAGEMENT

Demographic changes in the workforce are creating significant risks to A&D companies through the loss of critical skills and intellectual capital. Only companies that have detailed insight into the current capabilities of their workforce, and have the ability to identify, develop, acquire and retain the capabilities needed to run and transform their business, will be able to remain competitive. Three forces need to be addressed:

Changing of the guard

The average age of the A&D workforce is 45 years old.17 The coming wave of retirements requires A&D companies proactively devise strategies to manage the transition of the workforce to the digital generation.

Skills gap

While shortages in engineering are often highlighted, the reality is the skills gap impacts the entire workforce spectrum. Skilled trades on the shop floor, project managers, as well as compliance and acquisition professionals are all in great demand.

Competition for talent

The shift to digital means A&D companies no longer compete only with each other for talent. Execution of your company’s mission will rely on your ability to maintain a workforce with highly desirable skills by mastering the talent supply chain – enabling and retaining current employees, attracting new talent, and effectively leveraging contingent workers.

Improve your total workforce productivity: Simplify with SAP

28%of open requisitions now filled by internal talent, up from 5% (B/E Aerospace).19

The world is getting smarter in the digital economy. Will your workforce enable or hinderyou in the transformation of your business?

Contextual Intuitive

Adaptive and predictiveAnywhere/anytime

Secure

SMARTER APPS WITH IMPROVED USER EXPERIENCE

SAP Fiori

FLEXIBLE WORKFORCE LIFECYCLE

Recruiting/onboardingTime and expenseInvoicing/paymentStatement of work

Performance managementLearning

Workforce analytics

EMPLOYEE LIFECYCLE

Recruiting/onboardingPerformance and goals

Succession and developmentCompensation

Employee record and payrollTravel and expenseWorkforce analytics

Learning

- 19 -


BUSINESS NETWORKS AND SUPPLIER COLLABORATION

SAP S/4HANA gives you incredible capabilities to digitize business processes across your business. The connectivity to the business network allows you to extend those processes beyond the four walls of your business with: • Solution already at scale and covering all spend categories (direct and indirect material, labor and services, travel and expenses)• Business networks operating on a global basis, with near zero downtime, and compliant with data security standards • An extensive offering, leveraging services from many partner areas such as supply chain, financing payment, supplier

certification, etc.

Collaboration across all spend categories and the entire lifecycle from product design to sustainment will change the nature of how A&D companies acquire products and services, orchestrate R&D and manufacturing, and drive value creation across the ecosystem. Securely sharing data in real time and providing contextual insights adding network-level intelligence will allow companies to redefine control of complex distributed production and performance-based sustainment environments. Several key trends shape the game:

Collaborative supply chain and manufacturing networks Buying and managing direct and indirect material from a pre-approved and validated network of suppliers supports the consolidation of the existing supplier base. Electronic supplier integration enables efficient sourcing, material replenishment, and outsourced manufacturing processes. Connected manufacturing provides flexibility to react in real time to fluctuating supply and demand.

B2B collaboration by categoryAcquiring products and services or managing expenses requires a set of open standards and a different community of suppliers. Those standards are now set.

Network of networksA&D companies are looking at end-to-end supplier services like digital invoice processing, supplier certification, etc. This is all possible as business networks like Ariba are aggregating the services into a one-stop shop. Digital relationships can be taken to the next level by connecting vertical networks via shared, secure cloud-based services built on top of the SAP HANA Cloud Platform. This will allow all members of the A&D ecosystem to further increase the value from the combined knowledge processed within the trusted network of networks.

50–75% faster transaction cycles are being achieved with the Ariba Network.20

95%The Airbus Group is on track to achieve 95% automation of three million annual invoices, managing 30,000 suppliers in 103 countries.22

25–50%of travel bookings are “out of compliance” with limited corporate control or visibility.21

Simplify supplier collaboration with SAP Business Networks

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.

Manage expenses Labor and services Direct and indirect material

- 20 -


.

Tracking flights in 4DIn 2014, SAP and Luciad cooperated to start LuciadLightspeed, which offers the integration of 3D spatial visualization to SAP HANA. Lufthansa Systems has begun to explore the idea of an in-memory operational Big Data store and perfect flight operations using IoT. The collaboration of SAP and Luciad provides real-time situational awareness and consequently optimizes fuel and crew costs.23

BIG DATA AND THE INTERNET OF THINGS

With SAP HANA, Internet of Things edition, organizations can now take embedded device data, transform this data into useful information in real time, and apply this information across the value chain to drive business insights and create new business models.

The Internet of Things platform provides the connectivity to OT systems, either directly or via partners. The data is stored andprocessed in the platform, which provides basic functions like data services (such as operations on time series), predictive analytics, and others. Applications are developed by SAP, partners, and customers and enable use cases like complex product lead-time forecasting or predictive quality.

The Internet of Things is a powerful force within A&D today. For decades now, A&D companies have been successfully implementing sensors and computerized automation in their manufacturing operations and products. SAP’s digital platform connects IoT and Big Data with a digital core and business networks to finally exploit the full value of these data sources. A strategy for advanced analytics will enable A&D companies to understand past actions and predict future trends so they can make the right business decisions at the right time. Some key trends include:

Smart products driving new business models

Adding sensors to the “smart” equipment OEMs produce opens huge opportunities for hardware design improvements and new service offerings, helping customers get more out of their asset investment. In this environment, new partnerships will be forged to maximize the outcome.

Data-driven business models

A&D companies have an opportunity to optimize internal operations by analyzing large volumes of engineering, production, and supply chain data, connected via one digital platform. They can anticipate issues that impact product delivery or quality early and apply predictions, simulations, and machine-driven root-cause analysis to fine-tune process setups and address issues earlier and better.

Platform for revenue growth

A&D OEMs can capture opportunities in adjacent markets by enabling their infrastructure with Big Data, geospatial, or predictive capabilities to offer true innovation (for example for real-time situational awareness, security, or public safety solutions).

Connect, transform, and reimagine with SAP

The most dramatic change in the digital economy will be driven by hyperconnectivity and

Big Data science. These will transform nearly every A&D business model.

Analytics tools

Device / sensor data

Content: rules, standards, algorithms, data model

Data services / events

SAP HANA Platform, Internet of Things edition

IoT Connectors

Predictive maintenance

Lead time forecasting

Health monitoring

Predictive quality

Further use cases…

$

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Dream, develop, and deliver with SAP HANA Cloud Platform

SAP HANA 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 extensions

Extend your current cloud and on-premise solutions for optimal operational excellence throughout the A&D value chain.

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, 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.

The SAP HANA platform is…

Real-time, in-memory platform • 10x data footprint reduction for ERP • Extended storage, including Hadoop • Open architecture • Developer-friendly • Embeds mobile and analytics • Secure • Cloud-ready

Spirit Aerosystems“Think about the art of the possible –what’s a problem you can’t solve – a 10 or 50 million dollar problem…. How can you apply the SAP HANA technology to solve it? That’s the real return.”24

SAP HANA PLATFORM – A NEW COMPUTING PARADIGM

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

Honeywell Aerospace“SAP HANA and SAP Business Objects enabled Honeywell to deliver valuable, governed information to end users quickly and empower them via two self-service usage models - providing the business with a "single source of truth“25

SagemThanks to SAP HANA, more than 400 users in critical functions, including finance and supply chain, are able to collect data with greater ease and speed. Managers are also gaining vital insights into business processes, which helps them make smarter decisions faster.26

IoT

Infrastructure

Platform

Big Data (Hadoop, Spark)

SAP HANAData platform

(SAP HANA DB, SAP ASE)

Infrastructure delivery

Integration (SAP HANA Cloud

Integration)

Libraries (graph, predictive)

UX (Mobile/SAP Fiori)

SAP data centers Partner data centers Customer data centers

Analytics (SAP Lumira)

Security (SSO, Identify)

Elastic deployment

Open programming containers (Java, XS2)

NEW APPS EXTENSION INTEGRATIONNew apps and services

- 22 -


HOW DOES IT ALL COME TOGETHER? – EXAMPLE

Sensors on the aircraft feed both telemetry data (temperature, vibration, pressure, etc.) and fault codes to a central system –the digital core. This system enables visualization of this data and automatically predicts impending failures based on algorithms running in the background prior to failure, which can ground aircraft (AOG).

When impending failure is predicted, the system automatically triggers maintenance notifications with appropriate spares in the central system (automatic connection to logistical events that will correct failure). Labor/facility resources are optimized to ensure high priority requirements are given the appropriate attention and maintenance costs are minimized.

Material demand for needed spares is automatically sourced and fulfilled to ensure parts arrive at the point of demand when they are required. RFID speeds the fulfillment process through the warehouse and provides visibility across the transportation route.

Material requirements that cannot be fulfilled in-house are automatically sourced from the supply network.

Many processes in today’s operations are optimized within their silos and deliver individual business value. But next-generation business processes will span multiple pillars to drive efficiency internally or across the business network, connect to devices, and enhance the omnichannel customer experience. This will allow the manufacturer to address the cost challenges or, for airplane operators, to increase their equipment utilization, reliability, or uptime.

3D visual images can be used to provide visual work instructions, which speeds repair and ensures the correct procedures are followed.

Work order metrics (labor and material costs, time, etc.) are automatically collected and provided in real time to managers via mobile devices to report aftermarket service profitability and ensure aircraft availability contract metrics are met. Real-time equipment monitoring yields tangible business benefits:• Increased safety and availability of equipment• Increased reliability• Increased maintainability• Reduced risk and increased profitability, executing against

outcome-based contracts

The digital A&D platform provides additional opportunities for A&D OEMs to facilitate even more innovative value-added information services to airlines to help them improve customer satisfaction and lower operational cost. An example of this is the ability to optimize fuel consumption and emissions or improve day-of-operations recovery scenarios with advanced Big Data analytics and high-speed optimizations.

COMBINE DIFFERENT DATA SOURCES SUCH AS EQUIPMENT OPERATIONAL DATA, SITUATIONAL DATA, SUPPLY CHAIN DATA, AND OTHERS TO OFFER NEW SERVICES AND INCREASE PRODUCT RELIABILITY

Digital core

Supplier collaborationBusiness networks

Workforce engagement

Internet of Things

Time

Monitor aircraft signals

Predict component

failure

Automatically trigger

maintenance demand

Efficient dispatch of field

technicians

Auto-source spare parts and

worker

Route parts to maintenance

location

Optimize maintenance

resources

Manage contract

profitability

Purchase parts via consumer

like web UI

1

2

3

4

5

6

7

8

9

- 23 -


HOW TO START

THE JOURNEY TO THE DIGITAL A&D ENTERPRISE BEGINS WITH A CAPABILITY ANALYSIS THAT RESULTS IN THE TRANSFORMATION AGENDA

- 23 -


- 24 -


HOW TO START

5

GOVERNANCE

4

VALUE REALIZATION

3

SOLUTION ROAD MAPAND ROI

2

OPPORTUNITYASSESSMENT

1

STRATEGY ALIGNMENT1. Strategy alignment: Understand company and SAP

strategic direction and identify initiatives

2.Opportunities assessment: Opportunities deep-dive based on strategic initiatives and prioritization based on value

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

THE JOURNEY TO THE DIGITAL A&D ENTERPRISEThe journey to define future business models capitalizing on the digital A&D enterprise requires a systematic approach to identify and capture business opportunities.

The collaborative value and innovation frameworkA&D companies embarking on the transformation journey to the digital business typically start to reimagine their business with focus on business outcomes and customers.

Answering the key questions, “What role will we play in the A&D value chain?” and, “How will we make money?” will provide the 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 SAP’s collaborative value and innovation framework:

- 25 -


WHY SAP?

SAP ENABLES THE DIGITAL A&D NETWORK WITH THE DIGITAL CORE, BUSINESS NETWORKS, SUPPLY CHAINS, AND THE INTERNET OF THINGS

- 25 -


- 26 -


SAP IS COMMITTED 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

MORE ACCURATE LEAD TIMES

Lockheed Martin Space Systems is using SAP HANA, SAP Predictive Analytics, and the Data Science group to improve lead-time accuracy. The new custom application is expected to improve material lead-time accuracy by at least 25% and reduce lead-time overhead for buyers by 80%.27

REDUCE INVENTORY

Spirit AeroSystems has already accomplished significant inventory reductions by optimizing its manufacturing scheduling and work-in-process inventory, increasing its manufacturing responsiveness and visibility with the SAP HANA platform.7

FASTER REPORTING FOR BETTER DECISIONS

Sagem (a Safran company) has migrated its SAP Business Warehouse application to SAP HANA and achieved substantially faster reporting and data access, making more data available for more users and supporting them to achieve more accurate and granular production reporting.26

GLOBAL PRESENCE AND

RELEVANCE

DIGITAL ECONOMY

- READY

INNOVATION LEADER

• SAP solutions support the entire A&D value chain

• 95% of A&D companies in the Forbes Global 2000 are SAP customers

• More than 1,000 A&D companies in 51 countries are innovating with SAP solutions

AEROSPACEAND

DEFENSE ENABLED BY

SAP

• 95 million business cloud users

• 2.0 million connected businesses

• $740 billion+ in B2B commerce

• 99%+ of mobile devices are connected with SAP messaging

• 77k employees representing 120 nationalities

• 300K customers

• SAP operates in 191 countries

• Solutions for 25 industries and 11 lines of business

• 98% of top-valued brands are our customers

• 74% of the world’s transactions are managed on SAP

• 2011 SAP HANAlaunched

• 2012 SAP Cloudlaunched

• 2014 SAP businessnetworks are the largest marketplace in the world

• 2015 SAP HANA Cloud Platform

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

INDUSTRY ANDLOB FOCUS

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CREATE COMPETITIVE ADVANTAGE THROUGH INNOVATION

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 SAP’s collaborative value and innovation framework

Improve the value of the A&D business process platform with simplified transactions, unified data repositories, and reengineered user experience.

Analyze high volumes of program data to gain faster access to progress analysis, actual cost, and earned value metrics

Increase productivity and transform user experience on the shop floor while eliminating manual effort in production reporting

Streamline and automate business processes across the entire physical and financial value chain of your business

Increase process throughput, remove waste, and increase the quality of solutions by data-driven decisions in the context of universal risk and outcome factors

Accelerate project-related business processes throughout the entire project lifecycle with analytics and mobile solutions from SAP

Reduce time to market and costs for Big Data development projects with SAP HANA, allowing engineers to focus on core capabilities

Address manufacturing and supply chain disruptions more quickly to speed up production throughput

Leverage the SAP HANA Cloud Platform, Big Data, IoT, and advanced analytical capabilities to create innovative solutions for the entire A&D ecosystem.

Build state-of-the art customer service platforms with real-time equipment diagnostics and predictive maintenance capabilities based on SAP HANA

Grow revenue by embedding SAP software technology into defense and national security systems

Use SAP HANA to increase the efficiency of software development for faster time to market and reduced maintenance costs

ACCELERATESIMPLIFY INNOVATE

Digital coreWorkforce

engagement

SAP Fiori

Supplier collaborationBusiness networks

Customer experience Omnichannel

Big Data and Internet of Things

SAP HANA Cloud Platform

Public cloud

Private managed

cloud

On premise

SAP HANAMarketplace

Partners | ISVs | Startups

Business-to-business collaboration

World-class user experience

Powered by SAP HANA

Create and build

Store and aggregate

Orchestrate and govern Analyze and predict

Go mobile and secure

Core operations

Customer-centricity

ITHR ProcurementFinance

Risk and finance management

Partner collaboration

Industry capabilities

Line-of-business solutions

People-to-people collaboration

- 28 -


SAP GLOBAL SERVICES AND SUPPORT 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, from advising on a digital innovation road map and plan, to implementing with proven best practices, to the ability to run across all deployment models and ultimately optimize for continuous innovation across your digital journey. SAP provides both choice and value within our services, allowing you to tailor the proper approach based on your needs.

Turn to the 30,000 consultants and support professionals who can bring your digital strategy to life. SAP’s Global Service & Support (GSS) organization offers a consistent experience – on

premise, cloud, or hybrid. GSS provides the expertise, assets, and the proven methodologies required to accelerate business innovation, reduce TCO, and run a stable platform (on premise or in the cloud).

SAP Activate is a new, simplified consumption experience introduced for SAP S/4HANA and cloud adoption. It provides a combination of SAP Best Practices, methodology, and guided configuration. In addition, our leadership in learning drives quick time to value realization and a solid engagement foundation with SAP MaxAttention, SAP ActiveEmbedded, and SAP Value Partnership across the end-to-end customer lifecycle.

GSS offers 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)

Learn | Extend / Innovate | Engagement Foundation | Support

ADVISE

Simplify and innovate• Digital innovation road map

and plan

• Co-innovation by industry

IMPLEMENTwith proven best practices

Implement with SAP Activate• Simplified consumption

experience for SAP S/4HANA

• SAP Best Practices, methodology, and guided configuration

RUN all deployment models

Run with one global support• One global, consistent

experience• End-to-end support –on

premise, cloud, hybrid

OPTIMIZEfor continuous innovation

Optimize to realize value• Continuously capture and

realize benefits of digital transformation

- 29 -


Our comprehensive ecosystem for the A&D industry offers:• A wide range of business services (OEM suppliers,

banks, key vendors)• Special technology services for A&D with focus on

IT/OT convergence, geospatial integration, aircraft health management, etc.

• Open architecture: choice of hardware and software• Complementary and innovative third-party solutions• Reach – partners to serve your business of any size

anywhere in the world• A forum for influence and knowledge• A large pool of industry experts with broad and deep

skill sets

Our partner ecosystem includes, among others:

SAP COMPREHENSIVE ECOSYSTEM

Orchestrating the world to deliver faster value

• 1,900+ OEM solution partners to extend SAP solutions

• 2,700 startups developing SAP HANA apps

IMPLEMENTATION SERVICES

CHANNEL AND SME

INFLUENCE FORUMS AND EDUCATION

• 32 user groups across all regions (including A&D-specific charters within ASUG for GPD and CAMS, and SUGAIR for MRO)

• Nine out of the top 10 world’s most admired A&D companies are members of the SAP Advisory Council for Aerospace and Defense

• SAP Community >24 million unique visitors per year

• 2,400 SAP University Alliances

• 4,800 overall channel partners

PLATFORM AND INFRASTRUCTURE

• 1,400 cloud partners

• 1,500+ platform partners

INNOVATION

• 2 million suppliers

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

• 1.9 million contingent workers managed by SAP Fieldglass solutions

BUSINESS NETWORK

DRIVING CUSTOMER

VALUE

• 3,200 service partners overall

• Delivering A&D-specific solutions and services

• A&D-tailored best practice offerings

https://www.capgemini.com/

https://www.capgemini.com/

https://www.accenture.com/us-en

https://www.accenture.com/us-en

http://www2.deloitte.com/global/en/services/consulting-deloitte.html

http://www2.deloitte.com/global/en/services/consulting-deloitte.html

http://www.vistex.com/

http://www.vistex.com/

http://www.vendavo.com/

http://www.vendavo.com/

http://www.nttdata.com/

http://www.nttdata.com/

http://www.ibm.com/

http://www.ibm.com/

http://www.bearingpoint.com/

http://www.bearingpoint.com/

http://www.dassian.com/

http://www.dassian.com/

- 30 -


1. Economic Performance of the Airline Industry Data, December 10, 2015, table page 1 http://i2.cdn.turner.com/cnn/2015/images/12/17/iata-economic-performance-of-the-industry-end-year-2015-report.pdf

2. “Boeing Forecasts Demand for 38,050 New Airplanes Valued at $5.6 Trillion”, Boeing Press Release, June 11, 2015 http://www.boeing.co.uk/news-media-room/news-releases/2015/june/boeing-forecasts-demand-for-38050-new-airplanes-valued-at-$5.6-trillion.page

3. “Airbus To Boost A320 Rate to 60 a Month in Mid-2019”, AIN Online, October 2015 http://www.ainonline.com/aviation-news/air-transport/2015-10-30/airbus-boost-a320-rate-60-month-mid-2019

4. Airbus Defense & Space goes live with S4HANA, SAP news, 2016 http://global.sap.com/corporate-en/news.epx?category=ALL&articleID=25305&searchmode=C&page=1&pageSize=10

5. “The Digital Airline”, Boeing.com, Company Websitehttp://www.boeing.com/commercial/boeing-edge/#/services/integrated-services/the-digital-airline/

6. ““The Vision Thing: Developing a Transformative Digital Vision”, CapGemini Consulting, 2013, page 6 https://www.capgemini-consulting.com/resource-file-access/resource/pdf/digital_vision_05_junea_v3.pdf

7. “Spirit AeroSystems uses SAP HANA to Accelerate Production”, SAP, 2014 http://hana.sap.com/abouthana/customer-stories/SpiritAeroSystems.html

8. “Interview with Lockheed Martin's VP for Space”, Lee Roop | [email protected], 2015, http://blog.al.com/business_impact/print.html?entry=/2015/06/lockheed_martins_vp_for_space.html

9. “Lockheed Martin’s Digital Vision”, ML Journal, 2014 http://www.mljournal-digital.com/meleadershipjournal/201404?pg=16#pg16

10. 3D Printing and the New Shape of Industrial Manufacturing, PWC, June 2014, page 7 https://www.pwc.com/us/en/industrial-products/assets/3d-printing-next_manufacturing-chart-pack-pwc.pdf

11. SAP Estimates based upon: “Inquiry: Flying Blind” By Wolfgang Ullwer, Phil Te Hau, and Stephanie Overby, SAP 2013, pages 3 and 8 http://www.sap.com/bin/sapcom/en_gb/downloadasset.2013-03-mar-28-18.inquiry-flying-blind-pdf.bypassReg.html

12. “Accenture digital in aerospace survey 2014,” Accenture, 2014, page 2 https://www.accenture.com/us-en/insight-aerospace-defense-survey.aspx

13. “Airbus moves forward with its “factory of the future” concept”, Airbus, July 2014 http://www.airbus.com/newsevents/news-events-single/detail/airbus-moves-forward-with-its-factory-of-the-future-concept/

14. Boosting Productivity with Mobile 3-D Product Visualization Technology, Aviation Week/SAP 2012https://dam.sap.com/mac/preview/a/67/mJnAncmngJJAmyAAJ1wglnEDynnEmylSXAl2APmAlVXyHlAv/Northrop%20Grumman%20whitepaper%20on%20Mobility%20&%203D%20VE.htm

15. “Complex Products – Design and Build:, SAP Solution Overview for A&D, 2013 (Page 23) John Patrick Batache, Director of Lifecycle Logistics and Support, Northrop Grumman http://www.sdn.sap.com/irj/scn/go/portal/prtroot/docs/library/uuid/402d2c6b-5769-3010-8b9f-897348d43a5c?overridelayout=true

16. B2B Omni-Channel Commerce Platform Transformation: A Spotlight On Canada, Forrester B2B E-Commerce Thought Leadership Spotlight, November, 2014, pages 2,3 & 4http://go.sap.com/docs/download/2015/04/64c6a32b-397c-0010-82c7-eda71af511fa.pdf

17. “Aerospace Skills Gap: Workforce Declines, As Talent Needs Increase”, Area Development, 2015 http://www.areadevelopment.com/Aerospace/q3-2015-auto-aero-site-guide/Aerospace-Skills-Gap-Workforce-Declines-Needs-Increase-45711.shtml

18. “The Future of Work Around the World”, Oxford Economics, 2014 http://www.themanagementassistancecompany.com/wp-content/uploads/2014/11/The-Future-of-Work-Around-the-World.pdf

19. B/E Aerospace, SAP Customer Success Story, 2015, https://www.successfactors.com/content/dam/successfactors/en_us/resources/business-transformation-study/be-aerospace-bts.pdf

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

21. SAP Benchmarking*

22. “On Track to Achieving 95 Percent Automation of Three Million Annual Invoices”, Ariba Success Story https://dam.sap.com/mac/download/a.htm?k=HOPXSzPJEgwpglOllflUgXypPnAOU5xPPUE1XnXA

m6JwXUAB&c=67

23. “Tracking Flight in 4D” by Marcel Matha, SAP community blog, 2015http://scn.sap.com/community/business-trends/blog/2015/11/23/tracking-flights-in-4d

24. SAP HANA: The Art of the possible, by John Hunt, SAP News Center, 2013, http://news.sap.com/sap-hana-the-art-of-the-possible/

25. Empowered Self-Service with SAP Lumira and SAP HANA, Denis Scoville, Honeywell Aerospace May 15, 2014 Dennis Scoville, IT Program Manager, Honeywell Aerospacehttps://www.youtube.com/watch?v=OgOAun_P-QY

26. Sagem (Safran Group), SAP Customer Success Story http://www.sap.com/customer-testimonials/aerospace-defense/sagem.html#1567549244

27. “SAP HANA Helps Lockheed Martin Space Systems Predict More Accurate Lead Times” SAP HANA Innovation Award, April 6, 2015 https://ideas.sap.com/D26110

Note: All sources sited 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

Note: Logos contained in this document are used with the permission of SAP's partners.

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

http://www.boeing.co.uk/news-media-room/news-releases/2015/june/boeing-forecasts-demand-for-38050-new-airplanes-valued-at-$5.6-trillion.page

http://www.ainonline.com/aviation-news/air-transport/2015-10-30/airbus-boost-a320-rate-60-month-mid-2019

http://global.sap.com/corporate-en/news.epx?category=ALL&articleID=25305&searchmode=C&page=1&pageSize=10

http://www.boeing.com/commercial/boeing-edge/#/services/integrated-services/the-digital-airline/

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COMMENTS AND NOTES

- 32 -


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