Driving digital transformation in Automotive industry

Delivering Instant Value for Automotive Companies
Run Simpler with the Next-Generation Business Suite
SAP India
July, 2016

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 2
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Agenda
• Industry Dynamics
• SAP S/4HANA Overview
• SAP Roadmap for Automotive Industry
• What Next

Agenda
• What Next

Market realities are forcing the need for business transformation
Evolving expectations Business complexityHyper-connectivity
>75 B
Connected devices
in the Internet of
Things2
5B
Middle-class
consumers with €56
trillion spend power1
90%
Of the world’s data
generated in the last
two years3
<15 years
Average lifespan on the
Fortune Global 5004
US$99.4B
Daimler Market Cap, Benz
Patent Motorwagen,
automotive company,
founded in 18865
Accelerating Pace of Business
Sources:
1 Morgan Stanley: Asian Influence, The Emerging 21st Century Middle Class, June 2011
2 Kleiner Perkins Caufield Byers, Internet Trends 2015, May 2015
3 “Big Data, For Better or Worse: 90% of the World’s Data Generated in the Last Two Years,” ScienceDaily, May 2013
4 “Peggy Noonan on Steve Jobs and Why Big Companies Die,” Steve Denning, Forbes, November 2011
5 Yahoo Finance, July 13, 2015
US$175B
Alibaba market cap,
founded in 1999

Transformation does not come from incremental improvement
but from doing things fundamentally differently
Innovation and differentiation
• Insights and answers “before”
questions
• Highest reliability and fidelity of
real time information
Market Changer and Challenger
• Advanced use of electronics and
telemetry data to deliver clean
performance
• Changing the automotive
distribution chain with insight
Disruptive speed and efficiency
• Accelerated MRP runs improves
planning
• Reduced production inventory
potentially resulting in millions of
Euros in working capital
“By 2018, one-third of the top twenty market share leaders in most industries will be significantly disrupted by new competitors
(and “reinvented” incumbents).”*
The common denominator: a digital value chain enabling flexible, agile, interconnected operations and new levels of
business insight
#7
Private vehicle management
company, changing
operators behaviors
automotive manufacturer to do
things differently from design to
delivery and to enter other battery
markets
Global Automotive Supplier 1st #1
*Source: IDC, March 2015

Agenda
• What Next

SAP Framework for Digital Business
Adapting to the Digital Economy Requires a Simple and Powerful Strategy Framework
Every company can develop a
digital strategy across these 5
pillars:
1. Outcome based customer
experience
2. Re-platform core business
processes for high throughput
and combine business process
and analytics
3. Smarter and engaged workforce
across all employees and
contractors
4. Supplier collaboration to
accelerate growth and innovation
5. Harness internet of things and
big data to drive real-time
insights and new business
modelsSAP HANA PLATFORM
Customer Experience
Omni-Channels
Workforce
Engagement
Big Data & Internet
of Things
Supplier Collaboration
Business Networks
HANA CLOUD
PLATFORM
SAP FIORI
Digital Core

Why embrace digital transformation?
Reimagining the business
The digital value network will help you enable business transformation by:
Simplifying
technology
Transforming
business processes
Empowering the
business
Customer
experience
omnichannel
Workforce
engagement
Assets &
Internet of Things
Supplier
collaboration
business networks

Simplify Technology: SAP S/4HANA simplifies technology for automotive
companies
Reduce total cost of ownership Increase user productivityAccelerate execution
Simplified data model Simplified system landscape Simplified user experience
Classic SAP Business Suite
11 Inventory aggregate tables
2 Document aggregate tables
11 History aggregate tables
2 Material master tables
Role-based engagement across
the business
Instant access to any business
insight
Simple design across business
processes
SAP GUI SAP Fiori UX Delta
Duration
(seconds)
132 47 - 64%
Clicks 39 11 - 71%
Screen changes 8 2 - 75%
Fields filled 5 2 - 60%
Example: SAP S/4HANA Finance -
receivables management
Reduced number of systems and
business warehouses
Flexible access to data and data
compression
Fewer interfaces between systems
Elimination of aggregates
Example: SAP S/4HANA Supply Chain
– inventory management
SAP S/4HANA
1 Document table
2 Material master tables
Example: MRP Horizontal and Vertical
system consolidation using S/4HANA
Classic SAP Business Suite
High data volume customers
split their systems in several
instances sometimes several
instances per country or
region
SAP S/4HANA
Data compression and
scalability with HANA
requires only one MRP
plan for complete product
structure resulting in
• Reduced interface
• Lower TCO
Simplification of master data
Unification of tables

Simplify Technology: S/4HANA Data Model Simplification – Example
SIMPLE DATA MODEL
» Only main tables remaining, no redundancies
» Clear separation of master data from transactional data
» Reduction of memory footprint
THROUGHPUT INCREASE
» INSERT only on database level (MM-IM),
no locks for standard price valuation
BusinessSuite
MATDOC ACDOCAMaterial
Prices
Material
MBEW
OBEW
QBEW
OBEW
MBEWH
OBEWH
QBEWH
OBEWH MLHD
MLPP
MLIT
MLCR
Document
MLPPF MLCRF
CKMLPP CKMLCR
Totals
CKMI1
Index
GLPCA
ZZFISLA
FAGLFLEXA
GLFUNCA
COFIS
BKPF
BSEG
COBK
COEP
ANEK
ANEP
GLPCT
ZZFISLT
FAGLFLEXT
GLFUNCT
COSP
COSS
COFIT
BSIMBSID
BSAD
BSIK
BSAK
BSIT
BSAT
BSIS
BSAS
MARD
MARC
MSTQH
MSTEH
MSTBH
MSSQH
MSSAH
MSPRH
MSLBH
MSKUH
MSKAH
MKOLH
MCHBH
MARDH
MARCH
MSTQ
MSTE
MSTB
MSSQ
MSSA
MSPR
MSLB
MSKU
MSKA
MKOL
MCHB
MKPF
MSEG
Totals tables
Document
Totals
Totals
Indices
Documents
BKPF
PRINCIPLE OF ONE
» Only one valuation method (Material Ledger)
instead of 2 (IM + ML)
» Flexible rebate management instead of
cumbersome and expensive redundancies
InventoryMgmt.
(Quantities)
InventoryMgmt.
(Valuation via „MBEW)
Material Ledger
(multi GAAP, multi currency)
Accounting
MasterData Inventory Mgmt
(Quantities)
Material Ledger
(multi GAAP, multi currency)
Accounting
VBAK LIKP VBRK
LIPSVBAP VBRP VBFA
VBUK
VBUP
VAPMA
VAKPA
VLPMA
VLKPA
VRPMA
VBOX
S066
S067
EIKP
EIPO
NAST
Sales and Distribution
VRKPA
Primary
Document tables
Index
tables
Sales and Distribution
Status tables
LIS
tables
Rebate index Output mgmt
Export/import
tables
VBAK LIKB VBRK
LIPSVBAP VBRP VBFA
History tables

Simplify Technology: Combining transactions and analytics on a single in-
memory platform
• Instant insight to action on live data
• One copy of the data
• No ETL and batch processing
• Decisions and actions on old Data
• Multiple copies of the data
• ETL and batch processing efforts and costs

Simplify Technology: SAP Smart Business – new user experience and
working model
SAP Smart Business provides a new User
Experience & working model -
§ Role-based access to all relevant
information - KPIs, news feeds etc…
§ New working model supporting end to end
insight to action scenarios including
simulation & forecasting
§ Users can easily personalize
§ New coherent and responsive user
experience supporting multiple devices
§ Color-coded visualization of violated
thresholds
§ SAP Smart Business is an open
framework…
This presentation and SAP‘s strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or
implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement

Empower the Business: Unmatched advanced capabilities
DRILL DOWNS
REAL TIME
PREDICTIONS
SIMULATIONS RECOMMENDATIONS
RESPONSIVE
Eliminate batch processing,
data reconciliation
Discover and respond to future
opportunities and challenges
Explore the impact of business
decisions on outcomes
Analyze at any level
without exporting data
Improve user satisfaction
by reducing wait time
Built-in data-driven decision
support systems

Empower the Business: Reimagine planning and decision-making processes to
align around common goals
Monitor MRP situation globally with real-time calculation
of key MRP KPIs to help focus on critical disruptions
Discover future material flow issues in real-time
with flexible filters across plants
Simulate multiple supply solution proposals instantly
and graphically evaluate ‘what-if’ demand-supply picture
for each solution option on the fly.
Solve the problem by selecting the most feasible supply alternative
guided by system recommendations – immediately initiate workflow
to execute this decision (e.g. re-schedule order)
1 2
3 4

Empower the Business: SAP S/4HANA Embedded Analytics - Combining
transactions and analytics on a single in-memory platform
Finance
Supply chain
Marketing
Sales
Procurement
Manufacturing
…
Up-to-the-second insights
Contextualized information
Internal and external data
Closed-loop execution
Exception handling
Data drilldown
…
Business
process
Business
intelligence
(Data and information)
Any device
SAP S/4HANA embedded analytics

Empower the Business: Example of Embedded Analytics in Procurement
- Material order entry
Enter material order
Check budget overview
Check average supplier
delivery performance
Review detail report
Purchasing
manager
Choose best supplier and
complete material order entry
Start
transaction
Complete
transaction
All on one screen
ü Faster customer delivery
ü Larger average deal size
ü Fewer warehouse stock outs
Analyze and predict
Budget Overview
*Screenshots shown are for demonstration purposes only and are not final product commitments

Empower the Business: Self-service Analytics – from coding to
Configuration

Transform Business Processes: Reimagine business processes for
fundamentally higher performance
Finance
Allow for visibility into the state of the business
at any time:
• Enable real-time financial close for faster,
more accurate, and more collaborative
decision making and execution enterprise-
wide
HR
Manage, develop, reward, and retain a global
workforce:
• Integrate end-to-end HR and financial
processes for budget and head count
Digital Core
Sustainable Product
Innovation
Manufacturing and
Logistics
Responsive Supply
Networks
Marketing, Sales and
Aftermarket
Connect R&D areas and processes to
deliver desired innovations quickly and
with high quality:
• Enable real-time cross-functional
collaboration, from idea to launch
• Higher product quality through rapid
root-cause analysis on product and
process failures
• More accurate cost estimates with
role-based product cost estimation
activities
Increase the efficiency of supply
networks:
• Reduce supply chain risk and
disruption
• Monitor real-time commodity
price-and-supply volatility
• “Real-time” view of end-to-end
supply chain. Exception-based
notification and integrated
resolution of issues
Increase profit margins, optimize
services and innovate new offerings for
informed and demanding customers:
• Provide real-time visibility into
customer demand across all channels
for vehicles and parts
• Real-time marketing with increased
transparency and internal
collaboration
• Provide enhanced customer service
using context-aware, Big Data insights
Respond to globalization and cost
pressures by reducing inventories and
synchronizing logistics processes:
• Establish sub-daily material
requirements planning
• Real-time inventory monitoring with
automated procurement proposals
• Predict breakdowns to proactively
perform maintenance on assets
• Gain instant transparency due to real-
time processing of inventory
consumption
Eliminate supply disruption risk while protecting
margins:
• Collaborate instantly with global suppliers
• Monitor real-time commodity price-and-supply
volatility
• Automate procurement proposal creation based
on real-time inventory
Procurement
Workforce
engagement
Customer experience
omnichannel
Supplier collaboration
business networks
Assets &
Internet of
Things

Transform Business Processes: Key Business Innovations in SAP
S/4HANA Enterprise Management
This is the current state of planning and may be changed by SAP at any time.
Material Requirements
Planning
Inventory
Management
Available To Promise &
Backorder processing
Capacity Planning
Material
Valuation
Industry solutions to
core
Universal
Journal
Central Finance
Re-architecting for
in-memory platform
Responsive user
experience design
Unifying functionality
in core
Sales Representative
Order Management & Billing
Procurement Clerk Material Planner
> 20
3
< 1
Laggards Best-in-class Target
Accelerated
Financial Close

Universal Journal: Single Source of Truth
Functional Enhancements
New Architecture
» Concept: “Take the best of all worlds”
(e.g. ledger, market segment, coding
block, etc.)
» One line item table with full detail for all
applications - for instant insight & easy
extensibility
» This replaces the “logical document” of
SAP Accounting 1.0.
» Data stored only once: no more
reconciliation needed - by design
» Reduction of memory footprint
through elimination of redundancy.
» Fast multi-dimensional reporting
possible without replicating data to
business warehouse (BW).
» If BW is in place anyway, only one single
extractor needed.
» Secondary cost elements are now
G/L accounts.A universal journal entry can have (technically) up to 999,999 line items à
less or no need for summarization (depending on data volume)

Transform Business Processes: Value Scenarios of SAP S/4HANA
Finance
Close Books in a Day
Task acceleration
and automation
Intra-period reconciliation
Soft close and simulation
(planned)
$ Optimize Working Capital
Group cash management
Working capital analytics
Continuous cash collections
Invoice and discount
optimization
Ensure Compliance
Fraud detection and
prevention
Audit management
Plan Dynamically
Integrated business
planning
Predictive forecasting
Budget management
(planned)
”“ Real-time analytics enabling real-time processes
Centralize Finance
Real-time financial and operational reporting
Harmonized internal and external reporting
Group reporting in multi-ERP and M&A situations
Flexible reporting in matrix organizations
Centralized process execution
Analyze Plan Transact

Logistics in ERP –
a system of record…
Simulation
Decision support
Materials Management and Operations in S/4HANA Enterprise
Management -
a decision support system…
Enterprise Management
Transform Business Processes: Scope of SAP S/4HANA Materials
Management and Operations
SAP S/4HANA Enterprise
Management - Materials
Management and Operations
scope is -
Ÿ similar to functionality covered
by ECC 6.0x logistics
Ÿ It includes Core ERP functions
(without FIN, HR & Marketing)
Ÿ Is enhanced to support digital
trends like Internet of Things,
Business Networks, etc.

Transform Business Processes: Sales Order Fulfillment Cockpit
ü Resolved
ü Delivered
ü Billed
ü Paid
OLTP based systems
Issues & exceptions are typically identified by working down lists
of multiple table & aggregate structures – a time consuming
and error-prone process
A people centric collection of issues & exceptions via embedded analytics
and worklist access in realtime on primary data- to solve issues in seconds

nS/4HANA offers single approval workflow apps for various procurement objects. However, also a holistic view across all workflow items is
offered with a generic workflow inbox providing also document details. The workflow apps rely on preconfigured release strategy procedures
and business workflow.
Key Message
Unique Value of S/4HANA
• Provide single workflow
approval apps for purchase
requisition, contract, purchase
order and invoice
• In a Generic Workflow Inbox,
approvers get a holistic view
across all workflow items and
can filter the list
• Mobile access to the workflow
items
• Notice all document details
like attachments, notes,
approval details
Transform Business Processes: Fiori Apps for Procurement – Fiori
Inbox

Ÿ Object Page for Supplier, Purchase
Requisition, Purchase Order,
Purchase Contract, Invoice, Info
Record and Material
Ÿ Object Page design with quick
navigation to related areas and quick
navigation to related business
documents
Ÿ Additional links to related follow on
functions, e.g. from Purchase Order
Object Page you can navigate to the
Manage Purchase Order App to
maintain or change data
Transform Business Processes: Fiori Apps for Procurement – Object
Pages

nPressured to reduce supply costs, companies are seeking greater efficiencies and savings from procurement operations. With S/4, purchasers
get role based and quick access to the procurement information they need to analyzing purchasing spend, suppliers and contracts in real-time.
Key Message
Unique Value of S/4HANA
• Real-time calculation of key
performance indicators to
analyze managed and non-
managed spend, contracts,
and suppliers
• Fast and highly configurable
KPIs
• Instant insight to action
capabilities by navigating to
other Fiori Apps and
Factsheets
• Dynamic supplier evaluation
scoring based on procurement
documents in real-time
Transform Business Processes: Procurement Analytics

Reimagine the Business: Enabling digital transformation in the automotive
industry
Customer
experience
omnichannel
Workforce
engagement
Assets &
Internet of Things
Supplier
collaboration
business networks
Onboard mergers
and acquisitions
Expand in new
markets
Quickly scale combined
operations to accelerate
time to value
Create new business
opportunities by entering
into new business areas
such as fleet operations to
deliver new customer
value
Introduce new
business models
Sense and shape
demand
Deliver new and
innovative services
including e-mobility based
upon data and
connectivity
Sense and respond to
dynamic customer
demand in real time
across physical and
virtual channels
“We took an analytic that took us 6 months to develop and we redeployed it on HANA in two weeks. Results come back so
quickly now, we don’t have time to get coffee.”
Justin Replogle, Director – IT, Honeywell
SAP HANA PLATFORM

Reimagine the Business: Introduce new business models
Digital Business Scenario: SAP Connected Vehicles Value estimates
Internet of Things
and Big Data
Customer experience
Omnichannels
Digital core
Suppliers collaboration
Business networks
18%
Lower unplanned downtime for organizations adopting
preventive/predictive maintenance
Product life
cycle costing
Optimize supply
chain
3-D print of
service parts
5%
Executing a true 1-to 1 marketing campaign at scale has
shown to lift overall revenues by more than 5%
(Source: SAP (SeeWhy) research 2014: The ROI of Email Remarketing for
Ecommerce Brands)
4-5xMore revenue generated by value-added services than
simple connectivity
Source: SAP and customer benchmarks / Forrester Research, 2012
Time
8.2%
higher Order Fill Rate (in %) for Automotive Companies
which have higher Order Pick Accuracy (in %)
Monitor
vehicle
telematic
s
Monitor
vehicle
telematics
1
Predictive
maintenance
3
Predict service
parts demand
3
3
4
4
Gain Real-Time
Customer
Insights
5
Deliver unique
customer
experiences
6
Push real-time
alerts to fleet
dashboard
1
Data-driven
remote
diagnostic
2
Real-time
contextual 1:1
marketing
6
7 Insights-to-
action into driver
behavior
Pay-as-you-
drive
contracting
In-Car
Commerce
7
7
Optimize Parts
Sourcing
4

Reimagine the Business: Digital business scenario for automotive
Customer experience
Omnichannels
Workforce engagement
Suppliers collaboration
Business networks
Internet of Things
Digital Core
SAP HANA Cloud Platform for vehicle
insights by integrating vehicle telematics data
and analytic insights into business processes
1
SAP Predictive Maintenance and Service
S/4 to instantly trigger a maintenance
demand in the core system
2
Insight from SAP Predictive Analytics
powered by SAP HANA to calculate
service and parts requirements
3
Costs products in the early stages of
lifecycle based on SAP Product Life Cycle
Costing
3
Service parts and tools sourced
through the Ariba Network
4
SAP Extended Warehouse Management
SAP Transportation Management for
service order fulfillment and logistics
4
SAP hybris Marketing enables real-time
insights into the context of each customer
to deliver highly individualized customer
experiences across channels
6
With SAP hybris' omnichannel commerce
you engage with your customers better,
wherever they are; example: drivers
portal - central access to vehicle insights
and loyalty information
5
SAP Cloud for Social Engagement: connect
and engage with your prospects and
customers via social networks providing
best in class customer experience
5
Mobile analytics on SAP S/4HANA provides
360-degree view of operations and historical
maintenance data to find most likely
problem
7
SAP S/4HANA Finance solution to create
profit visibility
7
7

Only SAP enables a fully connected digital value network
Unique solution enablers . . . . . . delivered by SAP S/4HANA: a unique value platform
Digital
core
Digital
enterprise
Digital
ecosystem
Connected Predictive
Real-time
processes
Personalized
““By combining sensor technology from Modern Horsepower and
SAP Business Suite powered by SAP HANA, we get engine testing
results in real time. This breakthrough innovation is just the start…..”
Reinhard Breyer, Chief Information Officer, Mercedes-AMG GmbH
“SAP Fiori UX is a radical rethink of the way people should
interact with an ERP system. . . . Based on these factors,
Gartner believes that SAP Fiori UX is unavoidable.”
Gartner, March 2015
Secure

Agenda
• What Next

SAP S/4HANA planned and future innovations for
automotive
Collaborative product innovation
Ÿ Product safety: improved management of safety data sheets and dangerous goods
Manufacturing and logistics
Ÿ Simplify access to production planning (PP) and detailed scheduling (DS) as part of
manufacturing planning
Ÿ Monitor material coverage with an app that supports make-to-order and make-to-
project manufacturing
Ÿ Plan critical products with a Web-based graphical scheduling tool as part of
manufacturing planning
Responsive supply networks
Ÿ Pallet algorithm for processes supported by SAP EWM
Ÿ Extended warehouse management functionality embedded in SAP S/4HANA
Marketing, sales, and aftermarket
Ÿ New product availability check optimized for SAP S/4HANA
Ÿ SAP Fiori app for delivery managers to decide which sales orders should be part of
the next delivery wave (“release for delivery”)
Ÿ Enhancements to SAP Fiori apps for billing clerks
Ÿ Customer engagement in SAP S/4HANA through SAP Hybris Marketing
Ÿ Integration of SAP Product Lifecycle Costing to SAP Engineering Control Center
Ÿ Product compliance management with seamless integration into product
development processes (R&D, engineering, product lifecycle management)
Ÿ Project and portfolio management capabilities for SAP S/4HANA as the future
platform for integrated enterprise processes
Ÿ Launch a shop-floor cockpit (new SAP Fiori apps for production supervisors)
Ÿ Integrate SAP Quality Issue Management to improve product and process quality
Ÿ Digitalize the just-in-time process with SAP Fiori apps that support lean planners
in their daily work and connect Internet of Things (IoT) scenarios
Ÿ Simplify material valuation to enable parallel inventory postings for moving average
price-driven materials
Ÿ Back-order processing with improved flexibility
Ÿ Advanced available-to-promise capability with native rule-based sourcing and
product substitutions
Ÿ Extended manufacturing with PP and DS, an improved UI, and planning screens
Ÿ SAP Hybris Commerce integration to vehicle and part sales for B2B and B2C
Digital services
Ÿ Vehicle insights to enhance service management
Future directionPlanned innovations
View all SAP S/4HANA innovations for automotive in SAP Innovation Discovery

Other innovation highlights for automotive
Future directionPlanned innovations
Ÿ Enhance SAP Cloud for Product Stewardship to support supplier materials
management
Ÿ Integrate engineering change management
Ÿ Share project documents with internal and external parties using SAP Document Center
Ÿ Enhancements to SAP Manufacturing Execution to support the IoT
Ÿ Simplified production planning (PP) and detailed scheduling (DS) (on premise)
Ÿ SAP Manufacturing Execution enabled for SAP HANA
Ÿ Performance optimization in radio frequency picking
Ÿ Further enhancements in SAP Supply Chain Control Tower
Ÿ Enhanced integration of SAP TM and SAP EWM to support shippers management
Ÿ Real-time analytics for SAP TM
Ÿ Omnichannel commerce: consolidation of customer master data
Ÿ Omnichannel commerce: in-store customer engagement and clienteling
Ÿ Product intelligence and design for the IoT
Ÿ Extended creative authoring tool for system engineering
Ÿ Integration of SAP Product Lifecycle Costing to SAP Engineering Control Center
Ÿ Manufacturing planning and scheduling with a simplified application for an
improved user experience
Ÿ Support for IoT for Industry 4.0, connected logistics, predictive and remote
maintenance and services
Ÿ Cloud for manufacturing solutions
Ÿ Supply chain orchestration with the logistics network
Ÿ Track and trace for traceability across networks
Ÿ Next-generation available to promise functionality
Ÿ Integration of automotive digital services into SAP Hybris
Ÿ Real-time geolocation and event-triggered marketing management for individuals,
cars, and fleets
View all innovations for automotive in SAP Innovation Discovery

Agenda
• What Next

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 36Customer
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Next steps
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valuemanagement.sap.com.
Build a plan with the deployment
options (on premise, cloud, or hybrid)
and rapid-deployment solutions that
best fit your needs for scenarios in
your road map.
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Discover the power of SAP S/4HANA:
Ÿ Visit us at the next SAP event near
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Ÿ Get more information about solutions
for automotive industry from SAP.
Ÿ Leverage the customer adoption
journey map for SAP S/4HANA.
Ÿ Find out more at sap.com/S4HANA.
Ÿ Receive your SAP S/4HANA
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Driving digital transformation in Automotive industry

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