Dominik Gärtner, Executive Assistant to the CEO, SNP

Ralf Mehnert-Meland, President of SNP Applications Inc, SNP

Heidelberg ,19. – 20. Oktober 2017

BE SMARTER – TAKE IT TO A NEW LEVEL

Automated ERP Scans to Mitigate IT Integration Risks

Using SNP Applications for IT Due Diligence

21.11.2017 3

This Workshop Will Showcase How:

A clear view of the effort, time and cost required totransform an entity‘s ERP data provides a sound basis forsuccessful risk, synergy and integration planning.

Using SNP Applications for IT Due Diligence © SNP

AGENDA

1. SNP in a Nutshell

2. Due Diligence in M&A Transactions

3. Complex ERP Landscapes

4. Typical Customer Problem

5. M&A Success Factor „IT“

21.11.2017 4Using SNP Applications for IT Due Diligence © SNP

6. Full ERP Overview in M&As

7. SNP System Scan

8. SNP Interface Scanner

9. SNP CrystalBridge

10. Workshop Discussion

Headquarters

Heidelberg (GER)

Founded

1994

SNP in a Nutshell

2014 2015 20162013 2017

30

80

56

23

110*

Dr. Andreas Schneider-Neureither

CEO

Henry Göttler

COO

Revenuein € mn, *estimated

Employees

> 1,350

21.11.2017 5Using SNP Applications for IT Due Diligence © SNP

“We are working on enhanced software

solutions and investigating AI algorithms to

provide more time for our customers to

concentrate on their core business and

minimize business downtimes.”

Siemens

Evonik

ThyssenKrupp

HP Enterprise

ABB

Bosch

Kellogg‘s

Russian Railways

L‘Oreal

Sony

Sime Darby

Bose

Customers

21.11.2017 6Using SNP Applications for IT Due Diligence © SNP

21.11.2017 7

Due Diligence in M&A Transactions

Using SNP Applications for IT Due Diligence © SNP

Due Diligence

An approach to resolve the informational

gap between the potentially better-

informed seller and the less informed

buyer of a target company.

The purpose of the due diligence

process is not only to find potential risks.

More importantly, the process identifies

the necessary information for the most

advantageous structure of the

transaction and the most successful

post-event integration.

21.11.2017 8

Main Areas of Due Diligence Review

Using SNP Applications for IT Due Diligence © SNP

Due Diligence

Business Compatibility

Financial and Tax

Management and Human Resources

IT and Infrastructure

ERP Systems

CRM Systems

IT Processes

Post-Event Integration

Market Environment

Marketing Production Legal Operations

21.11.2017 9

The Problem: ERP Systems Rank Among the Most Complex IT Systems

Using SNP Applications for IT Due Diligence © SNP

21.11.2017 10

The Result: IT Due Diligence is Difficult

Using SNP Applications for IT Due Diligence © SNP

ERP migrations rank among the most

complex projects in PMI

Business units with special needs and

highly customized systems

Locations all over the world

Historically-grown heterogeneous ERP

landscapes

Business need for Near-Zero-

Downtime Go-Live

Manual approaches are time-

consuming, incomplete and incorrect

Typical Customer Problem: „We don‘t know, what we don‘t know!“

Documentation non-existent,

incomplete or out-of-date

Knowledge about essential

components, such as interfaces, not

centrally accessible

Monitoring tools do not provide all

needed information

No adequate graphical representation

of topology available

Risk assessment difficult

ERP system landscape information

available, but:

Information is scattered – no central

evaluation possible

Long-term evaluation difficult –

Information is deleted periodically

Many non-relevant data sets – missing

filters

Manual analysis and evaluation

cumbersome, costly and frustrating

21.11.2017 11Using SNP Applications for IT Due Diligence © SNP

Statistics on Failed M&As (Post-Merger)

Surveys: Wharton / Harvard / Deloitte

21.11.2017 12Using SNP Applications for IT Due Diligence © SNP

Would a Detailed IT Due Diligence Have Saved Company Value?

Survey (EY, 2011): „IT as driver for M&A“

▪ In 47% of transactions, a

stronger focus on IT

would have prevented a

loss of company value

post merger

▪The greatest challenges

are data migration and

Day 1 business

continuity

21.11.2017 13Using SNP Applications for IT Due Diligence © SNP

Nearly Half the Synergies Possible in a Merger are Strongly Related to IT

Survey (McKinsey, 2011): „Understanding the stategic value of IT in M&A“

21.11.2017 14Using SNP Applications for IT Due Diligence © SNP

Preparation − Careful Planning to Reduce Risks

▪ Prioritize areas of focus

▪ Decide what not to transform

▪ Analyze impact of simplification

▪ Design business process optimizations

▪ Identify key benefits

▪ Do housekeeping first

SCOPE

▪ Identify conflicts

▪ Plan efforts and timeline

▪ Ensure internal and external resources

▪ Evaluate possible side effects

RISKS

ChallengesPREPARATION

APPROACH

▪ Choose target system

▪ Choose scenario (brownfield vs greenfield)

▪ Choose target release (ERP vs S/4)

▪ Decide your transformation strategy

(big bang vs iterative)

▪ Decide your platform strategy (cloud vs on premise)

21.11.2017 15Using SNP Applications for IT Due Diligence © SNP

21.11.2017 16

Full (ERP) Overview is a Must Requirement in All M&A Stages

Using SNP Applications for IT Due Diligence © SNP

PRE MERGER MERGER POST MERGER

Target Benchmarking IT Due Diligence

IT Integration Risks

Project Estimation Phase / TSA

Integration Roadmap

ERP Integration Setup

ERP Integration Effort / Complexity ERP Optimization / Synergies

Benchmarking of buy side and vendor

scans

High-quality estimates for

project time, effort and cost

High-quality ERP system overview for ERP

integration setup

INTERNAL: Benchmarking EXTERNAL: Due Diligence & TSA INTERNAL: Integration

SNP System Scan (for SAP ERP)

Display of business units and legal entitys in SAP

21.11.2017 17Using SNP Applications for IT Due Diligence © SNP

SNP System Scan for SAP ERP

Functional system usage / Benchmarking of several ERP scans / Estimation of integration complexity

21.11.2017 18Using SNP Applications for IT Due Diligence © SNP

SNP Interface Scanner for SAP ERP

Topological View: In-/outbound interfaces of an SAP ERP System

21.11.2017 19Using SNP Applications for IT Due Diligence © SNP

SNP CrystalBridge Supports Project Control

▪ Customer view to control all phases

of transformation projects

▪ Enables to do the blueprint based on

system data in an interactive

environment

▪ Provide a more holistic view of an

entire SAP landscape

▪ Brings additional analysis, monitoring

and optimization functionalities

▪ Merge the vast data stores created by

our other SNP software tools

▪ Enables our clients to better plan,

implement, and optimize their IT

transformations

CrystalBridge

21.11.2017 20Using SNP Applications for IT Due Diligence © SNP

Group Discussion

What are your experiences with optimal timing of IT-integration

planning?

21.11.2017 21Using SNP Applications for IT Due Diligence © SNP

Group Discussion

Have you had recent pitfalls related to IT / ERP integration

planning?

21.11.2017 22Using SNP Applications for IT Due Diligence © SNP

Follow us

SNP Schneider-Neureither & Partner AG

Dossenheimer Landstrasse 100

69121 Heidelberg

+49 6221 64 25 – 0

+49 6221 64 25 – 20

info@snp-ag.com

www.snpgroup.com

Thank You!

DisclaimerCopyright 2017 SNP AG. All Rights Reserved.

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The information in this document is proprietary to SNP. No part of this document may be reproduced, copied, or transmitted in any form or for any purpose without the express prior written permission of SNP AG.

This document is a preliminary version and not subject to your license agreement or any other agreement with SNP. This document contains only intended strategies, developments, and functionalities of the SNP® product and is not intended to be binding upon SNP to any particular course of business, product strategy, and/or development. Please note that this document is subject to change and may be changed by SNP at any time without notice.

SNP assumes no responsibility for errors or omissions in this document. SNP does not warrant the accuracy or completeness of the information, text, graphics, links, or other items contained within this material. 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.

SNP shall have no liability for damages of any kind including without limitation direct, special, indirect, or consequential damages that may result from the use of these materials. This limitation shall not apply in cases of intent or gross negligence.

Heidelberg, Germany, 2016

21.11.2017 24Using SNP Applications for IT Due Diligence © SNP

21.11.2017 25

Hidden Risk: Data Security Compliance

Using SNP Applications for IT Due Diligence © SNP

Worst case scenario of …

New rules for obtaining consent and allowing

people to withdraw consent for data collection

Data breach notification within 72 hours of

awareness

The right for consumers to have their data

erased

The right for consumers to see any data

companies have about them

The right for consumers to move their data

from one provider to another

The requirement for companies to appoint a

Data Protection Officer

The requirement for companies to build privacy

into their systems and limit employee access to

personal data

AGENDAFRIDAY, OCTOBER 20, 2017

13:00 – 13:45

Level 2 – Smart Business

Everything you need to know

about the General Data

Protection Regulation (GDPR)

Gerhard Krauss, SNP

Level 3 – Roll 1

BCC eTime – A revolution in

time planning in SAP solutions

Przemyslaw Brudlo & Wojciech

Mackowiak, BCC | An SNP

Company

Lunch, networking and exhibition

Level 3 – Smart Migration

Data center relocation &

system transformation –

Experience report

Martin Schenke, T-Systems

Level 3 – Roll 2

Getting to know SNP

CrystalBridge

Steele Arbeeny, SNP

Level 4 – Smart IT

How Focused Build support

S/4HANA implementation

projects

Marc Oliver Schäfer, SAP SE

14:00 – 14:30

13:45 – 14:45