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Commodity Management Solutions from SAP Eric Somitsch, Director, Solutions for Commodity Management May 2013
Commodity Management Solutions from SAP
Eric Somitsch, Director, Solutions for Commodity Management
May 2013
© 2013 SAP AG or an SAP affiliate company. All rights reserved. 2
Global trends and their impact on commodity management
Volatility fueled by market dynamics
Increasing demand in emerging global
markets is creating a tight balance between
supply and demand
Geopolitical uncertainties
Rising influence of hedge funds and financial
institutions
Increasing focus on risk management
Increased focus on risk management by
crisis-shaken executives, driven by the
need to protect earnings and keep company
operations running
Compliance with government regulations
Companies struggle to keep up and comply with
regulations such as hedge accounting rules
Strong demand for business solutions designed
to meet these requirements
© 2013 SAP AG or an SAP affiliate company. All rights reserved. 3
Our approach to commodity management
Commodity management solutions from
SAP is one of the strategic investment
areas within SAP Business Suite
applications
Our commodity management solution
leverages our core strengths in logistics,
finance, and industry solutions
Our commodity management solution is an
integral part of SAP ERP – no need for
additional interfaces, hardware, and so on
© 2013 SAP AG or an SAP affiliate company. All rights reserved. 4
Our commodity management solutions
For some industries special solutions will be available, such as agriculture
© 2013 SAP AG or an SAP affiliate company. All rights reserved. 5
Efficiency gains in commodity procurement and sales
Capture
contract
Create call-
off
Transport
and delivery
Provisional
invoice
Update
quality or
price
Differential
invoice
Integrated with treasury
Transfer commodity risk automatically
Savings and efficiency gains in procurement and sales
Manage pricing with integrated price conditions
Flexible contract pricing
Handle multiple commodity and pricing conditions
Multiple invoice cycles
Handle quantity and quality adjustments
Fully integrated in standard purchase order
screens
© 2013 SAP AG or an SAP affiliate company. All rights reserved. 6
Efficiency gains in commodity risk management
Detailed risk reporting
Foundation for management reports
Real-time position reporting
Ability to see consolidated commodity position
Integrated with logistics
Based on customer-defined risk criteria
Full suite of commodity instruments
Expanded list of hedging instruments
Fully integrated in hedge and standard accounting
Integrated in standard screens
Managing
physical risk
exposure
Assessing risk
Executing
hedging
strategy
Deal
administration
Accounting
and settlement
Hedge
accounting
Solution road map
© 2013 SAP AG or an SAP affiliate company. All rights reserved. 8
Solution today Planned innovations Future direction
Overview of SAP road map for commodity management
Commodity procurement
Commodity sales
Commodity risk management
Enhanced commodity procurement
Enhanced commodity sales
Enhanced commodity risk management
SAP
HANA
Usability
Procurement
Sales
Risk Mgt.
Mobile
Analytics
© 2013 SAP AG or an SAP affiliate company. All rights reserved. 9
Rapid deployment solutions for commodity management
Service
Software
Enablement
Content SAP Commodity
Risk
Management
Q3
2012
Q1
2013
SAP Commodity Risk
Management
(powered by SAP HANA)
SAP Commodity
Procurement
* Planned dates only
Q2
2013*
© 2013 SAP AG or an SAP affiliate company. All rights reserved. 10
SAP Commodity Risk Management Planned innovations
Predefined industry and commodity-specific pricing rules
Complete audit support for contract and price changes
Higher degree of automation in month-end processing
Increased insight into contract optionality and contract
fulfillment status
Buy
SAP Commodity Procurement
Sell
SAP Commodity Sales
Improved risk reporting (position reporting, MTM, and so
on)
Detailed monitoring of business risk key figures
Real-time risk integration of specific procurement and
sales processes
Support of complex over-the-counter (OTC) instruments
SAP Commodity
Risk Management
Manage
Risk
© 2013 SAP AG or an SAP affiliate company. All rights reserved. 11
Taking commodity management solutions to the next level Future innovations
SAP Commodity Risk
Management will
leverage SAP Mobile
platform and in-memory
database functions of
SAP HANA
Innovating together with
our customers to create
the most value adding
use cases to drive the
highest business benefits
Future direction
© 2013 SAP AG or an SAP affiliate company. All rights reserved. 12
Future innovation
Future direction
Commodity management
Enhanced analytics
Leverage the real-time capabilities of SAP HANA
Improved usability in transactions and reporting
Specific industry requirements
Enhanced trading functionality
Continued legal compliance
Enhanced financial instruments support
SAP
HANA
Usability
Procurement
Sales
Risk Mgt.
Mobile
Analytics
Customers and conclusions
© 2013 SAP AG or an SAP affiliate company. All rights reserved. 14
Selected customer examples
European CP companies – Live with SAP Commodity
Risk Management
European metal company live with the full suite of our
commodity management solutions
Swiss-based Oil trading company implementing full
suite of our commodity management solutions
Various European metals companies – implementing
our commodity management solutions
Large international Mining company implementing full
suite of our commodity management solutions for
complete business
U.S. coffee roasting company, Asian agricultural
businesses, North American food ingredients
company, North American Sugar producer, South
African precious metals refining and smelting
company and number of more companies – Preparing
project on EHP6
Hundreds of customers live with SAP Treasury and Risk
Management and different versions of our industry
solutions
© 2013 SAP AG or an SAP affiliate company. All rights reserved. 15
Summary
SAP delivers a commodity management
platform that leverages the strength of
SAP Business Suite
Our commodity management solutions
provide integration between logistics, risk
management, and finance and enable a
real-time view of the risk position for all
involved parties
SAP is investing further in this area in close
cooperation with customers and partners
– to allow our customers to participate in
and benefit from future innovations
© 2013 SAP AG or an SAP affiliate company. All rights reserved.
Thank you
Contact information:
Eric Somitsch
Director, Solutions for Commodity Management
Microforum: “Manage Commodity Risk in
Today’s Volatile Markets”
Now at 4:00 pm in the Financials Microforum
area right next to the presentation theater.
© 2013 SAP AG or an SAP affiliate company. All rights reserved. 17
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