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1. Value View
Digitalization: Driving Business Model Transformation
Reinventing business models to monetize your services
www.sap.com/contactsap
To deliver value in today’s digital economy, professional services firms must continuously
transform their business models to meet client and market demands. Offering new client-centric
business solutions while automating delivery processes can help firms grow revenue, increase
profit margins, and satisfy clients.
But in addition to offering great opportunities, digital transformation – often referred to as
digitalization – creates a perpetual disruption in the business landscape, challenging firms to
continually update their business models just to stay competitive. To do so successfully, they must
consider the entire business – services, products, pricing, sales, delivery, and support – embracing
and taking advantage of transformation at every step.
To the innovators go
the spoils
Transforming a firm’s business
model may be more challenging
than product or process
innovation, but it also delivers
superior returns. SAP Performance
Benchmarking analysis showed
that, while both groups exceeded
average industry returns,
companies with innovative
business models averaged five
times the premiums of product
or process innovators. Business
model change also delivered
more sustainable returns; after
five years, those with significant
business model transformation
had outperformed the product and
process innovators 60 times over.1
Total shareholder return premium
Total shareholder return (TSR) premium is defined as the percentage by which
innovators’ average TSR (median %) exceeded that of their industry peers.
Business model
innovators
Over 3 years Over 5 years
Business model
innovators
Product and
process innovators
Product and
process innovators
© 2015 SAP SE or an SAP affiliate company. All rights reserved.
8.5
5X higher
60X higher
6.1
1.7 0.1
1

2. Value View
Digitalization: Driving Business Model Transformation
Reinventing business models to monetize your services
www.sap.com/contactsap
77% of professional services CEOs believe
that their business will be disrupted by digital
transformation in the next 12 months.3
51% see the use of digital technology as a
major driver of their business strategy.3
75% say that CIOs must lead digital
transformation; if they do not, the enterprise will
fall behind.4
How professional services is embracing the
digitalized economy
A recent Deloitte Digital GmbH and Heads! Executive Consultancy study2
shows that media, telecommunications, and retail continue to experience
digitalization-related disruption; they will soon be joined by professional
services, banking, insurance, and real estate. Professional services
executives agree:
What is digitalization?
Gartner defines digitalization as the use of digital technologies to innovate business models and provide new revenue and
value-producing opportunities; it is, in short, the process of moving to a digital business.6
The Altimeter Group defines it as “the
realignment of, or new investment in, technology and business models to more effectively engage digital customers at every
touchpoint in the customer experience lifecycle.”7
Three priorities for successful
digital transformation
To survive and thrive in the new digital
business era, savvy professional services
firms focus on:
Transforming business models, combining
services, projects, and products into new
offerings – often including the extended
partner network.
Becoming more customer-centric,
delivering a consistent digital experience
across all aspects of business.
Achieving operational excellence,
streamlining services portfolio and leveraging
standardized, automated end-to-end
processes on a global scale.
“We can testify that digital transformation
and constant innovation are definitely
not ‘nice to have,’ but rather ‘essential
to survive.’”2
– Deloitte Digital GmbH and
Heads! Executive Consulting
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 2

3. Value View
Digitalization: Driving Business Model Transformation
Reinventing business models to monetize your services
www.sap.com/contactsap
Design and sell business
solutions that solve
problems and deliver the
outcomes clients want to
achieve
Move to new pricing
models, such as
subscriptions and usage-
or outcome-based billing
Create reusable
productized services,
and deliver them across
clients, regions, and
markets
Personalize the selling,
delivery, and billing
experiences to make
clients feel “unique”
Standardize and
automate service delivery
processes globally
Personalization and the solution experience
On a consumer level, people expect to be able to personalize everything from music playlists to new cars, entirely online. To meet
these expectations in the business world, enterprises are similarly using customer preferences, habits, and context to make
experiences simple, delightful, and incredibly personalized.8
For professional services firms, personalization at this level means deepening customer relationships by offering a custom solution
experience, rather than simply selling a collection of underlying components. For example, a point-of-sale (POS) solution might
combine a mobile register (hardware), the software to run it, maintenance service, plus a migration project to roll out the solution to
all stores in a region. Bundling these components to fit the individual customer both maximizes personalization and drives margin
growth by selling higher-value services.
All this requires significant change to established business models. An integrated solution business lifecycle model allows firms to
design, offer, sell, deliver, and bill the right solutions for the right clients.
To provide such complete service, professional services providers need to:
Omnichannel experience
Solutio
n
Billing
Rapid Solu
tionDesign
Solutio
n
Sales
Solution
D
iscovery
Solution
Business
Lifecycle
Master agreementRevenue management
Business and pricing
model design
Billing and invoicing
Solution packagingPre-billing
Quote management
Usage rating
and charging
Contract managementUsage metering
“We’re no longer selling only products
or services – we’re transforming to sell
offerings. It’s a usage- and subscription-
based model rather than a one-off bump
in revenues.”5
– Doug Curren
Director of Enterprise Applications
Platform Consulting, EMC2
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 3

4. Value View
Digitalization: Driving Business Model Transformation
Reinventing business models to monetize your services
www.sap.com/contactsap
Learn more
To see the possibilities for digitalization and solution business,
explore SAP’s Solution Business Education Series. To learn
more about SAP Professional Services, visit us online.
Designing productized services: selling and billing packaged solutions
The actual components of a business solution are not what is
most important to clients – what matters is that the solution
delivers value by addressing a specific business problem.
Because SAP serves global clients and helps extend their
reach to new markets and services, it offers a consumer-like
experience with a single sales and delivery model, establishing a
consolidated view for every client.
hybris software, an SAP company, is a comprehensive
ecommerce and billing suite that delivers B2B user experiences
on par with those of top B2C websites.
It helps firms adapt to changing client needs with a unified
digital experience that supports omnichannel commerce in
even the most complex B2B environments. With it, you can:
Rapidly design and launch client-centric solutions, exploiting
fast-moving market opportunities by quickly changing client
pricing and partner revenue-sharing models.
Reduce sales administration costs by providing B2B clients
with self-service capabilities to manage their organization,
contracts, and installed base information. Clients are
enabled to place orders or request quotations, manage
contract changes, and submit service requests and
incidents.
Maximize efficiency by running an integrated order-to-cash
process across channels on a single platform for a low total
cost of ownership.
Embracing client opportunities with transformational business models
SAP’s approach to solution business combines the hybris portfolio of proven best-in-class solutions for customer engagement and
commerce with a single state-of-the-art platform and modern, integrated end-to-end business processes. SAP supports digital
business transformation by:
Delivering and driving business
model transformation that allows
for flexible client personalization
and solution packaging
Enabling business model
transformation to new
“as-a-service” offerings
Allowing firms to stay ahead of
the competition by supporting
nonlinear growth, streamlined
solution business processes, and
powerful analytical insights
Integrating solution packaging
and selling, with service delivery
and transparent, flexible billing
1
Based on SAP Performance Benchmark data and Boston Consulting
Group, Innovation 2009: Making Hard Decisions in the Downturn,
November 2009.
2
Deloitte Digital GmbH and Heads! Executive Consulting, Survival through
Digital Leadership, March 2015.
3
Forrester, The Digital Business Imperative, March 2014.
4
Gartner, Use CIO Leadership Critical Success Factors for Digital
Enterprise Transformation, September 2014.
5
IDC, Monetizing Digital Transformation, an IDC White Paper Sponsored
by SAP, 2015.
6
Gartner: IT Glossary,“Digitalization.”
7
Altimeter Group, The 2014 State of Digital Transformation, July 2014.
8
Accenture, Accenture Technology Vision 2015 – Digital Business Era:
Stretch Your Boundaries, 2015.
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 4