Agile Project Implementation Methodology

Key Take Aways Drive for better “Time to Value”; customers are looking for early confirmation that requirements can be met. Best Practices and Rapid Deployment Solutions greatly shorten deployment of SAP solutions. SAP offers a proven set of Acceleration Techniques and Deployment Strategies in SAP Activate Methodology Agile has been used successfully in SAP projects of various sizes and solution scope Level of acceleration and approach need to be tailored to the customer’s situation, requirements and culture 2014 SAP AG. All rights reserved. 2

Business Expectations Changed SHORTEN TIME TO VALUE AND REDUCE COSTS REDUCE RISKS, WHILE MOVING FORWARD FLEXIBILITY AND CHOICE Cost Time to Value Visibility Solution and Product Fit Flow (45 seconds): Briefly explain what we understood from customers, what are the market requirements….. Transition: To react on this requirements we have worked to implement the New Normal. -------- In the past, customer projects were expensive, lengthy, and time consuming. We are revolutionizing the way customers buy and consumer SAP solutions with SAP Rapid Deployment Solutions by taking complexity out of SAP implementations, delivering value in weeks. As we look at market trends today, it’s easy to see that customers want more innovation and higher value for their projects. What do your customers want: Solutions that are tailored to deliver business outcomes, along with clearly priced services and project time frames. Less Risk with quicker deliverables Flexibility and choice of landscape – whether it be On Cloud or On premise or a combination of both On cloud On premises Mobile Hybrid Cost Time to Value Incremental Approach Better Engagement between Business and IT

The Basics of Agile Methods ITERATIVE Frequent Inspection & Adoption PEOPLE CENTRIC Trust, Self-organizing teams and individuals FOCUS Team focuses on one thing at a time until it’s done CROSS-FUNCTIONAL TEAMS Face to face communication / no silos CONSTANT LEARNING Better fail early to learn fast, and improve ADAPTIVE PLANNING To hit a moving target Iterate in short cycles (1-4 weeks) At the beginning of each cycle, figure out what are the most important things to do right now. Demonstrate what was done at the end of each cycle (make it available for use if appropriate) Uses visualization to create transparency. Welcome feedback (and act on it). The team focuses on one thing at a time, until it is done. Defer requirements definition until just before you build them (JIT). Create cross-functional teams that include both business and technical people. Better fail early to learn fast. Promote adaptive planning and a people-centric approach.

SAP Activate for managed cloud and on-premise [ASAP successor] Prepare Explore Realize Deploy Run Best Practices that fit customer scope Solution Scope and Value Determination Delta Design Release and Sprint Plan Sprint Execution Support after Go-Live Value Management Prioritize Backlog Integration Testing Cutover Initial Roadmap and Approach Application Lifecycle Management Solution Validation including Gap Validation** Organizational and Production Readiness Value Audits Operations Control Center Pre- Assembly Baseline Build Technical and System testing Setup Operations or OCC** Jump-start project with pre-assembled solution Identify & validate delta requirements and gaps Build customer solution in short, time-boxed sprints Safeguard build and run with ICC**, OCC** and MCC** ** Deliverables, milestones and activities are only applicable in SAP Premium Engagements.

Agile Project Execution and Benefits EXAMPLE Drive Priorities Prepare Realize Explore Deploy Run Sprints 1-3 Iterations / Demos Demo Support Release Planning Tests Final Prep. Organizational Readiness Pre-built system or pre-assembled solution Solution Validation Must Should Could 16 15 14 13 12 11 10 09 08 07 06 05 04 03 02 01 Would 4 5 1 8 2 7 3 6 Backlog Priority [d] WS A WS B String Sprints 4-6 Epic Delta Design Visibility Jump Start Buy In

Agile Project Delivery Fundamentals

SCRUM Methodology – leading Agile approach Sprint Backlog Sprint Retrospective Sprint Execution Sprint Planning Meeting Sprint Review Meeting Scrum Process Recurring Cycle Design Scope Product Backlog Usable Software Daily Scrum Remove or move to a higher level

Agile Implementation Methodology Business Value Focused Explore Phase Product Backlog Must Should Could Would Priority days 16 15 14 13 12 11 10 09 08 07 06 05 04 03 02 01 4 5 1 8 2 7 3 6 Key components of Scope Validation Iterative Baseline Build Solution Demo Visualization Focus on Business Value through-out Prioritized Product Backlog Lean documentation templates Demo Checkpoint Baseline Build Process WS and Sol. Architecture Evaluation & Release Planning Define & Analyze, Scope, Demo Standard SAP Explore

Fit/Gap Workshops Approach Workshop Type A Solution Validation Workshop Type B Delta Design 7. Release & Sprint Planning 1. Reference Value Provide Process, Value and Strategic Context Set Boundaries Tie to Business Case, Value Drivers 6. Verify & Accept Verify process & solution design Drive Acceptance 2. Validation of SAP Solution Show and tell SAP standard key design elements Use reference material and use it to anticipate areas of interest, this might trigger a value prototype Also listen for additional gaps 5. Delta Design Update Business Models and Process Design Solution Design and Visualize 3. GAP Identification Identify gaps to Standard Log additional scope items 4. Delta Scope Prioritization

Agile Implementation Methodology Iterative, Incremental Realize Phase Agile Release of working software Product Backlog Must Should Could Would Priority days 16 15 14 13 12 11 10 09 08 07 06 05 04 03 02 01 4 5 1 8 2 7 3 6 Epic / Scenario Integration Test UAT Business Priority String Test Epic / Scenario Sprint 4 Sign-Off (Organization readiness) Sprint 3 Unit String Test Sprint 2 Unit Sprint 1 Unit Unit Iterations / Demos … Explore Realize

Agile Implementation Methodology Closer look at a Sprint / Iteration 2.3 Sprint Execution Design Build Test Document Delta Requirement A Design Build Test Document Delta Requirement C 2.1 Sprint Planning 2.4 Sprint Demo 2.5 Sprint Retrospective Design Build Test Document Delta Requirement B Design Build Test Document Delta Requirement D 2.2 Daily Team Meeting 2-4 weeks time box

Agile Implementation Methodology Testing Overview Prepare Explore Realize Deploy SBX (Pre-Assembled) DEV DEV/QA QA QA QA PROD Project Preparation Completion Business Solution Validation Completion Sprint 1 Sprint n Epic Solution Tested Start of Production Baseline Build User Story Definition User Acceptance Testing Test Case Development Testing Assessment Project Testing Strategy Test Plan Unit Testing Unit Testing Epic (String) Testing Integration Testing 1 Integration Testing n Finalize Testing Tools & Installation Data Migration Testing 1 Data Migration Testing n Data Migration Testing n Test Team Mobilization & Training Regression Testing Project System Environment Security Testing Project Milestone / Q-Gates Performance Testing Testing Work Packages

Agile Governance and Scaling

Scaling Agile Agile is not only for small projects, is also scales for large programs on a global level Characteristics of larger teams Higher functional, technical and integration complexities and dependencies Higher integration demands Multiple stakeholder groups and conflicting interests in product features and design Cultural differences Distributed decision making processes Higher communication demands, geographically dispersed Higher needs for organizational adoption of Agile principles Planning and execution requires more coordination Sign off and review processes require input from dispersed team members Logistically more challenging, in particular across time zones and work environments

How to start scaling Agile teams Guiding Principles Global Agile Programs Start with a small core team to setup project structure and identify initial product back log Onboard team members gradually over time and identify leads and coaches as scrum teams are build out Stick to the agile principles but replicate them in “scrum of scrums” Identify a core team to focus on planning activities Identify a dedicated integration team to focus on integration aspects including architecture, functions, technology and organizational change management Leverage a hierarchical product backlog that has multiple product owners and is decomposed into work stream backlogs As necessary start with a pilot project to demonstrate Agile success 2014 SAP AG. All rights reserved. 16

Scrum of Scrum Backlog Development Product Owners Product Backlogs Feature A Feature B Feature C Feature D Feature E Feature A Feature E Feature F Feature G Priorities Feature F Feature H Feature I Feature J Priorities Priorities 2014 SAP AG. All rights reserved. 17 Program Product Backlog Feature A Feature F Feature B Feature G Feature C Feature I Feature D Feature H Feature E Feature J Priorities Work Stream Product Backlogs (Scrum teams) Finance Feature A1 (Org.) Feature B Feature C Sales and Distribution Feature A2 Feature D Feature E Manufacturing Feature A3 Feature F Feature G Procurement Feature A4 Feature H Feature I Feature J Work Stream Sprint Backlogs (Scrum teams) Sprint 0 (A) Sprint 1 (B1) Sprint 2 (B2) Sprint 3 (C) Sprint 0 (A2) Sprint 1 (D) Sprint 2 (E1) Sprint 3 (E2) Sprint 0 (A3) Sprint 1 (F) Sprint 2 (G1) Sprint 3 (G2) Sprint 0 (A4) Sprint 1 (H) Sprint 2 (I) Sprint 3 (J)

Scaling Agile – Product Ownership Complexities Chief Product Owner Finance Process Owner Planning Experts Assets Management Sales Process Owner Manufacturing Owner Procurement Owner 2014 SAP AG. All rights reserved. 18 Product ownership can be complex in large organizations. Establish product ownership hierarchy to involve all key stakeholders in the right stages of the project. Align the SCRUM teams with the product owners for maximum impact.

Sprint Planning and Execution Product Backlog Must Should Could Would Priority days 16 15 14 13 12 11 10 09 08 07 06 05 04 03 02 01 4 5 1 8 2 7 3 6 Sprint Planning Add Sprint Zero for Product Backlog, Release Plan, Infrastructure and Organizational Structure Setup Develop common themes for sprints Align product development across sprints based on dependencies Pay attention to common master and organizational structures Sprint Execution Add Integration sprints for integrated functions Coordinate master and transactional data needs Work with aligned cross functional story lines Working Software 2014 SAP AG. All rights reserved. 19 Epic Integration Sprint Epic Sprint 4 Sprint 3 Unit Integration Sprint Sprint 2 Sprint 1 Sprint 0 Workstream 1 Finance Workstream 2 Sales and Distribution Workstream 3 Manufacturing Workstream 4 Procurement

Agile Project Governance Scrum Master (s) responsible for consistent scrum execution and standards, 1 for 3 scrum teams Work Stream / Scrum Team 1 e.g. Finance Executive Steering Committee Strategically directs project 2014 SAP AG. All rights reserved. 20 Work Stream / Scrum Team 2 Sales and Distribution Agile Coach Guides through the execution of the overall Agile program Work Stream / Scrum Team 3 Manufacturing Scrum of Scrums 1-n Scrum of Scrums 2 Core Team, Project Manager, Chief Product Owner, Chief Architect, Agile Coach Core Team Focus on program leadership, backlog management, planning and decision making, guiding principles Work Stream / Scrum Team 4 Procurement Focus on integration topics and cohesive solution build, Consists of the lead consultants and product owners from the individual scrum teams

Working with parallel Scrum teams Regular cadence of meetings between SCRUM Masters of all SCRUM teams Goal is to coordinate and align work; highlight dependencies; discuss cross-topics SCRUM Masters have responsibility to debrief their respective teams on the results represent team member Finance Sales and Distribution Manufacturing Procurement Agile Coach Project Manager Chief Product Owner Scrum Master Product Owner Solution Architect Weekly or Biweekly Product Owner Meeting PM Review (Daily) Technical Scrum of Scrums (Weekly or biweekly) 2014 SAP AG. All rights reserved. 21 Four independent Teams, and then each day after the daily stand-up meeting a Scrum of Scrums was organized. In order to resolve impediments. Teams made up with cross-functional roles: BPE / Authorization / DICT / SAP Consultant / Tester / Trainer

Typical Deliverables per phase

SAP Activate for on-premise [ASAP successor] Prepare Explore Realize Deploy Run Best Practices that fit customer scope Solution Scope and Value Determination Delta Design Release and Sprint Plan Sprint Execution Support after Go-Live Value Management Prioritize Backlog Integration Testing Cutover Initial Roadmap and Approach Application Lifecycle Management Solution Validation including Gap Validation** Organizational and Production Readiness Value Audits Operations Control Center Pre- Assembly Baseline Build Technical and System testing Setup Operations or OCC** Jump-start project with pre-assembled solution Identify & validate delta requirements and gaps Build customer solution in short, time-boxed sprints Safeguard build and run with ICC**, OCC** and MCC** ** Deliverables, milestones and activities are only applicable in SAP Premium Engagements.

Prepare Phase Typical Deliverables Engagement Model Project Organization Project Charter Kick-Off Workshop Scope Statement Project Governance Project Schedule and Budget Project Management Plan Project Management Plans Project and Organizational Standards Execution Standards for Agile ICC/MCC standards in Premium Engagements Project Standards and Policies Organizational Change Management Roadmap Project Training Strategy and Plan (team + key-users) OCM and Training Strategy Project Team Training Ramp up on methodology, engagement model, deliverables, SOW, planning, etc. Team Onboarding Project Support Tools and System Setup Project Room Facilities Access and Security Project Team Infrastructure Value Determination Capability Business / Process Needs Mapping Solution Scope and Value Determination Technical Requirements and Design Initial Hardware Sizing Proposal Technical Infrastructure and Sizing Data Readiness Analysis Data Migration Approach and Strategy Determine Baseline Solution A) Pre-Assembly per RDS or Best Practice B) Model Company Setup C) Prototyping D) Story Map / User Stories Baseline Solution

Explore Phase: Typical Deliverables Phase Initiation Execution Monitoring and Controlling Results PM Execution, Management and Controlling Results Stakeholder Analysis Change Impact Analysis Communication Plan Change Impact Analysis and Communication If no SAP Standard Solution (RDS) available to address customer needs Prioritize features Baseline Build Plan Baseline Build Sign-Off Baseline Build Set expectations on Scope of Modifications Solution Validation (Workshop Type A) Backlog build (translate features in functions) Parking lot items identified Value Realization Solution Validation Prioritize Backlog based on business value drivers Identify Delta scope items for current release Gap Validation via ICC (PE) Backlog Prioritization Solution Design for Deltas (Workshop type B) Develop BPDs and Functional Specifications Sign of design documents Design for Gaps and Deltas Legacy Data Migration Legacy Data Archive Legacy Data Migration Design and Plan Technical Solution Design User Access and Security Development Environment Technology Design and Setup of DEV environment Testing Strategy Test Strategy and Plan Estimate Backlog items Plan release executions Allocate all backlog items to sprints Consider technical and business dependencies and sequences Release and Sprint Plan

Realize Phase: Typical Deliverables Phase Initiation Execution Monitoring and Controlling Results PM Execution, Management and Controlling Results Organizational Alignment Knowledge Transfer / Train Key Users End User Training Delivery Enabled Organizational Alignment and User Enablement Quality Assurance Environment (QAS) / Switch to QA Production Environment (PRD) Security and Authorizations setup Technology Setup for QAS and PRD Sprint Planning Sprint Execution (Build and Unit Test) Sprint Demo Sprint Retrospective Firm-up Sprints (Transports + String Testing + Solution Documentation completion) Sprint Execution Scenario Tests Approved Integration Test (Iterative) Approved User Acceptance Test - Test Solution System and Performance Test Integrated Solution and Non-Functional Testing Legacy Data Migration SAP Data Archiving Value Audits SAP Going Live Check System User Roles and Authorization Administration Technical Operations and Handover Plan Technical Operations Setup Plan including OCC Preliminary Cutover plan Cutover and Transition Plan

Deploy Phase: Typical Deliverables Phase Initiation Execution Monitoring and Controlling Results PM Execution, Management and Controlling Results Pre Go-Live End-User Training Delivery / Validate End User training material Organizational and Production Support Readiness Check System and Performance Test Approved Technical System Tests Technical and System Testing Project Team validates the integration of the customer’s IT solution with non-functional tests (performance-data consistency check), and prepares and implements Run SAP Like a Factory, Setup Operational Support including OCC Includes organizational and technical readiness Readiness for Cutover Check Project team will execute the cutover to the production software and go live Cutover to Production Operations Control Center or customer’s operations team will take over the solution. Production Support after Go Live

Key Take Aways Drive for better “Time to Value”; customers are looking for early confirmation that requirements can be met. Best Practices, Rapid Deployment Solutions and Model Company greatly shorten deployment of SAP solutions. SAP offers a proven set of Acceleration Techniques and Deployment Strategies in Implementation Methodology Agile has been used successfully in SAP projects of various sizes and solution scope Level of acceleration and approach need to be tailored to the customer’s situation, requirements and culture 2014 SAP AG. All rights reserved. 28

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