SASCase

AstheleadingAIandadvancedanalyticsplatform,SAScontinuestoinnovaterelentlessly.We'vealignedourcompanybehindonecommongoal:tohelpcustomersrealizethefullpotentialoftheirAIandanalyticsinvestments.Thiscommitmenthassupportedtheprofitability,stabilityandgrowthofthecompanyfordecades.Morethan83,000organizationsrelyonSAS tohelpthem makebetterdecisions.Theyear2019representedsignificanttransformationforSAS,drivenbyatransitiontocloud-basedtechnologyandrelatedpricingstrategy,aswellasfinancialaccountingchanges.SASbeganadjustingitspricingstrategytosmoothmulti-year revenuepricingmoreevenlyovercontractperiods, whichisconsistentwithcloudpricingacrosstheindustry.SASalsoadoptedthenewaccountingstandardforreportingrevenuereferredtoasASC606thatchangedthetimingofwhenrevenueisrecorded.Asaresult,SASrevenuein2019wasrelativelyflat,growing.5%inconstantcurrency.InUSD,SASrevenuewas$3.1billion,reflectingaccountingandpricingchanges,aswellastheimpactofexchangeratechanges.InitiativesSAStargetedforinvestmentperformedverywell.SASexperienceddouble-digitrevenuegains inAIsoftwareandsolutionsforIoT,riskmanagementandfraudandsecurityintelligence.Cloudrevenueroseaswell,reflectingcustomers'appetiteforcloud-readysolutionslikeSASCustomerIntelligence360 and SASViyatomodernizetheiranalyticsenvironments.In2019,wecommittedtoinvest$1billioninAIinnovationoverthreeyears.Thatinvestmentcontinuestopayoffascustomersrealizethebenefitofinnovation,educationandservicestooptimizeROIonAIprojects.We'vealsoexpandedour channelprogramtogivecustomersthefullpowerofourpartnernetwork.In2019,SASpartnersinfluenced56%ofnewsales,andhalfofourtop50deals.Analyticsremainsahotindustry,andwe'reredoublingoureffortstoremaintheundisputedleaderinthisspace.Wecontinuetoreinvestanaverageof25%ofrevenuebackintoR&D-doubletheaverageoflargetechnologycompanies-tocreateinnovativeproducts,improvecustomerexperienceandhelpourcustomers digitallytransformtomeet theneedsoftomorrow.EverythingwedoatSASisdesignedtohelporganizationstransformtomakebetterdecisions. Innovationisournorthstar,andweconstantlystrivetodeliverbetterforyou.

Empowereveryone, everywherewith analytics

OurtechnologyhaspropelledfourdecadesofgrowthforSASinacompetitivemarket.Today,moredataandmorediversedataaregeneratedthaneverbeforeandaremovingaboutthenetworks.SASputstherightanalytictechnologytotherightplaceattherighttime:onpremises,inapublicorprivatecloud,attheedge.Herearetechnologiesthatwe'rerefiningaswemoveintothenextdecade.

SASPlatform.TheSAS Platformis theenginethatpowersouranalytics technology.Opentoanyinterfaceorcodinglanguage,ourend-to-endplatformworkswithallanalyticaltoolsincludingopensource.Fromdatatodiscoverytodeployment,theSASPlatformhandlestheentireanalyticslifecycle,helpingyouoperationalizeanalyticsandgetmodelsintoproductionfaster.CloudAnalyticscreatesvalue.Buttocashin,organizationsmustensureresourceslikedata,insightsandanalyticssoftwareareavailableacrosstheenterprise.Companieswanttorealizeefficienciesfromcloudcomputing,loweringthecostsofstorageandprocessing.Together,thesefactorsaremakingitlesslikelythatorganizationswillpowertheiranalyticseffortsusingafixed,on-premisesinfrastructure.Whileeveryorganizationhasdifferentneeds,moststillrequireastrategyforthecloud,andtheabilitytofindtherightcombinationoftechnologiestoturnamountainofdataintousefuldecisions.Throughacomprehensivevisionforcloudsolutionsanddeployment,SASisaggressivelyevolvingourtechnologytobecomecloud-native.Wehelporganizationsinnovate,manageriskandcreatevaluethroughtheSASCloud,whichcombinessoftware,infrastructureandservicesthataredesignedandmanagedbySASforoptimalperformanceandvalue.Andweoffercloud-deployableoptionsthathelpcustomersrunSASinnewandmodernwaysonalmostanyprivate,publicorhybridcloudinfrastructure.SASservicesareconfiguredtoaddressthegrowinginterestina"cloudfirst"approachtoanalytics,AI,datavisualizationanddatamanagement.Innovativedeploymentoptionsnowserveanybusinessneed.Forexample,SASforContainersgivesdatascienceteamsaflexibleandefficientwaytoexecuteSASworkloadsandhelpITteamstobeagileandtakeadvantageofcost-efficientcloudinfrastructures.AndwithSASResults,acloud-basedresults-as-a-serviceoffering,customersprovidethedata,aspecificbusinessproblemandascopeofwork,andSASdeliversanswersyoucanacton.CloudcollaborationsIn2019,SASandRedHatannouncedanexpansiontotheirexistingpartnershipwiththecreationofabest-in-classhybridcloudanalyticssolution,usingSASViyaonRedHatOpenShift,theindustry'smostcomprehensiveenterpriseKubernetesplatform.Byofferingouraward-winningsoftwareandservicesontheSASCloudorthird-partycloudproviderslikeAmazonWebServices(AWS),GoogleorMicrosoftAzure,wegiveorganizationstheultimateflexibilitytooptimizetheperformanceandvalueoftheiranalyticsecosystem.SASdoinggreatthingswithpubliccloudprovidersHandlingtoday'smodernanalyticworkloadsinthecloudisnoeasytask.HeavyworkloadsofAI,modeldevelopmentandmodeltrainingcanreallyslowthingsdown.AndmoreandmoreSAScustomersareexploringoptionsforrunningtheirdevelopmentandproductionworkloads.Ascustomersmakethedecisiontomovetowardcloud-nativedeployments,SAScontinuestodevelopsoftware,servicesanddeploymentpatternsthatusethecapabilities associatedwithpublic cloudproviders likeMicrosoft Azure, AmazonWebServicesandGoogle.FromestablishmentofGlobalCloudAccelerationCenterstousingadvancedtechnologiestomodernizeSAS'risk,fraud,complianceandcustomerintelligencesolutions,SASandourpartnershelpcompaniesnavigatetheircloudjourneymoresimplyandwithoptimalefficiency. Thisincludes:

Coordinatedsecurityandaccessmanagement servicesofenvironments thatareassafeason-premises deployments.

Accesstocloud-baseddatasourceslikeAWSRedshift,GoogleBigQuery,Snowflake andmore.

OrchestrationtoolslikeOpenShiftandotherKubernetesservicestomanageSASincontainer-basedenvironments.

Continuousinnovation/continuousdeliverypipelinestodeploynewSASfunctionalitywithoutmajorupgradeefforts.17AnearlyreturnonSAS'$1billioninvestmentinAIcameinthewayofa2019releaseofSASViya3.5.Andin2020,customerscanevenmoreeasilygetSAStechnologyintheirhandswiththelaunchofcloud-nativeSASViya 4.0,amore powerful, easy-to-accessplatform.

Artificialintelligence.ThestickinessofAIspeakstoitsusefulness.Foryears,we'veembeddedAItechnologiesintosolutionsacrosstheSASportfolio.Duringthattime,we'veadvancedAItechnologieslikemachinelearning,computervision,naturallanguageprocessingandforecastingandoptimization.Asaresult,ourAIcontinuestogrow,andarapidlyincreasingnumberofcustomersnowrelyonSAStooperationalizeAIforprofitandhumanprogress.AIisinourDNA.Longbeforeitdominatedheadlines,AIwasanintegralpartofSASsoftware.TodaywebuildupondecadesofresearchtoembedAItechnologieslikemachinelearning,computervision,naturallanguage,deeplearning,andforecastingandoptimizationinsolutionsacrosstheSASportfolio.Asaresult,customersineveryindustrycancapitalizeonadvancementsinAI.AtSAS,AIisnotastandaloneproductbutasurgeofintelligencetoourexistingproducts. MuchlikeSiriwasaddedasafeaturetoanewgenerationofAppledevices,weinjectAIcapabilitiesintooursoftwaretohelporganizationsboostproductivityandunlocknewpossibilities.Automation,conversationalplatforms,botsandsmartmachinescanbecombinedwithlargeArtificialintelligenceSASAICenterofExcellenceExpertknowledgeoftools,techniquesandmethodologiesisvitaltounlockingthebenefitsofAI.ThisknowledgeisscarceanddifficulttoacquirebecausetheneedforAItalent hasoutpacedindustry'sabilitytofill it. Toaddress thisproblem,SAShas created the SAS ArtificialIntelligenceCenterof Excellence(SASAICoE),agroupofPhD-levelexpertsinAI,machinelearning,naturallanguageprocessing,computervision,optimizationandsimulation,whoarefocusedexclusivelyoncustomerimplementations.Thegroupishighlytunedtocustomerneedsandcombinesabusiness-focusedmindsetwithdeeptechnicalexpertisetoaddressbusinesschallengesandconductassessmentstouncoverinnovativeopportunitiesthathavebusinessvalue.JimGoodnightCEOSASamountsofdatatoimprovemanytechnologiesathomeandintheworkplace,fromsecurityintelligencetoinvestmentanalysis.Forthisreason,we'reinvesting$1billioninAIoverthreeyearsthroughsoftwareinnovation,education,expertservicesandmore.ThiscommitmentbuildsonouralreadystrongAIfoundation.Andwecontinuetounderpintheseofferingswithdatamanagement,visualization,deploymentanddecisionsupporttohelpcustomersoperationalizeAIandoptimizecustomerreturnontheirAIprojects.

AIoT.WhenyoumergeAIandIoT,yougettheArtificialIntelligenceofThings,orAIoT

-arevolutionarycombinationthatcantransformindustries,elevatecustomerexperiencesandacceleratebusinessperformanceexponentially.We'veengineeredourAIsolutionstofeedonreal-timedatastreamingfrombillionsofIoTdevices.Soon, mostIoTprojectswillbeAIoTprojects,andSASispositionedtodeliversubstantialbusinessvalueinthis area.We'vefoundclearevidenceofmomentumbehindthisemergingcombinationoftechnologies.Anditmakessense.ThetruevalueofIoTdataisonlyrealizedwhencombinedwithAIandanalytics.Otherwise,yourIoTdatajustcollectsdust.CompaniesthatdevelopAIoTcapabilitiesreportstrongerresultsacrosscriticalorganizationalgoalsincludingtheabilitytospeedupoperations,introducenewdigitalservices,improveemployeeproductivityanddecreasecosts.ThiswasconfirmedlastyearinIDC'sglobalAIoTstudy,inwhich450businessleaderswereaskedabouttheiruseofIoTandAItechnologies.ThesurveyrevealedthemostsignificantpredictorinrealizingvaluefromIoTinitiativesacrossanorganizationistheheavyuseofAI.Afull90%ofsurveyrespondentsheavilyusingAIintheirIoToperationsreportedexceedingvalueexpectations.TheresearchalsoshowedorganizationsusingIoTwithAIappeartobemorecompetitivethanIoT-onlyenterprisesbyadouble-digitmarginacrossavarietyofbusinessindicatorslikeemployeeproductivity,innovationandoperatingcosts.ForVolvoTrucksandMackTrucks,sensordataandAIsolutionsfromSASareusedtopredictmaintenanceissuesandminimizeunplanneddowntime.Similarly,LockheedMartinsaved1,400hoursofdowntimeforitsbiggestdefencecustomerbyapplyingmachinelearningtoreal-timedatastreamingfromC-130aircraft.Andahigh-techmanufacturerinJapanusesSAStoanalyzestreamingdatafromIoTdevicestobetterforecastdemandandimprovecustomersatisfaction.Thoughstillanascent technology, AIoTis makingafasterandgreaterimpactthanexpected.AndweanticipateexplosivegrowthoverthenextfewyearsasmoreorganizationsworkingwithIoTdatarealizethepowerofAItoautomatebusinessdecisions.MixthatwiththerisingadoptionofAItechnologieslikemachinelearningandtherecipeforsuccessisclear.ByembeddingAIintoourIoTsolutions,we'releadingthewayinmakingAIoTareality.

Dogreatthingsforhumanity

SASiscontinuallyrecognizedforprovidinganinclusiveandenrichingworkenvironmentthatignitesemployees'creativity,givingthemtheopportunitytochangetheworld.AsCEOJimGoodnightsays,"Treatemployeesliketheymakeadifferenceandtheywill."SASisamodelforthephilosophythattreatingemployeeswellmakesgoodbusiness sense, forSASandits customers.

SAShasperfectedtheartofemployeemanagement.IthasbeenrankedonFortunemagazine'sbestplacestoworklisteveryyearsincethelistwasfirstpublished.EmployeesseemtogenuinelyenjoyworkingatSASandareunusuallyattachedtothecompany,resultinginaturnover ratethatislessthan4%inanindustrywhere20%isthenorm.

OnethingSASdoeswellisgivingitsemployeesopportunitiestoworkoninterestingandchallengingprojects.Thesoftwaredevelopershavetheopportunitytodevelopcutting-edgesoftwaretobeusedaroundtheworld.Thecompanymakesanefforttoconcentrateitsbusinessintheareasofanalytics,whichaddthemostvalueandhelporganizationsbestanalyzedisparatedatafordecisionmaking,creating opportunities forSASworkerstobechallenged.Plus,thecompanyremovesobstaclesforemployees.Equipment,policies,rules,andmeetingsthatcouldimpedeproductivityareeliminated.

Inaddition,thecompanyhasareputationasapioneerwhenitcomestotheperksitoffersemployees,buttheseperksarenotgivenwithamentalityof"offereverythingbutthekitchensink."Thereiscarefulthinkingandplanningbehindthechoiceofperksthecompanyoffers.SASconductsregularemployeesatisfactionsurveys,andanyfuturebenefitsandperksofferedareplannedinresponsetotheresults.Thecompanywantstoeliminatestressorsandanythingthatdissatisfiesfrompeople'slives.Tokeepemployeeshealthyandfit,thereareathleticfields;afullgym;aswimmingpool;andtennis,basketball,andracquetballcourtsoncampus.Plus,thecompanyoffersfreeon-sitehealthcareforemployees,coversdependentsattheirfullystaffedprimarymedicalcarecenter,andoffersunlimitedsickleave.Thecompanyunderstandsthatemployeeshavealifeandencouragesemployeestoworkreasonablehoursandthengohometotheirfamilies.Infact,afamousmottointhecompanyis,"Ifyouareworkingformorethan8hours,youarejustaddingbugs."SASistrulyoneoftheindustryleaders inleveragingits treatmentofpeopleforcontinuedbusinesssuccess.

SAS websiteisavailablehere:https://www.sas.com/en_au/home.html

SAS vision-and-missionisavailablehere:https://www.sas.com/en_au/company-information/vision-mission.html

Questions:

1.Whattypeof strategy(costleadership/differentiation)doesSAStake?Discussintermsofpersonnel,resourcesandactivitiesperformed.Provideathoroughanalysistojustifyyouranswer.[wordlimit:300words]

2.Whatmeasuresorkeysuccessfactorswouldyouconsiderimportant toevaluatetheperformanceofSAS?Provideexamplesofatleastthreekeysuccessfactors.[wordlimit:300words]

3.YouareaconsultantforSAS.DiscussthepossibleproblemsofprofitplanningatSAS,basedonthe currentstrategies.Howcouldyouaddresstheseproblemsbyfocusingontheinterconnectedstrategicbudgetingcycles?Provideathoroughanalysistojustifyyouranswer.[wordlimit:300words]

4.Suggestwhatisthetypeofcorporate structureshouldbeusedinSAS?ExplainwhySASshould use thisstructure.(Hint:connecttoitscurrentstrategy)[wordlimit:300words]

5.Wheredoesthefinancialdepartment fitwithinSAS'sstructureasyoudescribeabove?Inyourresponse,explainwhattypeofresponsibilitycentreSAS'sfinancialdepartmentwouldbeclassifiedas?Providetwoperformancemeasuresthatcanbeusedintheresponsibilitycentre youidentified.[wordlimit:300words]