the three dimensions of sap business bydesign set the ... · the three dimensions of sap business...

October2016

THETHREEDIMENSIONSOFSAPBUSINESSByDESIGNSETTHESTAGEFORGROWTH

SIMPLICITY,FLEXIBILITY,EXTENSIBILITYINTHECLOUD

InCloudERP:TheGreatEnablerofGrowth,MintJutrasexaminedhowEnterpriseResourcePlanning(ERP)solutionsdeliveredassoftwareasaservice(SaaS)helpcompaniesfuelandsimplifygrowthbyaddressingpeoplechallengesandmitigatingrisk,whilemaintaininggovernanceandcontrol.Cloudsolutionsenableyoutofail(orsucceed)faster,allowingyoutofocusonthenextandbestopportunityforgrowth.WhilesomeofthefactorsthatenablegrowthareinherentinanySaaSsolution,notallcloudERPsolutionsarecreatedequal.Targetingmid-sizeandfastgrowingcompanies,SAPclaimsitsSAPBusinessByDesignisdesignedspecificallytohelpthesecompaniesgrowandmaximizeprofits.Inthisreportweinvestigatethemeritofthoseclaims.

SAPBusinessByDesignwasborninthecloudin2007,longbefore“RunSimple”becamethemantraofSAP.Yettheinitialobjectivewastosimplify,deliveringa100%cloud-basedsolutionforthesmalltomid-sizeenterprise(SME),whilealsofullyleveragingSAP’sexperienceandinfrastructure.Insteadofreworkinganexistingproduct,SAPtooka“startover”approach,andoverthepastnineyearshasdevelopedandrefinedathreedimensionaldesignphilosophy.Thosethreedimensions:simplicity,flexibilityandextensibility.Thisphilosophyisaperfectprescriptionforagrowingcompanythatneedstogetoutofthegatefast,buthasnotyetreached,orperhapsevendetermineditsfinaldestination.HowdoesSAPdothat?

ABOUTSAPBUSINESSBYDESIGNBeforeweanswerthatquestion,itisimportanttounderstandwhatitis.SAPBusinessByDesignisacloud-basedERPsolutiondeliveredexclusivelyassoftwareasaservice(SaaS).Insteadofthetraditionalapproachofbuildingoutmoduleslikeaccounting,purchasingandinventory,thenlaterfleshingouttheproductwithfeaturesthatbringthemalltogether,SAPdesignedanddevelopedSAPBusinessByDesigninmuchthesamewayabusinessdevelopsandgrows.Itcreatedbusinessprocessscenarioslikeorder-to-cash,procure-to-pay,andintra-companystocktransfers(seesidebar,nextpage).Someofthesebusinessscenariosmaysitwithinasinglefunctionalareaofthebusiness,butmorelikely,theymightspanmanydifferentfunctions.Thisisa

Who is SAP?

SAPisoneoftheveryfewERPsolutionproviderswithinstantnamerecognitionacrosstheglobe.Bysheernumbers,SAPisamarketleader,butisalsowell-knownforitsverycomprehensivesolutionforlargeenterprises.However,80%ofSAPcustomersaresmalltomid-sizecompanies.

Somefactsaboutthecompany:

üOver320,000customersin188countries

ü80,000+employeesandlocationsinmorethan130countries

ü45+yearhistoryasasolutionprovider

üAnnualrevenue(IFRS)of€20.79billionin2015

ü Listedunderthesymbol"SAP"onstockexchanges,includingtheFrankfurtExchangeandNYSE

TheThreeDimensionsofSAPBusinessByDesignSettheStageforGrowthPage2of6

littlehardertodo.Withthescenarioapproach,thedesignersanddevelopersneedtounderstandmorethanonefunctionalsiloofthebusiness.Theyneedtounderstandhowthebusinessactuallyruns.

ButSAPalreadyhadaccumulatedthisexpertisethroughmanyyearsofdefiningrequirements,doingfunctionaldesigns,developingbestpractices.Itjustneededtoleverageallthisexperienceandreinvent,redesignanddeliveritforanewtargetmarket-mid-sizeandfast-growingcompaniesandsubsidiaries(businessunits,divisions)oflargeenterprises.

YetthetargetmarketforSAPBusinessByDesignisnotdefinedentirelybycompanysize.Needsvarybasedonindustryandproductofferingsofpotentialcustomers.Traditionallycompaniesfallintotwodistinctcategories:thosethatmake,moveand/orsellphysicalgoodsandthosethatbuildtheirbusinessonprovidingservices.TypicallyERPproductsaredesignedtofocusononeortheother,butnotnecessarilyboth.

Whilethisworkedwellfordecades,todaymanybusinessesareablendofthetwocategories.ThefirstSAPBusinessByDesigncustomerscamefrombothofthesetwodifferentworlds,andhappenedtoberepresentativeoftherealitiesoftoday’schangingbusinessclimate.BythetimethedustsettledontheearlyversionsofSAPBusinessByDesign,SAPfounditcouldeffectivelysupportbothcategories,aswellasblendedbusinesses.

Thisisparticularlykeyduringgrowthandexpansion.Evenifyouarepurelyoneortheothertoday,itislikelyyouwillnotbetomorrow.Andasyouextendyourfootprintinternationally,differentlocations(whichifindifferentcountrieswillbedifferentlegalentities)andsubsidiariesmightplaydifferentrolesintheorganization.

HOWSAPBUSINESSBYDESIGNENABLESGROWTHInordertoenablegrowthasolutionmustbebroad(intermsoffunctionality),flexibleandextensible.WehavealsoseenhowcloudERPcanbeanimportantenablerofgrowth.SAPattackstheserequirementswithamodernandmodulararchitecturethatwasborninthecloud.ItdeliversanextgenerationuserexperiencethatcontinuestoevolveandabusinessconfiguratorthathasbecomethegoldstandardwithinSAP,helpingorganizationsadaptastheygrowandchange.Andfinally,itembedsreportingandanalyticsrightintheapplicationitselfsothatcontinualoversightandanalysisdoesnotbecomeanafterthought.

SAPBusinessByDesignismodularbydesign.Thisshouldnotbeconfusedwithsimplybeingcomprisedofasetofmodules.Bydefinition,anyERPsolutionisanintegratedsuiteofmodules.Itishowmodulesarecoupledtogether,orinthecaseofSAPBusinessByDesign,howtheyaredecoupled,thatmakesasolutionflexibleorrigid.

SAP Business ByDesign Business

Scenarios

ü CashandLiquidityManagement

ü CustomerContractManagement

ü CustomerReturnManagement

ü DemandPlanningü ExpenseReimbursementü FieldServiceandRepairü FinancialClosingü FixedAssetManagementü Intra-CompanyStock

TransferüMake-to-StocküMarketing-to-

Opportunityü Order-to-Cash

(StandardizedServices)ü Order-to-Cash(Project-

BasedServices)ü Order-to-Cash(Sellfrom

Stock)ü Order-to-Cash(Third-

PartyOrderProcessing)ü Order-to-Cash(Specified

Products)ü PayrollServicesü PhysicalInventoryManagement

ü Procure-to-Pay(Non-Stock)

ü Procure-to-Pay(Services)ü Procure-to-Pay(Stock)ü ProductCatalogManagement

ü ProductDefinitionü ProductDevelopmentü ProductEngineeringü ProjectManagementü QualityAssuranceü Request-to-Resolveü ResourceManagementü StrategicSourcingü SupplierReturnManagement

ü TimeandLaborManagement

üWorkforceAdministrationandAuthorization

TheThreeDimensionsofSAPBusinessByDesignSettheStageforGrowthPage3of6

Thisdecouplingisdeliveredinavarietyofways.First,businesslogicisdecoupledfromtheuserinterface,allowingforeaseoftranslationandalsothereuseoflogicandservicesacrossanynumberofdifferenttypesofinterfaces.Thesametransactionscanbetriggeredwhetheryouareusingtheproductthroughabrowseronadesktop,amobileapplicationornouserinterfaceatall.Throughprocessautomation,sometimesthebestuserinterfaceisnointerface.Also,thesoftwaremodulesthemselvesareessentiallydecoupled.Insteadofhard-codedlogic,communicationbetweendifferentmodulesismessage-based.Thismakesitfareasiertoaddorswapmodulesandbusinessscenariosasneededoreventoconsumeinnovation.

Trendsintheindustryhavebeenconvergingtowardthegoalofmakinginnovationandthesoftwareitselfeasiertoconsume.Easeofuseisfirstandforemostaboutefficiency,whichnotonlyrequiresauserinterfacethatisintuitive,butalsoprocessesthatalignwiththewaybusinessreallyworks-businessscenariosthatmaximizeefficiencyandminimizetimetocompletetasks.

SAP’sdesignmethodologyisconducivetosupportingboth.Whendesigningabusinessscenario,SAPdesignersgoonsite,observingthewaypeopleworkandinteract.Theirdesignsarebasedontheseobservationsandthenvalidated,typicallyinmultiplecountries(China,India,GermanyandtheUnitedStates)beforebeingincorporatedintotheproduct.

Theresultofthismethodologyhasbeenanemphasisonthehumanengineeringoftheprocess,withthethemeofsimplicityandpersonalization.

PersonalizationwithinSAPBusinessByDesignisachievedthrougha“BusinessConfigurator”thattakesadvantageofthepre-definedbusinessscenariosdiscussedearlierandarules-basedcatalog.Togetherthesealloweachcustomertotailorthesolutiontospecificneedsbyinteractinginbusinesslanguage,notcodeandwithoutinvasivecustomization.Thesebusinessscenariosmaptheworkflowofabusinessprocessthroughthevariousfunctionsofthesolution.Selectingapre-definedscenarioautomaticallyselectsallthefunctionsnecessaryduringinitialimplementation.Customerscanthenselectivelyfine-tunethesettingsimmediatelyorasbusinessconditionsorastheorganizationalstructurechanges.

Reorganizationsareacommonresultofthesechangesascompaniesmatureandgrow.SAPBusinessByDesignallowsgrowingcompaniestomaintainasingleorganizationstructurethatdefinesrelationshipsbetweenalllegalentitiesbothfromafinancialconsolidationstandpointaswellasanorganizational(reporting)pointofview.

Legacysolutionsoftenrequirethesedifferentstructurestobemaintainedseparatelybybusinessunit,embeddingtheenterprisestructurewithinthegeneralledgeraccount,makingmaintenanceclumsyandanytypeofchangedifficult.Onceestablished,changingthestructureofthechartofaccountsis

SAPBusinessByDesignallowsgrowingcompaniestomaintainasingleorganizationstructurethatdefinesrelationshipsbetweenalllegalentitiesbothfromafinancialconsolidationstandpointaswellasanorganizational(reporting)pointofview.Asenterprisesmatureandgrowbothofthesetendtoshiftandchange.

Definition of ERP MintJutrasdefinesERPasanintegratedsuiteofmodulesthatformstheoperationalandtransactionalsystemofrecordofyourbusiness.Itincludesallthemasterdataneededtosupportthefullcyclefromordertocash,includingafullaudittrailofalltransactions.Whilethisisourminimaldefinition,mostcompleteandmodernERPsolutions,includingSAPBusinessByDesign,domuchmorethanthistoday.

TheThreeDimensionsofSAPBusinessByDesignSettheStageforGrowthPage4of6

nexttoimpossible.Inlegacysystemspersonnelreportingstructureswerelikelytobedefinedinacompletelyseparatesolution,iftheywererecordedatall.Thesetwoareoftennotalignedidenticallyandthiscausesproblemsinmanagingperformancewhilemaintaininggovernanceandcontrol.

SAPBusinessByDesignprovidestheflexibilitytostructureallofthisonce,inawaythatmakesmostsense,notinthewaydictatedbyyourERP.Ofcourse,decidingwhatmakessenseandthebestwaytospurandsupportgrowthisnotasimpledecision.Itrequiresafullunderstandingofyourcurrentbusinessstatus,aswellassomeinsightintofuturepotentialoutcomes.

Forcurrentbusinessstatus,oftencompanieslooktoreportingcapabilitieswithintheirERPsolutionsforthisviewofoperationalperformance,althoughmostaresittingonamountainofdata,buthavedifficultyinprocessingthroughitveryquicklyinordertodiscernwhichkeyperformanceindicators(KPIs)willbemostindicativeoffutureperformance.Yetinmanaginggrowth,younotonlyneedthatoperationalreporting,youalsoneedtolookbeyondcurrentoperationsandanalyzethepotentialofgrowthopportunities.Forthisyouneedanalytics.Whiletraditionalreportinganswersyourquestions,analyticshelpyouasktherightones.MostERPimplementationstodaydon’tadequatelydelivereither.

SAPBusinessByDesignembedsanalyticsdirectlyintothebusinessscenarios.Theanalyticsarebrowser-basedandavailableonmobiledevices,completewithalertsthatcanbesentinrealtime.SAPmakesextensiveuseofdashboards,whichbusinessuserscancreateorpersonalizeforthemselves.ButSAPdidn’tturnitsbackonbusinessusers’almostuniversalloveforspreadsheets.OfflineanalysisusingMicrosoftExcelisstillpossible.

FEATURE/FUNCTION:GROWTHMAYREQUIREMOVINGBEYONDERPFUNCTIONALITYThegrowthanddevelopmentofSAPBusinessByDesignhasfollowedapaththatmodelsthegrowthandexpansionofabusiness.AndsometimesthismeansneedingsomethingwellbeyondthetraditionalscopeofERPquiteearlyon.Itisnotjustverylargeenterprisesthatfacethischallenge.Asyouexpandintonewcountriesandtransformyourbusinessintoa“blended”business,yourneedswillvaryateach(new)location.

Let’ssayyouarelookingtoexpandyourmarketintonewterritoriesbyopeninganewsalesoffice.You’llneedtosupportthebusinessscenariofrommarketingtoopportunity.Youwillneedtoconvertquotestoordersandthenperhapsmanagetheorder-to-cashcycleorsendthoseorderstocorporateortoothersistersubsidiariesinordertodeliver.

Perhapsyouhaveasubsidiarydedicatedtoresearch.Humanresourcemanagementandprojectmanagementwillbeattheheartofyouroperations.

Business Scenarios– New Sales Office

ThefollowingBusinessScenariosdeliveredbySAPBusinessByDesignmayberequired:

üMarketingtoOpportunity

ü CustomerContractManagement

üDemandPlanningüOrdertoCashü ProcuretoPayü ProductCatalogManagement

ü StrategicSourcingü ProjectManagementüOthers….

Companiesaresittingonamountainofdata,makingitdifficulttoprocessthroughitveryquicklyinordertodiscernKPIswillbemostindicativeoffutureperformance.Afterall,theycan’tlookateverydetail…Orcanthey?

TheThreeDimensionsofSAPBusinessByDesignSettheStageforGrowthPage5of6

Timeandlabormanagementandworkforceadministrationandauthorizationbusinessscenarioswilllikelybedeployed.

Ifyousell,supportandrepairaphysicalproduct,youmayorganizerepairthroughdepotrepairandreturn,oryoumighthaverepairfacilitiesdistributedaroundtheworldforon-siterepair.Youwillneedfieldserviceandrepair,customerreturnmanagement,order-to-cash(forstandardizedorproject-basedservices),timeandexpensemanagement,eitherprocure-to-payorinter-companystocktransfersaswellastimeandlabormanagement–allbusinessscenariosbuiltintoSAPBusinessByDesign.

Throughout,whetherlookingatsubsidiariesorthecorporatewhole,youwillneedtomanagecashandliquidity,payrollservices,qualityassuranceandthefinancialclose.Forthisyouneedvisibility,deliveredbySAPBusinessByDesign’sembeddedanalytics.Andyouwillneedaconsolidatedviewacrossthesepotentiallydifferentbusinesseswithinthebusiness.ThisistheadvantageofSAPBusinessByDesign’sapproachofasingle,multi-purposesolution–providingitreallycanmeettheindividualneedsofthedifferentfunctions.

SUMMARYANDKEYTAKE-AWAYSCloudERPisindeedagreatenablerofgrowthformid-sizecompanies,particularlythoselookingtotakeboldstepsinarapidlychangingbusinessclimate.ItisclearthatSAPhastakentheneedsofthesemid-sizecompaniesseriously,particularlythosethatarefastgrowing.

Keyfactorsandthereforekeytakeawaysinclude:

• A“startover”approachthatkeepsthedesignanddevelopmentcleanandclear,butisabletodrawextensivelyfromSAP’svastexperienceandtechnologyinnovation

• AbusinessconfiguratorthathasbecomethegoldstandardwithinSAPforadaptingandpersonalizingthesolutionwithoutinvasivecodechangesorlock-in

• Theabilitytomaintainasingleorganizationstructurethatdefinestherelationshipsbetweenbusinessunits,locationsorsubsidiariesandalsoflexiblydefinesreportingstructuresthatmaycrosslegalentityboundaries

• Pre-definedbusinessscenariosthatallowentirecompaniesornewsubsidiariestogetoutofthegatefast,butwiththeflexibilitytoadapttochange

• Functionalitythatcreatesanend-to-endsolutionforavarietyofdifferentbusinessmodelsformanufacturedgoodsandservices,orablendedbusinessofboth

SAP Business ByDesign

Somefactsandcurrentstatisticsabouttheproduct:

ü3,500+businessesrunSAPBusinessByDesignsupporting80,000+users

üUsedin90+countriesaroundtheworld

ü175+largeenterprisesrunSAPBusinessByDesignintheirsubsidiaries

ü250+value-addedpartnersworldwide

ü200+softwaresolutionpartnerswith1,800+add-onsolutions

ü19SAP-deliveredcountrylocalizations,supporting9languages

TheThreeDimensionsofSAPBusinessByDesignSettheStageforGrowthPage6of6

• Anextgenerationuserexperiencethatmakesextensiveuseofdashboardsandembeddedanalytics,whetheronadesktop,laptoporanymobiledevice

Formid-sizecompanieslookingtotakefulladvantageofunprecedentedgrowthopportunities,anyoldERPisnotenough.Ifyouareinsearchofacloud-basedERPsolutionthatcanhelpyougrowandgrowquickly,SAPBusinessByDesigndefinitelydeservesconsideration.

Abouttheauthor:CindyJutrasisawidelyrecognizedexpertinanalyzingtheimpactofenterpriseapplicationsonbusinessperformance.Utilizingover40yearsofcorporateexperienceandspecificexpertiseinmanufacturing,supplychain,customerserviceandbusinessperformancemanagement,Cindyhasspentthepast10+yearsbenchmarkingtheperformanceofsoftwaresolutionsinthecontextofthebusinessbenefitsoftechnology.In2011CindyfoundedMintJutrasLLC(www.mintjutras.com),specializinginanalyzingandcommunicatingthebusinessvalueenterpriseapplicationsbringtotheenterprise.