business process improvement in a nutshell your ... - sap

PUBLIC

Volker von Gloeden, SAP

January, 2020

Business Process Improvement in a nutshellYour navigation help to success

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This presentation outlines our general product direction and should not be relied on in making a

purchase decision. This presentation is not subject to your license agreement or any other

agreement with SAP. SAP has no obligation to pursue any course of business outlined in this

presentation or to develop or release any functionality mentioned in this presentation. This

presentation and SAP's strategy and possible future developments are subject to change and may

be changed by SAP at any time for any reason without notice. This document is provided without a

warranty of any kind, either express or implied, including but not limited to, the implied warranties of

merchantability, fitness for a particular purpose, or non-infringement. SAP assumes no

responsibility for errors or omissions in this document, except if such damages were caused by

SAP intentionally or grossly negligent.

Disclaimer


You want to reduce costs and improve business / value drivers. Hence you bought standard software.

To gain the full value of the software you have to ensure that your master data and

configuration reflects reality and allows a high degree of process automation

You also need well-trained end users that know how to use the software best and do not

bypass or undermine defined processes. Process harmonization and standardization

is recommended as well.

Use the Business Process Improvement service & tools to improve the

above mentioned influencing factors and support your value realization.

Why Business Process ImprovementValue realization & tracking


Value of SAP solution: Potential vs Realization (1/2)No complaints: ‘As is’ considered as normal/optimal even if it is not

Year

Value in %

1 2 3 4 5

100

120

80

New innovations

shipped by SAP

Potential value of

SAP solution

Realized value of

SAP solution

The gap typically

widens over time

Illustrative typical 90% customer case


Value of SAP solution: Potential vs Realization (2/2)Business Process Improvement can address highlighted degradations

Year

Value in %

1 2 3 4 5

100

120

80

Technical problems

Configuration

vs realityInsufficient

end user

training

Master data

quality

Un-used process

automation

Resolved

techn. problems

Complexity:

Obsolete master

data & configuration

Document backlog

undermining central

planning

Document backlog

degrading techn

performance &

undermining

archiving

Re-training users

SAP innovation

adoptedSAP innovation

adopted

Illustrative typical 90% customer case


Business Process Improvement Use Case GoLive / Hypercare support

Year

Value in %

1 2 3 4 5

100

120

80

Insufficient Master data quality

Configuration not matching reality

Insufficient end user training

Un-used process automation

GoLive

Value of SAP solution most

of the time not fully realized

after GoLive due to

Problems often only

realized after the project

team already moved on

BPImp helps with a timely

problem identification,

esp. key figure types

Throughput

Backlog

Exception

Automation rate


Typical Return on Investment Basis: Business Process Improvement projects from 2010-2016

Invested MaxAtt days

50K – 200K €Benefit

500K – 10+ Mio €

€ € € € €

€ € € € € € € € € €

€ € € € € € € € € €

€ € € € € € € € € €

€ € € € € € € € € €

€ € € € € € € € € €

€ € € € € € € € € €

€ € € € € € € € € €

€ € € € € € € € € €

€ € € € € € € € € €

€ € € € € € € € € €

€ € € € € € € € € €

€ € € € € € € € € €

€ € € € € € € € € €

€ € € € € € € € € €

€ € € € € € € € € €

€ € € € € € € € € €

€ € € € € € € € € €

€ € € € € € € € € €

€ € € € € € € € € €

Benefit is typically at least 10x higher than investment

to …€ € € € € € € € € €

✓

✓

✓


Business Process Improvement for SAP solutionsMore than just a(nother) tool

Business Process Improvement for SAP solutions is a service offering that

• Provides an initial

analysis of an SAP

BusinessSuite or SAP

S/4HANA system,

• Activates different SAP

Solution Manager tools

with out-of-the-box key

figure content,

• Applies best practice

knowledge

in order to achieve tangible improvement results that could be business and/or IT driven.


• Increase business process efficiency by

reducing manual rework and reprocessing

• Increase degree of business process

automation

Reduce TCO• Improve throughput & performance

Value of SAP solution: Business Process Improvement Scope & deliverables

TimelinePlan & Build GoLive Run

Busin

ess

IT

Optimization of Business / Value

Driver (e.g. DSO, DPO, DII, Fast Close, Reduce

costs for purchasing, finance or manufacturing,

improve Supply Chain Planning accuracy)

Support foundation

for digital transition• Improving (transactional) data

quality to support

• Fast Closing

• MRP Planning

• Inventory Optimization

• Support clean-up activities for

old & obsolete business data /

prepare archiving

Reduce Complexity• Identification of customers,

materials, vendors, etc. with

no / low activity

• Support standardization /

harmonization projects

• Identification of incorrect /

not ideal application

configuration

• Identification of inactive

organizational units or

document types


Business Process Improvement Approach Using the Business Process Improvement Suite in SAP Solution Manager

Progress Management BoardWhat shall be improved and what is the progress

Dependency DiagramDifferentiate cause and effect to improve the right thing

Tabular DashboardContinuous tracking / break-down across org. units

Business Process AnalyticsIdentify the root cause

Issue ManagementDocument & track actionsAll mobile

enabled


Applied Business Process Improvement Delivery approach

Select high-level goal,

business/value driver as focus

area based on initial analysis

Select & define Best Practice

key figures & KPI trees

Activate & measure via

Business Process Analytics

Analyze via Business

Process Analytics

Align & implement action

items for sustainable

improvement

Control & track via

Dashboards

Track progress & value realization

centrally across business KPIs, PPIs

via Progress Management Board

Bundled in one or

several work

streams within a

Business Process

Improvement

program /

initiative with

respective

roadmap

Apply Business Process

Improvement methodology per area

1

2

3

4


Goal: High & error-free automation in SAP solutionRequirements and business benefits

Excellent master data

quality allowing automation and avoiding errors

Correct configuration & process designallowing automation

and reflecting the real world process

Well trained end users

not bypassing or undermining the SAP

system

Technical reliability

error free background jobs and interfaces

Low Total

Cost of

Ownership

High Return On

Investment

High automation rate + little backlog + little exceptions + high throughput+ fast lead times

(Reverse ) Business

Process Improvement


Maximize the value of your existing SAP investmentBusiness Process Improvement with Business Process Analytics

Best Practice knowledge & content

Business Process Analysis service


Analysis methodology

Business Process Analytics / Dashboards

Define & implement action items

E2E business process (OTC, PTP, RTR,…) /

business goals (POF, DSO, DPO,…)

Problem oriented tool designed for root cause analysis

Identify root causes(master data quality, configuration mismatch, user handling, missing

automation,…)

Resolve existing issues (process un-processed documents,

maintain missing master data)

Resolve root causes for the future(change configuration/design, train users, better use

SAP automation capabilities,…)

Trend reporting

Current state of SAP Business Suite or S/4 HANA processes


Perfect Order Fulfillment

Focus & Value Areas for Company Success Responsibilities of IT & Business

Time & effort PEC

Days Sales Outstanding Days In InventoryDays Payables Outstanding

Supply Chain

IT Operations / ICC & OCC / IT process costs

Forecast Accuracy Cost Manufacturing Optimization ReplenishmentCost Purchasing

IT

Business

(enabled

by IT)

Goals Business Process Improvement for SAP solutions


effectivenessefficiency

How automation influences TCO and ROIWhat happens if you successfully automate

…the less manual

(post-) processing &

changes…the lower the

process costs…

…the less transactions

might be overlooked and

not processed

(backlog)…the higher the

customer satisfaction & the

faster the revenue…

…the higher the

throughput & faster the

process cycle/lead

times)…the faster the

revenue …

…the more compliant…the

less error prone

(exceptions) and the better

the data quality, e.g. for

management reporting…

The more automation…

SAP BusinessSuite and S/4HANA is the integration & automation enabler

…the lower

the TCO

…the higher the

ROI

The less errors during automation…


Only if all SAP automation capabilities are implemented and

operated “right” the TCO and ROI expectations will be met

How automation influences TCO and ROIDo the right things (automation) right (error-free)

Quality of SAP

implementation &

operation

Low automationDegree of utilization

of available

SAP capabilities

High error rate

High automation

Low error rate

TCO

ROI

TCO

ROI

TCO

ROI

TCO

ROI

<10% of SAP customers are

in the upper right quadrant*

*based on 1.000+ SAP Business Process Analysis services worldwide

Tools Business Process Improvement Suite in SAP Solution

Manager


Business Process Improvement Suite with SAP Solution Manager 7.2 Tool overview and target groups

BP Analytics

Web Dynpro

BPO Dashboards

Web Dynpro

Detail List

SAP GUI

Display Document

SAP GUI

Level 1👤 Manager

1

Level 2👤 Process Expert

2


3


4

Dependency Diagrams

SAP UI5

Progress Management Board

SAP UI5

BP Analytics

SAP UI5

Detail List

SAP UI5


Dynamic rating tables provide tabular view with

1.Trending over time

2.Individual rating per characteristic (e.g. organizational unit)

3.Switch between count and monetary value

4.Drilldown into detail/child panels

5.Usage of virtual characteristics (e.g. grouping in regions, markets)

6.Integration with Business Process Analytics & jump into detailed result list

Business Process Operations DashboardsExample: Head of Finance


Dependency DiagramExample: Perfect Order Fulfillment / On-time In-full

• Visualize dependencies between

different key figures, KPIs and

PPIs

• Default data source is Business

Process Analytics, but also other

data sources can be used, e.g.

business SAP BW via BEx Query


Progress Management Board (1/2)Example: Perfect Order Fulfillment / On-time In-full

Track the organizational progress per key figure


Progress Management Board (2/2)Example: Perfect Order Fulfillment / On-time In-full

Track the progress per key figure system fact based



Identify root causes for a key figure

Methodology How to best utilize Business Process

Analytics as a root cause analysis tool


Business Process Improvement Approach Business Process Improvement Suite and DMAIC

1. Use Business Process Analytics to learn WHERE you have improvement

potential and HOW it could be improved (root cause)

2. Use Issue Management to document analysis activities and track WHO should

perform WHAT until WHEN

3. Use the tabular dashboards to have several key figures in one view and

monitor WHICH organizational units are better or worse and who made more

or less progress (INTERNAL BENCHMARKING)

4. Use the Dependency Diagram to visualize CAUSE and EFFECT and monitor

how moving the needle on low-level key figures / PPIs can have a

positive/negative impact on high-level KPIs

5. Use the Progress Management Board to track per key figure where you

STARTED, how you PROGRESSED and where you stand compared to the

defined TARGET

Measure & Analyze

Implement

Control


Business Process ImprovementStandardized Methodology with Business Process Analytics

Identify Root Causes (RC)

5

Document Root Cause via Issue

6

Perform Detail Analysis

4

Visualize Impact on Business KPIs

8

Control Achievements via Progress Management Board

9

Define Action Items via Task

7

Get Global Transparency

1

Identify Org Units to be analyzed

2

Split between old & operational data

3

Content Nearly 1.000 out-of-the-box key figures for the entire

SAP Business Suite and SAP S/4 HANA


Key Figure Overview (1/2)Types of key figures and their respective use cases

Me

as

ure

Us

e C

as

es

Throughput

No. of

documents/

items posted in

time frame

• Go-Live support/

hypercare

Backlog

No. of documents/

items not completely

processed until

expected date

• Go-Live support

• Process excellence

/ improvements

• Process compliance

& audits

• Data archiving

support

• Migration prep.

Exception

No. of error

messages (incl.

msg. texts) raised in

selected time frame

• Integration tests

• Go-Live support


/ improvements

• Process compliance

& audits

• Root cause analysis

Lead Time

Avg. processing

time for completed

process instances


/ improvements

Automation

rate

How many

documents were

processed manually

vs. automatically

• Go-Live support

• Process efficiency

increase / process

cost reduction

• Process

harmonization /

standardization


Key Figure Overview (2/2)Types of key figures and their respective use cases

Me

as

ure

Us

e C

as

es

Usage

Configuration /

master data not

(much) used

• Use better

• Reduce

complexity

• Process

harmonization /

standardization

Changes

All (dialog) changes

per master data /

business document


/ improvements


increase / process

cost reduction

• Reduce complexity

Configuration

check

• Integration tests

• Go-Live support

• Run better

„Wrong“ configuration

typically leading to

performance

problems

Process

progress

Process progress &

leakages within given

timeframe


/ improvements


increase / process

cost reduction


Process Progress content delivered with ST-A/PI 01T SP 2 & 3

Sales Procurement

Manufacturing

• Purchase order item creation to GR/IR clearing

• Purchase order item creation to invoice receipt

• Purchase order item creation (with approval) to IR

• Purch.order item creation (w. approval & conf.control)

to IR

• Sales order item creation to outb. delivery item

• Sales order item creation to SD invoice item

• Sales order item creation to FI-AR clearing

• 3rd party sales order item to SD invoice item

• Sales order items (via purchase to order) to SD invoice item

• Sales order items (via make to order) to SD invoice item

• ICo Sales order item creation to ICo billing document

• Production order creation to technical completion

• Process order creation to technical completion

• PM/CS orders creation to status 'closed'

Replenishment

• Stock transport order items creation (w/o delivery) to GR

• Stock transport order items creation (with delivery) to GR

• Cross-company STO item creation to FI-AR clearing


Business Process Analytics with Process Progress Key FigureExample: From sales order item creation to FI-AR clearing

One process progress

key figure allows

tracking an entire pre-

defined business

process and indicating

where improvement

areas exist.

One can filter

dynamically per

organizational unit,

material, customer,

vendor or single

document where

applicable.


Key Figure OverviewKPI Catalog in the Cloud

https://go.support.sap.com/kpicatalog

https://go.support.sap.com/kpicatalog/index.html?sap-language=EN

The service offering Business Process Improvement

for SAP solutions


Maximize the value of your existing SAP investmentBusiness Process Improvement as a service

Best Practice knowledge & content

Business Process Analysis service


Analysis methodology

Business Process Analytics / Dashboards

Define & implement action items

Go / No Go

Value realization

Go / No Go

SAP S/4 HANA Reduce complexity

How to fully exploit SAP S/4 HANA benefit cases


SAP S/4 HANA for the digital transformationBusiness Process Improvement to reduce complexity

When moving from the SAP BusinessSuite to SAP S/4 HANA it is also a good opportunity to

reduce the complexity that was built up over time:

• Review how many document types are customized (in sales, finance, manufacturing etc.) and how many

of those are really (intensively) used. Get rid of un-used document types, i.e. process variants.

• Review how many material master records are maintained and how many of those are (still) intensively

used in sales, procurement or manufacturing. Get rid of un-used material master data.

• Review how many customers/vendors are maintained and how many of those are (still) intensively used

in sales or procurement. Get rid of un-used customer/vendor master data.

• Review how many routings/master recipes/task lists, bill of materials are maintained and how many of

those are (still) intensively used in manufacturing or maintenance. Get rid of un-used master data.


SAP S/4 HANA for the digital transformationBusiness Process Improvement to fully exploit SAP S/4 HANA capabilities

1 ) Reduce data / memory footprint

Close old, unprocessed business documents

(backlog) so that they become archiveable

Archive outdated data to minimize memory

requirements for SAP HANA

2) Improve (transactional) data quality

Close old, unprocessed business documents

(backlog) relevant for planning

➢ Better input data leading to more accurate MRP

planning results & accurate inventory levels

➢ Better input data leading to more accurate liquidity

planning /cash forecasting results

➢ Better input data leading to less “false positive”

error messages

Reduce backlog & exceptions related to Period End

Closing

➢ Less time & effort (manual re-processing) during

Fast Close

3) GoLive Hypercare

Ensure successful GoLive also from an

application / business process

perspective

4) Increase degree of automation

Ensure that S/4 automation capabilities are fully

utilized

Avoid manual re-processings due to errors


Last change date for shipment must be at least y days

in the past

Archiving ShipmentsArchiving object SD_VTTK

Shipments SD_VTTK

Creation date of shipment must be at

least x days in the past

Overall status of shipment must be at

least ‘z’

Corresponding values maintained

in customizing table TVARS

Shipment cost documents

must have been archived first

In KF 03 you can filter on certain overall status and in KF 05 & 06 only status

‚0‘ to ‚‘4‘ is checked

Use older than parameter in KFs 03, 05 & 06 to check only for old (open) shipments

All deliveries in shipment must have

transportation planning status 'C'

All deliveries in shipment must have goods movement status ' ' (not relevant) or 'C'

(fully processed).

Shipment must have overall shipment costs calculation

status ' ' (not relevant) or 'C' (completely processed).

KF 03, 05 & 06 provide the info if deliveries exist

All three KFs 03, 05 & 06 provide the

info on status

Look for archiving object

SD_VFKK


Complementing the benefit case “Fast Close”Reduce manual effort for re-work and post-processing

Fast CloseValue Driver

Sales

Correction & post-processing of documents not billed on time

Correction & post-processing of documents not transferred

to accounting

Manufacturing & Asset

Management

Finance

Review & evaluation of parked documents

Review & evaluation of open items in FI-GL, FI-AR,

FI-AP

Correction & post-processing of failed goods movements during

backflushing

Correction & post-processing of failed actual cost postings

Correction & post-processing of errors during variance or WIP calculation / order settlement1. S/4 HANA Finance allows (technical) Soft Close at any time

2. S/4 HANA Finance eliminates FI & CO & CO-PA & FI-AA reconciliation and many other

long running batch tasks

3. A lot of time and manual effort is related to backlog documents and documents that

require error post-processing →BPImp


Input

Old & obsolete requirements / demand

Sales

Complementing the benefit case “faster MRP / MRP cockpit”Reduce transactional backlog & ensure that planning data is actively used

Forecast / Planning AccuracyValue Driver

Old & obsolete (fixed) receipts / supply

Procurement & Manufacturing

Planning Output

Old & obsolete dependent requirements

Manufacturing

MRP exceptions

• Stock-outs

• Potential bottlenecks

• Lot sizes

• Potential delays

Orders created without reference to

corresponding planning document

Planned qty unequal actual order qty

Planned dates unequal

actual dates

1. MRP cockpit helps to deal with MRP exceptions and how to best resolve them

2. Many exceptions are just a consequence of input data that is not reflecting reality →BPImp

3. Many purchasing or manufacturing departments do not use the planning data provided by MRP →BPImp


Current Stock

Dead stock analysis

Complementing the benefit case “Inventory Optimization” Reduce transactional backlog

Days In InventoryValue Driver

Slow moving stock analysis

Future stock

Old & obsolete requirements / demand

(e.g. sales orders, deliveries, planned independent requirements)

Old & obsolete (fixed) receipts / supply

(e.g. planned orders, purchase reqs, purchase orders, production orders)

Old & obsolete components

(e.g. dependent requirements, order reservations)

1. S/4 HANA can help to identify excessive stock or stock-outs in current stock situation

2. As long as input data for MRP is not reflecting reality, the automatic supply chain planning will lead to new excessive

stock or stock-outs in the short- or midterm future →BPImp

Excessive stock

Late replenishment,

risk of stock-outs

Excessive stock

Contact information:

Volker von Gloeden

Support Architect

Thank you.

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business process improvement in a nutshell your ... - sap

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