dr. bjarne berg director sap bi myitgroup - a vip consulting company

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If, when, why, and how to use SAP NetWeaver BI analytical content to assess and improve sales anddistribution processes

Dr. Bjarne BergDirector SAP BIMyITgroup - A VIP consulting company

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In this session we will look at what ready-made content is available with SAP NetWeaver BI 7.0 to assess and monitor sales and distribution (SD) process performance.

Pinpoint the best ways to leverage SAP NetWeaver BI analytics for SD to improve processes for sales forecasting, commission reporting, market-basket analysis, cross-selling, customer segmentation, and standardized formatted reporting.

Learn how sales reps can get access to performance reports through mobile devices.

Learn how to use SAP information broadcasting alerts and exception reporting to better track items such as late deliveries, exceptional orders, nonstandard billings, and unusual orders.

Introduction…

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What We’ll Cover …

• Introduction• How to use BI in SD Business Process Management• Core Analytics

Sales forecasting Commission reporting Market-basket analysis & cross-selling Customer segmentation Standardized formatted reporting

• Mobile Analytics• Broadcasting and Alerts• Wrap-up

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SAP BI Adoptation is exploding

SAP BI is now a Mainstream SAP Solution

There are now almost 25,000 productive SAP BI systems worldwide, an increase of 3,250% in 18 months!!

Source: Zia Yusuf, EVP SAP, TechEd, 2007

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BPM on a NetWeaver Business Process Platform

SAP NetWeaver is also a platform for developing and integrating value added business processes. BI can be used to support complex senarios that increases sales and profits through process innvoation and tighter SCM integration.

B2B Non SAP

BPM increasingly being used to manage processes that bridge multiple packaged

applications.

BPM is not only XI integration and data movement, but also how the data is being used.

This session focuses on the CRM process, usage and BPM

integration, Not on XI.Source: SAP AG, 2008

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NetWeaver BPM tools

SAP NetWeaver has process and rules composer tools that is used to define & implement complex business processes.

In this session we will cover many new & innovative CRM processes you should consider as prime candidates to integrate with SAP BI and these tools.

In the current release of BPM these features are pre-delivered:

1. Human Workflow Patterns:Task management (claim, complete)Sequence flow (including data flow)Decisions (XOR)Parallel branch & merge (AND)Deferred choice (eventing)Exception handlingNested (sub-)processesServiceProcesses

2. Service OrchestrationEnterprise service consumptionSequencing of automated activitiesException handlingEventing (intermediate events)Event correlation

Source: SAP AG, 2008

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BPM on SAP NetWeaver

Business processes are becoming increasingly complex, integrated and comprised of more and more partners.

Intelligent Process Automation must therefore be developed to provide a close link between the analytical (SAP BI) & the transaction systems


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• Mobile Analytics• Broadcasting and Alerts• • Wrap-up

What can SAP BI do for my Sales BPM?: Pre-Sales Actitivies

Pre-Sales ActivitiesSales Order Processing

DeliveryBilling

Inventory Sourcing

Payment

Before the sales meeting, the SAP BI system provides a Customer overview file(s):Customer's profile & financial

informationPast due paymentsCustomer complaints logged in the

systemPrevious period shipping problemsThe customer's orders in progressCancelled ordersReturned items in the past,Unearned discounts takenTarget salesSuggestive products, prices &

'deals'

Before the sales meeting, the SAP BI system provides a Customer overview file(s):Customer's profile & financial

informationPast due paymentsCustomer complaints logged in the

systemPrevious period shipping problemsThe customer's orders in progressCancelled ordersReturned items in the past,Unearned discounts takenTarget salesSuggestive products, prices &

'deals'

The basic data is inside SAP BI and a set of process rules determine what is

needed, who have access and how/when it is delivered (pdf, web, print, portal etc).

What can SAP BI do for my Sales BPM? - Order managment


DeliveryBilling

Inventory Sourcing

Payment

The sales staff are pushed customer's order activities. BEx Broadcasters sends email notifications about unusual events or series of events I.e.: Unusual orders (high volume, low price, short delivery time)

Cancelled orders

Tracking special customer's orders

Tracking contracted sales

Invividual sales rep requests for order notifications

Early demand shifts: Increased order volume for particular items.

The sales staff are pushed customer's order activities. BEx Broadcasters sends email notifications about unusual events or series of events I.e.: Unusual orders (high volume, low price, short delivery time)

Cancelled orders

Tracking special customer's orders

Tracking contracted sales

Invividual sales rep requests for order notifications

Early demand shifts: Increased order volume for particular items.

What can SAP BI do for my Sales BPM? - Inventory


DeliveryBilling

Inventory Sourcing

Payment

Dashbords for workers & SCM leaders

Improved transportation & logistics planning with SAP Advanced Planning & Optimization (APO)

Web tracking of all inventory movements available to customers & partners (UPS, FedEx & Amazon)

Instant mobile access to inventory data by sales reps in the field

Dynamic pricing based on aging inventory & demand spikes - Done by airlines, car rental and hotels why not you?

Dashbords for workers & SCM leaders

Improved transportation & logistics planning with SAP Advanced Planning & Optimization (APO)

Web tracking of all inventory movements available to customers & partners (UPS, FedEx & Amazon)

Instant mobile access to inventory data by sales reps in the field

Dynamic pricing based on aging inventory & demand spikes - Done by airlines, car rental and hotels why not you?

What can SAP BI do for my Sales BPM? - Inventory


DeliveryBilling

Inventory Sourcing

Payment

Proactive deliviery management using SAP BINotify customers about delivery problems before they contact you - BEx Broadcaster

Manage shippers and their on-time, on-cost, delivery performance - SAP BI scorecards

Improve on-time delivery by predictive modeling based on past performance - SAP BI Analysis Process Designer (APD)

Create external facing dashboards for your key customers and partners, providing them insights into the supply chain - SAP BI Visual Composer & Web Application Designer

Proactive deliviery management using SAP BINotify customers about delivery problems before they contact you - BEx Broadcaster

Manage shippers and their on-time, on-cost, delivery performance - SAP BI scorecards

Improve on-time delivery by predictive modeling based on past performance - SAP BI Analysis Process Designer (APD)

Create external facing dashboards for your key customers and partners, providing them insights into the supply chain - SAP BI Visual Composer & Web Application Designer

What can SAP BI do for my Sales BPM? - Billing


DeliveryBilling

Inventory Sourcing

Payment

Externalize billings and provide insights Customer can manage their own accounts (SAP Portal)

Invoiced electronically - no paper, email/fax (SAP Portal)

Access old statements and invoices (SAP BI)

Dispute billings electronically (X-Apps)

We can do detailed profit analysis on billing condition data (SAP BI)

We can do statistical analysis & data mining on detailed billing information (BI-analysis process designer - APD)

Externalize billings and provide insights Customer can manage their own accounts (SAP Portal)

Invoiced electronically - no paper, email/fax (SAP Portal)

Access old statements and invoices (SAP BI)

Dispute billings electronically (X-Apps)

We can do detailed profit analysis on billing condition data (SAP BI)

We can do statistical analysis & data mining on detailed billing information (BI-analysis process designer - APD)


DeliveryBilling

Inventory Sourcing

Payment

What can SAP BI do for my Sales BPM? - Payment

Allow customers to set up accounts, credit lines, banker's letter of acccpetance, letters of credits, electronic payments cards, automatic drafts, check payments and pre-payments on-line.

Use SAP Portals to give customers secure access and SAP BI for all account statements, reports and loyalty programs.

Allow customers to set up accounts, credit lines, banker's letter of acccpetance, letters of credits, electronic payments cards, automatic drafts, check payments and pre-payments on-line.

Use SAP Portals to give customers secure access and SAP BI for all account statements, reports and loyalty programs.

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Available Standard CRM and SD Content

SAP BI content for SD and CRM has been developed over the last 10 years and now have data stores for most content areas used in sales processes

Don't start a multi-year SAP BI project for SD BPM. Instead do a quick project that leverages standard content

Analytics Area Group Infocubes DSOsERP Analytics Enterprise Sales & Distribution Enterprise SD 6 2

Installed base Analysis 0 1Activity Analysis 2 2Case Mgmt Analysis 0 3Billing Engine Analysis 1 1Incentive & Commission Mgmt 1 0CRM Incentive & Commission Mgmt 1 1Customer Relationship Mgmt for Retail 0 0Pharmaceuticals 0 0High Tech 0 1InfoArea: Channel Sales Mgmt 2 0Consumer Products - Sales & Trade Promotions 5 1Consumer Products - Syndicated data 3 0Consumer Products - Assortment Agreement 1 1Consumer Products - Category Mgmt. 10 0

Entitlement Analyses Entitlement Analyses 1 3Service Contract & Quotation Analysis 5 5Warranty Analysis 0 4Service Order & Quotation Analysis 4 10Cost & Revenue Analysis 1 3Case Mgmt Analysis 0 3Planned Services Analysis 1 2Strategic Service Planning 0 1Timestamp Service Analysis 2 1

CRM Analytics

Service Analyses

Cross-Scenario Analyses

Industry-Specific Analyses

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Most of what your sales representatives are looking for (orders, deliveries and billing) are in InfoCube SD_C03 - "Sales Overview"

There are 127 InfoCubes for user access with data extraction programs and 108 Data Store Objects (DSOs) for CRM in SAP BI

version 7.0. Use these and focus on the process models & presentation to end users.

Analytics Area Group Infocubes DSOsE-Analytics 2 3Interaction Center Analytics 31 6

Cross-Application Performance Analyses Cross-Application Performance Analyses 10 10Customer Analyses Customer Analyses 3 4

Cross selling 2 2Product Analyses 0 3Marketing & Campaign Analysis 9 9External List Analysis 4 1Lead Analysis 1 2Business Partner Marketing Attributes 0 1Market Exploration 2 0

Digital Asset Mgmt Analysis Digital Asset Mgmt Analysis 1Sales Planning Analysis 2 0Activity Analysis 2 2Opportunity Analysis 1 1Sales Quotations & Orders Analysis 4 9Contracts Analysis 2 3

Rebate Processing Analyses Rebate Processing Analyses 0 2Partner & Channel Analytics Partner & Channel Analytics 0 2Grants Mgmt for Grantor Grants Mgmt for Grantor 5 3

127 108

CRM Analytics

Sales Analyses

Product Analyses

Marketing Analyses

Interaction Channel Analyses

Available Standard CRM Content (contined)

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Key Inputs to real Sales Forcasts -Determine Customer Lifetime Value

Are you using customer life-time value, retention & attrittion analysis processes in your sales forecast?

I.e. a major US phone company, has determined that the lifetime value of a customer is so high, that it can afford to give incentives (such as checks up to $100) if key private customer is willing to switch companies.

Do you know what a new customer is really worth long-term?

SAP BI can be used to determine the total Customer Lifetime value (CLV) and build this dynamically into the forcasting process.

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Key Inputs to real Sales Forcasts - What should you charge?

SAP BI is also used to track the price sensitivity of certain geographical regions and customer groups. This type of analysis, called price elasticity analysis, is often performed against the historical data in SAP BI in order to determine the best price to charge for a certain product.

SAP BI models can also be built to monitor the effect of changes in pricing strategies, i.e. did we sell more widgets in France after we reduced the price by 10%, or did a "clearance sale" have the intended effect.

This is often done in the food industry, where the same product may be packaged, labeled & priced differently,while being sold in the same store.

BPM is a prime resource to help answer such price analysis processes

Image Source: SAP AG, 2008

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Key Inputs to real Sales Forcasts - What must you charge?

From the other side, SAP BI can provide a unified cost picture of all activities related to a sale.

SAP BI can be used to evaluating minimum sales price of each product, in each region, and to designated customer groups.

BPM and SAP BI can answer complex analysis processes dynamically

This is frequently done at construction projects such as road and bridge building, construction of utilities plants, as well as in sales of commodity goods, where large overheads directly related to sales have to be evaluated.

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Key Inputs to real Sales Forcasts - Predict Customer Behavior

If we know which customers are likely to leave us for a competitive offering, we can flag them for improved customer service or target them for a promotional marketing campaign designed to keep them as a customer.

The key is that SAP BI have the data to support analysis of complex purchasing patterns over time.

If we know that a man under the age of 25, with an income less than $35,000 who buys a Mercedes, is 1.8% more likely to default on his loan than a woman in the same customer group, why should the creditor not increase the interest rate by 1.8% to reflect the increased risk?

SAP BI is the enabler of this type of analysis

(Hint: look at SAP BI Analysis Process Designer).

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Complex scenarios can be built for structured analysis such as risk modeling, customer segmentation, market basket analysis, predictive modeling and much more

Image: SAPImage: SAP

Analysis Process Designer (APD)

“New data” based on the findings can be loaded back into data targets and used by others for reporting i.e. CRM analysis.

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SAP BI & BPM - a Natural choice for Category Management

Category Management is the process of managing a category of similar products across suppliers. 'Category Captains' (CM) are responsible for everything from the product mix to the store layout. SAP BI Information needed for category management includes:

Efficient Assortment, Efficient Promotion, Competitive Pricing Analysis, Product Profitability Analysis, Shelf Presentation, Scorecard

With SAP BI, you can empower a CM with full responsibility for assortment decisions, inventory levels, shelf-space allocation, promotions & buying.

With the SAP BI, authority & responsibility, the CM may be able to judge more accurately the consumer buying patterns, product sales & market trends of that category.

By emphasizing profits & sales for entire product groups instead of individual items, CM encourage a longer-term, joint retailer-supplier focus without being

confounded by the complexity of analyzing 1000s of different SKU’s.

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Incentive & Commission Process Management

Accurate and complete comission reporting is critical to build trust in agency relationships.

SAP offers a package known as Incentive and Commission Management (ICM) for CRM.

In SAP BI it is supported by the standard InfoCubes:

ICM - (0CRM_ICO1) Remuneration and Liability (0CRM_ICO1)

Jump-targets to show detailed BI analysis on how the commission was calculated can be added in any SAP BI query.

T-Mobile Deutschland processes over 2 million commission checks each month with SAP ICM

(whitepapers.techrepublic.com.com/abstract.aspx?docid=273253)

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Marketbasket Analysis with SAP BI & BPM

This is a type of analysis where the user is attempting to find out which products are bought in combination, where should they be positioned within the store, catalog or web site, and how much space they should they have in your store, catalog, web site, marketing campaign etc.

Your analysis should also be designed to find:

SAP BPM can help you answer product mix questions dynamically & continiously better than guessing and intuition can

The appropriate product breath (the number of products offered)

The optimal product depth (the number of items within the product breath)

The best product line extension (product variety)

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Using Market-Basket Analysis: Cross, Upgrade & Suggestive Selling

The world's largest on-line bookstore, Amazon.com, uses active market basket analysis to suggest what you should also buy (suggestive selling).

They can also offer special deals to customers that are generated automatically in sales processing

The banks are also good at cross-selling products such as VISA cards to high saving account holders, & car loans to good mortgage customers.

1. Do you know what your customers are likely to also buy.

2. Do you know what to suggest to a customer that buys any product?

3. Are you good at spotting new demand trends & can price dynamically?

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Using BI for Cross-Selling

Delta is an airline, but through marketbasket analysis, they cross sell many other products:

- Hotel rooms- Rental cars- Activities

SAP BPM models can track what customers are searching for and what products are logical compliments.

Cross selling and suggestive selling works, but composite applications are needed to make it executionable

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Suggestive Selling

Suggestive selling started with waiters suggesting what to order to the customer and have moved into mainstream marketing rapidly, because it works…

Some banks in the US are already experimented with pre-approving car loans, and sending out vouchers to its prime customers a few months before their current loan has been paid off (no appliction needed).

Does your SAP BI system tell you when your customer are likely to make their next purchase and what you should suggest? - BPM rules

can be created to take advantage of existing data & knowledge

The bank has the customer's payment history and the customer's personal information, and can, therefore, cross-sell its product through a push-strategy.

The bank does not have to compete for that same customer every time the customer is making a new financial decision.

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Customer Segmentation with SAP BI

SAP BI provides significant insights to your customer behanviors and what drives profitability. BPM can analyze segmentation by Sales volumeSales amountsTotal sales (-returns and complaint costs)Total profitabilitySales growth and potentialLong-term customer valueCustomer behavior such as reference customers, early product adoptors and marketing customers

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Integrate on-line access to formatted statements in your BPM processes

• Customizable font styles (i.e. bold, italic), colors, etc.

• Group-level changes with individual formatting

• Layout options, e.g.: Height of rows, width of columns

• Multi-line column headers

• Flexible field positioning

• Merging cells

• Support for hierarchies

• Rules for the presentation of special characteristic values

• Integration of text, pictures, and charts

• Header & footer for reports

BEx Report Designer 7.1, (last release in 2008) will be available under maximum

maintenance until 2016 and will be

replaced with the Crystal Light product.

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BEx Report Designer In SAP BI

This SAP BI tool was created to simplify the formatting of reports and fix printing issues in previous versions.

Use it to externalize customer & partner information.

Source: SAP AG

You have color control, header-footer control and many new features such as location control of cells and integration of pictures, charts and fixed text.

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Crystal Report a SAP BI tool to support BPM

• With BW you get access to Crystal reports. In fact you have many pre-developed reports that comes with SAP-BW. Currently, you can modify, or develop and deploy a few Crystal reports without additional licensing cost.

• Crystal is a great tool for batch reporting of "pixel controlled' formatted reports.

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SAP NetWeaver Mobile 7.1

With SAP NetWeaver 7.1 users of mobile devices can carry out their tasks without a connection to a back-end system. The required applications and the user interface exist on the mobile device. Data is exchanged with the back end during the synchronization. Supported SD & CRM senarios include:

Track customer information remotelyCreate and display orders in real timeUpdate new opportunities instantlyImprove pipeline visibilityAccount ManagementSales order managementOpportunity managementActivity and task managementProduct and Price InformationSurveys on handheldService Functionality

What was cool 5-10 years ago are now expected by many customer & employees


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A SAP Mobile Application Example – Book a flight

This is accessing the backend system using a handheld device and searching the products catalog.

The available products can be stored in ECC or in SAP SAP NetWeaver BI.

For a sales application, you can add many search features and also allow for pick-lists (drop-downs). But the trick to

fast processing is to keep it simple.


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A SAP Mobile Application Example – Look up products

After the search results is returned, you can allow the users to access more product information.

Since these screens are used frequently, you should keep them free for graphs, images and other high

bandwidth features.


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A SAP Mobile Application – Data Entry & confirmation

For rapid data entry, keep the required fields to a minimum.

You should pre-fill as much as possible based on:

User log-on Previous naviation Previous purchasesPre-defined “user preferences”

Since External users cannot print from the PDA and Mobile phones you should also offer to email

confirmations on the last process screenSource: SAP AG, 2008

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What Is BEx Information Broadcasting ?

It’s a standard part of SAP NetWeaver. It lets you send “reports,” BEx queries, Workbooks, and Web Applications to a variety of recipients i.e:

• Email addresses, BW users, BW roles

• SAP Enterprise Portal Knowledge Management folders

• SAP Enterprise Portal

Image: SAP AG

BEx Broadcaster: Exception Reporting integration in BPM

You can make BEx Broadcaster send you an exception report when an exception occurs or if the system reaches a certain level

We can make a query and define any exception.

In this example we are tracking the returned items by customers.

If they return many items we want to be proactive and call them to ask why…

Making Alerts text based and Intuitive

Using the Central Alert Server, by selecting the distribution type “Create Alert” and selecting the" Alert Category”, you can also insert text from BEx Broadcaster into the alerts to make them more relevant to the recipient.

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7 Key Points to Take Home

• You need to be proactive and provide advanced services in SD and CRM before your competitors act.

• You should plan for composit applications and don’t feel restricted by the system boundaries and current capabilities.

• SAP BI is an integral part of the external facing partner community and business processed, not just a reporting tool.

• Advanced analytics should be integrated in every step of the Order-to-Cash senario to push target information, instead of relying on users to log-on and ‘pull’ reports every day.

• Mobile computing is a key component of sales force automation. Dta should be available everywhere

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7 Key Points to Take Home

• Integration and BPM can take place in composite applications inside the portal so that data transparency is enforced (users don’t care which system provided the data).

• BPM is not just another way of linking the same old processes, but instead BPM allows companies to provide new innovate processes that adds value to the SD and the CRM experience -benefits to seller & buyers

• The key to success in BPM is to re-examine the old process senarios, decide on new capabilities, and creating a strategy for new technology enabled processes.

“Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat”.

– Sun Tzu, The Art of War

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Dr. Bjarne Berg's web page -- 75+ presentations, tutorials & articles http://csc-studentweb.lrc.edu/swp/Berg/BB_index_main.htm

The SAP Business Process Expert Communitybpx.sap.com

SAP Global: Next-Generation BPM on an Open Business Process Platform presentation (need free registration)http://www.sap.com/community/showdetail.epx?itemID=11665

SAP Global: Road Map for BPM and Event-Driven Architecture (need free registration)http://www.sap.com/community/showdetail.epx?itemID=8960

Resources

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Your Turn!

How to contact me:Dr. Bjarne Berg

[email protected]

dr. bjarne berg director sap bi myitgroup - a vip consulting company

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