Fitness for Business Processes

VMS Process Dashboard boosts process excellence

VMS AG

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Content

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• About VMS AG

• Why process benchmarking?

• How does the VMS Process Dashboard work?

• What does the VMS Process Dashboard provide?

• Which are the benefits of the VMS Process Dashboard?

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About VMSWho we are

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If you can’t measure it,you can’t manage it!

Peter F. Drucker

2002

2006

2007

2008

2009

• VM Solutions GmbH, Heidelberg

• VMS = Value Management Solutions = IT creates value

• Creation of a new methodology: DNA-level benchmark to measure and compare complex systems

• Finalist CyberOne 2005

• Germany’s most active benchmarking company

• > 1,000 SAP systems optimized

• > 50 international customers

• New service: Optimizing SAP licenses

• Advisory Service: SAP know how - best practice processes

• > 1,600 years of SAP data collected

• VMS Benchmarkbase is the largest repository of SAP usage worldwide

• CAGR 40%

> 100 international customers Conversion to VMS AG

• > 2,100 measured SAP systems

• Launch of VMS Process Dashboard

• “Top Innovator 2010”

2010

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Who are VMS Customers?Coverage of various industries and business models

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CPG

Process manufacturing

Pharmaceuticals

Energy / Infrastructure

Manufacturing

Automotive / Aerospace

Retail

Finance

Services

IT / IT services

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IT and Process ExcellenceFrom IT monitoring to the VMS Process Dashboard

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IT

Hardware, Server, Storage, OS, DB, Virtualization, Facilities

Basis, Netweaver, Monitoring, Jobs, Patches, Transports

Customizing, Extensions, Maintenance

IT- und Anwendungs-Architektur, Rollouts, Releases

Infrastructure

SAP Technology

SAP Application

Concepts

Investments & Payments

Licenses, Systems, Infrastructure

IT Processes (ITIL, CCC, CCoE)

Incidents, Problems, Changes

Business

Governance, Sustainability, Compliance

Reporting

Complexity, Process Efficiency

Supplier CustomerCompany

SCM, HR, FI, Sales, Core

ERP, APO, BW, CRM, …

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The Top Tasks of the CIOs…… and VMS appropriate solution!

The major issues for 2010

This year, the interviewed CIOs mainly address traditional tasks. They consider process optimization and business standard software as being very important issues.

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Figures in percent; Basis: 155 IT manager; Source: CIO Trends 2010 Figures: number of responses; Source: CIO Trends 2010

27

63

53

10

up to 10 % 10 to 20 % 21 to 40 % 41 to 60 %

Business processes

63 of 155 interviewed CIOs spend ten to20 percent of their working time for business process management.

11,6

14,2

14,8

14,8

18,7

19,4

20,0

31,0

31,0

Supply Chain Management

Security

Collaboration/Messaging

CRM

IT Business Alignement

Virtualization

Standardization and consolidation

ERP

Process optimizationVMS

VMS

VMS

VMS

May we help you to save time ?

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Business Process Highway

There are many reasons why a company wants to check process quality.

Interesting to hear what a CIO says:

“We invest a significant amount in improving processes. We have no solid

indication if we invest at the right places. Of course, each process

improvement will come out somehow positive. But if building a six-lane

highway for a process results in relocating the traffic jam 20 miles

onwards, we have gained nothing.

My decision for VMS is based on the following question: What is the

amount of the damage of 10% misallocation in the budget compared with

the costs for the VMS Process Dashboard?”

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Content

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• About VMS AG

• Why process benchmarking?

• How does the VMS Process Dashboard work?

• What does the VMS Process Dashboard provide?

• Which are the benefits of the VMS Process Dashboard?

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• Process improvement holds huge benefits for companies in terms of savings, quality improvement and customer services.

• Transparency makes optimization possible. Facts, saving potentials, deficits and trends have therefore to be represented transparent.

• Benchmarking allows a deeper look, at least provides suggestions, often puts light on not perceived weaknesses, at the best becomes the standard for measuring its own excellence.

• Traditional methods require manual data collection and are highly demanding for the business process managers, therefore tedious and expensive.

• VMS takes the shortcut: Ask your SAP ERP system! SAP holds all the relevant business process data, however they are not prepared to be used in a process benchmarking. This is VMS’s domain.

• VMS’s customers are not limited to standard reports. Comprehensive analysis functions allow its own considerations.

Process Excellence via BenchmarkingSmall improvements lead to high potential

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REPORT

BENCHMARK

ANALYSIS

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Example of ApplicationImprovement of the stock turnover

(Simplified example: In reality more KPIs are needed)

Example of calculation given by Peter Wroblowski, CIO of Henkel AG & Co KGaA, in the magazine Computerwoche dated from July 15th 2009:

“The group with an annual turnover of 15 billion Euro spends about 6 billion Euro for its processes. Avoiding 2% of the process costs would lead to savings of 120 millions Euro.”

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Reduction: 16%

Reduction: 10% * 16%

(10% for interests, wastage and storage costs)

KPI Actual Best ∅

Stock turnover

9days

7.5days

10days

Service level 95% 95% 90%

Purchasing cost ratio 4% 2,9% 5,1%

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Content

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• About VMS AG

• Why process benchmarking?

• How does the VMS Process Dashboard work?

• What does the VMS Process Dashboard provide?

• Which are the benefits of the VMS Process Dashboard?

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VMS Process DashboardFact-based, automated process benchmarking

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• The VMS DataCollector gathers facts directly from the SAP systems. VMS collects all facts out of the SAP transactional systems.

• VMS transfers facts in an automated quality process into the VMS Benchmarkbase.

• Comparisons via Key Performance Indicators (KPIs) are built in the VMS Benchmarkbase.

• The customer views the company performance in a dashboard.

Businessprocess data

VMS Benchmarkbase

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Key Performance IndicatorsThe following KPIs are available; others will follow

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KPI Package II – Suppliers

Degree of performance per order line

Service level per order line

On-time delivery per order line

Degree of performance per supplier

Service level per supplier

On-time delivery per supplier

Average delivery time

Ratio of materials per supplier

Ratio of materials in single sourcing (number)

Ratio of materials in single sourcing (value)

Ratio of suppliers with a framework contract

Ratio of order lines with framework contract (number)

Ratio of order lines with framework contract (value)

KPI Package IV – Delivery

Perfect fulfillment

Delivery on scheduled time as confirmed

Delivery in due time as confirmed

Confirmed as requested (quantity)

Confirmed as requested (due date)

Variation in staging of materials

Variation in shipment

Ratio of returns (number)

Ratio of returns (value)

On-time delivery (requested date - number)

On-time delivery (requested date - value)

Reliability of delivery quantity (requested quantity - number)

Reliability of delivery quantity (requested quantity - value)

On-time delivery (scheduled due date - number)

On-time delivery (scheduled due date - value)

Reliability of delivery quantity (confirmed quantity - number)

Reliability of delivery quantity (confirmed quantity - value)

KPI Package III – Storage

Days of supply

Days of supply (value)

Stock turnover

Stock turnover (value)

Average days of supply

Average days of supply (value)

Average stock turnover

Average stock turnover (value)

KPI Package I – Purchasing

Purchasing costs per order

Purchasing costs per order line

Purchasing costs per supplier

Purchasing cost ratio

Orders per purchaser

Order lines per purchaser

Suppliers per purchaser

Number of lines per order

Ratio of electronic orders

First KPI Set: SCOR Model

More to come: Sales, administrative

processes, finance, controlling, …

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Organization LevelsThe following organization levels are currently available

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KPI Package II – Suppliers

Client / company code

Purchasing organization

KPI Package IV – Delivery

Client / company code

Plant

Sales organization

Business unit

Sales channel

KPI Package III – Storage

Client / company code

Plant

Storage location

Stock type

Material type

KPI Package I – Purchasing

Client / company code

Purchasing organization

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Content

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• About VMS AG

• Why process benchmarking?

• How does the VMS Process Dashboard work?

• What does the VMS Process Dashboard provide?

• Which are the benefits of the VMS Process Dashboard?

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The delivery of the VMS Process DashboardDashboard for Reporting, Benchmark und Analysis

The VMS Process Dashboard provides once a month updated KPIs in three different views:

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Reporting

Analysis

Benchmark

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VMS Process Dashboard: ReportingVisualization of the actual KPIs

• Representation of the actual KPIs in form of charts and tables

• Easy understanding of the standardized charts

• Automated measurement directly out of the SAP ERP-System

• Therefore no high introduction or operating costs for SAP BW or other BI tools are needed

• No introduction project, no investment in a complex infrastructure

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VMS Process Dashboard: BenchmarkInternal and external comparison of the business processes

• VMS supplies information for identifying improvement potentials via comparative analysis.

• The intrinsic value of the statements is based on facts. VMS knows where to find facts in the SAP system and compiles them in an accurate way.

• Comparisons work internally (between business units of a company) as well as externally as the VMS method carries out a standardization of the measuring parameters.

• Comparisons require similar definitions. This is one of the value propositions of VMS.

• The serviceability of the statements is based on the choice of appropriate KPIs. For example VMS builds for the Supply Chain on the proven SCOR model.

• Individual KPIs are possible as upgrade.

• Unique: The easiest way to obtain market and comparison data

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Industry Sector ClassificationMatching the SAP functionality

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Industries SectorsFinancial and public services Banking

HealthcareHigher Education & ResearchDefense & SecurityPublic sectorInsurance

Service Professional servicesWholesale distributionRetailTransportation & LogisticsMediaTelecommunicationsUtilitiesFacilities Management

Manufacturing AutomotiveEngineering, Construction & OperationsHigh techConsumer productsAerospace & DefenseIndustrial Machinery & ComponentsMill products

Process industry MiningChemicalsLife ScienceOil & Gas

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VMS Process Dashboard: AnalysisIdentify correlations and weaknesses at one glance

• Modern, graphical analysis for the complete KPI model

• The KPIs are displayed not only separately, e.g. for one sales organization, but in comparison with all other sales organizations within the company.

• Thereby, process owners identify at one glance which KPIs are “different” and can induce the requested corrective measures.

• The evolution of the KPIs over the time gives hints about the seasonal variations and shows which KPIs are affected by these variations.

• The free combination of connections leaves room for individual creativity and root-cause analysis.

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Operation ModelsAccess to data and analysis functions

• Service Edition

SaaS (Software-as-a-Service), access via a browser to the VMS central site

• Enterprise Edition

Service runs within the company, access via a browser to the customer’s data center

• Personal Edition

Data and analysis software are installed on a single computer (e.g. of the controller)

• Data Only Edition

Pure data delivery into the existing company dashboard

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INTERNET

INTRANET

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Content

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• About VMS AG

• Why process benchmarking?

• How does the VMS Process Dashboard work?

• What does the VMS Process Dashboard provide?

• Which are the benefits of the VMS Process Dashboard?

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Market Positioning towards other ToolsTrusted KPI quality at low price

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VMS Process Dashboard BI Tools BAM / BPM Dashboards Data

Warehouse

Bench-marking Report

Cubeware, MIK, MIS Alea,

MS Excel, …

SAP SolMan BAM, ARIS

Process Event Monitor, …

ARIS Process Dashboard, SAP

SCMSAP BW, SAS … Gartner Reports,

PRTM Reports, …

Reporting

Benchmark Analysis Process flow with Alerts Requested data basis SAP ERP SAP BW SAP ERP SAP BW External DW Questionnaires

Effort ++ - -- - -- - /+Price + + - - - - /+Function: existing / inexistent - Effort or price: + low / - high

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Benefits of the VMS Process DashboardBenchmark: Traditional methods are imprecise and time-consuming

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VMS Process Dashboard Consultants Analysts Benchmark Surveys

Software productTraditional consultants

compare with theirexperience

General industryinformation

Company participates to a survey

Data collection Automated collection out of source data

Manual compilation out of existing projects Telephone survey Manually compiled

questionnaires

Definitions Same definition for all Varying according to the project

Very broad in order to keep survey simple

Preset in the questionnaires, but

implementation in details not guaranteed

Benchmark method

DNA-level:weighting of complex

combinations

Mostly rather simple key figures comparison

Very simple key figures comparison

Very simple key figures comparison

Comparison group

• Cross-industry• Industry• Internal units

Limited to the projects conducted by the consultant

group

(n/a) Limited to the participants of the survey (5-15)

Level of detail Multitude of KPIs, up to group level High level Absolutely high level High level

Too imprecise and error-prone for identifying concrete recommendation for actions. Setting-up strategic decisions on too imprecise facts is latent dangerous.

VMS shows improvement potentials based on facts.

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The VMS Process Dashboard is uniqueBusiness process excellence with VMS

The VMS Process Dashboard helps you designing your processes a more efficient and cost-saving way via comparative analysis, e.g. improving your company performance towards the market.

The VMS Process Dashboard

• Initialization is Plug & PlayNo infrastructure, no introduction effort, no programming effort, no risk,

• delivers Reporting, Benchmark and Analysis in one dashboard,

• allows comparative analyses internally (between company units) as well as externally,

• delivers a unique level of details through the granularity of the SAP database,

• is overall applicable through the usage of standard KPI (SCOR model),

• allows an accurate, fast, easy and periodically repeatable measurement directly out of the SAP ERP system,

• guarantees the comparability with the help of the proven VMS DNA-level method (norming and scaling),

• provides an intuitive, graphical, modern representation of the results,

• is available in single packets as per analyzed business process .

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Test Run OfferTest run with your own data

• TEST INSTALLATION

VMS provides the VMS DataCollector software for one single measurement of one or several ERP systems. The customer installs the software and executes a test run, for instance most suitable on the last 12 months. The collected data is transferred to VMS.

• EVALUATION

The data is loaded into the VMS Process Dashboard and securely provided for a demo session. During a workshop VMS demonstrates the VMS Process Dashboard filled with the customer’s own data including benchmarking figures . The presentation is done via a browser (Zero-Footprint) and requires no installation on the customer’s site.

• TRY & BUY

If the customer decides to buy the software, measurement and use can immediately be transferred into steady operation. If he/she decides not to do so, the measurement software is de-installed.

• NO RISK

The customer has no time and effort to invest, except for the installation of the software. VMS executes the test run free of charge.

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