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PUBLIC
Volker von Gloeden, SAP
January, 2020
Business Process Improvement in a nutshellYour navigation help to success
2PUBLIC© 2020 SAP SE or an SAP affiliate company. All rights reserved. ǀ
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
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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
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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
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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
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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
7PUBLIC© 2020 SAP SE or an SAP affiliate company. All rights reserved. ǀ
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 …€ € € € € € € € € €
✓
✓
✓
8PUBLIC© 2020 SAP SE or an SAP affiliate company. All rights reserved. ǀ
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.
9PUBLIC© 2020 SAP SE or an SAP affiliate company. All rights reserved. ǀ
• 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
11PUBLIC© 2020 SAP SE or an SAP affiliate company. All rights reserved. ǀ
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
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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
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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
14PUBLIC© 2020 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Maximize the value of your existing SAP investmentBusiness Process Improvement with Business Process Analytics
Best Practice knowledge & content
Business Process Analysis service
Business Process Analytics
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
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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
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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…
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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
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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
Level 3👤 Process Expert
3
Level 4👤 Process Expert
4
Dependency Diagrams
SAP UI5
Progress Management Board
SAP UI5
BP Analytics
SAP UI5
Detail List
SAP UI5
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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
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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
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Progress Management Board (1/2)Example: Perfect Order Fulfillment / On-time In-full
Track the organizational progress per key figure
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Progress Management Board (2/2)Example: Perfect Order Fulfillment / On-time In-full
Track the progress per key figure system fact based
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Business Process Analytics
Identify root causes for a key figure
Methodology How to best utilize Business Process
Analytics as a root cause analysis tool
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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
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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
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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
• Process excellence
/ improvements
• Process compliance
& audits
• Root cause analysis
Lead Time
Avg. processing
time for completed
process instances
• Process excellence
/ improvements
Automation
rate
How many
documents were
processed manually
vs. automatically
• Go-Live support
• Process efficiency
increase / process
cost reduction
• Process
harmonization /
standardization
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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
• Process excellence
/ improvements
• Process efficiency
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
• Process excellence
/ improvements
• Process efficiency
increase / process
cost reduction
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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
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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.
35PUBLIC© 2020 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Key Figure OverviewKPI Catalog in the Cloud
https://go.support.sap.com/kpicatalog
The service offering Business Process Improvement
for SAP solutions
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Maximize the value of your existing SAP investmentBusiness Process Improvement as a service
Best Practice knowledge & content
Business Process Analysis service
Business Process Analytics
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
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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.
41PUBLIC© 2020 SAP SE or an SAP affiliate company. All rights reserved. ǀ
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
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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
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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
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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
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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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