SAP Benchmarking for Capital Project and

Portfolio Management

Horst Hönig

March 2012

© 2012 SAP AG. All rights reserved. 2

SAP Benchmarking for Capital Project & Portfolio Mgmt Overview

SAP Benchmarking for Capital Project & Portfolio Management provides a

comprehensive framework to measure an organization’s performance and maturity in

managing its capital projects and portfolio.

Average Deviation of ROI

(%)

Bottom 25% Average Top 25%

5 10 12 15

Projects On Time, Budget and Scope

(%)

Bottom 25% Average Top 25%

90 64 67 50

Project Administration Cost

(% of Revenue)

Bottom 25% Average Top 25%

2 4 3.5 5

Performance

Align Capital Project

Portfolio To Support

Growth Strategy

Integrate And Harmonize

Project And Portfolio

Management Process

Enable Effective And

Efficient Project

Management Decisions

Propose Approve Setup Assign

Resources

Confirm

Milestones

Close and

Handover

Project Management

Resource Management

Maturity

Portfolio Planning & Management

© 2012 SAP AG. All rights reserved. 3

SAP’s Benchmarking Program

Established end of 2004

Complimentary service

Available to SAP and non-SAP customers

Overview

Reach

Over 12,000 participants from over 3,000 companies

Partnerships with ASUG and other user groups

Studies available in 12 languages

Content

Coverage

Over 20 business process assessments

Over 700 KPIs, over 1,000 Best Practices

Over 300 peer groups

© 2012 SAP AG. All rights reserved. 4

Benchmarking Can Be Used in Many Ways Across the

Business Transformation Lifecycle

Simpler, cost-effective benchmarking options are enabling

customers to benchmark more broadly and proactively

Opportunity Identification/Prioritization Identify key areas of process improvement opportunity

1

Business Case Foundation

Measure KPIs & best practices maturity to uncover value gaps 2

Value Realization

KPI and process measurement before or during a transformation 3

On-going Performance Management

Comparison of current performance to past performance 4

Capital Project and Portfolio Management

Benchmarking Results - Sample Report

© 2012 SAP AG. All rights reserved. 6

Executive Summary

30.2

17.5

8

15.2

Top 25% Average Bottom 25% Company

10

5

0.5

2.5

Top 25% Average Bottom 25% Company

70

60

40

50

Top 25% Average Bottom 25% Company

0.3

0.5

1.1

0.7

Top 25% Average Bottom 25% Company

Average Deviation of ROI (in %) Avg. 5 Year Profit Growth (in %)

% Of Projects On Time, Budget and Scope Project Administration Cost (% of Revenue)

ILLUSTRATIVE DATA

© 2012 SAP AG. All rights reserved. 7

Effectiveness Metrics

Key Metrics Company Value Peer Group

Average Top 25%

Average Deviation of ROI (in %) 15.2 XX XX

% of Projects On Time, Budget and Scope 50 XX XX

% of Approved Projects with Business Case 90 XX XX

% of Projects (by Portfolio Value) at Risk 20 XX XX

% of Non-Compliant Projects (by Portfolio Value) 30 XX XX

% of Non-Compliant Projects (by # of Projects in Portfolio) 5 XX XX

Number of Portfolio Optimization Reviews/ Year 1 XX XX

# Of Regulatory Citations / Year / B Rev 5 XX XX

Performance Results –Metrics

First Quartile Between Average and First Quartile Below Average Outlier Ranking:

ILLUSTRATIVE DATA

© 2012 SAP AG. All rights reserved. 8

Efficiency Metrics

Company Peer Group

Resource Utilization Rate (in %) 75.0 XX XX

Profit Growth (in %) 2.5 XX XX

Project Administration Cost (% of Revenue) 0.7 XX XX

Time Spent on Project Reporting (in %) 20 XX XX

Project Audit Cycle Time (in days) 10 XX XX

Project Management FTE Cost (% of Project Admin. Cost) 20 XX XX

Project Management IT Cost (% of Revenue) 0.1 XX XX

# of Risk Management Application per Billion in Revenue 7 XX XX

# of Standalone Systems and Manual Interfaces per Billion in Revenue 30 XX XX

Performance Results –Metrics

First Quartile Between Average and First Quartile Below Average Outlier Ranking:

ILLUSTRATIVE DATA

© 2012 SAP AG. All rights reserved. 9

Best Practices

3.7

2.7

3.5

2.73.0

2.72.8

4.3 4.3

4.0 4.0 4.0

4.3 4.4

0

1

2

3

4

5

6

Portfolio Evaluation Portfolio Risk

Management

Portfolio Optimization Project Execution Resource

Management

Project and Portfolio

Governance

System Integration

Top 25% Average Customer Coverage Customer Importance

Company Best Practice Importance Compared to Coverage Contrasted Against Peer Responses

1 = No Coverage 5 = Full Coverage

ILLUSTRATIVE DATA

© 2012 SAP AG. All rights reserved. 10

Portfolio Evaluation

0

1

2

3

4

5

6

1 2 3

Top 25% Average

Customer Coverage Customer Importance

Best Practice Ranking 1 Organization has enterprise wide framework to evaluate and create

balanced project portfolio ( based on risk, value, strategic criteria)

2 Comprehensive and documented criteria are used to evaluate, prioritize

and finalize project requirements and build project roadmaps

3 Organization has automated workflow and information flow from

investment proposal to project closing

Best Practice Listing

1 = No Coverage 5 = Full Coverage

ILLUSTRATIVE DATA

© 2012 SAP AG. All rights reserved. 11

Recommended Improvement Strategies

Recommended Improvement Strategies and Current Capabilities

Average

Deviation of ROI

(in %)

% Of Projects On

Time, Budget

and Scope

Avg. 5 Year Profit

Growth (in %)

Project

Administration

Cost (% of

Revenue)

Utilize clear and consistent process for evaluating and comparing investment opportunities

Drive real time monitoring and risk management processes

Continually evaluate and govern the portfolio to optimize investments

Adopt phase gate/ milestone process for project execution throughout the lifecycle

Manage project information and processes in a single environment to maximize efficiency

Optimize usage of operational project resources

Standardized portfolio & project management processes and integrate with enterprise

operations

Establish corporate governance to ensure compliance with internal policies and external

regulations

R

T

Top 25% performance for supporting best practices and KPIs

Between average and top 25% performance for supporting best practices and KPIs

Strategies to focus: below average performance for supporting best practices, KPIs

Align Capital Project

Portfolio To Support

Growth Strategy

Enable Effective And

Efficient Project

Management

Decisions

Integrate And

Harmonize Project And

Portfolio Management

Process

R

T

T

T

T

T

ILLUSTRATIVE DATA

Benchmarking Process and Other Surveys

© 2012 SAP AG. All rights reserved. 13

Benchmarking Process

Present draft report to

“owner”

Revise report if

inconsistencies found

Revise analysis to

“zoom in” if necessary

Present final report to

“owner“

Highlight relevant

findings

Agree (any) next steps

Identify “owner” to

complete survey

Register and complete

survey at

https://valuemanageme

nt.sap.com

Validate data provided

in the survey

Analyze input and

compare to peer groups

(industry and

organization size )

Clarify survey and

provide guidance as

needed

Part

icip

an

t S

AP

Clarify inputs where

necessary

Complete survey

questionnaire

Answer validation

questions if needed

Review draft report

Clarify any outliers

Highlight any

inconsistencies

Review final report &

recommendations

Agree (any) next steps

½ to 1 day Normally 1 week ~1 hour session

Survey

Registration &

Completion

Data Validation,

Analysis & Report

Creation

Validate Draft Report Finalize Report &

Determine Next Steps

© 2012 SAP AG. All rights reserved. 14

Available Benchmarking and Best Practices Surveys1

Financial Excellence

Finance

Financial Compliance

Financial Performance and

Risk Management

Public Sector: Finance

Finance Shared Services

Superior Customer Value

Sales Effectiveness

Customer Contact Center

Customer Service and

Support

Consumer Products: Trade

Promotions Mgt.

Product and Service

Leadership

Product Lifecycle Mgt.

Responsive Supply Networks

Supply Chain Planning

Warehouse Mgt.

Transportation Mgt.

Retail: Integr. Demand and

Replenishm. Plan.

Oil and Gas: Primary

Distribution

Fashion: Supply Chain

Planning

Professional Business

Networks

Operational Excellence

Manufacturing

Procurement

Fashion: Procurement

Lean Enterprise

Healthcare: Accountable

Care Organizations

End to End Processes

Enterprise Healthcheck -

Manufacturing

Enterprise Healthcheck -

Services

Public Sector Healthcheck

Order to Cash

Fashion: Order to Cash

Retail: Merchandising

Private Equity: Operational

Assessment

Best People and Talent

HCM

Talent Management

HR Shared Services

Strategic IT

Business Intelligence

Enterprise Information

Management

High Performance Analytics

Enterprise Mobility

Total Cost of Ownership

Best Run IT

Value Management

Enterprise Architecture

Implementation Services

High Performing Assets

EH&S Compliance

Enterprise Asset Mgt.

Utilities: Optimized Asset Mgt

and Operations

Capital Project and Portfolio

Mgt.

Benchmarking Survey

Best Practices Survey

Industry Specific Benchmarking Survey