Company Confidential 1 1

Company Confidential 2

Increase ROI on SCM Investments with Composite Applications

Raghunath Mahalingam

05 May 2008

Company Confidential 3

Contents

• Inhibitors to ROI realization

• Will SOA improve my ROI Realization?

• CAF Scenarios

• Extending CAF with SAP standard functionality

• Road Ahead

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Inhibitors in ROI realization in SAP Investments

Common end user thoughts• “ My business process in unique. Large generic ERP / SCM

applications cannot meet my unique needs” • “ I can change my business model much easier than my own

software programs”• “Legacy applications are critical to my organization and few

people know them”• “ Real time data integration between heterogeneous systems

are nice to hear, difficult to achieve”• “I should be able to run my business with MS-Office, Intranet

and Blackberry Apps. I don’t care about back end systems”

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Will Service Enabled Business Architecture improve my ROI

Facts• Even the best ERP systems may not address all the unique

business processes of customer organization. However, they provide robust back end for core processes

• Business model changes are the order of the day. Need an application which has flexible design and easy maintainability & upgrade path

• Some of the existing legacy application may be unique and may not map to equivalent functionality in ERP/SCM Applications

• Good news - Ecosystem ready for SOA as many customers have upgraded to SAP ECC 5.0/6.0 that is service enabled

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What is CAF & how is it useful?

DefinitionThe Composite Application Framework from SAP is a development environment where end users can model the business processes. CAF enables the separation of services from the underlying business logic & creates a reusable repository of component objects

What does that mean to me ?

• Processes are user centric and need solutions with easy interface and work flows • CAF ensures ‘Code-free’ modification of process flows using reusable process

components• Provides relevant customization opportunities within the process• Enables enterprise-wide collaboration• Can be installed and adapted in a very short time

Let us see the value of CAF through some scenario examples

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Scenario – 1 Enhanced Warehouse Analytics

• Robust product segmentation tools required to hedge • Reduced life cycle and faster obsolescence• High demand uncertainty coupled with a high supply

uncertainty• Frequent New Product Introductions• Low reuse of parts • Frequent promotions and Markdowns• Seasonal Demand

xApp fitment• Use forecast to predict product behavior and thus leverage

benefits of advance planning systems• Define and track action plan easily on slow and non movers

• Accurate product segmentation and product specific action control

• Early disposition of unwanted SKUs to reduce SKU carrying costs

• Maintain Smaller and Stronger Portfolio of Products• Focus on High Performing Products

Business Value

SAP Gaps• Past history may not be only factor to decide slow movers / non

movers• Easy tracking of user actions on slow movers/ non movers not

available

Industry Challenges

43% of true new products, 51% of line extensions, and 77% of so called me-too products are “dead” or “almost dead” within one year of their introduction”

Loss on disposal of obsolete inventories = 1% of COGS

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Enhanced Warehouse Analytics Screenshot

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Scenario 2 - Replenishment Dashboard • Actual demand for a given product is highly unpredictable• Inventory carrying cost is high• To achieve reduced inventory levels with out occurrences of stock

outs, collaborative replenishment strategies (e.g. VMI or CMI) with top retailers is recommended

xApp fitment

• Comprehensive Order Dashboard built on top of SCM system• Simulate and decide perfect order quantity to replenish• Provisions for collaboration and consensus

• Reduced manual effort for VMI planners to validate planning results

• Easy to use decision management tool with replenishment order create, modify and delete facility

Business Value

SAP Gaps

• Standard SAP SCM order data view contains only basic order data (i.e. Product, Quantity, date )

• In order to know other critical parameters (like target cover, etc.) users needs to switch to different screens. No simulation features

Industry Challenges

64.376.431.1Total Inventory Days of Supply

MedianAverageBest in ClassCash-to-Cash Cycle Time Component Metrics

83.2%77.7%99.2%Scheduled Orders to Customer Request

MedianAverageBest in ClassDelivery Performance (%)

64.376.431.1Total Inventory Days of Supply

MedianAverageBest in ClassCash-to-Cash Cycle Time Component Metrics

83.2%77.7%99.2%Scheduled Orders to Customer Request

MedianAverageBest in ClassDelivery Performance (%)

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Responsive Replenishment Dashboard Screenshot

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Scenario 3 : Distributed Order Management Process

Create Sales Order Workflow Based Pending Task

Invoke Outbound Delivery

Create Outbound Delivery Request

Outbound Delivery Request

Pick - Pack - Ship

SO Closure

Create Post Goods Issue

Inputs for KPI

Confirm Outbound Delivery Request

NY Logistics Inc Distributor / Customer

WMS

Application

Patni Computer Systems

SAP ERP

Logistics

Portal

UDDI

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Other CAF enabled Business Scenarios

• Compliance management (CAPA) in pharma/ life-sciences• Dollarize SAP SCM planned order recommendations for quick S & OP decisions• Supply Chain Events/Exception notification in Intranet / MS –

Outlook• MS-Excel download of Production Orders, quick adjustments, and

what-if analysis in MS-Excel (e.g. real time capacity simulations) and upload back to SAP

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Available list of services from SAP!

•Automatic Identification Label Processing•Confirmation and Inventory •Customer Freight Invoice Request Processing

•Customer Requirement Processing•Delivery Collaboration •Delivery Schedule Collaboration •Demand Planning•External Procurement Trigger and Response

•Inbound Delivery Analytical Source Data •Inbound Delivery Processing •Interchangeability Group Management •Inventory Collaboration •Invoice Collaboration•Kanban Processing•Location Data Management •Logistics Area and Storage Management•Manufacturing Work Order Collaboration•Outbound Delivery Processing•Process Tracking

•Product Data Maintenance •Product Demand Influencing Event Collaboration

•Product Forecast Collaboration •Purchase Order Analytical Source Data •Purchase Scheduling Agreement Processing•Replenishment Order Collaboration •Retail Planning •Return Delivery Instruction Collaboration•Sales Order Analytical Source Data •Service Parts Planning •Shipment Processing •Site Logistics Processing •Source of Supply Determination •Supplier Freight Invoice Request Processing •Supply and Demand Matching •Supply and Demand Matching (Foundation Layer)

•Supply Chain Exception Collaboration•Transportation Customer Quote Processing •Transportation Order Processing •Transportation Request Processing •Transportation Supplier Quote Processing

Services in SCM . More extensive list available for SAP ERP !

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CAF Implementation - Salient points

• Identify scenarios where service enablement yield maximum ROI

• Map business process with available SAP service and undertake gap analysis

• Assess service capability of current IT landscape• Leverage available enterprise architecture framework • Use available adaptors for legacy applications to fast track

integration• Setup a Governance Model for Application Lifecycle

Management• Close interaction with SAP for faster resolution of technical

issues for newly introduced services

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Extending CAF with Additional Functionality in Standard SAP

• Have I used all the features of standard SAP?• Have I ‘re-invented the wheel’ or customized with out understanding actual power of

configuration and standard contents ?• Can I integrate SAP data to other common office tools like Microsoft products (outlook ,

excel , intranet) and devices like Blackberry

Scenario Example - Evaluating supply chain efficiency through analytics

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Measure KPIs using SAP BI SCM Analytics

Standard SAP BI

Pre Packaged Analytic Capability

No extra purchase – In Built –

“Ready to Go Installations”

KPIs defined by SCOR

Easy Interpretation of delivered

reports incorporating business

process variations

KPIs across the entire Supply Value

Chain

Patni add-on using CAF

“Integration” with Heterogeneous IT Landscapes via Patni Tool Kit

“Closed Feedback” loop capability to Source System

“Information Broadcasting” over different communication mediums

Black Berry – “At your finger tips”

Visual Composer – “Enterprise Portal”

Business Objects – “Visualize / Simulate”

“What if” Analysis - Predictive Analytics

“Have I exploited full power of standard BI content” ?

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KPIs “At your Fingertips”

Perfect Order Fulfillment… SCOR Level 1 Metrics

Logon to Blackberry… Perfect Order Fulfillment =

[(% Orders delivered in full) +

(Delivery performance to Customer commit date) +

(Perfect Condition)] / 3

Send MAIL to responsible

person

Mobile Analytics – Perfect Order Fulfillment - Level 1

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Perfect Order Fulfillment… SCOR Level 2 Metrics

% Orders Delivered in Full =Delivery Quantity Accuracy

Delivery Performance to Customer Commit Date =

[(% Orders shipped on due date) +

(% Shipments delivered on time)] / 2

Perfect Condition =

[(% Orders delivered damage free) + (% Orders delivered defect free)] / 2

Mobile Analytics - Perfect Order Fulfilment - Level 2

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Perfect Order Fulfillment… SCOR Level 3 Metrics

% Orders Delivered Defect Free =

1 – [(Items returned for defects by customer’s incoming inspection) / (Total number of items delivered) * 100]

% Orders Delivered Damage Free =1 – [(Items returned for damage on delivery) / (Total number of Items delivered) * 100] Send MAIL to

responsible person

Mobile Analytics - Perfect Order Fulfilment - Level 3

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Perfect Order Fulfillment…

Damaged Deliveries (Root Cause Analysis)

Mobile Analytics - Perfect Order Fulfilment - Level 4

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STANDARD SAP BI Patni add-on

Identify Performance measures

Map Measure in

SAP BI

InstallSAP BI

Content

Perfect Order Fulfillment

ReturnAnalysis

STEP 1 STEP 2 STEP 3

Implementation Timeline

STEP 4

SetupBusiness

KPIs

1 Week 1 Week 1 - 2 Weeks 1 Weeks

STEP 5

ClosedFeedback to Source

“What if” Analysis

3 Weeks

Black Berry Integration

Implementation Methodology for BI Content Activation

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Road Ahead

• Re-look your implementation to identify unrealized benefits of SAP standard features

• Identify a candidate for CAF which brings maximum value on your IT investment - key customization or Integration with legacy in your organization

• Explorer IT vendors who are ready to built risk – free CAF prototype as proof-of-concept

• Evaluate and decide GO / NO-GO

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Patni SAP NetWeaver COE

• Strong vertical focus • Solution Architects from

each vertical business unit provide domain knowledge

• Specific labs like lab for research in specific domain

SAP

Expertise

Domain

Expertise

Architectural

Expertise

• SAP Partnership enables early ramp-up on new product releases

• Deep application and SAP architecture knowledge

• Organizational focus on expertise - Architectural CoEs: SOA/EA, BPM, Microsoft, IBM

• Over 200+ consultants• Fast ramp up on new

technology implementation

Patni Strength

• Consulting Services• Focused eSOA – SOA workshops

and requirement elicitation workshops

• Architecture evaluation• Help customers define "road

map" for moving to the new architecture

• Implementation Services• EP, MDM, BI Implementations• Implementing Enterprise

Services Model based on business strategy, existing IT portfolio and business processes

• Web Services Enabling of Legacy Applications

• POCs for different SOA scenarios

• Integration Services• Cross-Application Integration

using PI• Portal Integration with

SAP/other applications• Integration & extension of

Mobile Infrastructure • SOA Product centric application

integration

Service Portfolio

Patni’s

NetWeaver

Practice

We welcome you to visit us at Booth No. 572

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Thank You

We welcome you to visit us at booth No. 572

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