business process improvement using business process...

Business Process Improvement using

Business Process Analytics

Mark Cooling/SAP SSC (Ireland) Ltd.

July, 2012

© 2012 SAP AG. All rights reserved. 2

Disclaimer

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.


Key Take Aways Business Process Analytics tool & Business Process Improvement

Main target of Business Process Improvement is that you maximize the

value of your existing SAP solution

Business Process Analytics is a problem oriented SAP Solution

Manager tool that supports Business Process Improvement activities and

complements your existing SAP Business Warehouse/SAP

BusinessObjects reporting environment

SAP provides a Business Process Improvement methodology in order

to analyze critical process milestones in a systematic 9 step approach

Over 750 out-of-the-box key figures allow a fast technical Business

Process Analytics implementation within days so that the root cause

analysis is the main activity within a Business Process Improvement project

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Motivation for Business Process Improvement Projects Benefits & Challenges

Goal Benefit Challenge

Transparency

Global transparency across

organizational units &

process variants

…increase process compliance and standardization by

reduction of process diversification and template

adherence.

Efficiency

Reduced process costs ... automate business processes and reduce manual

process inefficiencies and human errors. Avoid

systematic process exceptions.

Effectiveness

Higher customer

satisfaction, improve

working capital

…avoid delayed business documents (e.g. deliveries or

shipments) and financial losses (e.g. delayed invoices or

payments).

Clean-up

Better planning results &

more accurate business

reporting

…avoid business documents remaining in un-finished

status. Close all documents within the SAP system that

are closed from a business perspective.

Internal Audit

Higher reliability of financial

reporting & possible

detection of fraud

…avoid parked documents and open items in FI-AP and

FI-AR before PEC. Ensure that all SD invoices are

created and transferred to FI before PEC. Review

blocked payments in MM & FI.


Focus & Value Areas for Company Success Mapping of example Key Figures

Customer Satisfaction Overdue Sales Orders

Sales Ordes with delivery block

Overdue outbound delivieries

Number of returns

Revenue / Receivables

Sales Orders & Deliveries without

invoice

Invoices not transferred to FI

Open & overdue items in FI-AR

Bank statements not posted

Inventory / Capital tie-up

Slow moving items

Materials with expired shelf life

Inspection lots w/o usage decision

Open & overdue reservations items

Cost / Payables

Number of credit memos (requests)

Open & overdue items in FI-AP

Blocked items for payment (cash

discount endangered)

Early payments

Supply Chain Planning Accuracy

Open & Overdue Purchase Requisition & Order items

Open & Overdue STO items (incl. stock in transit)

Open & Overdue Planned Orders

COGI errors

Prod. Orders overdue for release

Schedule lines initially not confirmed

Data Accuracy

Incomplete Sales Document items

Application Log errors

Update errors & ABAP dumps

Performance

Production / Process / PM Orders

without deletion flag

Transaction & job runtimes

Integration & Automation

Interface errors

Background job cancellations

Batch Input errors

Wo

rkin

g C

ap

ita

l Wo

rkin

g C

ap

ital


IT Business Business Process

Stabilization (monitor interfaces & jobs)

Business Process

Improvement (based on document backlog)

Business Process

Improvement (based on internal benchmarks)

Minimize interface failures

Minimize errors or delays in

background processing

Maximize technical

performance

Avoid functional errors (e.g.

ABAP dumps, update errors)

Identify possible end-user

training gaps

Standardization issues

Close process design gaps

Adjust customizing and/or

configuration

Clean up old & open business

data

Lead Time calculation for

certain process steps

Analysis of Inventory (Slow

Moving Stock)

Supply Chain Analysis (STO

Value in Transit, STOs

without Deliveries)

Order Analysis (Returns,

Rejections, Incompleteness)

“Protect initial investment”

“Make most of initial investment & achieve optimum according to plan”

Business Process Monitoring for interfaces,

background jobs & cross-application



Business Process Operations Dashboards

Business Process Lifecycle Alert Monitoring, Analytics, Dashboards














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Business Process Operations Architecture & Information Flow – High-level Overview

Data Storage

Collect SAP data for

Analytics

Data Source

Application

InfoCube

0SM_BPMRH

InfoCube

0SM_BPM Table

DSWP_BPM_ALERTS

Collect SAP & non-SAP data for

Monitoring

Extract

alert

data

Monitoring on

Analytics data

BPMon Trend

Analysis

BP Monitoring BP Analytics BP Op Dashboards


Complementing your reporting environment Traditional Business KPI approach vs Business Process Analytics

Influencing factors

• Slow warehouse tasks

• Slow transportation

• Insufficient stock

Business KPIs (often %-based)

• Order fulfillment rate

• Days of Sales Outstanding

Key figures for respective

detailed measurement

“Top-down approach”

Out-of-the-box key figures from

BPMon / Analytics

• Overdue Sales Orders / Deliveries

• Incompletes SD documents

• Schedules initially not confirmed

Business Areas &

KPIs affected

Root Causes • Master Data

• Customizing

• End User

• Business Exception

“Bottom-up approach”

(Theoretically) Derive (Practically) Identify

Define Derive














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Business Process Improvement Methodology Five phases of typical Six Sigma project (DMAIC)

Define BP Analysis by

Measure

Analyze

Control

Implement

Decide on Work Streams/

Processes to start with

Set up BP Analytics

Root Cause Analysis

Create Action Plan &

Execute Action Items

BP Monitoring should

show no red alerts

BP Analytics Trend

Analysis should show

decreasing trend


Possible Work Streams To Start With Business Processes or Value Areas

Customer

Satisfaction

Revenue

Stream

Working

Capital

Supply Chain

Planning

Period End

Closing

Order to

Cash

Returns

Management

Procure to

Pay

Plan to

Produce

Maintain to

Settle

Open Items

Management

(FI)

Weak / indirect correlation Strong / direct correlation


Business Process Analytics Functional Scope

SAP BW based Business Process Analytics

(Internal) Benchmarking

Age structure of document backlog

Trend analysis

Additional Business Process Analytics features with SAP Solution

Manager 7.1 Support Package 5 (requires ST-A/PI 01P on the backend system)

Advanced Benchmarking

Value Benchmarking

Selection variants / favorites can be stored

Filters on characteristics


Business Process Analytics (< Solution Manager 7.1 SP5) Benchmarking


Business Process Analytics (< Solution Manager 7.1 SP5) Age Structure


Business Process Analytics (< Solution Manager 7.1 SP5) Trend Analysis


Business Process Analytics (>= Solution Manager 7.1 SP5) Business Process Analytics - Filter

Analytics data can be filtered on several different characteristics


Business Process Improvement Standardized Methodology with Business Process Analytics

Get Global Transparency

1

Identify Org Units to be analyzed

2

Identify Potential for old Data Reduction

3

Identify Root Causes (RC)

5

Create Frequency Diagram of RC

6

Perform Detail Analysis

4

Define Action Plan

7

Visualize Impact on Benefit/Value Categories

8

Control Achievements via Trend Analysis

9


End User

Missing quantities that are not needed are not rejected

Business Process Improvement Example: Overdue Sales Orders – Identifying Systematic Issues

Key Figure

Overdue Sales Order

Technical Performance

Reporting Quality

Supply Chain Planning

Technical Exception

Functional error

Customizing

System expects deliveries where non are expected from business side

Master Data

Inactive Sales Organizations

Inactive Document Types

Customer Satisfaction

Revenue Stream

Business Exception

Key message: Systematic issues have mainly an influence on the value areas

„Technical Performance“, „Reporting Quality“ and „Supply Chain Planning“


End User

Incomplete Sales Order

Business Process Improvement Example: Overdue Sales Orders – Real Exceptions

Technical Performance

Reporting Quality

Supply Chain Planning

Technical Exception

Cancelled background job

Erroneous interface

Customizing

Master Data

Planned dates calculated too ambitiously

Customer Satisfaction

Revenue Stream

Business Exception

Missing Stock

Delivery Block

Slow/delayed warehouse tasks

Slow/delayed transportation

Key message: Business exceptions have mainly an influence on the value areas

„Revenue Stream“ and „Customer Satisfaction“

Key Figure

Overdue Sales Order














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Business Process Monitoring Functional Scope – High-level Overview

Application specific monitoring for

SAP ERP (SD, MM, PP, LE, WM, PM/CS, QM, FI) & SAP EWM

SAP CRM (Sales, Services, Customer Interaction Center; Marketing)

SAP APO (planning runs in DP, SNP, PP/DS, gATP/BOP)

SAP SRM (Self-service Procurement, Sourcing Cockpit)

Background Job monitoring for

Single background jobs or SAP BW Process Chains

Interface monitoring for

IDoc, BDoc, tRFC, qRFC, bgRFC, Batch Input, flat files, SAP PI

Cross-Application monitoring for ABAP dumps, Update errors, number range fill-level, Application Log entries

Performance monitoring for transactions and RFC processing

Industry specific monitor enhancements for

SAP Apparel and Footwear, SAP for Automotive, SAP for Banking, SAP for Retail, SAP for Utilities

Data Consistency monitoring for

SAP ERP, SAP CRM, SAP APO

Complete catalog of >750

standard out-of-the-box key

figures available under

http://service.sap.com/bpm >

Media Libary > Customer

Information > Key Figure

Overview

http://service.sap.com/bpm

http://service.sap.com/~sapdownload/011000358700000230852008E



Business Process Improvement Project Roadmap

Plan & Build Phase

Week

1 2 3 4 5 6 7 8-10 11-15 16-20 21-25

Positioning – Bus. Process Analysis / Benefit Case

– Prepare Management Workshop

– Workshop / Get Mgmt. Buy-in

Technical Readiness – Prepare Analytics in SolMan

– Authorization Concept

Organizational Readiness – Communication & Project Plan

Define – Define Scope / Select Key Figures

Duration: Activity Milestone: Activity Cut-off from Plan/Build to Run phase Duration: Work Package Milestone: Work Package

Duration: Parallel Activity outside initial scope


Business Process Improvement Project Roadmap

Run Phase

Week

1 2 3 4 5 6 7 8-10 11-15 16-20 21-25

Measure – Set up Key Figures in BP Analytics

Analyze – Analyze Key Figures with BP Analytics

– Define corresponding Action Items

Implement – Implement defined Action Items

Control – Continuously follow Trend Analysis

with BP Analytics

Management Sign-off – Get sign-off for achieved

improvements

Duration: Activity Milestone: Activity Cut-off from Plan/Build to Run phase Duration: Work Package Milestone: Work Package

Duration: Parallel Activity outside initial scope


Business Process Improvement Best Practice: Organizational Structure for Business Process Improvement

• Definition of Key Figures &

Filter Criteria

• Root Cause Analysis

• Verification of Business

Impact

• Definition of Action Items

Project Lead

(BPAnalytics

Owner)

Application

Expert / Module

Owner

BPAnalytics Expert

(Configuration of Business

Process Analytics)

Global/Local

Process Owner

(GPO, LPO) & Local

Key Users (LKU)

Executive Sponsor

IT Business


Business Process Operations Summary

Business Process Analysis

SAP service (process health check) that can be used as a starting point

Business Process Monitoring

Tool helping with Business Process Stabilization and helping to perform

monitoring tasks more efficiently


Tool helping with Business Process Improvement methodology and helping to

make business processes more efficient and effective

Business Process Operations dashboard

Dashboard framework to configure user group specific dashboards










value of your existing SAP solution, i.e. operate more efficient and

effective




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Thank You!

Contact information:

Mark Cooling

SAP Active Global Support

SAP SSC (Ireland) Ltd.

[email protected]

mailto:[email protected]

Further Information


SAP Service Offerings SAP Enterprise Support

SAP Solution Manager Enterprise Edition

Business Process Monitoring functionality

Business Process Analytics functionality

Expert Guided Implementation

Expert Guided Implementation for Business Process Monitoring

Self Service - 'Business Process Analysis'

SAP Services

SAP CQC Business Process Analysis and Monitoring

SAP Business Process Analysis*

SAP Business Process Operations*

SAP Classroom Trainings

(E2E300) Business Process Integration & Automation Management

(SM300) Business Process Monitoring

* Only for SAP MaxAttention /

SAP Safeguarding customers


Further Information – SAP Notes

1320940 - Prerequisites for CQC service: BPA and BPM

• Describes the necessary (minimum) prerequisites in order to execute an CQC Business

Process Analysis and Business Process Monitoring services respectively

784752 - BPMon in SAP Solution Manager - Prerequisites

• Describes the more detailed and recommended technical prerequisites in order to implement

Business Process Monitoring with a wide scope

521820 - Availability of Business Process Monitoring

• Describes the latest Support Packages or single SAP notes available in order to possibly

rule-out known malfunctions of Business Process Monitoring


Further Information – Links

Business Process Monitoring on SAP Service Marketplace

https://service.sap.com/bpm

Business Process Monitoring on SDN

https://www.sdn.sap.com/irj/sdn/nw-processmonitoring

White Paper “Exception Handling and Business Process & Interface Monitoring”

Link to Business Process Monitoring

https://service.sap.com/bpm







Further Information – SDN Blogs & Wiki

Functional Scope of Business Process Monitoring in SAP Solution

Manager http://www.sdn.sap.com/irj/scn/weblogs?blog=/pub/wlg/15153

Frequently Asked Questions

http://wiki.sdn.sap.com/wiki/display/SM/FAQ+Business+Process+Monitoring

http://wiki.sdn.sap.com/wiki/display/SM/FAQ+Business+Process+Analytics

Typical Use Cases for Business Process Monitoring

http://www.sdn.sap.com/irj/scn/weblogs?blog=/pub/wlg/16947

Business Process Monitoring - Template configuration available for

download



http://wiki.sdn.sap.com/wiki/display/SM/FAQ+Business+Process+Monitoring

http://wiki.sdn.sap.com/wiki/display/SM/FAQ+Business+Process+Analytics




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