the process innovation journey for sap

© 2012 IBM Corporation

Application Innovation Services

1

The Process Innovation Journey for SAP



2

Business Process Effectiveness is the Top Priority for Executives

A Global Technology Survey

found that “Improving

business process

effectiveness” ranked as the

#1 priority for executives…

but WHY?

A Global Technology Survey

found that “Improving

business process

effectiveness” ranked as the

#1 priority for executives…

but WHY?

McKinsey Global Technology Survey, December 2011 , How IT is Managing New Demandshttps://www.mckinseyquarterly.com/High_Tech/Strategy_Analysis/A_rising_role_for_IT_McKinsey_Global_Survey_results_2900

McKinsey Global Technology Survey, December 2011 , How IT is Managing New Demandshttps://www.mckinseyquarterly.com/High_Tech/Strategy_Analysis/A_rising_role_for_IT_McKinsey_Global_Survey_results_2900



3

A customer’s experience with an enterprise is based on the quality and consistency of the company’s critical processes



4

Typically process improvement as well as ERP has been managed in a discrete and segmented fashion with limited visibility, governance and collaboration across organizations

OperationsSales/Marketing

Human Resources

Finance

Manufacturing

Consumers and businesses tend to choose products and services based on their experiences and relationship with a company



5

Tools and methods for driving process improvement have also been implemented with a limited holistic and cross operational integration view….

….resulting in sub-optimized islands of excellence that are neither holistic nor customer centric

Cloud

BPMERP SOA

Lean 6 SigmaValue IntegrationTime in Motion



6

Today, creating outstanding customer experiences requires broad Process Innovation that spans the entire organization

Respond and react to individual customer’s, segments or market needs no matter where in the organization they interact.

Interconnect and synchronize departments with enterprise-wide visibility to ensure consistency and outstanding client experiences.

Create collaboration and governance across departments & organizations to drive efficiency but more importantly effectiveness.

Manage for end outcomes enabled by consistent & value driven execution from the front office to the back office.

Process Innovation



7

Process Innovation enables new forms of customer value to be identified with strategies for Unique Business Change

Business Events

Business Analysis

Business Process

Business Rules

Business Content

Business Information

Optimization

Business Monitoring

Process Automation Integration

Business Collaboration Governance

Structured Experimentation E2E Process Optimization Adaptive & Integrated Operations

Value-based Pricing System Revitalization Harmonized Systems

Process Innovation

Domain Expertise

Organizational Enablement

Innovative Business Change = Stronger Customer Experience



8

Integrated Business Applications Deliver Strong Value…and SAP is the best

Improve alignment of strategies and operations

Improve productivity and insight

Support changing industry requirements

Reduce risk

Improve financial management and corporate governance

Retain top performers

Provide immediate access to enterprise information

Give employees new ways to access the enterprise information required for their daily activities.

SAP customers excel by taking advantage of SAP’s industry-

specific knowledge, best practices and standardized

processes – all codified into the world’s leading integrated

application platform.



9

But…SAP implementations tend to drive standardization not Process Innovation

Most SAP implementations are documentation-centric driving standardized processes that create a reliance on informal business processes and differences between organizations and instances.

Every business strives to be unique, requiring heavy process

customization for all but a very few, commodity processes making it

difficult to invoke change, migrate to future releases and provide adequate real-time visibility.

…all costing you customer centricity, flexibility, adaptability, time, money and lost business opportunities

s



10

Because many SAP implementations are basic configurations avoiding customizations they do not meet initial expectations

Opaque SAP processes make process analysis and improvement difficult

Rigid SAP processes increase time to value

End-to-end processes are difficult to model, simulate and manage

SAP Enterprise Services are difficult to use and incomplete

Limited SAP process and real-time visibility causes risk to KPIs and SLAs

Low utilization of inline operational decision management limits productivity

A solution to one or more of these challenges is required

in almost every SAP implementation

0% 10% 20% 30% 40% 50% 60%

Failed to realize somebenefits

Executives unsatisfied

Employees unsatisfied

Operational disruptionat go-live

Failed to realize 50%+of benefits

Total implementationcost exceeds budget

Took longer thanexpected

0% 10% 20% 30% 40% 50% 60%

Failed to realize somebenefits

Executives unsatisfied

Employees unsatisfied

Operational disruptionat go-live

Failed to realize 50%+of benefits

Total implementationcost exceeds budget

Took longer thanexpected

Source: Panorama Consulting 2010 ERP Report



11

Though SAP is on of the best enterprise wide solutions to improve business execution there is no easy way to implement or avoid customizations

Blueprint

Solution Manager

Capability



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Process Innovation requires balancing two methods to optimize business processes

BPM Tools & SOA Adapt quickly Outpace the competition Process visibility across core &

fringe application systems Smaller, incremental projects

BPM Tools & SOA Adapt quickly Outpace the competition Process visibility across core &

fringe application systems Smaller, incremental projects

Successful organizations will have a balanced I/T Strategy of SOA/BPM and ERP Consolidation

Process OptimizationApproach B

Process OptimizationApproach A

NaturalTendency

NaturalTendency

Packaged Applications Improve 100’s of processes at once Sunset inflexible legacy systems Catch up to competitors Huge multi-year projects

Packaged Applications Improve 100’s of processes at once Sunset inflexible legacy systems Catch up to competitors Huge multi-year projects

DifferentiatingBusiness Processes

Non-DifferentiatingBusiness Processes

BPM



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Global Integration

Finance

Opportunity to Order

Order to Cash

Examples of IBM’s Own BPM – SAP Projects and Benefits in 2011

Business Value Business Value

AchievedAchieved

Mid-Market Deal Registration – Delivered $18.5M 2012 PTI by reducing deal registration cycle time with rules-based work-flow automation.

Supply Chain Alerts – Over $2M annual savings for timely notifications when supply chain disruptions occur.

Pricing estimator for Cross-brand solutions – Reduced pricing proposal implementation from 14 days to 1 day and deployment to new countries in days versus weeks.

GTS Cloud Sales Enablement – Integrated work-flow, rules and monitoring to reduce partner “register to welcome kit” cycle-time from days to hours.

GMU Geo Location Code Assignment - Geo location code is key enabler of GMU expansion. Eliminated manual process and enabled GMU reps to update rules directly and reduced cycle time to update and run rules from several weeks with many handoffs to just a week for more than 50 countries.

Infrastructure Optimization – Reduced cycle time by 75% to complete the analysis required to migrate from Physical servers to Virtual servers.



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Process Innovation for SAP can be enabled with IBM Software and Expertise

Analytics

Enterprise Content

Management

Master Data Management

Integration

Business Process

Management

Process Discovery & DesignProcess Discovery & Design

Business MonitoringBusiness Monitoring

Operational Decision

Management

Process Innovation

Adaptive Case

Management

Domain Expertise

Organizational Enablement

FIFinancial

Accounting

COControlling

PSProjectSystem

WFWorkflo

w

ISIndustry

Solutions

HRHuman

Resources

MMMaterials

Mgmt.

SDSales &

Distribution

PPProductionPlanning

QMQualityMgmt.

PMPlant

Maintenance

SMServiceMgmt.

ECEnterpriseControlling

AAAsset

Accounting

SAPApplications



15

IBM BPM V8 integrates seamlessly with SAP to improve your implementation and execution success

FIFinancial

Accounting

COControlling

PSProjectSystem

WFWorkflo

w

ISIndustry

Solutions

HRHuman

Resources

MMMaterials

Mgmt.

SDSales &

Distribution

PPProductionPlanning

QMQualityMgmt.

PMPlant

Maintenance

SMServiceMgmt.

ECEnterpriseControlling

AAAsset

Accounting

SAPApplications

Upload processes to Solution Manager

Download processes from Solution Manager

Orchestrate SAP Services

Retrieve Enterprise Service Definitions

Monitor SAP Business Events



Lev 3

Lev 2

Lev 1

Lev 0

SAP Implementation Content

Activity, (Sub-)process, Service

Process Step

ProcessBusiness Process

Business Scenario

Process ApplicationProject

Business Process Hierarchy

IBM Process DesignerSAP Solution Manager

Implementation Contenteg. Transactions, Docs

SS

I4BP

M

IBM BPM can easily exchange Models with SAP Solution Manager

s

IBM BPM maps its process elements directly to SAP Solution Manager constructs and

performs bidirectional exchanges



17

IBM offers a comprehensive solution to SAP implementation and process challenges

Challenge IBM BPM Solutions

Opaque SAP processes make process analysis and improvement difficult

Iterative, playback-based modeling facilitates transparent process definition

Rigid SAP processes increase time to value Directly execute SAP process models for flexible processes and rapid process change cycles

End-to-end processes are difficult to model, simulate and manage

Easily orchestrate heterogeneous processes for simple end-to-end control

SAP Enterprise Services are difficult to use and incomplete

Easily consume and deploy SAP Enterprise Services at the business level

Limited SAP process and real-time visibility causes risk to KPIs and SLAs

Actively monitor and manage SAP and heterogeneous processes in real time

Low utilization of inline operational decision management limits productivity

Improve process throughput, consistency and responsiveness with active inline decision management



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BPM Enhances the Value of Your SAP Investment


Optimize IT spending

Gain higher ROI faster


Give employees new ways to access enterprise information

Reduce risk


Reduce costs through increased flexibility

Improve insight

Improve productivity


SAP with IBM BPM

SAP OnlyBenefit


Optimize IT spending

Gain higher ROI faster


Give employees new ways to access enterprise information

Reduce risk


Reduce costs through increased flexibility

Improve insight

Improve productivity


SAP with IBM BPM

SAP OnlyBenefit



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Applying IBM BPM to SAP

Modeling for Documentation

Guided Workflow

Process Integration and Orchestration

Process Automation

Real-Time Monitoring

Inline Decision Automation

Use an iterative, experiential-based approach to accelerate traditional SAP blueprinting

Mine SAP business events to discover actual processes and act in real time to business challenges

Interactively guide end users through process steps to improve productivity, visibility and consistency

Optimize process steps to improve cycle time, manageability and visibility of key processes

Dramatically reduce the cycle time of high volume processes by reducing/removing human interaction

Automate complex decision making to reduce bottlenecks and improve business outcomes

Increa

sing

Integ

ration



20

IBM BPM Drives Stronger Business Results From Your SAP Implementation

‘Live’ playback during all phases of process design and rollout

Reduce blueprinting time and costs

Deliver agile SAP business processes that are easy to change

Create market-differentiating SAP processes

Position your SAP implementation for continuous process improvement

Integrate SAP business activity monitoring

Business users can directly drive SAP blueprinting, process orchestration and process improvement s



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Next Steps

Discuss with us how to provide you and your team with a demonstration or a detailed briefing

Discuss how we could assist with your SAP project

Let us lead your team with an in-house workshop

s

+



22

Examples



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SAP Process Documentation Is Usually Outdated by Months or Years

2008 2012SAP process blueprints created

Probably Outdated

SAP design completed Probably Outdated

SAP configuration changes completed

Additional SAP configuration changesDocumentation Possibly

Outdated

SAP customization completed

Additional SAP customizationDocumentation Possibly

Outdated

Ad hoc changes to processes by end users Blueprint Not Updated

Without insight into the ‘real’ SAP processes being used in production, it is very difficult to initiate and build an effective process innovation program or to

migrate to a newer SAP release.



24

Event-Based Business Monitoring Can Be Used to Uncover the ‘Real’ SAP Processes

SAP can create and publish the business events needed to discover the actual business processes in production

VD03 - Display customer master

VA01 - Create sales order;

CK51N - Create Order BOM Cost Estimate

VOK0 - Maintain Pricing;

IW21 - Create notification

+

Ad hoc or added process steps

A list of detailed business events, describing what was

actually done by the user

• Customer displayed (VD03)

• Customer changed (VD04)

• Sales order created (VA01)

• Sales order modified (VA02)

• Pricing Maintained (V0K0)


• Notification previewed (IW22)

• Order BPM cost estimated created (CK51N)


• Customer displayed (VD03)

Which could be analyzed by a data analyst or process

specialist to discovery real

process structures



25

But SAP’s Business Monitoring Approach is Overly Complex

…And lots of custom coding is required to implement



26

Identify trends, forecast events, feed & correlate alerts to make key decisions for critical business situations and events in real-time

Completely non-intrusive to SAP – simply turn on the SAP Business Events needed

Easily customize dashboards to ensure targeted, relevant information

Easily create ‘shadow process’ views of SAP Business Events by associating milestones with changes in business state

Rebalance work loads on the fly

Leverage mobile

Business Monitor can be used to drive real-time insight that leads to continuous Process Innovation



27

Most SAP implementations follow a traditional approach while using general purpose documentation tools

Most SAP customers use Office or Visio for blueprinting.

Some leverage Aris which is a documentation-centric modeling tool.

These tools encourage a documentation-centric approach to process management.

The typical SAP implementation approach is structured to drive configuration and not Process Innovation.

Approximately 40% of SAP customers use Solution Manager to maintain their process flows, which is used to document, but not control, the business process and can not provide execution of the process.

Goal Setting and Scope Management

Process Analysis

SAP Process Library

SAP Process Blueprinting

(Powerpoint, Visio, Excel, Aris)

SAP Solution Manager

Configure Customize



28

A typical SAP process today

A high level process blueprint is defined in Powerpoint, Visio, SAP Solution Manager or a modeling tool, including transactions:






The implementation then relies on users to read, properly understand and comply with documentation by entering the proper sequence of transaction codes in SAP.



29

With this approach, how can you?....

Quickly know the status of key processes?

Ensure that the process you designed is the process that is being executed?

Get real-time visibility into where workload or other bottlenecks are causing business issues?

Effectively reroute work to less experienced workers to reduce bottlenecks?

Know which process changes are most likely to help improve business performance?

Quickly rollout SAP process changes?

Quickly integrate new process workers into your business?

Many SAP customers attempt to address these

issues with customization.



30

Workflow in the traditional SAP implementation is paper based

Process designers create SAP documentation (paper, Word, HTML, etc.)

Users are trained in how to use the SAP process documents

Some users comply with the process as designed, others create their own

Training time for new users is often lengthy

Difficult to move users from task to task, even in the same department

Little to no visibility of backlogs, bottlenecks, poor throughput and other process issues








31

With IBM BPM 8.0 the picture is your SAP process

Import SAP or IBM best practice libraries

Playback any process – regardless of the level of detail and completion

Include real screens, mockups or images

Clarify roles, process steps, flow, KPIs and reporting

Process execution is logged

Process performance parameters are visible - KPIs are calculated & displayed in real time

See, feel and touch the process as it’s executing



32

IBM BPM Can Deliver Guided Workflow for SAP

VD03 – Display Customer MasterVD03 – Display Customer Master

Define process in BPM V8

Define activities or steps to execute process – clarify roles, steps, experts, and KPIs.

Invoke correct SAP screen & transaction sequence for each process step, while gaining real time insight into business performance issues and opportunities

Process performance parameters are visible - KPIs are calculated & displayed in real time

If multiple instances exist process can execute at best practice while handling unique differences for each instance



33

Use BPM to Collaborate and move decisions to closer to the source

Interact with other Participants via

Stream of comments and attachments for process instance

Get closer to your operations through on the go

visibility into how, when and by whom process work gets done



34

IBM BPM automation or guided workflow improves SAP Value Documented processes become

orchestrated processes

Improve SAP process: Visibility Manageability Reliability Consistency Audit-ability Performance

Detect bottlenecks

Reroute process instances with capacity overload

Escalate problem processes

Initiate and track exception processes

Begin continuous process improvement



35

The Value of IBM BPM for SAP

Business performance

Agility

Flexibility

Visibility

Variability

Manageability

Audit-ability

Consistency



36

Use IBM BPM Throughout Your SAP Life Cycle

A New SAP Implementation

SAP Version Migration

SAP Process Innovation

End-to-End Process Integration

Functional Extensions

Most SAP Implementations Benefit from IBM BPM at every life cycle stage

s



37

Large US Toy Company Improves SAP Supply Chain Processes to Reduce Costs

BPM Solution

• Gathers the bill-of-lading information from freight forwarders and corresponding invoice data from SAP at the right time

• Automatically prepares and routes all documentation required

• Automates the reconciliation process required for all US Customs requirements, updating SAP at each milestone

IBM BPM reduced dependency on phone calls, e-mails and paper faxes, while standardizing communication between employees and vendors with increased process visibility

Challenge: Increase responsiveness with customers and

collaboration with suppliers while utilizing previous investments in core enterprise applications

Benefits: Increased productivity by 250 percent

without additional resources being put into play

Reduced cycle times by 80 percent, from 12 days to only two

Improved overall business efficiency



38

Small Sample of IBM BPM SAP Customers



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Next Steps

Discuss with us how to provide you and your team with a demonstration or a detailed briefing

Discuss how we could assist with your SAP project

Let us lead your team with an in-house workshop

s

+



40

BPM can help you maximize your investment in SAP customizations

Top reasons for SAP customization: Streamline or customize the SAP

user interface Streamline or customize the SAP

process flow Add complementary functionality Integrate with non-SAP systems

SAP provides tooling to accomplish each, but not in the same tool

IBM BPM V8 provides all four capabilities in a single tool, driven by the process definition & innovation

Reducing SAP customization reduces cost and deployment time, while minimizing risks to future SAP updates

Total Cost

FlexibilityBusiness Fit

Typical Customizations

using SAP

Typical Customizaitons using IBM BPM & SOA Technologies

SAP

the process innovation journey for sap

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