Smarter processes - IBM Business Connect Qatar
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Accelerating SAP Value with IBM BPM
Logan Vadivelu
BPM Technical Leader and SAP SME
3
Topics
• The Process Imperative for SAP Implementation
– Business challenges faced by customers due to silo-ed systems and broken processes
• BPM's Role and Value in enabling Smarter Process Orchestration in ERP / SAP landscape
• Introducing IBM BPM Capability for SAP
– Enables business flexibility without complex and costly SAP customizations
• Demo – A Day in the Life of Order to Cash
4
Topics
• The Process Imperative for SAP Implementation
– Business challenges faced by customers due to silo-ed systems and broken processes
• BPM's Role and Value in enabling Smarter Process Orchestration in ERP / SAP landscape
• Introducing IBM BPM Capability for SAP
– Enables business flexibility without complex and costly SAP customizations
• Demo – A Day in the Life of Order to Cash
5
Evolution of Business Drivers in the Packaged Applications Space
Reduce
Custom
Coding
and related costs
Flexibility
Application
Configuration
Improved
System-Level
Collaboration
SOA and Application
Integration
Active
Business
Performance
Optimization
Orchestration and
Inline Automated
Decision Making 1980’s 1990’s 2000 - present FORWARD!
6
SAP Process Optimization Gaps
• Not clear what the currently running processes really are
• Limited real-time operational visibility
Flexibility Visibility
Agility Control
SAP configuration and customization typically deployed at major release boundaries
Slow to respond to change “at the pace of business”
Achieved through complex configuration and customization of SAP today
Proliferation of customized SAP transactions
Limited process compliance and operational cost control capability
Unnecessary or counterproductive tasks are often performed
Know the status of key processes?
Get real-time visibility into bottlenecks?
Effectively reroute work to less experienced workers?
How can the average SAP
customer:
Know which process changes are most likely to help?
Quickly rollout process changes?
Quickly integrate new process workers into your business?
7
Top SAP Challenges
• Informal and incomplete process management paradigm
• Complex configuration and transaction tailoring
• Frustrating user interface and other usability issues
Inadequate operational visibility,
flexibility, agility and control
A transaction-centric business
driven by custom reports and
informal compensation
Best business optimization options
not clear
Over-differentiation resulting in excessive customization
Over-differentiation resulting in excessive functional extension
Under-differentiation that negatively impacts business performance
SAP Issues Business Challenges
Design Tensions
8
Topics
• The Process Imperative for SAP Implementation
– Business challenges faced by customers due to silo-ed systems and broken processes
• BPM's Role and Value in enabling Smarter Process Orchestration in ERP / SAP landscape
• Introducing IBM BPM Capability for SAP
– Enables business flexibility without complex and costly SAP customizations
• Demo – A Day in the Life of Order to Cash
9
Managing Processes for Better Business Benefits Varying Capabilities Required across process levels to address Business Challenges
L6 – Sub-Transaction and Exception Management
Record Keeping (SoR)
Data Integrity
Exception Management
Reporting
Data Reusability Productivity
L1
L2 - Group
L3 - Process
L4 - Activity
L5 – SAP Transactions
SAP
Category
Business Process Hierarchy
(System of Engagement)
(System of Record) BPM
Flexibility
Visibility
Simplicity Optimization
Automation Mobile access
Agility
Consistency
Reusability Productivity SLA / KPI
Collaboration
L6 – Sub-Transaction and Exception Management
Record Keeping (SoR)
Data Integrity
Exception Management
Reporting
Data Reusability Productivity
L1
L2 - Group
L3 - Process
L4 - Activity
L5 – SAP Transactions
SAP
Category
Business Process Hierarchy
(System of Engagement)
(System of Record) BPM
Flexibility
Visibility
Simplicity Optimization
Automation Mobile access
Agility
Consistency
Reusability Productivity SLA / KPI
Collaboration
L1
L2 - Group
L3 - Process
L4 - Activity
L5 – SAP Transactions
Category
Business Process Hierarchy
L1
L2 - Group
L3 - Process
L4 - Activity
L5 – SAP Transactions
Category Business Strategy
Operation
Process
10
An Example of applying BPM to manage ERP BPM enables Level – 3 process modeling, orchestration of Level-4s and provide visibility
Level 4 Process Step
Verify Customer & Product Info
Credit Limit Exceeded ?
Yes
No Create Delivery
Manager Approval
Credit Approved ?
Yes
No
Pick & Pack Goods
Post Goods Issue
Enter Order Data
Auto Release Block ?
Yes Release Credit Block
Review Credit
Increase
No Hold Order
Invoice Customer
Post Payment
Level – 3 Process - - Order-to-Cash
11
BPM helps Extend SAP Processes Across the Enterprise For Wider Reuse to Increase ROI
Web Order Capture Process
B2B Order Capture Process
CSR Order Capture Process
Mobile Order (Sales Rep)
Capture Process
Activity
Flo
w
Level – 3 Processes
In BPM
Level – 2 Process Group
In BPM
Level - 4 in SAP and below in BPM
BPM enables, supports and manages higher level
processes (Level 1 – 3)
SAP + BPM typically support Level-4 and
lower processes
Business Users
ERP CRM ERP
12
Combining the ‘best of the both’ Worlds ….
• The premiere integrated business application platform
• Robust and complete transactional capabilities
The premiere BPM platform, providing a formal
and complete process management paradigm
Simple process configuration and SAP
transaction tailoring
Flexible, highly productive user interface
The right amount of process differentiation,
driven by business need – not time and cost
Transactional Layer
Process Layer
13
Manage Your Business at the Process Level While minimizing SAP complexity, configuration and customization
• Optimize business processes by providing visibility, agility and control for all processes
• Simplify work content, business processes and the management approach
• Increase efficiency and control with consolidated task management across all your applications
• Empower the business with real-time analytics and optimized decision making
• Reduce SAP customization and configuration through business-user-focused capabilities
• Enable continuous process improvement
Move your business to a
process-driven paradigm with
integrated modeling,
orchestration, monitoring and
optimization.
14
Surround SAP With a Highly Flexible Process Layer
Transaction Orchestration
End to End Orchestration
Sub-Transaction Orchestration + Visibility
Orchestrated Exception Processes
Real-Time Monitoring and Operational Insight
Orchestrated Value Management Processes
Forensic Process Discovery
Empirical Process Characterization
Iterative Business Blueprinting
IBM BPM for SAP introduces a radically superior process paradigm for SAP
15
Topics
• The Process Imperative for SAP Implementation
– Business challenges faced by customers due to silo-ed systems and broken processes
• BPM's Role and Value in enabling Smarter Process Orchestration in ERP / SAP landscape
• Introducing IBM BPM Capability for SAP
– Enables business flexibility without complex and costly SAP customizations
• Demo – A Day in the Life of Order to Cash
16
Core IBM BPM for SAP Capabilities
• Apply the right mix of process innovation capabilities based on:
– Process characteristics
– The level of optimization desired
– Current process innovation maturity
Business Optimization Potential
Reduce blueprinting time, cost and risk
Improve process reliability, flexibility, visibility and control
Improve process efficiency and reduce business
complexity
Innovation
Iterative Business
Blueprinting
Process Integration and Orchestration
Process Automation
Process Discovery and
Monitoring
Decision Automation
Guided Workflow
Mine SAP Business Events to discover actual processes and act in real time to business challenges
Use an iterative, experiential-based approach to accelerate traditional SAP blueprinting with SAP Solution Manager
Interactively guide end users through SAP screens 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
Transformation
17
IBM BPM Integrates Seamlessly with SAP Design-time and Run-time Integration for leveraging SAP functionality
FI Financial
Accounting
CO Controlling
PS Project System
WF Workflo
w IS
Industry Solutions
HR Human
Resources
MM Materials
Mgmt.
SD Sales &
Distribution
PP Production Planning
QM Quality Mgmt.
PM Plant
Maintenance
SM Service Mgmt.
EC Enterprise Controlling
AA Asset
Accounting
SAP
Applications
Upload processes to Solution Manager
Download processes from Solution Manager
Orchestrate SAP Processes and
Services
Retrieve Enterprise Service Definitions
Monitor SAP Business Events
s
18
IBM BPM Guided Workflow Requires Limited IT Involvement
Import the SAP Business Process Hierarchy (BPH) into
IBM BPM
Launch a new process instance or select from your inbound task list.
Complete your SAP transaction. Review the process picture, see who has worked on previous process steps, leverage previous process collaborations
1
2 3
19
Generate Guided Workflow for Imported Process Configure SAP server and run default guided workflow
20
IBM BPM Guided Workflow Enhances the User Experience The SAP GUI is Automatically Surrounded by Rich Process Tools for Every End User
Standard or ‘Z’ SAP GUI
Process Status (Diagram)
Process History
Process Collaboration
History
Process Experts
Community
Process instance data
from previously
steps can be pre-loaded
into the SAP screen
Process Launch Bar
Launch any process for which a user is authorized
See a pictorial process history and downstream steps
See a detailed stream showing all process steps completed thus far
See the complete collaboration history for the current process step
Instantly contact an identified expert in the current process step
IBM BPM Guided Workflow for SAP automatically transforms any SAP GUI into a rich process workspace,
tightly integrated into its process context.
21
Guided Workflow Enables Iterative SAP Process Blueprinting
Use ‘live’ process execution to design and test SAP business processes, then implement your SAP process using the same tool!
Model Processes
Playback Process
SAP Guided Workflow
Monitor Results
Enrich, Configure, Simulate and Refine
Test and Deploy
SAP Solution Manager, Aris,
etc.
Design, build and refine processes for execution in a single integrated tool set. Optionally store process definitions in SAP Solution Manager Repository.
Iteratively invoke or design screens as part of the process definition exercise
Playback modeled processes at any time to directly see, feel and touch the real process
Empirically understand how the process can meet KPIs and SLAs
Simulate changes without changing the current model process. Incorporate new process changes.
Promote the new or changed process into production
22
Orchestrate and Automate Complex E2E Processes
1. Order is received from the web site
3. Credit check and approval are completed
5. Required components are determined, ordered, allocated and received
4. Customer order is written and confirmed for production
6. Production order is completed and warehoused
7. Customer order is approved for shipment
8. Customer order is picked from warehouse and scheduled for shipping
2. Customer records are updated with order request information
9. Customer order is invoiced
End-to-End Process Choreography
Retrieve Customer
Master Data IBM BPM SAP
Integration Module
Create Sales Order IBM BPM SAP
Integration Module
Create Order BOM
Cost Estimate IBM BPM SAP
Integration Module
Create Notification IBM BPM SAP
Integration Module
IBM BPM Order to Ship End-To-End Process
23
Understand and Manage Any Process – Even Without Orchestration!
• Gain real time operational insight. Monitor total cycle time, process step cycle time, lag times between process steps, average queue size, actual queue at time of execution
• Orchestration is not necessary! Identify exception process frequency and causality
24
Benefits of SAP Business Activity Monitoring View SAP and other system
transactions as processes – without process orchestration!
Easily understand the complex network of business transactions within SAP or across systems
Empirically categorize process characteristics and performance issues
Minimally intrusive to SAP – configure the SAP Business Events needed
Minimize the time required to prepare for a new SAP implementation, a version migration or process innovation
Minimal disruption to your SAP environment
25
Topics
• The Process Imperative for SAP Implementation
– Business challenges faced by customers due to silo-ed systems and broken processes
• BPM's Role and Value in enabling Smarter Process Orchestration in ERP / SAP landscape
• Introducing IBM BPM Capability for SAP
– Enables business flexibility without complex and costly SAP customizations
• Demo – A Day in the Life of Order to Cash
26
Use IBM BPM Throughout Your SAP Life Cycle A New SAP
Implementation
SAP Version Migration
Continuous SAP Process Optimization
End-to-end Process Integration
Functional Extensions and Customizations
Any SAP Implementation can benefit from every IBM BPM capability at every life cycle stage.
Sta
ble
SA
P
Imp
lem
en
tatio
n
27
IBM BPM for SAP Value
• Reduce SAP customization costs by 50% or more
• Reduce time required for SAP changes by 50% or more
• Improve business process cycle time and costs by up to 80%
• Reduce process bottlenecks by 75% or more
• Improve productivity by 250% or more
• Decrease time to market by 25% or more
• Improve process visibility, flexibility, agility and control
• Dramatically simplify your business, while providing high
process compliance
28
How does IBM BPM enhance Traditional SAP? Process Monitoring & Discovery - Visibility across processes in SAP & other applications
Blueprinting - integrated with SolMan, but using IBM agile BPM Playback Methodology
Guided Workflow – implementing business user screen flow w/o written code
Process Orchestration – deeper process management of transactions
Decision Management - Extending SAP Logic – using natural language, your vocabulary & simple logic vs.
code
Process Integration – across SAP and non SAP, multiple departments and manual steps and exceptions (e.g. Order to Cash)
Keep SAP clean – avoid bespoking e.g. for differentiating fit/gap, move configuration complexity to the process layer
Process automation and optimisation
Agile business driven processes/rules
Reduce IT TCO
Productivity improvements
Faster process cycle times and time to market for process/rule changes
29
Start Here
Example References by Maturity
• Automate a manual process
• Provide visibility
• Faster cycle times
• Improve compliance
• Innovation
• Go to market
• Customer centricity
• Product flexibility
• Industry standards
• Economies of scale (factory
approach)
• Accelerate Time to value
• Prebuilt assets / reuse
• Standards (business + IT)
First Project
- Point solutions - Early wins
Program - industrialisation
- Optimize projects - Extend to new projects
Transformation
-LoB, Enterprise focus -Align strategy and execution -e.g. Globally integrated enterprise
Adoption and Maturity
Note 1: Non SAP context
Note 1 Utility Co. uses SAP for billing
but can’t optimise
BPM enhances Refund Process
-62% Faster cycle time
20 FTE reduction
ROI after 14 months
Business users directly manage the changes to the business process
Business users built and deployed 200 processes to production within 18 months
SAP Harmonisation project to transform time to market for new products
EU Utility
30
Common IBM BPM for SAP Use Cases
• Revenue optimization - adaptive processes that modify, reduce or eliminate steps based on revenue optimization rules
• Supply chain exception handling – manage the complex web of supply chain exceptions in a systematic, yet flexible manner to decrease time to problem resolution and optimize revenue
• Design/execution integration - monitoring and orchestration to help improve collaboration and process execution reliability across PLM, ERP and B2B activities
• New product introduction - process orchestration and monitoring to reduce time to market and time to value
• Vendor sourcing – flexible processes to streamline the integration of new purchased material sources • New pricing release - process orchestration and data quality assurance to improve new pricing KPIs • New employee onboarding - reduce cycle time and costs throughout the requirements, recruiting,
hiring and onboarding processes • Replacement of traditional treatments for SAP custom development - use cases are client-specific • SAP CoEs - many clients are looking to including IBM BPM as part of their SAP and process innovation
CoE strategy and execution - use cases are client-specific
31
#1 in BPMS market share
IBM is the proven leader in all aspects of BPM
*Source: IBM Press Release; http://www-03.ibm.com/press/us/en/pressrelease/37376.wss
IBM was named the #1 vendor in BPMS software with a 27.1 percent share, almost triple that of
its closest competitor*
32 IBM Confidential 32
32
Questions
+ = Enables Innovative Business Model