THE THREE DIMENSIONS OF SAP BUSINESS ByDESIGN SET THE ... · The Three Dimensions of SAP Business...
6
October 2016 THE THREE DIMENSIONS OF SAP BUSINESS ByDESIGN SET THE STAGE FOR GROWTH SIMPLICITY, FLEXIBILITY, EXTENSIBILITY IN THE CLOUD In Cloud ERP: The Great Enabler of Growth, Mint Jutras examined how Enterprise Resource Planning (ERP) solutions delivered as software as a service (SaaS) help companies fuel and simplify growth by addressing people challenges and mitigating risk, while maintaining governance and control. Cloud solutions enable you to fail (or succeed) faster, allowing you to focus on the next and best opportunity for growth. While some of the factors that enable growth are inherent in any SaaS solution, not all cloud ERP solutions are created equal. Targeting mid-size and fast growing companies, SAP claims its SAP Business ByDesign is designed specifically to help these companies grow and maximize profits. In this report we investigate the merit of those claims. SAP Business ByDesign was born in the cloud in 2007, long before “Run Simple” became the mantra of SAP. Yet the initial objective was to simplify, delivering a 100% cloud-based solution for the small to mid-size enterprise (SME), while also fully leveraging SAP’s experience and infrastructure. Instead of reworking an existing product, SAP took a “start over” approach, and over the past nine years has developed and refined a three dimensional design philosophy. Those three dimensions: simplicity, flexibility and extensibility. This philosophy is a perfect prescription for a growing company that needs to get out of the gate fast, but has not yet reached, or perhaps even determined its final destination. How does SAP do that? ABOUT SAP BUSINESS BYDESIGN Before we answer that question, it is important to understand what it is. SAP Business ByDesign is a cloud-based ERP solution delivered exclusively as software as a service (SaaS). Instead of the traditional approach of building out modules like accounting, purchasing and inventory, then later fleshing out the product with features that bring them all together, SAP designed and developed SAP Business ByDesign in much the same way a business develops and grows. It created business process scenarios like order-to-cash, procure- to-pay, and intra-company stock transfers (see sidebar, next page). Some of these business scenarios may sit within a single functional area of the business, but more likely, they might span many different functions. This is a Who is SAP? SAP is one of the very few ERP solution providers with instant name recognition across the globe. By sheer numbers, SAP is a market leader, but is also well-known for its very comprehensive solution for large enterprises. However, 80% of SAP customers are small to mid-size companies. Some facts about the company: ü Over 320,000 customers in 188 countries ü 80,000+ employees and locations in more than 130 countries ü 45+ year history as a solution provider ü Annual revenue (IFRS) of € 20.79 billion in 2015 ü Listed under the symbol "SAP" on stock exchanges, including the Frankfurt Exchange and NYSE
Transcript of THE THREE DIMENSIONS OF SAP BUSINESS ByDESIGN SET THE ... · The Three Dimensions of SAP Business...
October2016
THETHREEDIMENSIONSOFSAPBUSINESSByDESIGNSETTHESTAGEFORGROWTH
SIMPLICITY,FLEXIBILITY,EXTENSIBILITYINTHECLOUD
InCloudERP:TheGreatEnablerofGrowth,MintJutrasexaminedhowEnterpriseResourcePlanning(ERP)solutionsdeliveredassoftwareasaservice(SaaS)helpcompaniesfuelandsimplifygrowthbyaddressingpeoplechallengesandmitigatingrisk,whilemaintaininggovernanceandcontrol.Cloudsolutionsenableyoutofail(orsucceed)faster,allowingyoutofocusonthenextandbestopportunityforgrowth.WhilesomeofthefactorsthatenablegrowthareinherentinanySaaSsolution,notallcloudERPsolutionsarecreatedequal.Targetingmid-sizeandfastgrowingcompanies,SAPclaimsitsSAPBusinessByDesignisdesignedspecificallytohelpthesecompaniesgrowandmaximizeprofits.Inthisreportweinvestigatethemeritofthoseclaims.
SAPBusinessByDesignwasborninthecloudin2007,longbefore“RunSimple”becamethemantraofSAP.Yettheinitialobjectivewastosimplify,deliveringa100%cloud-basedsolutionforthesmalltomid-sizeenterprise(SME),whilealsofullyleveragingSAP’sexperienceandinfrastructure.Insteadofreworkinganexistingproduct,SAPtooka“startover”approach,andoverthepastnineyearshasdevelopedandrefinedathreedimensionaldesignphilosophy.Thosethreedimensions:simplicity,flexibilityandextensibility.Thisphilosophyisaperfectprescriptionforagrowingcompanythatneedstogetoutofthegatefast,buthasnotyetreached,orperhapsevendetermineditsfinaldestination.HowdoesSAPdothat?
ABOUTSAPBUSINESSBYDESIGNBeforeweanswerthatquestion,itisimportanttounderstandwhatitis.SAPBusinessByDesignisacloud-basedERPsolutiondeliveredexclusivelyassoftwareasaservice(SaaS).Insteadofthetraditionalapproachofbuildingoutmoduleslikeaccounting,purchasingandinventory,thenlaterfleshingouttheproductwithfeaturesthatbringthemalltogether,SAPdesignedanddevelopedSAPBusinessByDesigninmuchthesamewayabusinessdevelopsandgrows.Itcreatedbusinessprocessscenarioslikeorder-to-cash,procure-to-pay,andintra-companystocktransfers(seesidebar,nextpage).Someofthesebusinessscenariosmaysitwithinasinglefunctionalareaofthebusiness,butmorelikely,theymightspanmanydifferentfunctions.Thisisa
Who is SAP?
SAPisoneoftheveryfewERPsolutionproviderswithinstantnamerecognitionacrosstheglobe.Bysheernumbers,SAPisamarketleader,butisalsowell-knownforitsverycomprehensivesolutionforlargeenterprises.However,80%ofSAPcustomersaresmalltomid-sizecompanies.
Somefactsaboutthecompany:
üOver320,000customersin188countries
ü80,000+employeesandlocationsinmorethan130countries
ü45+yearhistoryasasolutionprovider
üAnnualrevenue(IFRS)of€20.79billionin2015
ü Listedunderthesymbol"SAP"onstockexchanges,includingtheFrankfurtExchangeandNYSE
TheThreeDimensionsofSAPBusinessByDesignSettheStageforGrowthPage2of6
littlehardertodo.Withthescenarioapproach,thedesignersanddevelopersneedtounderstandmorethanonefunctionalsiloofthebusiness.Theyneedtounderstandhowthebusinessactuallyruns.
ButSAPalreadyhadaccumulatedthisexpertisethroughmanyyearsofdefiningrequirements,doingfunctionaldesigns,developingbestpractices.Itjustneededtoleverageallthisexperienceandreinvent,redesignanddeliveritforanewtargetmarket-mid-sizeandfast-growingcompaniesandsubsidiaries(businessunits,divisions)oflargeenterprises.
YetthetargetmarketforSAPBusinessByDesignisnotdefinedentirelybycompanysize.Needsvarybasedonindustryandproductofferingsofpotentialcustomers.Traditionallycompaniesfallintotwodistinctcategories:thosethatmake,moveand/orsellphysicalgoodsandthosethatbuildtheirbusinessonprovidingservices.TypicallyERPproductsaredesignedtofocusononeortheother,butnotnecessarilyboth.
Whilethisworkedwellfordecades,todaymanybusinessesareablendofthetwocategories.ThefirstSAPBusinessByDesigncustomerscamefrombothofthesetwodifferentworlds,andhappenedtoberepresentativeoftherealitiesoftoday’schangingbusinessclimate.BythetimethedustsettledontheearlyversionsofSAPBusinessByDesign,SAPfounditcouldeffectivelysupportbothcategories,aswellasblendedbusinesses.
Thisisparticularlykeyduringgrowthandexpansion.Evenifyouarepurelyoneortheothertoday,itislikelyyouwillnotbetomorrow.Andasyouextendyourfootprintinternationally,differentlocations(whichifindifferentcountrieswillbedifferentlegalentities)andsubsidiariesmightplaydifferentrolesintheorganization.
HOWSAPBUSINESSBYDESIGNENABLESGROWTHInordertoenablegrowthasolutionmustbebroad(intermsoffunctionality),flexibleandextensible.WehavealsoseenhowcloudERPcanbeanimportantenablerofgrowth.SAPattackstheserequirementswithamodernandmodulararchitecturethatwasborninthecloud.ItdeliversanextgenerationuserexperiencethatcontinuestoevolveandabusinessconfiguratorthathasbecomethegoldstandardwithinSAP,helpingorganizationsadaptastheygrowandchange.Andfinally,itembedsreportingandanalyticsrightintheapplicationitselfsothatcontinualoversightandanalysisdoesnotbecomeanafterthought.
SAPBusinessByDesignismodularbydesign.Thisshouldnotbeconfusedwithsimplybeingcomprisedofasetofmodules.Bydefinition,anyERPsolutionisanintegratedsuiteofmodules.Itishowmodulesarecoupledtogether,orinthecaseofSAPBusinessByDesign,howtheyaredecoupled,thatmakesasolutionflexibleorrigid.
SAP Business ByDesign Business
Scenarios
ü CashandLiquidityManagement
ü CustomerContractManagement
ü CustomerReturnManagement
ü DemandPlanningü ExpenseReimbursementü FieldServiceandRepairü FinancialClosingü FixedAssetManagementü Intra-CompanyStock
TransferüMake-to-StocküMarketing-to-
Opportunityü Order-to-Cash
(StandardizedServices)ü Order-to-Cash(Project-
BasedServices)ü Order-to-Cash(Sellfrom
Stock)ü Order-to-Cash(Third-
PartyOrderProcessing)ü Order-to-Cash(Specified
Products)ü PayrollServicesü PhysicalInventoryManagement
ü Procure-to-Pay(Non-Stock)
ü Procure-to-Pay(Services)ü Procure-to-Pay(Stock)ü ProductCatalogManagement
ü ProductDefinitionü ProductDevelopmentü ProductEngineeringü ProjectManagementü QualityAssuranceü Request-to-Resolveü ResourceManagementü StrategicSourcingü SupplierReturnManagement
ü TimeandLaborManagement
üWorkforceAdministrationandAuthorization
TheThreeDimensionsofSAPBusinessByDesignSettheStageforGrowthPage3of6
Thisdecouplingisdeliveredinavarietyofways.First,businesslogicisdecoupledfromtheuserinterface,allowingforeaseoftranslationandalsothereuseoflogicandservicesacrossanynumberofdifferenttypesofinterfaces.Thesametransactionscanbetriggeredwhetheryouareusingtheproductthroughabrowseronadesktop,amobileapplicationornouserinterfaceatall.Throughprocessautomation,sometimesthebestuserinterfaceisnointerface.Also,thesoftwaremodulesthemselvesareessentiallydecoupled.Insteadofhard-codedlogic,communicationbetweendifferentmodulesismessage-based.Thismakesitfareasiertoaddorswapmodulesandbusinessscenariosasneededoreventoconsumeinnovation.
Trendsintheindustryhavebeenconvergingtowardthegoalofmakinginnovationandthesoftwareitselfeasiertoconsume.Easeofuseisfirstandforemostaboutefficiency,whichnotonlyrequiresauserinterfacethatisintuitive,butalsoprocessesthatalignwiththewaybusinessreallyworks-businessscenariosthatmaximizeefficiencyandminimizetimetocompletetasks.
SAP’sdesignmethodologyisconducivetosupportingboth.Whendesigningabusinessscenario,SAPdesignersgoonsite,observingthewaypeopleworkandinteract.Theirdesignsarebasedontheseobservationsandthenvalidated,typicallyinmultiplecountries(China,India,GermanyandtheUnitedStates)beforebeingincorporatedintotheproduct.
Theresultofthismethodologyhasbeenanemphasisonthehumanengineeringoftheprocess,withthethemeofsimplicityandpersonalization.
PersonalizationwithinSAPBusinessByDesignisachievedthrougha“BusinessConfigurator”thattakesadvantageofthepre-definedbusinessscenariosdiscussedearlierandarules-basedcatalog.Togetherthesealloweachcustomertotailorthesolutiontospecificneedsbyinteractinginbusinesslanguage,notcodeandwithoutinvasivecustomization.Thesebusinessscenariosmaptheworkflowofabusinessprocessthroughthevariousfunctionsofthesolution.Selectingapre-definedscenarioautomaticallyselectsallthefunctionsnecessaryduringinitialimplementation.Customerscanthenselectivelyfine-tunethesettingsimmediatelyorasbusinessconditionsorastheorganizationalstructurechanges.
Reorganizationsareacommonresultofthesechangesascompaniesmatureandgrow.SAPBusinessByDesignallowsgrowingcompaniestomaintainasingleorganizationstructurethatdefinesrelationshipsbetweenalllegalentitiesbothfromafinancialconsolidationstandpointaswellasanorganizational(reporting)pointofview.
Legacysolutionsoftenrequirethesedifferentstructurestobemaintainedseparatelybybusinessunit,embeddingtheenterprisestructurewithinthegeneralledgeraccount,makingmaintenanceclumsyandanytypeofchangedifficult.Onceestablished,changingthestructureofthechartofaccountsis
SAPBusinessByDesignallowsgrowingcompaniestomaintainasingleorganizationstructurethatdefinesrelationshipsbetweenalllegalentitiesbothfromafinancialconsolidationstandpointaswellasanorganizational(reporting)pointofview.Asenterprisesmatureandgrowbothofthesetendtoshiftandchange.
Definition of ERP MintJutrasdefinesERPasanintegratedsuiteofmodulesthatformstheoperationalandtransactionalsystemofrecordofyourbusiness.Itincludesallthemasterdataneededtosupportthefullcyclefromordertocash,includingafullaudittrailofalltransactions.Whilethisisourminimaldefinition,mostcompleteandmodernERPsolutions,includingSAPBusinessByDesign,domuchmorethanthistoday.
TheThreeDimensionsofSAPBusinessByDesignSettheStageforGrowthPage4of6
nexttoimpossible.Inlegacysystemspersonnelreportingstructureswerelikelytobedefinedinacompletelyseparatesolution,iftheywererecordedatall.Thesetwoareoftennotalignedidenticallyandthiscausesproblemsinmanagingperformancewhilemaintaininggovernanceandcontrol.
SAPBusinessByDesignprovidestheflexibilitytostructureallofthisonce,inawaythatmakesmostsense,notinthewaydictatedbyyourERP.Ofcourse,decidingwhatmakessenseandthebestwaytospurandsupportgrowthisnotasimpledecision.Itrequiresafullunderstandingofyourcurrentbusinessstatus,aswellassomeinsightintofuturepotentialoutcomes.
Forcurrentbusinessstatus,oftencompanieslooktoreportingcapabilitieswithintheirERPsolutionsforthisviewofoperationalperformance,althoughmostaresittingonamountainofdata,buthavedifficultyinprocessingthroughitveryquicklyinordertodiscernwhichkeyperformanceindicators(KPIs)willbemostindicativeoffutureperformance.Yetinmanaginggrowth,younotonlyneedthatoperationalreporting,youalsoneedtolookbeyondcurrentoperationsandanalyzethepotentialofgrowthopportunities.Forthisyouneedanalytics.Whiletraditionalreportinganswersyourquestions,analyticshelpyouasktherightones.MostERPimplementationstodaydon’tadequatelydelivereither.
SAPBusinessByDesignembedsanalyticsdirectlyintothebusinessscenarios.Theanalyticsarebrowser-basedandavailableonmobiledevices,completewithalertsthatcanbesentinrealtime.SAPmakesextensiveuseofdashboards,whichbusinessuserscancreateorpersonalizeforthemselves.ButSAPdidn’tturnitsbackonbusinessusers’almostuniversalloveforspreadsheets.OfflineanalysisusingMicrosoftExcelisstillpossible.
FEATURE/FUNCTION:GROWTHMAYREQUIREMOVINGBEYONDERPFUNCTIONALITYThegrowthanddevelopmentofSAPBusinessByDesignhasfollowedapaththatmodelsthegrowthandexpansionofabusiness.AndsometimesthismeansneedingsomethingwellbeyondthetraditionalscopeofERPquiteearlyon.Itisnotjustverylargeenterprisesthatfacethischallenge.Asyouexpandintonewcountriesandtransformyourbusinessintoa“blended”business,yourneedswillvaryateach(new)location.
Let’ssayyouarelookingtoexpandyourmarketintonewterritoriesbyopeninganewsalesoffice.You’llneedtosupportthebusinessscenariofrommarketingtoopportunity.Youwillneedtoconvertquotestoordersandthenperhapsmanagetheorder-to-cashcycleorsendthoseorderstocorporateortoothersistersubsidiariesinordertodeliver.
Perhapsyouhaveasubsidiarydedicatedtoresearch.Humanresourcemanagementandprojectmanagementwillbeattheheartofyouroperations.
Business Scenarios– New Sales Office
ThefollowingBusinessScenariosdeliveredbySAPBusinessByDesignmayberequired:
üMarketingtoOpportunity
ü CustomerContractManagement
üDemandPlanningüOrdertoCashü ProcuretoPayü ProductCatalogManagement
ü StrategicSourcingü ProjectManagementüOthers….
Companiesaresittingonamountainofdata,makingitdifficulttoprocessthroughitveryquicklyinordertodiscernKPIswillbemostindicativeoffutureperformance.Afterall,theycan’tlookateverydetail…Orcanthey?
TheThreeDimensionsofSAPBusinessByDesignSettheStageforGrowthPage5of6
Timeandlabormanagementandworkforceadministrationandauthorizationbusinessscenarioswilllikelybedeployed.
Ifyousell,supportandrepairaphysicalproduct,youmayorganizerepairthroughdepotrepairandreturn,oryoumighthaverepairfacilitiesdistributedaroundtheworldforon-siterepair.Youwillneedfieldserviceandrepair,customerreturnmanagement,order-to-cash(forstandardizedorproject-basedservices),timeandexpensemanagement,eitherprocure-to-payorinter-companystocktransfersaswellastimeandlabormanagement–allbusinessscenariosbuiltintoSAPBusinessByDesign.
Throughout,whetherlookingatsubsidiariesorthecorporatewhole,youwillneedtomanagecashandliquidity,payrollservices,qualityassuranceandthefinancialclose.Forthisyouneedvisibility,deliveredbySAPBusinessByDesign’sembeddedanalytics.Andyouwillneedaconsolidatedviewacrossthesepotentiallydifferentbusinesseswithinthebusiness.ThisistheadvantageofSAPBusinessByDesign’sapproachofasingle,multi-purposesolution–providingitreallycanmeettheindividualneedsofthedifferentfunctions.
SUMMARYANDKEYTAKE-AWAYSCloudERPisindeedagreatenablerofgrowthformid-sizecompanies,particularlythoselookingtotakeboldstepsinarapidlychangingbusinessclimate.ItisclearthatSAPhastakentheneedsofthesemid-sizecompaniesseriously,particularlythosethatarefastgrowing.
Keyfactorsandthereforekeytakeawaysinclude:
• A“startover”approachthatkeepsthedesignanddevelopmentcleanandclear,butisabletodrawextensivelyfromSAP’svastexperienceandtechnologyinnovation
• AbusinessconfiguratorthathasbecomethegoldstandardwithinSAPforadaptingandpersonalizingthesolutionwithoutinvasivecodechangesorlock-in
• Theabilitytomaintainasingleorganizationstructurethatdefinestherelationshipsbetweenbusinessunits,locationsorsubsidiariesandalsoflexiblydefinesreportingstructuresthatmaycrosslegalentityboundaries
• Pre-definedbusinessscenariosthatallowentirecompaniesornewsubsidiariestogetoutofthegatefast,butwiththeflexibilitytoadapttochange
• Functionalitythatcreatesanend-to-endsolutionforavarietyofdifferentbusinessmodelsformanufacturedgoodsandservices,orablendedbusinessofboth
SAP Business ByDesign
Somefactsandcurrentstatisticsabouttheproduct:
ü3,500+businessesrunSAPBusinessByDesignsupporting80,000+users
üUsedin90+countriesaroundtheworld
ü175+largeenterprisesrunSAPBusinessByDesignintheirsubsidiaries
ü250+value-addedpartnersworldwide
ü200+softwaresolutionpartnerswith1,800+add-onsolutions
ü19SAP-deliveredcountrylocalizations,supporting9languages
TheThreeDimensionsofSAPBusinessByDesignSettheStageforGrowthPage6of6
• Anextgenerationuserexperiencethatmakesextensiveuseofdashboardsandembeddedanalytics,whetheronadesktop,laptoporanymobiledevice
Formid-sizecompanieslookingtotakefulladvantageofunprecedentedgrowthopportunities,anyoldERPisnotenough.Ifyouareinsearchofacloud-basedERPsolutionthatcanhelpyougrowandgrowquickly,SAPBusinessByDesigndefinitelydeservesconsideration.
Abouttheauthor:CindyJutrasisawidelyrecognizedexpertinanalyzingtheimpactofenterpriseapplicationsonbusinessperformance.Utilizingover40yearsofcorporateexperienceandspecificexpertiseinmanufacturing,supplychain,customerserviceandbusinessperformancemanagement,Cindyhasspentthepast10+yearsbenchmarkingtheperformanceofsoftwaresolutionsinthecontextofthebusinessbenefitsoftechnology.In2011CindyfoundedMintJutrasLLC(www.mintjutras.com),specializinginanalyzingandcommunicatingthebusinessvalueenterpriseapplicationsbringtotheenterprise.
