SAP Performance Management

In Purchasing & Logistics

Jürgen Andermahr Ulrich Gantenbein

Field Solution Manager Business Architect
Purchasing & Logistics Business Performance Management
SAP (Schweiz) AG SAP (Suisse) SA
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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.
 Agenda

1. Today Challenges in Performance Management

2. SAP Delivers: Supply Chain Performance Management
3. SAP Delivers: Spend Performance Management
4. Value & Summary

© SAP 2010 / JAN / Page 3

 Today challenges in enterprise networks

Demand for revenue growth Fear of poor customer service

reality
Increased margin pressure Spiraling supply chain costs

Focus on brand protection Control failures, product recalls

Need to balance demand and supply Excess inventory, out-of-stock

reality

Calls for improved network efficiency Maverick one-off spending

Expectation for trade compliance Non-compliance, border hold-ups

© SAP 2010 / JAN / Page 4

 Enterprise value - Continuous process

Demand for revenue growth Ensure perfect order

need
Increased margin pressure Optimize for profitability
Focus on brand protection Monitor compliance

Bridge the measurement gap.

Align planning and action with strategy
Monitor, control, and optimize execution.

Need to balance demand and supply Maintain visibility and control

need

Calls for improved network efficiency Actively manage risk

Expectation for trade compliance Automate filing and reporting

© SAP 2010 / JAN / Page 5

 SAP solution for enterprise value
Packaged applications for performance management

SAP SCPM SAP SPM

Supply Chain Performance Management Spend Performance Management

Standards-based process support Automated data collection

Automated data collection Gain deep data accuracy and

full spend visibility
Proactive supply chain diagnostics
Identify and realize saving opportunities

© SAP 2010 / JAN / Page 6

 Agenda

1. Today Challenges in Performance Management

2. SAP Delivers: Supply Chain Performance Management
3. SAP Delivers: Spend Performance Management
4. Value & Summary

© SAP 2010 / JAN / Page 7

 SAP delivers
Packaged applications for performance management

SAP SCPM SAP SPM

Supply Chain Performance Management Spend Performance Management

Standards-based process support Automated data collection

Automated data collection Gain deep data accuracy and

full spend visibility
Proactive supply chain diagnostics
Identify and realize saving opportunities

© SAP 2010 / JAN / Page 8

 Supply chains are under pressure
And you can not manage what you cannot measure

How much Consumer Confidence Index

should I
Volatility 65

produce? 50

35
Sample of M J J A S O N D J
Economic Measures 2007 2008 Change
Dow Jones Industrial Average
14,279 8,579 -39.9%
on Oct 9
Crude Oil/bbl on Oct 9
Institute of Supply Management
$94.83

50.9%
$76.77

38.9%
-19.0%

-23.6%
Are my Risk
– PMI for Manufacturing, Oct
$/Euro on Oct 9 .7093 .7320 +3.2%
customers How, if at all, has the amount of supply chain risk
faced by your company changed in the past 5 years?
University of Michigan satisfied ?
80.9 57.6 -28.1%
Consumer Sentiment Index- Oct 33
Increased significantly 23
Purchasing Manufacturing Index
44
Increased Slightly
42
Am I managing 15
my assets No change 26
effectively? Decreased Slightly 6
7 2008, n = 273
Cost What are your company's 2 main
Decreased significantly 1 2006, n = 3,172
strategic goals for your supply chain? 2
Reducing costs
Improving customer service McKinsey, 2008
Getting new products/services to market faster
Improving reliability of supply chain
Improving product quality
Reducing company’s carbon footprint
Maintaining majority of employees in home region
None of above

Supply Chain Digest, 2009, and McKinsey, 2008

© SAP 2010 / JAN / Page 9
 Need for Performance Management
Effectiveness, not only efficiencies

Volatility

Why is this
happening? Inventories

Product quality

Purchasing cost

Risk

How are Number of returns

we doing?
Cost Customer satisfaction

Customer defection
Accounts payable

Cash flow
What should
Shipment cost we do?

© SAP 2010 / JAN / Page 10

 SAP BusinessObjects
Supply Chain Performance Management

Improving Supply Chain Effectiveness

Standards based end to end process support

At any time, know your operational and related
financial performance
Comply with leading industry standards for
performance management (e.g. SCOR)

Automated data collection

Timely insights, with tight operational application
integration
Relevant information, derived from actual business
processes

Proactive diagnostics
Fully understand operational drivers affecting
performance
Deliver alerts about deviations from performance
targets

© SAP 2010 / JAN / Page 11

 Demo
SAP Supply Chain Performance Management

SAP Supply Chain Performance Management

© SAP 2009 / Seite 12

Solution: SAP BusinessObjects Supply Chain
Performance Management
Executive Scorecards

Define and track supply chain

goals

Set targets and monitor

performance of KPI’s

Benchmark against industry

peers

Understand performance in
detail
Solution: SAP BusinessObjects Supply Chain
Performance Management
Impact Analysis and
Metrics Management

Flexibly model metrics

hierarchies

Define relationships between

KPIs and visualize them

Identify and understand full

consequence of changing
metrics
Solution: SAP BusinessObjects Supply Chain
Performance Management
Intuitive Business User UI

Flexible and customizable

analytical scenarios

End user authoring capabilities –

report, dashboard creation, alert
definition

Create snapshots in briefing

books

Out of the box, role based

content – Scorecards, Metrics,
Dashboards, Reports
 Agenda

1. Today Challenges in Performance Management

2. SAP Delivers: Supply Chain Performance Management
3. SAP Delivers: Spend Performance Management
4. Value & Summary

© SAP 2010 / JAN / Page 16

 SAP delivers
Packaged applications for performance management

SAP SCPM SAP SPM

Supply Chain Performance Management Spend Performance Management

Automated data collection

Standards-based process support
Gain deep data accuracy and
Automated data collection full spend visibility
Proactive supply chain diagnostics Identify and realize saving opportunities

© SAP 2010 / JAN / Page 17

Root causes for ineffective spend information

Disparate data sources Dirty data Difficult to access

Multiple ERP’s Multiple points of Complex spreadsheets

Multipe DWH‘s entry Reliance on IT for reports
GL Accounts Duplicate suppliers Complicated analysis tools
T&E Misclassified items Spending more time in creating reports
Multiple contract Unclassified than in using them to realize savings
platforms invoices
Outsourced
….
 SAP BO Spend Performance Management
the complete end to end solution

spend transparency spend accuracy access to spend information

Data classification and Business Content: Spend specific data model,

Data integration supplier normalization business user interface

Supplier Spend
Normalization + Classification

Data Stores Info Cubes

Process

ERP 1
GL

T&E
P-Cards
Business
Compendium
Knowledge Base

Out of the box ETL for Data services (DSE): SAP NetWeaver BW 7.0 Out of the box
Solution

SAP source systems Supplier business Out of the box data frontend
BusinessObjects ETL compendium model Integration into portal
(Data Services) for ‘Predictive Coding’ Integrats easily with Briefing book,
Non-SAP sources other SAP BW models dashboards, etc.
 SAP BO Spend Performance Management
data collection / integration

spend transparency spend accuracy access to spend information

Data classification and Business Content: Spend specific data model,

Data integration supplier normalization business user interface

Supplier Spend
Normalization + Classification

Data Stores Info Cubes

Process

ERP 1
GL

T&E
P-Cards
Business
Compendium
Knowledge Base

Out of the box ETL for Data services (DSE): SAP NetWeaver BW 7.0 Out of the box
Solution

SAP source systems Supplier business Out of the box data frontend
BusinessObjects ETL compendium model Integration into portal
(Data Services) for ‘Predictive Coding’ Integrats easily with Briefing book,
Non-SAP sources other SAP BW models dashboards, etc.
SPM Data Integration and Data Quality

SAP extractor kits

Preconfigured SAP extractors to be transported into
each ECC system

easy to deploy

BusinessObjects Data Services

powerful data quality functionality within the data
integration environment

Built-in features for pre-validating data against business

rules and auditing data movement execution

End-to-end metadata impact analysis and lineage

Powerful preconfigured transformations

Self-service data management

SPM Business Content

 SAP BO Spend Performance Management
the “washing machine”

spend transparency spend accuracy access to spend information

Data classification and Business Content: Spend specific data model,

Data integration supplier normalization business user interface

Supplier Spend
Normalization + Classification

Data Stores Info Cubes

Process

ERP 1
GL

T&E
P-Cards
Business
Compendium
Knowledge Base

Out of the box ETL for Data services (DSE): SAP NetWeaver BW 7.0 Out of the box
Solution

SAP source systems Supplier business Out of the box data frontend
BusinessObjects ETL compendium model Integration into portal
(Data Services) for ‘Predictive Coding’ Integrats easily with Briefing book,
Non-SAP sources other SAP BW models dashboards, etc.
Supplier Cleansing, Normalization and
Enrichment
Used to normalize, validate and de-duplicate supplier data

Validate Supplier information to

ensure transparent business
relationship

Establish Parent / Child relationships

Enrich vendor data to include Business

Multiple
Compendium
diversity information, credit rating, master files
financial data
Data Classification

Used for classifying spend data to a taxonomy that enables effective sourcing

“Predictive Coding Methodology” allows us to

classify miss-classified or unclassified
transaction

Build taxonomy to a customer’s specification

(or a standard coding system such as UNSPSC)

Massive knowledge base ensures high degree

of thoroughness and accuracy

Transaction
Knowledge
Base MultiVariate
Analyses
 SAP BO Spend Performance Management
business user interface

spend transparency spend accuracy access to spend information

Data classification and Business Content: Spend specific data model,

Data integration supplier normalization business user interface

Supplier Spend
Normalization + Classification

Data Stores Info Cubes

Process

ERP 1
GL

T&E
P-Cards
Business
Compendium
Knowledge Base

Out of the box ETL for Data services (DSE): SAP NetWeaver BW 7.0 Out of the box
Solution

SAP source systems Supplier business Out of the box data frontend
BusinessObjects ETL compendium model Integration into portal
(Data Services) for ‘Predictive Coding’ Integrats easily with Briefing book,
Non-SAP sources other SAP BW models dashboards, etc.
Intuitive business user navigation

Create own
analysis

Create personal
dashboards

Set filters, alerts

Capture
snapshots in
briefing book
Spend Advisor for performance monitoring

Establish goals and

measures of spend
performance
Monitor key spend
Set Goals
performance
indicators
External data feeds
Take Action
Established and view Integration into SAP
spend performance
monitors Bidding Engine and
non-SAP sourcing
applications also
possible
 Demo
SAP Spend Performance Management

SAP Spend Performance Management

© SAP 2009 / Seite 28

 Agenda

1. Today Challenges in Performance Management

2. SAP Delivers: Supply Chain Performance Management
3. SAP Delivers: Spend Performance Management
4. Value & Summary

© SAP 2010 / JAN / Page 29

 Packaged apps - Faster time to value
At lower cost, lower project risk

Configure and extend

Set up users
Personalize
Gather requirements
Define business questions
Time and
Design and build data model Cost Savings
Design and build reports
Define metrics
Design and build dashboards
Design and build analytic workflows
Define business meta build
Define data staging and loading Configure and extend
Set up users
Define scope
Personalize
Identify best practices
Gather requirements
Select components Define business questions

Self Build Packaged Analytics

© SAP 2010 / JAN / Page 30

 Value proposition
Packaged analytic applications

Packaged Analytic Applications Custom-Build Analytic Applications

Deployed in matter of weeks

Deployed in months or years
(‘managed’ by IT or 3rd party)

Business user self-service

Developed and owned by IT
(discover, personalize, use)

Built around business practices

Built around data
(actionable, user language, navigation)

Application roadmap
Technology roadmap
(e.g. sourcing optimization)

Viable solution
Continued IT maintenance costs
(from leading EPM vendor)

Benefits Benefits

Less Risk
Faster Time to Value Increased Flexibility (IT)
Lower Cost

© SAP 2010 / JAN / Page 31

 SAP benchmarking services
Know where you stand, and where to improve

Since participating in the

“ Benchmarking and Best Practices
program we can compare apples to
apples. We know what each
business process costs and we can
go after technical improvements to
reduce the costs.”

Mike Stoko, Assistant Director, SAP

Global Operations and Value
Capture, DuPont

Services by SAP Value Engineering

Industry-leading benchmark program
Wide network of partnerships

© SAP 2010 / JAN / Page 32

 For more Information:
Ulrich Gantenbein
Business Architect
Business Performance Management
SAP (Suisse) SA
T: +41 58 871 64 08
E: ulrich.gantenbein@sap.com
W: www.sap.com/srm
Thank you!
© SAP 2010 / JAN / Page 33
Jürgen Andermahr
Field Solution Manager
Purchasing & Logistics
SAP (Schweiz) AG
T: +41 58 871 63 37
E: juergen.andermahr@sap.com
W: www.sap.com/scm
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