SAP Solution in Detail SAP Business Suite

Continuous innovation for ProduCts and serviCes

EvolvE Smoothly for DiffErEntiAtion AnD Growth

Evolving your products and services to add market share and seize revenue opportunities while protecting your brand is a major challenge in this volatile global economy. Aggregating and communicating the relevant information gets harder the more your ecosystem grows. Piecemeal improvements in portfolio performance management and project planning and execution can bolster innovation, but you need a well-tuned engine to sustain that advantage. SAP Business Suite software supports the business insight and business process integration to connect key functions in a closed feedback loop that enables continuous innovation for profitability.

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Integrating Inspiration, Delivery, and Performance Analysis Strategy and Planning Product intelligence Strategy management initiative Planning Innovation Management idea management Concept Development Program and Project Management Project Portfolio Planning resource management initiative management Project Execution Project Accounting market launch management Portfolio Management Performance visualization Project Profitability Analysis Realizing the Benefits of Using SAP Business Suite Software for more information

integrating insPiration, delivery, and PerformanCe analysis

foStEr your ABility to StAy AhEAD of ChAnGinG DEmAnD

when your favorite customers demand improvements, or you spot several inviting windows in a tough market, how do you make the right choices quickly and for maximum profitability? you rarely have enough top talent or the financial resources and production capacity to pursue all potential opportunities at once or even to be proactive about innovation. A reactive stance leaves your products and services in danger of commoditization, weakening their crucial differentiation from competitive offerings. youd like to lead from strength, but can you still define the core competencies in all corners of your extended enterprise and keep strategy aligned with them?
remaining competitive in the market is also no longer based solely on the merits of your products and services; it also depends on the health of your business model. when your value chain begins to extend its global reach and rely more heavily on collaboration, efficiency can suffer. Key programs and projects

involving widely distributed constituencies often lag behind schedule. And you must have the flexibility to adjust resource allocations on the fly as market demands evolve across the ecosystem. tracking the performance of product and service portfolios across multiple currencies and languages is also complex, so collecting reliable information for decision makers can be daunting. these challenges demand a new approach to evaluating business value, which we call a feedback-forward process. this paradigm activates first strategy and planning, then management of the right resources, next coordination of efficient development and launch, and finally measurement of the business value that feeds back to strategy and planning. this is the framework for true continuous product and service innovation. SAP Business Suite software helps you institute this kind of continuous product

and service innovation by focusing your entire extended enterprise on innovation opportunities. you can spot possibilities, develop concepts into products, optimize program and project management, and commercialize new offerings more effectively. And to close the loop, the software integrates revenue and cost analytics to monitor performance to inform future product and service strategies and planning processes with clear and consistent business intelligence. figure 1 shows how the four steps loop back to drive innovation through business value in SAP Business Suite software. with this approach you can: respond nimbly to customers and market opportunities leverage the right talent, partners, and capabilities in innovation processes Achieve speed and efficiency across complex programs and projects measure and evaluate the strategic impact of investments in innovation

1 Strategy and planning identifying value opportunities

2 Innovation management leveraging talent and core capabilities

3 Program and project management

4 Portfolio management

Coordinating efficient measuring and development and optimizing business launch value

Figure 1: Continuous Product and Service Innovation

SAP Solution in Detail Continuous innovation for Products and Services

strategy and Planning

iDEntify vAluE oPPortunitiES

Simply waiting for new opportunities to present themselves is not a likely path to success. Creating your own luck starts with the aggregation of all relevant knowledge about product performance, project pipelines, operational metrics, market trends, and customer needs. the rich set of business intelligence tools and analytics in the SAP software enables strategists and planners to gather this input and collaborate on interpreting it to identify profitable innovation opportunities. A product and service road map with innovation targets helps communicate the initiatives clearly, so that all leaders along the path can properly focus the intellectual and creative disciplines of their organizations.

Strategy Management
Strategy management functions in SAP Business Suite foster coordination, communication, and alignment among key stakeholders on product and services strategies. By creating a high-level strategic plan based on vision, mission, and goals, you can demonstrate the fit of the innovation initiative with overall corporate strategy. you can establish milestones and key performance indicators (KPis) and monitor metrics by scorecard to keep performance within defined ranges.

Initiative Planning
initiative planning means weighing the cost and benefit of high-level plans to assess feasibility and communicating those you select as clear and focused innovation opportunities. for any desired product innovation strategy, the SAP software helps you establish and plan innovation initiatives and their respective projects. By drawing up a general timeline and assessing financial objectives and resource requirements, you can estimate the cost and staffing requirements of an innovation initiative. you can also articulate the interaction of other business objectives, addressing functional, technical, legal, or compliance issues with each innovation topic under the overall product innovation initiative. During innovation management, topics may be solicited from or assigned to various internal and external communities.

Product Intelligence
Product intelligence functions collect, maintain, and present accurate and complete business information to support product strategy with near-term, midterm, or long-term detail on sales figures; material costs and availability; and production costs and capacity. this high visibility into combinations of trends, capabilities, and costs can lead to new insights for further definition and alignment in the strategy management process.

Simply waiting for new opportunities to present themselves is not a likely path to success. Creating your own luck starts with the aggregation of all relevant knowledge about product performance, project pipelines, operational metrics, market trends, and customer needs. the rich set of business intelligence tools and analytics in the SAP software enables strategists and planners to gather this input and collaborate on interpreting it to identify profitable innovation opportunities.

SAP Solution in Detail Continuous innovation for Products and Services

innovation management
lEvErAGE your tAlEnt AnD PArtnErShiPS

there are various approaches to managing the innovation process, but idea management, collaboration, and concept development lie at the core of most. And there are many ways to encourage those efforts in any given project. But engaging the right people and business partners at the right time in the right way to support continuous innovation requires a comprehensive approach. long-term success requires the inclusion of human resources and legal business processes. on the human resources front, driving innovation ultimately depends on attracting and retaining the best people with the optimal skill sets. Every winning innovation opportunity has had its reflection in sound employee performance management, and failure to integrate employee performance incentives is a sure way to jeopardize innovation objectives. in addition, the legal handling of intellectual property whether based on strict confidentiality or open disclosure must involve a clear strategy, a dedicated team, and the integrated business processes to support both the strategy and the team throughout innovation activities.

managing ideas begins with the strategic innovation topics derived from the strategy and planning process. these strategic innovation topics may be extended company-wide, throughout your partner ecosystem, or to various third-party service providers to solicit further ideas. Qualified ideas that have been filtered and evaluated are then brought back into the initiative for further concept development.

Concept Development
Concept development functions help you build fully developed business cases for development from the selected ideas and any relevant interrelated ideas. the process begins with the decision to follow through on promising innovation topics derived from the idea management process. functions supporting concept development, like those supporting all innovation processes, are integrated in SAP Business Suite software with your operations and analytics. this helps ensure that the movement from inspiration to product addresses all relevant issues arising within portfolio management, resource planning, and financial planning functions.

Idea Management
SAP Business Suite software helps you screen and rationalize new ideas, conduct preliminary assessments, and identify a short list of promising ideas properly aligned to company strategies.

the timely execution of complex innovation initiatives requires information across project portfolios, human resources, and financial systems. SAP Business Suite software provides comprehensive visibility and management functionalities designed to improve the ongoing selection, scoring, monitoring, and review of programs and associated resources.

SAP Solution in Detail Continuous innovation for Products and Services

DEvEloP lEADS AnD lAunCh nEw ProDuCtS AnD SErviCES

Program and ProjeCt management

the timely execution of complex innovation initiatives requires information across project portfolios, human resources, and financial systems. SAP Business Suite software provides comprehensive visibility and management functionalities designed to improve the ongoing selection, scoring, monitoring, and review of programs and associated resources. Because task duration and task outcome are often uncertain when youre developing new products and services, managing the efficient use of resources is a key

ingredient of success. Closed-loop project planning and execution helps keep utilization levels optimal, reducing the total cost of development and increasing the net output of the innovation pipeline. with SAP Business Suite software, you retain the flexibility to fine-tune resource allocation if priorities change as the strategic impact of projects shifts because of market volatility. Simply developing and launching a new product or service on time and within budget cannot ensure its value. other

critical factors include pricing, cost structure, and adoption in the market over which those responsible for developing the new product or service often have little influence. therefore, development and launch requires a coordinated program that from the outset engages all stakeholders, including marketing, sales, operations, and key supply and distribution partners. Software such as the SAP Portfolio and Project management application can help you coordinate development and launch, as illustrated in figure 2.

Figure 2: Example of a Coordinated Program in Product Development Using SAP Software

SAP Solution in Detail Continuous innovation for Products and Services

Project Portfolio Planning

Proper project portfolio planning helps you coordinate resources and projects across multiple business functions to bring new offerings to market during a time frame that allows maximum revenue capture. SAP Business Suite supports this business process, which follows your decision to move forward with qualified product and service development concepts. it requires making well-informed decisions about how to prioritize, schedule, and staff the new product or service development project among other enterprise projects.

Project Execution
Successful project execution enables a team to plan, manage, and control the entire project development process, from initial idea to completion. this includes network planning techniques and integrated tools that support cross-project costs, revenues, margins, schedules, and resource management. SAP Business Suite software lets you set up a project and monitor its progress throughout its lifecycle. A project planning board simplifies project planning and control, combining tabular and graphical data to provide a global overview and help you assign resources to tasks. thorough time reporting allows you to measure and track efforts, budgets, and expenditures. the software also enables you to guide the entire development process and target cost reduction with efficient project management Phase gate management functionality enables the definition of standard processes with milestones and establishes criteria for advancing from one phase to the next. it also reviews and manages projects through the crucial investment decision points at which projects are killed or continued.

Market Launch Management

functionality supporting market launch management in SAP Business Suite covers the entire process of introducing the new product or service into the market and managing its interaction with consumers to achieve your business goals. the launch occurs after the product is developed and tested and involves considerable investment in sourcing, manufacturing, distribution, marketing, and sales. the commercialization phase ends when the product or service has reached the end of its useful life and is retired, renewed, or regenerated.

Resource Management
resource management is the allocation of appropriate resources to specific tasks. the process begins during project planning, where SAP Business Suite software lets you reserve resources for later confirmation once the project is in the execution phase.

Initiative Management
initiative management functionality in SAP Business Suite aggregates data from all processes involved in your product innovation and development initiative and gives you an overview of project performance. you can plan financial and capacity resources and track the progress of your initiative against specified metrics. you can control how your initiative moves forward by scheduling and tracking reviews and decision points.

Project Accounting
Project accounting is an important cornerstone in project management. with SAP Business Suite software, you can track and trace budget consumption through tight and transparent management of project costs. this visibility into financial performance is useful not only in real time but also for reporting and forecasting.

measuring the strategic impact of a product and service portfolio against overall business performance metrics is fundamental to understanding the return on innovation investments. Assembling current, accurate, and complete information and displaying it appropriately for the given audience are backbreaking tasks without the right business intelligence tools.

SAP Solution in Detail Continuous innovation for Products and Services

Portfolio management

oPtimizE BuSinESS vAluE AnD rEturn on invEStmEnt

measuring the strategic impact of a product and service portfolio against overall business performance metrics is fundamental to understanding the return on innovation investments. Assembling current, accurate, and complete information and displaying it appropriately for the given audience are backbreaking tasks without the right business intelligence tools.

based on actual company-wide development, supply chain, manufacturing, support, and sales metrics. the visualization features of SAP Businessobjects software let you see the strategic impact of initiatives and link them to their original activities and insights, so that you can ultimately determine a return on innovation.

can feed performance management insights into strategy and planning cycles for a truly sustainable and continuous approach to product and service innovation. you can, for example, use tools such as SAP Businessobjects Xcelsius Enterprise software to view metrics in which you have defined and updated initiative KPis. these can include total production costs, planned and actual revenues, time to market, and cash flow year by year (see figure 3).

Performance Visualization
SAP Businessobjects software, which integrates with SAP Business Suite software, supports the development of product and service performance dashboards

Project Profitability Analysis

Project profitability analysis in the dashboards helps you compare financial planning forecasts and project execution costs with actual or existing operational costs as well. And product and service managers

Figure 3: Example of Product PerformanceOriented Analytics

SAP Solution in Detail Continuous innovation for Products and Services

realizing the Benefits of using saP Business suite software

CloSE thE looP for SElf-SuStAininG innovAtion

SAP Business Suite software helps support continuous product and service innovation by first empowering you to: identify growth and innovation opportunities proactively Develop key insights that leverage core capabilities Create an innovation road map aligned with corporate strategies Shift the right resources to projects that show the greatest strategic potential implement consistent and sustained program management processes Keep portfolio performance visible and aligned with corporate objectives

meeting those objectives can also help you aim toward higher-level strategic goals, such as: Engaging partners and customers everywhere in innovation increasing your ability to create intellectual property or patent value reducing the total cost of new-product development Accelerating times to market improving resource utilization

For More Information

to learn more about how SAP Business Suite software helps enable continuous product and service innovation, call your SAP representative today or visit us on the web at www1.sap.com/solutions /executiveview/product-development /innovate-products-continuously/index .epx.

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SAP Solution in Detail Continuous innovation for Products and Services

QuiCk faCts

www.sap.com /contactsap

Summary Competitive strength depends on the performance of the extended value chain. And boosting profitability means aligning product and service development with core capabilities. SAP Business Suite software can help you manage these challenges and take a proactive approach to sustained and continuous innovation. Business Challenges respond nimbly to customers and market opportunities optimize resources and capabilities in innovation processes Achieve speed and efficiency across complex programs and projects measure and analyze the strategic impact of innovation investments Key Features Product intelligence Deliver accurate information on demands, capabilities, and pipeline to support product and service strategies Strategy management Enable open communication and full collaboration among key stakeholders on product and service strategies Innovation management leverage the right talent, partners, and capabilities to enhance your companys core innovation competencies Project portfolio management Coordinate resources and projects cross-functionally to enable launching at the right time to maximize profitability Resource management Define overall resource demand based on initiatives, projects, and proposals, and allocate resources appropriately to achieve enterprise objectives Project execution and profitability analysis focus on deliverables, roles, and commitments, and compare financial planning forecasts and project execution costs with actual operational costs Business Benefits Sharper competitive edge through faster time to market to capture revenue opportunity and market share Higher profitability and performance as a result of better-managed development and resource utilization Improved perception to raise loyalty among your customers and awareness for your brand, with your responsiveness to changing demand For More Information to learn more, call your SAP representative or visit us at www1.sap.com/solutions /executiveview/product-development/innovate-products-continuously/index.epx.

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