Business Process Improvement using Business Process Analytics

Business Process Improvement using Business Process Analytics Mark Cooling/SAP SSC (Ireland) Ltd. July, 2012

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© 2012 SAP AG. All rights reserved.

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Key Take Aways Business Process Analytics tool & Business Process Improvement

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Main target of Business Process Improvement is that you maximize the value of your existing SAP solution

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Business Process Analytics is a problem oriented SAP Solution Manager tool that supports Business Process Improvement activities and complements your existing SAP Business Warehouse/SAP BusinessObjects reporting environment

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SAP provides a Business Process Improvement methodology in order to analyze critical process milestones in a systematic 9 step approach

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Over 750 out-of-the-box key figures allow a fast technical Business Process Analytics implementation within days so that the root cause analysis is the main activity within a Business Process Improvement project


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Motivation for Business Process Improvement Projects Benefits & Challenges Goal

Transparency

Benefit

Challenge

Global transparency across organizational units & process variants

…increase process compliance and standardization by reduction of process diversification and template adherence.

Reduced process costs

... automate business processes and reduce manual process inefficiencies and human errors. Avoid systematic process exceptions.

Higher customer satisfaction, improve working capital

…avoid delayed business documents (e.g. deliveries or shipments) and financial losses (e.g. delayed invoices or payments).

Better planning results & more accurate business reporting

…avoid business documents remaining in un-finished status. Close all documents within the SAP system that are closed from a business perspective.

Higher reliability of financial reporting & possible detection of fraud

…avoid parked documents and open items in FI-AP and FI-AR before PEC. Ensure that all SD invoices are created and transferred to FI before PEC. Review blocked payments in MM & FI.

Efficiency

Effectiveness

Clean-up

Internal Audit


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Focus & Value Areas for Company Success Mapping of example Key Figures

Customer Satisfaction Overdue Sales Orders Sales Ordes with delivery block Overdue outbound delivieries Number of returns

Revenue / Receivables

Cost / Payables

Inventory / Capital tie-up

 Sales Orders & Deliveries without invoice  Invoices not transferred to FI  Open & overdue items in FI-AR  Bank statements not posted

 Number of credit memos (requests)  Open & overdue items in FI-AP  Blocked items for payment (cash discount endangered)  Early payments

   

Slow moving items Materials with expired shelf life Inspection lots w/o usage decision Open & overdue reservations items

Working Capital

Working Capital

   

Supply Chain Planning Accuracy  Open & Overdue Purchase Requisition & Order items  Open & Overdue STO items (incl. stock in transit)  Open & Overdue Planned Orders

 COGI errors  Prod. Orders overdue for release  Schedule lines initially not confirmed

Data Accuracy

Performance

Integration & Automation

 Incomplete Sales Document items  Application Log errors  Update errors & ABAP dumps

 Production / Process / PM Orders without deletion flag  Transaction & job runtimes

 Interface errors  Background job cancellations  Batch Input errors


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Business Process Lifecycle Alert Monitoring, Analytics, Dashboards

Business

IT Business Process Stabilization

Business Process Improvement

Business Process Improvement

(monitor interfaces & jobs)

(based on document backlog)

(based on internal benchmarks)

 Minimize interface failures  Minimize errors or delays in background processing  Maximize technical performance  Avoid functional errors (e.g. ABAP dumps, update errors)

“Protect initial investment” Business Process Monitoring for interfaces, background jobs & cross-application

 Identify possible end-user training gaps  Standardization issues  Close process design gaps  Adjust customizing and/or configuration  Clean up old & open business data

 Lead Time calculation for certain process steps  Analysis of Inventory (Slow Moving Stock)  Supply Chain Analysis (STO Value in Transit, STOs without Deliveries)  Order Analysis (Returns, Rejections, Incompleteness)

“Make most of initial investment & achieve optimum according to plan” Business Process Analytics

Business Process Analytics

Business Process Operations Dashboards


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Business Process Operations Architecture & Information Flow – High-level Overview Application

BP Analytics

BP Op Dashboards

BP Monitoring

BPMon Trend Analysis

Data Storage Monitoring on Analytics data

InfoCube 0SM_BPMRH Collect SAP data for Analytics

Extract alert data Table DSWP_BPM_ALERTS

InfoCube 0SM_BPM

Collect SAP & non-SAP data for Monitoring

Data Source


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Complementing your reporting environment Traditional Business KPI approach vs Business Process Analytics

Out-of-the-box key figures from BPMon / Analytics

Business KPIs (often %-based) •

Order fulfillment rate

•

Days of Sales Outstanding

(Theoretically) Derive

• Overdue

Sales Orders / Deliveries • Incompletes SD documents • Schedules initially not confirmed (Practically) Identify

Influencing factors

Root Causes

•

•

• •

Slow warehouse tasks Slow transportation Insufficient stock Define Key figures for respective detailed measurement

“Top-down approach” © 2012 SAP AG. All rights reserved.

• • •

Master Data Customizing End User Business Exception Derive

Business Areas & KPIs affected “Bottom-up approach” 10


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Business Process Improvement Methodology Five phases of typical Six Sigma project (DMAIC)

BP Analysis by

Control

Define Decide on Work Streams/ Processes to start with

 BP Monitoring should show no red alerts  BP Analytics Trend Analysis should show decreasing trend

Implement Create Action Plan & Execute Action Items


Measure Set up BP Analytics

Analyze Root Cause Analysis

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Possible Work Streams To Start With Business Processes or Value Areas Customer Satisfaction

Revenue Stream

Working Capital

Supply Chain Planning

Period End Closing

Order to Cash Returns Management Procure to Pay Plan to Produce

Maintain to Settle Open Items Management (FI)

Strong / direct correlation © 2012 SAP AG. All rights reserved.

Weak / indirect correlation 13

Business Process Analytics Functional Scope

SAP BW based Business Process Analytics  (Internal) Benchmarking  Age structure of document backlog  Trend analysis Additional Business Process Analytics features with SAP Solution Manager 7.1 Support Package 5 (requires ST-A/PI 01P on the backend system)  Advanced Benchmarking  Value Benchmarking  Selection variants / favorites can be stored  Filters on characteristics


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Business Process Analytics (< Solution Manager 7.1 SP5) Benchmarking


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Business Process Analytics (< Solution Manager 7.1 SP5) Age Structure


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Business Process Analytics (< Solution Manager 7.1 SP5) Trend Analysis


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Business Process Analytics (>= Solution Manager 7.1 SP5) Business Process Analytics - Filter

Analytics data can be filtered on several different characteristics


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Business Process Improvement Standardized Methodology with Business Process Analytics

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2 Get Global Transparency

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3

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6 Identify Root Causes (RC)

Perform Detail Analysis

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8 Define Action Plan


Identify Potential for old Data Reduction

Identify Org Units to be analyzed

Create Frequency Diagram of RC

9 Visualize Impact on Benefit/Value Categories

Control Achievements via Trend Analysis 25

Business Process Improvement Example: Overdue Sales Orders – Identifying Systematic Issues

Key Figure Overdue Sales Order

Master Data

Customizing

End User

Technical Exception

 Inactive Sales Organizations  Inactive Document Types

 System expects deliveries where non are expected from business side

 Missing quantities that are not needed are not rejected

 Functional error

Technical Performance

Reporting Quality


Revenue Stream

Business Exception

Customer Satisfaction

Key message: Systematic issues have mainly an influence on the value areas „Technical Performance“, „Reporting Quality“ and „Supply Chain Planning“ © 2012 SAP AG. All rights reserved.

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Business Process Improvement Example: Overdue Sales Orders – Real Exceptions

Key Figure Overdue Sales Order

Master Data

Customizing

 Planned dates calculated too ambitiously

Technical Performance

Reporting Quality

End User

Technical Exception

Business Exception

 Incomplete Sales Order

 Cancelled background job  Erroneous interface

 Missing Stock  Delivery Block  Slow/delayed warehouse tasks  Slow/delayed transportation


Revenue Stream

Customer Satisfaction

Key message: Business exceptions have mainly an influence on the value areas „Revenue Stream“ and „Customer Satisfaction“ © 2012 SAP AG. All rights reserved.

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Business Process Monitoring Functional Scope – High-level Overview

Application specific monitoring for    

SAP ERP (SD, MM, PP, LE, WM, PM/CS, QM, FI) & SAP EWM SAP CRM (Sales, Services, Customer Interaction Center; Marketing) SAP APO (planning runs in DP, SNP, PP/DS, gATP/BOP) SAP SRM (Self-service Procurement, Sourcing Cockpit)

Background Job monitoring for 

Single background jobs or SAP BW Process Chains

Complete catalog of >750 standard out-of-the-box key figures available under http://service.sap.com/bpm > Media Libary > Customer Information > Key Figure Overview

Interface monitoring for 

IDoc, BDoc, tRFC, qRFC, bgRFC, Batch Input, flat files, SAP PI

Cross-Application monitoring for  

ABAP dumps, Update errors, number range fill-level, Application Log entries Performance monitoring for transactions and RFC processing

Industry specific monitor enhancements for 

SAP Apparel and Footwear, SAP for Automotive, SAP for Banking, SAP for Retail, SAP for Utilities

Data Consistency monitoring for 

SAP ERP, SAP CRM, SAP APO


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Business Process Improvement Project Roadmap Plan & Build Phase Week 1

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3

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8-10

11-15

16-20

21-25

 Positioning – Bus. Process Analysis / Benefit Case – Prepare Management Workshop – Workshop / Get Mgmt. Buy-in

 Technical Readiness – Prepare Analytics in SolMan – Authorization Concept

 Organizational Readiness – Communication & Project Plan

 Define – Define Scope / Select Key Figures

Duration: Work Package

Milestone: Work Package

Duration: Activity

Milestone: Activity

Cut-off from Plan/Build to Run phase

Duration: Parallel Activity outside initial scope © 2012 SAP AG. All rights reserved.

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Business Process Improvement Project Roadmap Run Phase Week 1

2

3

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5

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8-10

11-15

16-20

21-25

 Measure – Set up Key Figures in BP Analytics

 Analyze – Analyze Key Figures with BP Analytics – Define corresponding Action Items

 Implement – Implement defined Action Items

 Control – Continuously follow Trend Analysis with BP Analytics

 Management Sign-off – Get sign-off for achieved improvements

Duration: Work Package

Milestone: Work Package

Duration: Activity

Milestone: Activity

Cut-off from Plan/Build to Run phase

Duration: Parallel Activity outside initial scope © 2012 SAP AG. All rights reserved.

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Business Process Improvement Best Practice: Organizational Structure for Business Process Improvement

Business

IT Executive Sponsor

• Definition of Key Figures & Filter Criteria • Root Cause Analysis • Verification of Business Impact • Definition of Action Items

Project Lead (BPAnalytics Owner)

Global/Local Process Owner (GPO, LPO) & Local Key Users (LKU)

Application Expert / Module Owner BPAnalytics Expert (Configuration of Business Process Analytics) © 2012 SAP AG. All rights reserved.

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Business Process Operations Summary

Business Process Analysis  SAP service (process health check) that can be used as a starting point Business Process Monitoring  Tool helping with Business Process Stabilization and helping to perform monitoring tasks more efficiently Business Process Analytics  Tool helping with Business Process Improvement methodology and helping to make business processes more efficient and effective Business Process Operations dashboard  Dashboard framework to configure user group specific dashboards


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Main target of Business Process Improvement is that you maximize the value of your existing SAP solution, i.e. operate more efficient and effective

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Thank You! Contact information: Mark Cooling SAP Active Global Support SAP SSC (Ireland) Ltd. [email protected]

Further Information

SAP Service Offerings SAP Enterprise Support

SAP Solution Manager Enterprise Edition Business Process Monitoring functionality Business Process Analytics functionality Expert Guided Implementation Expert Guided Implementation for Business Process Monitoring Self Service - 'Business Process Analysis' SAP Services SAP CQC Business Process Analysis and Monitoring SAP Business Process Analysis* SAP Business Process Operations* SAP Classroom Trainings (E2E300) Business Process Integration & Automation Management (SM300) Business Process Monitoring * Only for SAP MaxAttention / SAP Safeguarding customers © 2012 SAP AG. All rights reserved.

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Further Information – SAP Notes 1320940 - Prerequisites for CQC service: BPA and BPM • Describes

the necessary (minimum) prerequisites in order to execute an CQC Business Process Analysis and Business Process Monitoring services respectively

784752 - BPMon in SAP Solution Manager - Prerequisites • Describes

the more detailed and recommended technical prerequisites in order to implement Business Process Monitoring with a wide scope

521820 - Availability of Business Process Monitoring • Describes

the latest Support Packages or single SAP notes available in order to possibly rule-out known malfunctions of Business Process Monitoring


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Further Information – Links

Business Process Monitoring on SAP Service Marketplace https://service.sap.com/bpm

Business Process Monitoring on SDN https://www.sdn.sap.com/irj/sdn/nw-processmonitoring

White Paper “Exception Handling and Business Process & Interface Monitoring” Link to Business Process Monitoring


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Further Information – SDN Blogs & Wiki Functional Scope of Business Process Monitoring in SAP Solution Manager http://www.sdn.sap.com/irj/scn/weblogs?blog=/pub/wlg/15153

Frequently Asked Questions http://wiki.sdn.sap.com/wiki/display/SM/FAQ+Business+Process+Monitoring http://wiki.sdn.sap.com/wiki/display/SM/FAQ+Business+Process+Analytics

Typical Use Cases for Business Process Monitoring http://www.sdn.sap.com/irj/scn/weblogs?blog=/pub/wlg/16947

Business Process Monitoring - Template configuration available for download http://www.sdn.sap.com/irj/scn/weblogs?blog=/pub/wlg/15187 © 2012 SAP AG. All rights reserved.

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Business Process Improvement using Business Process Analytics

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