Application Innovation Services
The Process Innovation Journey for SAP
Accelerate your
path to
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Process
Innovation…
© 2012 IBM Corporation
Application Innovation Services
Business Process Effectiveness is the Top Priority for
Executives
A Global Technology Survey
found that “Improving
business process
effectiveness” ranked as the
#1 priority for executives…
but WHY?
McKinsey Global Technology Survey, December 2011 , How IT is Managing New Demands
https://www.mckinseyquarterly.com/High_Tech/Strategy_Analysis/A_rising_role_for_IT_McKinsey_Global_Survey_results_2900
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© 2012 IBM Corporation
Application Innovation Services
A customer’s experience with an enterprise is based on the
quality and consistency of the company’s critical processes
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© 2012 IBM Corporation
Application Innovation Services
Typically process improvement as well as ERP has been
managed in a discrete and segmented fashion with limited
visibility, governance and collaboration across organizations
Operations
Sales/Marketing
Finance
Manufacturing
Human Resources
Consumers and businesses tend to
choose products and services based
on their experiences and relationship
with a company
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© 2012 IBM Corporation
Application Innovation Services
Tools and methods for driving process improvement have also
been implemented with a limited holistic and cross
operational integration view….
ERP
SOA
BPM
Cloud
Time in Motion
Value Integration
Lean 6 Sigma
….resulting in sub-optimized islands of excellence
that are neither holistic nor customer centric
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© 2012 IBM Corporation
Application Innovation Services
Today, creating outstanding customer experiences requires broad
Process Innovation that spans the entire organization
 Respond and react to individual customer’s, segments or market needs
no matter where in the organization they interact.
 Interconnect and synchronize departments with enterprise-wide visibility
to ensure consistency and outstanding client experiences.
 Create collaboration and governance across departments &
organizations to drive efficiency but more importantly effectiveness.
 Manage for end outcomes enabled by consistent & value driven execution
from the front office to the back office.
Process
Innovation
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© 2012 IBM Corporation
Application Innovation Services
Process Innovation enables new forms of customer value to
be identified with strategies for Unique Business Change
Business
Process
Business
Rules
Business
Collaboration
Business
Events
Domain
Expertise
Governance
Business
Content
Business
Information
Optimization
Business
Monitoring
Business
Analysis
Process
Automation
Organizational
Enablement
Integration
Process Innovation
Innovative Business Change = Stronger Customer Experience
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Structured Experimentation
E2E Process Optimization
Value-based Pricing
System Revitalization
Adaptive & Integrated Operations
Harmonized Systems
© 2012 IBM Corporation
Application Innovation Services
Integrated Business Applications Deliver Strong Value…and SAP is
the best
 Improve alignment of strategies
and operations
 Improve productivity and insight
 Support changing industry
requirements
 Reduce risk
 Improve financial management
and corporate governance
 Retain top performers
 Provide immediate access to
enterprise information
 Give employees new ways to
access the enterprise information
required for their daily activities.
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SAP customers excel by taking
advantage of SAP’s industryspecific knowledge, best
practices and standardized
processes – all codified into
the world’s leading integrated
application platform.
© 2012 IBM Corporation
Application Innovation Services
But…SAP implementations tend to drive standardization not
Process Innovation
Most SAP implementations are
documentation-centric driving
standardized processes that
create a reliance on informal
business processes and
differences between
organizations and instances.
Every business strives to be
unique, requiring heavy process
customization for all but a very few,
commodity processes making it
difficult to invoke change, migrate to
future releases and provide
adequate real-time visibility.
…all costing you customer centricity, flexibility,
adaptability, time, money and lost business opportunities
9
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© 2012 IBM Corporation
Application Innovation Services
Because many SAP implementations are basic configurations
avoiding customizations they do not meet initial expectations
 Opaque SAP processes make
process analysis and improvement
difficult
 Rigid SAP processes increase time
to value
 End-to-end processes are difficult
to model, simulate and manage
 SAP Enterprise Services are
difficult to use and incomplete
 Limited SAP process and real-time
visibility causes risk to KPIs and
SLAs
 Low utilization of inline operational
decision management limits
productivity
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Took longer than
expected
Total implementation
cost exceeds budget
Failed to realize 50%+
of benefits
Operational disruption
at go-live
Employees unsatisfied
Executives unsatisfied
Failed to realize some
benefits
0%
10%
20%
30%
40%
50%
60%
Source: Panorama Consulting 2010 ERP Report
A solution to one or more of
these challenges is required
in almost every SAP
implementation
© 2012 IBM Corporation
Application Innovation Services
Though SAP is on of the best enterprise wide solutions to improve
business execution there is no easy way to implement or avoid
customizations
Solution Manager
Blueprint
Capability
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© 2012 IBM Corporation
Application Innovation Services
Process Innovation requires balancing two methods to optimize
business processes
Packaged Applications
 Improve 100’s of processes at once
 Sunset inflexible legacy systems
 Catch up to competitors
 Huge multi-year projects
Natural
Tendency
BPM Tools & SOA
 Adapt quickly
 Outpace the competition
 Process visibility across core &
fringe application systems
 Smaller, incremental projects
BPM
Natural
Tendency
Process Optimization
Approach A
Process Optimization
Approach B
Non-Differentiating
Business Processes
Differentiating
Business Processes
Successful organizations will have a balanced
I/T Strategy of SOA/BPM and ERP Consolidation
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© 2012 IBM Corporation
Application Innovation Services
Examples of IBM’s Own BPM – SAP Projects and Benefits in 2011
Global Integration
Opportunity to Order
Order to Cash
Finance
Business Value
Achieved
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 Mid-Market Deal Registration – Delivered $18.5M 2012 PTI by
reducing deal registration cycle time with rules-based work-flow
automation.
 Supply Chain Alerts – Over $2M annual savings for timely
notifications when supply chain disruptions occur.
 Pricing estimator for Cross-brand solutions – Reduced pricing
proposal implementation from 14 days to 1 day and deployment
to new countries in days versus weeks.
 GTS Cloud Sales Enablement – Integrated work-flow, rules and
monitoring to reduce partner “register to welcome kit” cycle-time
from days to hours.
 GMU Geo Location Code Assignment - Geo location code is key
enabler of GMU expansion. Eliminated manual process and
enabled GMU reps to update rules directly and reduced cycle time
to update and run rules from several weeks with many handoffs to
just a week for more than 50 countries.
 Infrastructure Optimization – Reduced cycle time by 75% to
complete the analysis required to migrate from Physical servers to
Virtual servers.
© 2012 IBM Corporation
Application Innovation Services
Process Innovation for SAP can be enabled with IBM Software and
Expertise
Process Innovation
Process Discovery & Design
Business
Process
Management
Operational
Decision
Management
Adaptive
Case
Management
SD
Sales &
Distribution
MM
Materials
Mgmt.
FI
Financial
Accounting
CO
Controlling
AA
Asset
Accounting
PP
Production
Planning
SM
Service
Mgmt.
Business Monitoring
QM
Quality
Mgmt.
SAP
Applications
PM
Plant
Maintenance
HR
Human
Resources
Integration
EC
Enterprise
Controlling
PS
Project
System
WF
Workflo
w
IS
Industry
Solutions
Analytics
Domain
Expertise
Master Data
Management
Organizational
Enablement
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Enterprise
Content
Management
© 2012 IBM Corporation
Application Innovation Services
IBM BPM V8 integrates seamlessly with SAP to improve your
implementation and execution success
SD
Sales &
Distribution
Orchestrate SAP
Services
MM
Materials
Mgmt.
FI
Financial
Accounting
CO
Controlling
AA
Asset
Accounting
PP
Production
Planning
SM
Service
Mgmt.
QM
Quality
Mgmt.
SAP
Applications
PM
Plant
Maintenance
Monitor SAP
Business Events
Download processes
from Solution Manager
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Upload processes to
Solution Manager
HR
Human
Resources
EC
Enterprise
Controlling
PS
Project
System
WF
Workflo
w
IS
Industry
Solutions
Retrieve Enterprise
Service Definitions
© 2012 IBM Corporation
Application Innovation Services
IBM BPM can easily exchange Models with SAP Solution
Manager
SAP Solution Manager
IBM Process Designer
Business Process Hierarchy
Project
Lev 1
Business Scenario
Lev 2
Business Process
Lev 3
Process Step
Implementation Content
eg. Transactions, Docs
Process Application
SSI4BPM
Lev 0
Process
Activity, (Sub-)process,
Service
SAP Implementation Content
IBM BPM maps its process elements directly
to SAP Solution Manager constructs and
performs bidirectional exchanges
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© 2012 IBM Corporation
Application Innovation Services
IBM offers a comprehensive solution to SAP implementation and
process challenges
Challenge
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IBM BPM Solutions
Opaque SAP processes make process analysis
and improvement difficult
Iterative, playback-based modeling facilitates
transparent process definition
Rigid SAP processes increase time to value
Directly execute SAP process models for flexible
processes and rapid process change cycles
End-to-end processes are difficult to model,
simulate and manage
Easily orchestrate heterogeneous processes for
simple end-to-end control
SAP Enterprise Services are difficult to use and
incomplete
Easily consume and deploy SAP Enterprise
Services at the business level
Limited SAP process and real-time visibility
causes risk to KPIs and SLAs
Actively monitor and manage SAP and
heterogeneous processes in real time
Low utilization of inline operational decision
management limits productivity
Improve process throughput, consistency
and responsiveness with active inline decision
management
© 2012 IBM Corporation
Application Innovation Services
BPM Enhances the Value of Your SAP Investment
SAP Only
SAP with IBM
BPM
Improve alignment of strategies and operations


Improve productivity


Improve insight


Reduce costs through increased flexibility


Support changing industry requirements


Optimize IT spending


Reduce risk


Improve financial management and corporate governance


Gain higher ROI faster


Provide immediate access to enterprise information


Give employees new ways to access enterprise
information


Benefit
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© 2012 IBM Corporation
Application Innovation Services
Applying IBM BPM to SAP
Modeling for
Documentation
Real-Time Monitoring
Increasing Integration
Guided Workflow
Mine SAP business events to discover actual
processes and act in real time to business challenges
Interactively guide end users through process steps
to improve productivity, visibility and consistency
Process Integration
and Orchestration
Optimize process steps to improve cycle time,
manageability and visibility of key processes
Inline Decision
Automation
Automate complex decision making to reduce
bottlenecks and improve business outcomes
Process Automation
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Use an iterative, experiential-based approach to
accelerate traditional SAP blueprinting
Dramatically reduce the cycle time of high volume
processes by reducing/removing human interaction
© 2012 IBM Corporation
Application Innovation Services
IBM BPM Drives Stronger Business Results From Your SAP
Implementation
 ‘Live’ playback during all phases of
process design and rollout
 Reduce blueprinting time and costs
 Deliver agile SAP business processes
that are easy to change
 Create market-differentiating SAP
processes
 Position your SAP implementation for
continuous process improvement
 Integrate SAP business activity
monitoring
Business users can directly
drive SAP blueprinting,
process orchestration and
process improvement
20
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© 2012 IBM Corporation
Application Innovation Services
Next Steps
+
 Discuss with us how to provide you
and your team with a demonstration
or a detailed briefing
 Discuss how we could assist with
your SAP project
 Let us lead your team with an inhouse workshop
21
s
© 2012 IBM Corporation
Application Innovation Services
Examples
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© 2012 IBM Corporation
Application Innovation Services
SAP Process Documentation Is Usually Outdated by Months or
Years
2008
2012
SAP process blueprints
created
Probably Outdated
SAP design completed
Probably Outdated
SAP configuration
changes completed
Additional SAP configuration changes
Documentation Possibly
Outdated
SAP customization
completed
Additional SAP customization
Documentation Possibly
Outdated
Ad hoc changes to processes by end users
Blueprint Not Updated
Without insight into the ‘real’ SAP processes being used in production, it is very
difficult to initiate and build an effective process innovation program or to
migrate to a newer SAP release.
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© 2012 IBM Corporation
Application Innovation Services
Event-Based Business Monitoring Can Be Used to Uncover the
‘Real’ SAP Processes
VD03 - Display customer
master
VA01 - Create sales
order;
A list of detailed business
events, describing what was
actually done by the user
• Customer displayed (VD03)
• Customer changed (VD04)
VOK0 - Maintain Pricing;
• Sales order created (VA01)
• Sales order modified (VA02)
CK51N - Create Order
BOM Cost Estimate
IW21 - Create notification
+
Ad hoc or added
process steps
• Pricing Maintained (V0K0)
• Sales order modified (VA02)
• Notification previewed (IW22)
• Order BPM cost estimated
created (CK51N)
• Sales order modified (VA02)
• Customer displayed (VD03)
Which could be
analyzed by a data
analyst or process
specialist to
discovery real
process structures
SAP can create and publish the business events needed to discover the actual business
processes in production
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© 2012 IBM Corporation
Application Innovation Services
But SAP’s Business Monitoring Approach is Overly Complex
…And lots of custom coding is required to implement
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© 2012 IBM Corporation
Application Innovation Services
Business Monitor can be used to drive real-time insight that leads
to continuous Process Innovation
 Identify trends, forecast events,
feed & correlate alerts to make key
decisions for critical business
situations and events in real-time
 Completely non-intrusive to SAP –
simply turn on the SAP Business
Events needed
 Easily customize dashboards to
ensure targeted, relevant
information
 Easily create ‘shadow process’
views of SAP Business Events by
associating milestones with
changes in business state
 Rebalance work loads on the fly
 Leverage mobile
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© 2012 IBM Corporation
Application Innovation Services
Most SAP implementations follow a traditional approach while
using general purpose documentation tools
Goal Setting and Scope
Management
SAP Process
Library
Process
Analysis
SAP Process Blueprinting
(Powerpoint, Visio, Excel, Aris)
SAP Solution Manager
Configure
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 Most SAP customers use Office or Visio
for blueprinting.
 Some leverage Aris which is a
documentation-centric modeling tool.
 These tools encourage a documentationcentric approach to process
management.
 The typical SAP implementation
approach is structured to drive
configuration and not Process Innovation.
 Approximately 40% of SAP customers
use Solution Manager to maintain their
process flows, which is used to
document, but not control, the business
process and can not provide execution of
the process.
Customize
© 2012 IBM Corporation
Application Innovation Services
A typical SAP process today
A high level process blueprint is defined in
Powerpoint, Visio, SAP Solution Manager
or a modeling tool, including transactions:
VD03 - Display customer
master
VA01 - Create sales
order;
VOK0 - Maintain Pricing;
CK51N - Create Order
BOM Cost Estimate
IW21 - Create notification
The implementation then relies on users to
read, properly understand and comply with
documentation by entering the proper
sequence of transaction codes in SAP.
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© 2012 IBM Corporation
Application Innovation Services
With this approach, how can you?....
 Quickly know the status of key
processes?
 Ensure that the process you designed is
the process that is being executed?
 Get real-time visibility into where
workload or other bottlenecks are
causing business issues?
 Effectively reroute work to less
experienced workers to reduce
bottlenecks?
 Know which process changes are most
likely to help improve business
performance?
 Quickly rollout SAP process changes?
 Quickly integrate new process workers
into your business?
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Many SAP customers
attempt to address these
issues with customization.
© 2012 IBM Corporation
Application Innovation Services
Workflow in the traditional SAP implementation is paper based
VD03 - Display customer
master
VA01 - Create sales
order;
VOK0 - Maintain Pricing;
CK51N - Create Order
BOM Cost Estimate
IW21 - Create notification
 Process designers create SAP documentation (paper, Word, HTML, etc.)
 Users are trained in how to use the SAP process documents
 Some users comply with the process as designed, others create their own
 Training time for new users is often lengthy
 Difficult to move users from task to task, even in the same department
 Little to no visibility of backlogs, bottlenecks, poor throughput and other
process issues
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© 2012 IBM Corporation
Application Innovation Services
With IBM BPM 8.0 the picture is your SAP process
 Import SAP or IBM best practice libraries
 Playback any process – regardless of
the level of detail and completion
 Include real screens, mockups or
images
 Clarify roles, process steps, flow, KPIs
and reporting
 Process execution is logged
 Process performance parameters are
visible - KPIs are calculated & displayed
in real time
 See, feel and touch the process as it’s
executing
31
© 2012 IBM Corporation
Application Innovation Services
IBM BPM Can Deliver Guided Workflow for SAP
 Define process in BPM V8
 Define activities or steps to execute
process – clarify roles, steps, experts,
and KPIs.
VD03 – Display Customer Master
 Invoke correct SAP screen &
transaction sequence for each
process step, while gaining real time
insight into business performance
issues and opportunities
 Process performance parameters are
visible - KPIs are calculated &
displayed in real time
 If multiple instances exist process can
execute at best practice while
handling unique differences for each
instance
32
© 2012 IBM Corporation
Application Innovation Services
Use BPM to Collaborate and move decisions to closer to the source
Interact with other Participants via
Stream of comments and
attachments for process instance
Get closer to your operations through on the go
visibility into how, when and by whom process work
gets done
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© 2012 IBM Corporation
Application Innovation Services
IBM BPM automation or guided workflow improves SAP Value
 Documented processes become
orchestrated processes
 Improve SAP process:
 Visibility
 Manageability
 Reliability
 Consistency
 Audit-ability
 Performance
 Detect bottlenecks
 Reroute process instances with
capacity overload
 Escalate problem processes
 Initiate and track exception
processes
 Begin continuous process
improvement
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© 2012 IBM Corporation
Application Innovation Services
The Value of IBM BPM for SAP
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 Business performance
 Variability
 Agility
 Manageability
 Flexibility
 Audit-ability
 Visibility
 Consistency
© 2012 IBM Corporation
Application Innovation Services
Use IBM BPM Throughout Your SAP Life Cycle
A New SAP
Implementation
SAP Process Innovation
End-to-End Process Integration
Functional Extensions
SAP Version
Migration
s
Most SAP Implementations Benefit from IBM BPM at every life
cycle stage
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© 2012 IBM Corporation
Application Innovation Services
Large US Toy Company Improves SAP Supply Chain Processes to
Reduce Costs
Challenge:
 Increase responsiveness with customers and
collaboration with suppliers while utilizing
previous investments in core enterprise
applications
Benefits:
 Increased productivity by 250 percent
without additional resources being put into
play
BPM Solution
• Gathers the bill-of-lading information from
freight forwarders and corresponding invoice
data from SAP at the right time
• Automatically prepares and routes all
documentation required
• Automates the reconciliation process
required for all US Customs requirements,
updating SAP at each milestone
 Reduced cycle times by 80 percent, from
12 days to only two
 Improved overall business efficiency
IBM BPM reduced dependency on phone calls, e-mails and paper faxes, while
standardizing communication between employees and vendors with increased
process visibility
37
© 2012 IBM Corporation
Application Innovation Services
Small Sample of IBM BPM SAP Customers
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© 2012 IBM Corporation
Application Innovation Services
Next Steps
+
 Discuss with us how to provide you
and your team with a demonstration
or a detailed briefing
 Discuss how we could assist with
your SAP project
 Let us lead your team with an inhouse workshop
39
s
© 2012 IBM Corporation
Application Innovation Services
BPM can help you maximize your investment in SAP
customizations
 Top reasons for SAP customization:
 Streamline or customize the SAP
user interface
 Streamline or customize the SAP
process flow
 Add complementary functionality
 Integrate with non-SAP systems
 SAP provides tooling to accomplish
each, but not in the same tool
Total Cost
Typical
Customizations
using SAP
 IBM BPM V8 provides all four
capabilities in a single tool, driven by
the process definition & innovation
SAP
Business Fit
Flexibility
Typical Customizaitons using IBM
BPM & SOA Technologies
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 Reducing SAP customization reduces
cost and deployment time, while
minimizing risks to future SAP
updates
© 2012 IBM Corporation