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.
CONTENT
^ 4 Integrating Inspiration, Delivery,
and Performance Analysis
^
5 Strategy and Planning
5 Product Intelligence
5 Strategy Management
5Initiative Planning
^ 6 Innovation Management
6Idea Management
6 Concept Development
7 Program and Project
Management
8 Project Portfolio Planning
8Resource Management
8Initiative Management
8 Project Execution
8 Project Accounting
8Market Launch Management
^ 9 Portfolio Management
9 Performance Visualization
9 Project Profitability Analysis
^10 Realizing the Benefits of Using
SAP Business Suite Software
10For 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. You’d 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
1
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
2
3
Strategy and
planning
Innovation
management
Program and project
management
Identifying value
opportunities
Leveraging talent
and core capabilities
Coordinating efficient Measuring and
development and
optimizing business
launch
value
Figure 1: Continuous Product and Service Innovation
4
4
SAP Solution in Detail – Continuous Innovation for Products and Services
Portfolio
management
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.
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.
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.
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
5
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.
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.
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.
Concept Development
Idea Management
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.
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.
6
SAP Solution in Detail – Continuous Innovation for Products and Services
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.
Program and Project Management
Develop Leads and Launch
New Products and Services
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 you’re 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
7
Project Portfolio Planning
Project Execution
Market Launch Management
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.
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.
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.
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.
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.
8
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.
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.
SAP Solution in Detail – Continuous Innovation for Products and Services
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.
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.
Performance Visualization
SAP BusinessObjects™ software, which
integrates with SAP Business Suite software, supports the development of product
and service performance dashboards
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.
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
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).
Figure 3: Example of Product Performance–Oriented Analytics
SAP Solution in Detail – Continuous Innovation for Products and Services
9
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
10
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.
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 company’s 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.
50 101 367 (10/09)
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