business modelling and processes_guide

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Where you need Business Modelling within

ASAP

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How it all connects



What is a Business Model

A firm’s profitability is determined by both industry factors and firm-specific

competencies (positions, activities/capabilities, and resources). Thus, because

business models are about making money, a business model must also depend on

the factors that determine a firm’s profitability. That is, a firm’s business model is a

function of its positions, core critical competencies (CCCs), and non core

competencies (NCCs) and the attached main and supporting processes and the

industry’s factors.

A business model is about competencies, which when combined together, build a

framework for making money. It is to use the competencies in a set of activities that a

firm performs, how it performs them, and when it performs them to offer its customers

benefits they want and to earn a profit.

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What is a Business Model and how is it used

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How to use the Business Model input in the Process

Modelling and Application Modelling perspective

Core Differentiated The core differentiating competencies (CDCs) must be differentiating to the industry average. They should be supported bySAP Own Practice and Performance and Value Drivers need to be identified in order to ensure wished results/benefits

Core Competitive The core competitive competencies (CCCs) must be at least industry average, but diminishing returns beyond that point. They

should be supported by SAP Own Practice and Performance and Value Drivers need to be identified in order to ensure wished

results/benefits

Base (Non-Core) The Non-Core Competencies (NCCs). Within this area there are the low value processes which should be operated effective at

the lowest cost possible. They need to supported by SAP Best Practice and Performance and Value Drivers need to be identified

in order to ensure wished results/benefits

Source: Prof. Dr. Mark von Rosing

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Whereas the SAP system Best Practices are vital to cut costs, for example, fastimplementation, fewer mistakes, standardization, and less risk, because it is proven to

work, this automated process enablement can’t be applied in the area of Core

Competetive Competencies (CCCs) that enable core competitive and core

differentiated competencies. However, even if a firm offers the right customer value to

the right market segments and does so better than its rivals, it is still possible that the

firm might not be profitable. That is, superior relative customer value offered to the

right customer segments, although necessary, is not always a sufficient condition for

profitability. Therefore, the cost of making money is a vital ingredient for succeeding.

Offering the right value to the right customer segments and being positioned

advantageously vis-à-vis suppliers, customers, rivals, potential new entrants, and

substitute products may still not be enough for a firm to capture the revenues that its

positions suggest it should. To keep the cost low a company should standardize its

Non-Core Competencies NNCs and thereby all the attached processes in this are in

applying SAP system Best Practices to all NNCs and the attached management, main

and supporting processes.

How to use the Business Model input in the Process

Modelling and Application Modelling perspective

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Blueprinting based on Business Modelling

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Business Model levels and the connection

to Process Model Levels

Business Model Hierarchy

BPM Process Model Hierarchy

Business Model

Competency

Areas / Categories

Business Model

Competency Group

Business Model

Competency

Business ModelCompetency

Elements

Business Model Competencies and

Processes can, and should, be interlinked.

These are the main business areas and thereby

process categories which produce external and/or

internal value. Example: Sales – As this is neither a

scenario nor a transaction, this cannot be integrated

into SAP, but is needed to scope the business area.

Every Process Business Area's main process

consists of more than one level 2 process groups

which describes it in detail.

Example: Sales Processing – this can be used inSOLMAN as an SAP solution scenario.

Process groups will be described as a set of

level 3 processes (Business Process).

Example: Create Sales Order – this is the first

level SAP transactions.

Level 4 is at least needed to map To-Beprocesses to SAP solutions.

Example: Sales Order for known customer

- SAP transactions.

Level 5 is ideal to map To-Be process

activities and its different variances to

SAP Solutions.

Example: Sales Order Invoicing - SAPtransactions.

© ValueTeam 2011/



Process view and Business Model are not the same, but

are complementary and are needed in any engagement

• C ompetencies by

(re-) grouping activities

• Activities have input /

output -> consolidation

into Competencies

defines competencyinterfaces

• Organization = A set of

Competencies

networking together

Business process descriptions are alreadyavailable in many client organizations

• Business Model as a new dimension to align

business processes and process architecture

• Through Business Model and process

linkage, identification of business issues,

pain points and weakness clusters

•"Activities" as linking part between BusinessModel and process view

• Complementary views, e.g. prioritize "hot"

Core Critical Competencies (CCCs) with

Business Model transformation and

innovation potential

Matching the Business Model and the processes gives the company:

• The much needed "link" to Strategy in the processes and thereby the applications

• Identification and mapping of Core Competitive Competencies (CCC's) – either Core Competitive or Core

Differentiated

• Identification and mapping of Non-Core Competitive Competencies (NCC's)

• Identification and mapping of Value and Performance Drivers

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Process Example:

Operations Support Planning

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Process ExampleSales Service:

Understand markets and customers

Sales & Service: Understand markets & customers:

Management Processes

-Develop target segments strategy

-Decision Making Processes in quantifying market opportunities

-Determine target segmentsPrimary Processes

-Conduct customer and market research

-Identify market segments

-Analyze market and industry trends

-Analyze competing organizations, competitive/substitute products

Supporting Processes

-Perform customer and market intelligence analysis reporting

-Evaluate existing products/brands

-Assess internal and external business Environment

-Evaluate and prioritize market opportunities-Prioritize opportunities consistent with capabilities and overall strategy

-Validate market changes and opportunities

© ValueTeam 2011/



How to define High Value and Low Value

Processes based on 4 basic principles

Strategic Importance Legend:

High LowMedium



Example of Process Prioritization audit

Strategic Importance Legend:High Medium



Automotive Example: Sales & Promotion Planning –

Identified Value Clusters (Value Drivers and

Performance Drivers)

Strategic Importance Legend:

High Medium



SAP Blueprinting: Business Architecture Template

applying the Business Model as well as Value identification input



If you have any questions or want more information (e.g

examples or industry versions), please feel free to contact the

IC owner: [email protected]

© ValueTeam 2011 /

Application Lifecycle

Process Lifecycle

Value Lifecycle

Service Lifecycle

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