optimise sap business processes for maximum value
TRANSCRIPT
Increase SAP Value With West Trax
11/02/13
Optimise SAP ROI
®West Trax International Ltd. 2013 2
A paper in February 2010 by Bill Swanton and Lucie Draper of AMR Research (now part of Garner, Inc.) opened with the following statement: - “With the down economy, IT is under pressure to get value out of ERP investments. A new study of value management practices, though, shows that only a minority of companies actually measure value. Those that do achieve a higher percentage of their business case and attain it earlier as they adopt more value management and benefits realization best practices identified in a survey by AMR Research, ASUG, and SAP”. Of 186 companies surveyed only 37% actually measured the business value from their ERP projects. Read the full article at How Do You expect To Get Value?
How Do You Expect To Get Value
From ERP If You Don’t Measure It?
®West Trax International Ltd. 2013 3
Organisations buy from SAP to benefit from highly standardised software and best practice business processes. BUT----
In many cases business and IT executives lack appropriate metrics to evaluate and optimise how effectively their SAP systems are supporting their business operations after they go live.
Major potential to improve business processes and reduce support and project costs not recognised or exploited.
What’s The Problem?
®West Trax International Ltd. 2013 4
Application Lifecycle Management
Design Development Testing Ops, Support, Projects Effort
Costs Design, Develop, Test Operations Support Projects
Leading analysts (and SAP) comment that: - 70 to 80% of ALM efforts focus on the design, development,
and testing phases.
BUT --- post rollout operations, support and project activities often represent 70 to 80% of lifecycle costs.
What’s The Cause?
®West Trax International Ltd. 2013 5
West Trax benchmark database contains details of over 1,400 analyses completed to date in 100+ companies and 13 industries. Typical issues identified in benchmark data: -
More than 50% of the available and relevant standard SAP code unused. 30-40% of all used programs were custom code. 30-40% of all custom programs were never used. Clients paying at least double what they need to. Unused custom programs maintained for months or years.
What Are The Consequences?
®West Trax International Ltd. 2013 6
High Standardisation
Productivity SAP ROI
Typical KPI Value
Ideal
50% Standard
70-80% Standard
Degree Of Standardisation
Low Standardisation
Optimisation Potential
No. Used Standard Transactions X 100 Total No. Used Transactions
West Trax Standardisation KPI
®West Trax International Ltd. 2013 7
Degree of Standardisation KPI
52.0
%
51.0
%
50.7
%
50.7
%
47.3
%
47.1
%
46.5
%
44.7
%
83.6
%
76.7
%
67.1
% 74.0
%
78.8
%
74.7
%
61.0
%
71.0
%
65.7
%
59.7
%
62.7
%
57.2
% 65.2
%
34.3
% 41.6
%
37.8
%
28.0
%
32.3
%
24.0
%
41.6
%
22.4
%
20.0
%
18.5
%
29.5
%
30.8
%
31.5
%
59.9
%
58.8
%
53.4
%
51.3
%
46.4
%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
Au
tom
otive
Go
ve
rnm
en
t
Ph
arm
a
Ma
nu
factu
rin
g
Te
lco
Ch
em
ica
ls
He
alth
ca
re
Co
nsu
me
r
Go
od
s
Se
rvic
e
Tra
nsp
ort
Fin
an
ce
En
erg
y
Insu
ran
ce
Average
Measured Best Practice
Measured Worst Case
Standardisation Benchmark Data
®West Trax International Ltd. 2013 8
Unused Standard Potential KPI
®West Trax International Ltd. 2013 9
Unused Standard Potential KPI67.6
%
67.7
%
68.4
%
80.3
%
83.5
%
83.8
%
84.2
%
85.7
%
88.3
%
52.6
%
40.3
%
40.3
%
52.3
%
69.2
%
66.8
%
67.1
%
68.8
%
72.7
%
77.2
%
75.6
%
79.7
%
82.7
%
75.7
%
85.7
%
94.1
%
87.1
%
91.0
%
93.7
%
93.9
%
89.5
%
91.8
%
89.2
%
97.4
%
88.6
%
96.9
%
74.1
%
77.3
%
81.8
%
84.3
%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Ph
arm
a
Ch
em
ica
ls
Ma
nu
factu
rin
g
Au
tom
otive
Co
nsu
me
r
Go
od
s
Se
rvic
e
Tra
nsp
ort
Te
lco
Insu
ran
ce
He
alth
ca
re
En
erg
y
Go
ve
rnm
en
t
Fin
an
ce
Average
Measured Best Practice
Measured Worst Case
Unused Standard Benchmark Data
®West Trax International Ltd. 2013 10
Deployment of Standard Functionality
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Goods
Managem
ent
Pro
cure
ment
Sale
s &
Dis
trib
utio
n
Pro
ject
Managem
ent
Asset
Managem
ent
Revenue &
Cost
Contr
olling
Exte
rnal
Accountin
g
Pro
duct D
ata
Managem
ent
Custo
mer
Serv
ice
Available Potential
Used Potential
Typical Client Data
Unused Standard By Enterprise Area
®West Trax International Ltd. 2013 11
Maximising ROI?
Business alignment?
Benchmarking?
Business process improvement?
Cost reduction?
Upgrades?
Outsourcing, Insourcing, Rightsourcing?
Consolidation, Integration, Virtualisation?
Due diligence, M&A, Restructuring, Divestitures?
Governance, Risk, Compliance?
Are You Fully Exploiting The Standard Potential In Your SAP Systems?
Is Your Level Of System Standardisation Optimal?
How Does It Compare With Best Practice?
Can You Prove This To Your Business Leaders?
What Metrics Do You Use To Prove It?
Are Your SAP Systems
Best Positioned For: -
®West Trax International Ltd. 2013 12
A West Trax Analysis Highlights Opportunities To Maximise ROI Through Optimal Deployment Of SAP Application Core Processes
And Increased System Standardisation Levels.
West Trax helps clients to exploit the full potential of SAP Application Core Processes by identifying where standard functionality can: -
be best deployed to reduce costs, improve performance, increase productivity and enhance consistency and quality of usage across the enterprise.
replace custom code that does not provide significant value added.
minimise interfaces to non-core processes such as Middleware, Legacy, 3rd Party programs.
be optimally applied during projects such as upgrades, consolidation and outsourcing.
Maximising SAP ROI With West Trax
®West Trax International Ltd. 2013 13
What Does A West Trax Business Process Analysis Deliver
That Others Do Not Or Cannot?
Measurement of the level to which the business is supported by SAP Application Core Processes utilising the available standard transactions.
Identification of Core Process gaps and use of custom code and non-core functionality.
Measurement and comparison of Core Process usage, gaps and external interfaces to identify inconsistency of implementation, customisation and usage between systems, BU’s, LOB’s, countries etc.
Comparisons of KPI’s against sector peers and best practice benchmarks.
Quantification of potential to optimise system standardisation and deliver additional value.
Recommended actions and implementation strategies to optimise the value derived from Core Business Processes and make major savings.
Why Is West Trax Different?
®West Trax International Ltd. 2013 14
With
Optimise SAP ROI
®West Trax International Ltd. 2013 15
KPI Scan®
KPI Optimiser®
KPI‘s, Benchmarks Action plans
Cost / Benefit Analyses Implementation Strategies
Design, develop, convert, test
West Trax Optimisation
And
Benchmarking
Services
Implementation
Partners And Tool
Vendors
Planning Phase
Establish Current
System Baseline And
Optimisation Plans
Develop Lean Risk Free
Business Cases And
Project Plans
Implementation
Phase
Post Project Phase Establish New
System Baseline
Track Goal Achievement
KPI QA® West Trax
Quality Assurance Service
When West Trax Adds Value
®West Trax International Ltd. 2013 16
Optimal Deployment Of SAP Best Practice Core Processes
Identification of opportunities to improve productivity and profitability
by optimising use of core business processes.
Identification of breaks within business processes and standard alternatives.
Increased business alignment and usage from optimised business processes.
Increased system standardisation levels.
Elimination of unused custom code immediately cuts maintenance workload
and costs. Savings identified range from €200,000 to over €1 million p.a.
Value derived from optimising alignment with core business processes
typically 5 - 10 times the savings from eliminating unnecessary custom code.
Increased ROI on the SAP asset.
Benefits For Clients (1/2)
®West Trax International Ltd. 2013 17
Optimal Deployment Of SAP Best Practice Core Processes
Development and support of expensive, unnecessary custom code avoided.
Ongoing identification of cost reduction opportunities.
Elimination of long response times due to system bottlenecks.
KPI’s and benchmark comparisons with sector peers and best practice.
Efficient utilisation of available system and human resources.
Redeployment of valuable skills to added value projects.
Avoidance of GRC exposures.
Early warning of re-training requirements.
Benefits For Clients (2/2)
®West Trax International Ltd. 2013 18
West Trax is an international company that specialises in increasing the business value delivered by SAP ® systems.
This is achieved by identifying the potential to optimise the use of SAP ® systems in the areas of cost, productivity, performance and quality and providing a financial valuation of the business and IT benefits . With KPI Scan®, KPI Optimiser® and KPI QA® West Trax offers solutions that ensure business processes are effective and efficient . Typical applications are SAP system re-standardisation / modernisation associated with business process optimisation, release upgrades, outsourcing, system consolidation and separation. West Trax also offers management information system solutions. Predefined modules can be quickly implemented and deliver immediate client benefits. The privately owned company was founded in 2003 with headquarters in Germany and UK, and offices in Austria and Switzerland. Potential client cost savings identified range from €200 k p.a. to € 1 million+. Average project ROI (Return on Investment) ranges from 1:4 to 1:9 (€1 investment generates €4-9 € in savings).
About West Trax
®West Trax International Ltd. 2013 19
Automated analysis of SAP system usage provided in electronic form. Based on reusable process models. Offline analysis rapidly provides transparency with minimal use of resources. Template and rule-based process models enable comparing of different SAP systems. Customisable models and simulation for the calculation of optimisation potential and project costs. Methodology and database certified by IHK Darmstadt.
Over 1,400 analyses carried out to date, 24 Quality Awards presented. Benchmark database contains results from 15 sectors.
Results presented in the form of easy to use and re-usable BI cockpits (based on QlikView).
West Trax Methodology
®West Trax International Ltd. 2013 20
David Long
Chief Executive
T: +44 (0) 1989 780114
M: +44 (0) 7774 808694
E: Name @westtrax.com
W: www.westtrax.com
Contact