Are You REady? Blueprint for Growth Things to Consider Getting Started SAP Executive Buyer’s Guide How to Select Business Management softwareRelease 1.0March 2011
Are You Ready? Are You REady? Blueprint for Growth Things to Consider Getting Started Are You Ready for Business Management Software? How do you know when your company is ready for more formalized business applications? If your company is growing, yet you still rely on stand-alone solutions and spreadsheets for critical business functions, a fully integrated business solution may be in your future. Here are seven telltale signs you could benefit from an integrated business management solution: • Increased IT needs: Your IT department needs an integrated infrastructure to efficiently support infor- mation, analysis, and technology requests from a growing company. • Increased complexity: Your company is moving in several directions at once, requiring more sophisti- cated and integrated technology. Stand-alone business applications no longer get the job done.Self-Evaluation • Global demand: Your products and services are distributed worldwide, making forecasting, coordina- tion, and logistics increasingly complex. • Company growth: Whether you’re experiencing rapid expansion or consistent year-over-year growth, operations naturally become more complex as a business grows. This makes revenue forecasting and historical analysis more important than ever. • Employee growth: To support growth, both existing and new employees need access to technology to transact business, conduct analysis, and support collaboration. • New CEO or CFO: New executive leadership often means a host of changes for your organization – from cultural change to a renewed emphasis on technology. • Equity event: You just received a new round of funding. That means new directions, new people, new markets, and new customers. You need systems and solutions that support expansion. If any of these scenarios resonate with you, it’s time to evaluate the costs and benefits of an integrated business management solution. “There are a million ways to expand our SAP solution, far beyond the base package. But as a starting point with infinite growth capability, never having to leave the SAP platform, you can’t beat it.” Guy Paproski, President, Nuestro Queso LLC
Are You Ready? Are You REady? Blueprint for Growth Things to Consider Getting Started Ask Yourself These Questions • Do you have visibility into your most important key performance indicators (KPIs)? • Is the process of calculating and reporting KPIs repeatable and dependable? • Can numerous staff members access information and conduct analysis for critical milestones or reports (such as board meetings and quarterly close), or do you rely on only a handful of employees with this ability? • Can you make critical go and no-go decisions quickly and confidently? • Is there opportunity to automate labor-intensive tasks and reports across your company? • Can you easily get the information you need from across your network of suppliers and partners? • Does your current approach enable you to access a single holistic view of the customer? • Does your current approach encourage collaboration? • Does your current approach support individual accountability and appropriate levels of decision making?Self-Evaluation • Can you quickly change, extend, or repeat your business processes? If you need to improve your approach or process in any of these areas, it’s time to consider the value of an integrated business software solution. Tips for Choosing the Right Software When it comes to choosing the right business software for your company, one size doesn’t fit all. Consider whether a solution can do the following: • Support end-to-end business processes • Provide a complete view of your business • Accommodate and match your available IT resources and skills • Deliver the functionality you need and yet fit your IT budget • Scale and grow with your business
Best-Run Business Are You REady? Blueprint for Growth Things to Consider Getting Started What Does It Mean to Be a Best-Run Business? Scenario #1 You want to gain control over performance and improve visibility to maximize results. You need a perfor- mance environment that aligns execution with plans and enhances decision making. Scenario #2 You want to respond quickly to, and profit from, market opportunities. You need a business model that allows you to efficiently manage, run, and adapt your business – and software – to changing conditions. Scenario #3Software Matters You want to strengthen partnerships and collaborate both internally and externally. You need to connect to, and interact with, people and processes throughout your organization. Each of these scenarios suggests different paths to value for a best-run business. Supporting your financial and operational business processes with integrated business intelligence and performance management helps ensure up-to-date reports for every role and function in your organization. You can track metrics and help ensure performance in major areas – finance, human resources, sales and marketing, manufacturing supply chain, services supply chain, and customer relationships – for the great- est positive impact. For a more detailed breakdown of how performance and value can be measured for particular functional areas, check out Paths to Value. Did You Know?Paths to Value • SAP works with more than 67,000 s uccessful small and midsize enterprise (SME) customers around the world. • SME customers represent 78% of the total SAP customer base. • SAP has more than 4,500 local partners to support SME customer needs.
Best-Run Business Are You REady? Blueprint for Growth Things to Consider Getting Started Why Business Software Matters As sophisticated business management software solutions become more readily available to small and midsize enterprises, such solutions are emerging as essential management tools to help organizations cut costs, improve business performance, and enable revenue growth. Integrated business software can: • Connect your company’s assets, employees, and customers to maximize operational efficiency while reducing errors and costs • Provide a complete view of your customers, so you can tailor services to meet demands and exceed expectations – thereby maximizing revenue • Capture crucial data and deliver full transparency across the enterprise, allowing you to be moreSoftware matters effective in managing priorities and optimizing resources • Provide real-time information so you can better control operations, make better decisions, and a nticipate and respond more quickly to changes – thereby reducing riskPaths to Value
Best-Run Business Are You REady? Blueprint for Growth Things to Consider Getting Started Paths to Value Identify your path-to-value opportunities, and then find the business solution that helps meet your immediate challenges and provides a blueprint for growth. Area Path to Value Opportunities Sample Key Performance Indicators Finance and accounting • Automate manual tasks • Cash flow • Enable faster close • Days sales outstanding • Maximize efficiency of working capital • Cost of goods sold • Ensure compliance • Margins Purchasing • Maintain reliable supply sources • Contract spend ratio • Ensure quality, quantity, and safety at lowest possible cost • On-time delivery by supplierSoftware Matters • Centralize, automate, and standardize processes • Purchasing discounts captured • Purchase order lead time HR • Automate HR processes • Employee turnover • Enable employee self-service • Labor costs as percentage of sales • Manage organizational change efficiently • Benefit costs per employee • Safety (lost workdays and injuries) Marketing and sales • Shorten lead-to-close cycle • Sales revenue • Expand customer base • Margins • Ensure customer satisfaction and loyalty • Lead generation and conversion rates • Improve customer relationship management • Customer retention • Service response time • First-time fix rate Project management • Focus on profitable projects • Resource utilization • Reduce service delivery and project-related costs • Revenue from new offerings • Bill more quickly, accurately, and efficiently • Project profitability • Projects finalized on time and within budgetPaths to Value Supply chain • Sense and respond to customer demand • Inventory carrying cost • Enable dynamic capacity and resource planning • On-time delivery and shipments • Increase quality of services delivered • Quality rating of goods and services • Asset and capacity utilization • Service delivery cycle time IT • Lower total cost of ownership • Response time • Employ better software setup, deployment, upgrade, and • Person-days for deployment and upgrades aintenance processes m • Cost of in-house IT resources • Gain access to next-generation technology without large capital • Total implementation costs investment
Are You REady? Blueprint for Growth Things to Consider Getting StartedManagement Business Compare Business Management Solutions Is On Demand Right for from SAP to Determine the Best Fit You? Business Management Solutions • Do you have limited capital budget, limited IT support, or no desire to invest in a large SAP Business SAP Business in-house IT backbone? SAP® Business One ByDesign™ All-in-One • Do you need an immediate fix for a particu-Intelligence What it is A single, integrated solution The best of SAP, delivered on Comprehensive, integrated lar area but can’t risk a disruption to your Business to manage your entire demand industry solutions to support business? business your business processes end • Do you want core process automation and to end best practices but don’t require deep cus- Best for Small businesses that have Companies that need Midsize companies with tomized functionality? outgrown their packaged business software but don’t industry needs that want a • Does your company typically embrace out- accounting-only solutions want to support a large IT scalable foundation sourcing as a business principle? backbone • Do you need better control and more predictable costs associated with managing # of employees Up to 100 100–500 100–2,500 and maintaining applications over the long Industry Primarily used in wholesale, Primarily used in Used in all major industries term?Best-of-BreedvS. Integrated retail, professional services, manufacturing, professional and light manufacturing services, and distribution If you answered yes to any of these questions, Key functionality General business General business General business the SAP® Business ByDesign™ solution may be management functionality* management functionality* management functionality* a good fit for you. and 550+ add-on solutions and 660+ industry-specific solutions Deployment On premises** On demand On premises** Get the Best of SAP Implementation 6–8 weeks 4–8 weeks 8–16 weeks*** Delivered On Demand How to buy Perpetual licensing Monthly subscription Perpetual licensing SAP Business ByDesign is the best of SAP software delivered on demand – managed, monitored, and maintained by SAP experts in Functionality *General business functionality typically includes financials, purchasing, inventory, operations, production, leading-edge data centers at a low total cost sales and customer relationship management, built-in analytics, and reporting. of ownership. Working in the background, SAP **Hosting options are available through SAP channel partners. ensures performance, availability, and security ***Implementation time may be shorter with the SAP Business All-in-One fast-start program. and handles all technical maintenance. Your solution is always up-to-date with legal and compliance changes, and functional upgrades never disrupt your business.
Are You REady? Blueprint for Growth Things to Consider Getting Started anagement Business Compare Business Intelligence Solutions from SAP to Determine the Best FitM Business Intelligence Solutions SAP BusinessObjects™ SAP BusinessObjects SAP® Crystal Reports® BI OnDemand Edge SolutionsIntelligence What it is Intuitive reporting, Software-as-a-service Comprehensive business Business dashboards, and ad hoc (SaaS) solution providing intelligence (BI) software analysis solutions for small comprehensive, intuitive, specifically for midsize businesses and functional turnkey business intelligence companies departments Best for Small businesses that need Companies that need a Midsize companies that need affordable reporting with comprehensive BI solution comprehensive functionalities access to any data source, for exploring, reporting on, for enterprise reporting, intuitive exploration and and sharing data that delivers ad hoc query and analysis, analysis, visualizations and insight quickly and reduces dashboards and visualization, interactive dashboards, and the burden on IT data management, planningBest-of-BreedvS. Integrated the ability to perform “what- and budgeting, or strategy if” analysis management # of employees 10–500 1–5,000+ 100–2,500 Deployment • On premises • On demand • On premises • Hosted • Hosted • Desktop • On demand Implementation 1–8 days Immediate 4–8 weeks How to buy Perpetual licensing or monthly Monthly subscription Perpetual licensing subscription Functionality
Are You REady? Blueprint for Growth Things to Consider Getting Started anagement Business Evaluate Best-of-Breed Versus Integrated SoftwareM The debate over whether to buy best-of-breed or integrated software whirls on. And your choice will have a profound impact on your company. Best-of-breed solutions are great at quickly addressing specific problems – streamlining your financial processes, for example, or improving customer relationship management (CRM). Such systems, however,Intelligence Business can’t address all business issues – just near-term, targeted needs. You’ll also need to purchase solutions for areas such as order management, inventory, customer service, and HR. Chances are you’ll end up with solutions from multiple vendors, and you may need extensive integration to provide complete coverage. The costs of integrating such follow-on investments can add up quickly. In contrast, a well-designed software solution can provide coverage for all your business processes. A comprehensive yet modular solution also gives you the flexibility to start small and add integrated software as you grow. You’ll need to carefully evaluate how each solution supports your internal processes and affects budgetBest-of-Breedvs. Integrated and resources: • Evaluate and prioritize cross-functional business processes that could benefit from automation. • Consider where a functional solution touches the areas of your organization outside its domain. For example, if you have a stand-alone time and expense solution and you hire contractors, you’ll need a way to track contractor hours and incorporate billable hours into project billings. • Consider the hidden future costs of your other solutions (CRM, enterprise resource planning, and so on) and the potential costs of integrating them with your current investment. If you buy best-of-breed solutions, you may need substantial IT resources to integrate and maintain your solutions. Functionality
Are You REady? Blueprint for Growth Things to Consider Getting Started Finance and Human Marketing Project Supply Purchasing IT anagement Accounting Resources and Sales Management Chain Business Finance and Accounting As a financial executive, you need to optimize working capital, provide real-time business insight, and lowerM transaction costs to support growth. SAP® solutions help you streamline processes, provide enhanced transparency, and facilitate compliance. Unlike many other products, SAP software enables unified financial and management accounting; it also delivers a complete financial view across the business, early visibility into profitability, and tools to optimize working capital.Intelligence Finance and Accounting Business Cash and liquidity management Cost and revenue Employee self-service Financial analytics Fixed asset accounting General ledger accounting Inventory valuation Payables Payment managementBest-of-BreedvS. Integrated Receivables Tax management Functionality
Are You REady? Blueprint for Growth Things to Consider Getting Started Finance and Human Marketing Project Supply Purchasing IT anagement Accounting Resources and Sales Management Chain Business Purchasing As a purchasing manager, you need to maximize purchasing effectiveness and process efficiency. SAPM solutions help you manage procurement and maintain reliable sources of supply. Unlike solutions that require managers to interact with multiple applications, SAP software integrates procurement with other key functional areas, creates a unified view of purchasing, and provides the organizational tools you need to monitor performance and address exceptions. SAP software helps you collaborate with suppliers, auto- mate processes, and continuously assess the effectiveness of your procurement activities and supplierIntelligence relationships – which ultimately helps you control cost. Business Purchasing Goods and services receipts Purchasing analytics Purchase requests and orders Self-service procurement Sourcing and contracting Supplier analytics Supplier invoicingBest-of-BreedvS. Integrated Functionality
Are You REady? Blueprint for Growth Things to Consider Getting Started Finance and Human Marketing Project Supply Purchasing IT anagement Accounting Resources and Sales Management Chain Business Human Resources As an HR manager, you want to provide quality services, drive process efficiencies, and allocate moreM resources to strategic activities. SAP solutions provide streamlined support for all HR activities – from hire to retire. SAP software helps you integrate end-to-end HR processes while providing the agility required to adapt to constant change. Human ResourcesIntelligence Business Compensation functions Employee self-service HR analytics Personnel administration Payroll processing Time and labor managementBest-of-BreedvS. Integrated Functionality
Are You REady? Blueprint for Growth Things to Consider Getting Started Finance and Human Marketing Project Supply Purchasing IT anagement Accounting Resources and Sales Management Chain Business Marketing and Sales As a marketing, sales, or customer service executive, you need to improve demand generation, meet salesM targets, and manage customer service requests efficiently. SAP software gives a 360-degree view of each customer, supports integrated lead generation and conversion, promotes a customer-centric culture, and uses escalation and exception-based processing. And SAP software supports scalable, end-to-end market- ing, sales, and service scenarios that accelerate time to revenue, shorten the sales cycle, increase win rates, and help ensure customer loyalty.Intelligence Business Marketing and Sales Account management Customer invoicing Marketing New business Product and services portfolio Sales analytics Sales ordersBest-of-BreedvS. Integrated Service Field service and repair Service analytics Service desk Service entitlements Service orders Functionality
Are You REady? Blueprint for Growth Things to Consider Getting Started Finance and Human Marketing Project Supply Purchasing IT anagement Accounting Resources and Sales Management Chain Business Project Management As a project manager, you need to deliver projects on time, on budget, and within scope. SAP solutionsM support key project activities, from planning and structuring to executing and managing cost and revenue. Unlike products that support only one aspect of a project, SAP software enables full project visibility and integrates data across areas, from basic cost collection to full-scale project planning and coordination of internal and external staffing.Intelligence Project Management Business Project analytics Project cost and revenue Project management Project teamBest-of-BreedvS. Integrated Functionality
Are You REady? Blueprint for Growth Things to Consider Getting Started Finance and Human Marketing Project Supply Purchasing IT anagement Accounting Resources and Sales Management Chain Business Supply Chain As a supply chain, logistics, or production manager, you must deal with customers demanding “perfectM orders” on one side and executive management’s need for cost efficiency on the other. SAP solutions sup- port streamlined processes such as multiple fulfillment strategies and site-level manufacturing execution. SAP software also enables parallel processing and execution of customer requests for inbound, outbound, and internal logistics – while minimizing stock needs, time lags, and errors.Intelligence SAP software delivers integration of supply chain planning, logistics, and production with sales, sourcing Business and replenishment, and financials. And with integrated business intelligence, you’ll always have the timely insights needed to capitalize on opportunities and minimize risks throughout your supply chain. Supply Chain Demand planning Execution Outbound logistics control Supply control Supply chain analyticsBest-of-BreedvS. Integrated Supply planning Logistics Execution External logistics Inbound logistics Outbound logistics Outbound logistics control Physical inventory Production Functionality Execution Production control Quality assurance
Are You REady? Blueprint for Growth Things to Consider Getting Started Finance and Human Marketing Project Supply Purchasing IT anagement Accounting Resources and Sales Management Chain Business Information Technology As an IT executive, you want to contribute to revenue growth and control costs. SAP solutions help youM adapt swiftly to changing business needs. A flexible technology platform keeps SAP solutions highly scal- able, making it easy to support your organization as it grows and evolves. SAP software empowers end users to learn as they go – with a quickly adaptable solution that simplifies IT. Information TechnologyIntelligence Business Application and user management Business configuration IT analytics System managementBest-of-BreedvS. Integrated Functionality
Are You REady? Blueprint for Growth Things to Consider Getting Started Step 1: Step 2: Step 3: Step 4: Leadership Team Internal Considerations Solution Review Get a Bid Discuss Objectives with Your Leadership Team Start a discussion with your senior management team about overall objectives. What are you trying to accomplish with a new, integrated software solution? Are you trying to support profitable growth? exploit multiple market opportunities? improve business performance? increase collaboration beyond company boundaries? Gather your team and discuss the following: 1. What are the core reasons you are looking to improve your business operations with a software s olution? And why are they important? Growth in demand Entry into new markets Economic factors Competition Operating costs Administrative costs Customer satisfaction 2. What KPIs are most important to achieve your goals in each business area? 3. Review Paths to Value to identify areas that need improvement. 4. What are the reasons for acting now, and what are the risks of not acting? Consider trigger events such as: • Global demand • Increased IT requirements • Rapid growth • Employee growth • New CEO or CFO • Acquisition of large customer • Equity event • Retrenching after economic downturn 5. How soon do you want the solution up and running? Identify any gaps in expectations.
Are You REady? Blueprint for Growth Things to Consider Getting Started Step 1: Step 2: Step 3: Step 4: Leadership Team Internal Considerations Solution Review Get a Bid Engage Functional Experts to Assess Areas of Opportunity Once you have executive alignment, you’ll want to assemble a team of cross-functional experts to conduct an internal assessment. The goal is to identify current process inefficiencies and prioritize areas based on time- and cost-saving opportunities. A gap analysis – comparing how things are done now to how they would look if automated or integrated – is a useful way to determine priority areas for your company. Ask team members to identify inefficiencies in their own departments. Have team members review the Paths to Value so that they understand how integration and automation can overcome those inefficiencies. Finally, ask them to identify the KPIs in each business section that indicate success or failure. You should now have a short list of functional areas, processes ripe for improvement, and prioritized KPIs to track performance.
Are You REady? Blueprint for Growth Things to Consider Getting Started Step 1: Step 2: Step 3: Step 4: Leadership Team Internal Considerations Solution Review Get a Bid Review Solutions The next step is to select a solution that can support your prioritized needs and scale as your business grows – and a vendor able to support your long-term vision. Consider the following as you explore solu- tions and evaluate vendors: 1. Form a review group • Enlist a cross-functional team of functional and process experts. • Establish guidelines for selection (for example, cutting costs or enabling self-service). 2. Consider options • Evaluate your vendor and solution. • Compare on-premise and on-demand options to determine which best meets your IT and business needs. • Explore long-term potential. 3. Evaluate SAP software Look for a vendor that: • Is willing to conduct a personalized needs assessment • Is committed to the long-term success of your organization • Can deliver software, support, services, and training (through its organization or via partners) • Offers a portfolio of solutions • Has an enthusiastic, involved user community 4. Pay attention to reputation • Review the vendor’s Web site, consult with sales representatives, and contact user groups to evalu- ate the vendor’s success with companies of your size and in your industry. • Pay attention to the company’s market share, especially if your company tends to be risk averse. An established player is more likely to be here five years from now to service your installation.
Are You REady? Blueprint for Growth Things to Consider Getting Started Step 1: Step 2: Step 3: Step 4: Leadership Team Internal Considerations Solution Review Get a Bid Request a Bid To get an estimate for your business, first make sure that your vendor understands your objectives and priorities. Costs can vary on the basis of scope of components activated, data migration requirements, and unique deployment considerations. Next, the vendor should conduct a workshop with your cross-functional team to determine detailed scoping based on the team priorities identified in step 2. In addition to providing a bid, a vendor should walk your evaluation team through a detailed demo, to help future users understand what to expect from the solution. The vendor should also provide a process map for going live.