Revenue and Spend Insights from Vistex and IBM Whitepaper
 

Revenue and Spend Insights from Vistex and IBM Whitepaper

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SAP Incentive Administration and SAP Paybacks and Chargebacks by Vistex are applications that extend SAP® ERP and SAP CRM software functionality. These applications provide companies with an ...

SAP Incentive Administration and SAP Paybacks and Chargebacks by Vistex are applications that extend SAP® ERP and SAP CRM software functionality. These applications provide companies with an embedded, fully-integrated solution for handling discount pricing, marketing fund claims, sales commissions & broker fees, in- & outbound royalty payments, and volume- & growth-based sales or purchasing rebates.

With visibility into costs, pricing and incentives, SAP Incentive Administration and SAP Paybacks and Chargebacks can analyze the gross-to-net profitability of sales in complex channels involving any number of intermediary channel partners. The solutions define the eligible products, channels, customers, pricing and incentives in each sales agreement. In many cases, multiple agreements may be involved in selling a product to the end-customer since there is typically an agreement between each intermediary partner in the supply chain.

These applications are able to consolidate a view of the multiple agreements, incentives and transactions, providing insight into revenue and spend. Operationally, the system needs to process the large influx of daily transactions, and analytical reporting consumes a significant portion of system resources.

SAP® HANA™ technology takes these solutions to the next level by enabling real-time insight into revenue and spend. First, the solution lowers data demands on the operational database used for transaction processing. Second, the solution virtually eliminates the data latency that is inherent in replicated data marts using traditional database technologies. Third, the solution accelerates analytical processing to provide insight on larger data sets (including Big Data) at faster speeds than traditional analytical tools.

SAP Co-innovation Lab (COIL) global network is designed for driving open innovation projects and initiatives to extend SAP’s solution coverage and enhance our solution infrastructure efficiency with partners. Vistex partnered with SAP and IBM in the SAP Co-Innovation Lab to develop a solution to provide real-time profitability analytics while reducing the overall impact on transactional processing and other business operations. As part of the project, an operational system was created with millions of lines of transactional data reflecting a large size (multi-billion dollar revenue) company, and reports analyzing revenue and spend were defined. This environment was used to evaluate the speed at which the analytical data set could be updated with new and changed data, as well as the time necessary to analyze and report revenue and spend data using multiple transaction types.

SAP HANA was used to reduce typical analytical report generation from several minutes to less than one second, while maintaining an up-to-date analytics data source that is updated within milliseconds of data changes in the operational system.

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Revenue and Spend Insights from Vistex and IBM Whitepaper Revenue and Spend Insights from Vistex and IBM Whitepaper Document Transcript

  • REVENUE AND SPEND INSIGHTS: ANALYZING GROSS-TO-NET PROFITABILITY USING SAP® HANA A CO-INNOVATION STORY WITH VISTEX AND IBMEditors Varma Datla, Vistex Matthew Hays, Vistex Catherine Moran, SAP Kevin Liu, SAPMarch 2012Version 1.0White PaperSAP Co-Innovation Lab
  • An SAP HANA CO-INNOVATION STORY WITH VISTEX AND IBM 2AcknowledgementsThis document is the work of a virtual project team at SAP Co-innovation Lab, whose members haveincluded:Christopher Y Chung (IBM), David Cruickshank (SAP), Varma Datla (Vistex), Matthew Hays (Vistex),Kevin Liu (SAP), Magnus Meier (SAP), Siva Gopal Modadugula (SAP), Catherine Moran (SAP), RebeccaNewell (SAP), Hans-Joachim Odlozinski (SAP), Juergen Schmerder (SAP), Sanjay Shah (Vistex), GoranStoiljkovski (SAP), Wilson Ramos (SAP), Tag Robertson (IBM), and many colleagues from IBM, SAP, andVistex who helped with the project
  • An SAP HANA CO-INNOVATION STORY WITH VISTEX AND IBM 3Content1 Executive Summary ....................................................................................................................................... 42 Challenges of Traditional Approaches to Analytics .................................................................................. 42.1 Infrastructure and Technological Constraints ...................................................................................................42.2 Increasing Complexity of the Gross-to-Net Equation .......................................................................................52.3 Increasing Demand for Insights ........................................................................................................................53 Revolutionary Solution for Today’s Business Analytics ........................................................................... 53.1 Why in-memory is relevant for Analytics ...........................................................................................................63.2 Revenue and Spend Insights ............................................................................................................................64 Co-innovate at SAP Co-Innovation Lab ....................................................................................................... 74.1 Key components of the COIL test landscape ...................................................................................................74.2 Architecture of the COIL test landscape ...........................................................................................................74.3 Hardware...........................................................................................................................................................85 Reporting Example ........................................................................................................................................ 95.1 Scenario ............................................................................................................................................................95.2 Requirements ....................................................................................................................................................95.3 Outcomes ....................................................................................................................................................... 106 Conclusion.................................................................................................................................................... 14 View slide
  • An SAP HANA CO-INNOVATION STORY WITH VISTEX AND IBM 41 Executive SummarySAP Incentive Administration and SAP Paybacks and Chargebacks by Vistex are applications that extendSAP® ERP and SAP CRM software functionality. These applications provide companies with an embedded,fully-integrated solution for handling discount pricing, marketing fund claims, sales commissions & brokerfees, in- & outbound royalty payments, and volume- & growth-based sales or purchasing rebates.With visibility into costs, pricing and incentives, SAP Incentive Administration and SAP Paybacks andChargebacks can analyze the gross-to-net profitability of sales in complex channels involving any number ofintermediary channel partners. The solutions define the eligible products, channels, customers, pricing andincentives in each sales agreement. In many cases, multiple agreements may be involved in selling a productto the end-customer since there is typically an agreement between each intermediary partner in the supplychain.These applications are able to consolidate a view of the multiple agreements, incentives and transactions,providing insight into revenue and spend. Operationally, the system needs to process the large influx of dailytransactions, and analytical reporting consumes a significant portion of system resources.SAP® HANA™ technology takes these solutions to the next level by enabling real-time insight into revenueand spend. First, the solution lowers data demands on the operational database used for transactionprocessing. Second, the solution virtually eliminates the data latency that is inherent in replicated data martsusing traditional database technologies. Third, the solution accelerates analytical processing to provideinsight on larger data sets (including Big Data) at faster speeds than traditional analytical tools.SAP Co-innovation Lab (COIL) global network is designed for driving open innovation projects andinitiatives to extend SAP’s solution coverage and enhance our solution infrastructure efficiency with partners.Vistex partnered with SAP and IBM in the SAP Co-Innovation Lab to develop a solution to provide real-timeprofitability analytics while reducing the overall impact on transactional processing and other businessoperations. As part of the project, an operational system was created with millions of lines of transactionaldata reflecting a large size (multi-billion dollar revenue) company, and reports analyzing revenue and spendwere defined. This environment was used to evaluate the speed at which the analytical data set could beupdated with new and changed data, as well as the time necessary to analyze and report revenue and spenddata using multiple transaction types.SAP HANA was used to reduce typical analytical report generation from several minutes to less than onesecond, while maintaining an up-to-date analytics data source that is updated within milliseconds of datachanges in the operational system.2 Challenges of Traditional Approaches to AnalyticsAnalyzing gross-to-net profitability—and business analytics in general—can pose challenges technically andoperationally. The root-cause of these challenges can be found in several areas.2.1 Infrastructure and Technological Constraints View slide
  • An SAP HANA CO-INNOVATION STORY WITH VISTEX AND IBM 5Companies have long relied on operational data that has been replicated to data marts for reporting purposes.Reporting is system resource-intensive, and transaction processing cannot be subject to delays. Immediately,it becomes apparent from this model that the transaction processing system is not the ideal system to use foranalytical reporting. Replicating operational data into a data mart is not real time, and frequent refreshing ofthis data is necessary to provide a current view of operational data.2.2 Increasing Complexity of the Gross-to-Net EquationDue to the growing number of business partners a particular customer can have, the number of agreements,variance in models, and the volume of transaction data, the complexity of gross-to-net analyses increases. Asa result, analyses performed on revenue and spend data require new levels of sophistication.2.3 Increasing Demand for InsightsAs the pace of change in the business climate accelerates due to economic and social factors, the time toanalyze business conditions and react to evolving situations shrinks. Information analysts are asked toperform increasingly sophisticated analyses at ever faster speeds to provide the revenue and spend insightsthat enable their businesses to compete and win. CHALLENGES Standard Reporting • Reports draw from operational system • Analytics impact business Optional Reporting • Typically once-a-day update of data • Data may be aggregated to improve analytic speed Limited Insight • Aged data yields equally aged analysis • Analysis may be limited by data aggregationFigure 1: SAP Incentive Administration and SAP Paybacks and Chargebacks with traditional BW system3 Revolutionary Solution for Today’s Business AnalyticsToday’s solution to analytical reporting needs to be a fundamental leap ahead of traditional approaches.
  • An SAP HANA CO-INNOVATION STORY WITH VISTEX AND IBM 6SAP HANA technology provides a secondary data source for business analytics that can be updated in real-time without significantly impacting the primary data source, used for business operations. SAP LandscapeTransformation replication software is used to replicate new and changed data almost instantaneously,keeping the analytical data source current. HANA’s in-memory structure eliminates input/output contentionto physical storage and accelerates the analysis of large data sets.3.1 Why in-memory is relevant for AnalyticsHANA provides the capacity and speed to sift through detailed data without aggregation, so the analyticalresults can be drilled into for deeper insight. It has the ability to query and analyze very large data sets toperform intensive tasks such as consolidated, multi-year line-item and lifetime analysis of revenue by productor customer. HANA enables instant access to relevant decision information in a user-initiated or automatedfashion. BENEFITS Improve Reporting • Business user-driven data analysis • Instant response times Eliminate Boundaries • No pre-defined data aggregation levels • Complete lifetime, line-item analysis Gain Deeper Insight • Big Data and ad hoc queries • No limitations on reporting dimensionsFigure 2: SAP Incentive Administration and SAP Paybacks and Chargebacks with HANA as secondary database3.2 Revenue and Spend InsightsGross-to-net analyses are especially difficult to perform using traditional analytical technologies because itinvolves a significant amount of data investigation, calculation and summarization. This extensive analysisrequires all of the financial transactions related to the sale of products. These transactions are spreadthroughout the sales channel, involving any number of channel partners, the end customer, and allagreements to which the transaction is governed. The relevant transactions must be found, linked, computedand summarized for presentation.Furthermore, valuable information can be found by drilling into data to search for specific customers orproducts, make comparisons, and find patterns or discrepancies. The reporting mechanism must maintain theability to drill into high-level reports through a number of data dimensions. This requires the ability to query
  • An SAP HANA CO-INNOVATION STORY WITH VISTEX AND IBM 7and manipulate very large data sets quickly, since these actions are performed in real-time by the businessanalyst.With its advanced analytical capabilities and extreme speed, HANA performs the complex queries,calculations and analysis in a single user request, delivering results quickly while maintaining the ability todrill into the summarized data to see rich detail with equal speed.Performing gross-to-net analyses on real-time transaction data allows businesses to determine profitabilityinstantly and react to changes in manufacturing cost, trade spend, and other expenses quickly. Fasterdetection of changes in profitability allows businesses to adjust pricing as soon as possible to limit the impactof cost changes on profitability.4 Co-innovate at SAP Co-Innovation LabSAP Co-innovation Lab (COIL) is a global lab network that is designed to bring value to our customers bydriving open innovation projects and initiatives to extend SAP’s solution coverage and enhance our solutioninfrastructure efficiency. Both Vistex and IBM are members of the SAP Co-innovaiton Lab and leveraged thelab‘s project enablement platform to conduct a HANA Proof-of-Concept (PoC) to determine the feasibilityand potential performance improvement of in-memory processing using HANA technology in data-intensiveapplications commonly encountered by Vistex solutions. In particularly, the PoC checked the feasibility ofputting transactional data (obtained from IP Docs) in-memory to support near-real-time operational reporting.4.1 Key components of the COIL test landscapeThe following SAP and partner components were deployed at COIL to support this PoC: - ECC 6 IDES with ehp5 with IBM DB2 and SLES o Vistex Solution Extension for ECC - BI Platform 4.0 on Windows 2008 64 bit and SQL server, with Advanced Analysis OLAP and MS Office - HANA 1.0 with SLT4.2 Architecture of the COIL test landscapeSAP HANA provides a secondary data source dedicated to analytical reporting. This data source is updatedin real-time by SAP’s Landscape Transformation replication software. The implementation of SAP HANAdoes not disturb the original architecture of SAP ECC and Vistex.The architectural diagram for the SAP Co-Innovation Lab set-up is shown below.
  • An SAP HANA CO-INNOVATION STORY WITH VISTEX AND IBM 84.3 HardwareSAP HANA software requires specialized hardware to provide the memory storage and memory accessbandwidth. IBM provided the hardware necessary to install SAP HANA software in the SAP Co-InnovationLab. The specifications for the hardware are listed below.IBM System x3850 X5Machine Type: 7145Number of processor: 4, Intel Xeon Nahalem EX, 8CMemory: 512GB / Hard drives: 8 X 300GBHigh IOPS SSD: 1 X 320GBMore details for IBM System x3850 X54 socket @ Intel Xeon 8C Processor Model X7560
  • An SAP HANA CO-INNOVATION STORY WITH VISTEX AND IBM 9512 GB Memory, eight memory cards, each with eight DIMM sockets (64 DIMM @ 8GB/DIMM).2.4 TB SAS per chassis (using eight 300 GB 2.5" SAS HDDs).320 GB High IOPS SLC DUO Adapter for IBM System x5 Reporting ExampleThe following setup was used in the SAP Co-Innovation Lab environment to simulate the transactions thatwould be used in a typical revenue and spend analysis report. This volume of data represents the annualtransaction data for a small enterprise or the monthly transaction data for a medium-to-large enterprise.5.1 Scenario • 5 Million Billing line items • 5 Million Sales rebates items • 5 Million Sales Incentive items • 5 Million Chargeback items5.2 RequirementsTo test the ability to perform typical analyses, the following capabilities needed to be performed to ensurerobust utility. • Report on product- or customer-related profitability • Drill down to customer rebates • Sales incentives • Chargebacks for a single company
  • An SAP HANA CO-INNOVATION STORY WITH VISTEX AND IBM 105.3 OutcomesThe timing of the report generation using SAP HANA and the traditional approach are shown in the tablebelow.SAP HANA SAP Business WarehouseLess than 1 second Several minutes(Runtime is measured for this specific scenario, no general (A tradition Data Warehouse would take several manualstatement is made for all analytical scenarios.) steps to achieve the same results as SAP HANA and would typically take several minutes.) • Directly on line item level, no pre-calculated • Pre-calculated data aggregation levels data aggregation levels required • Processing time for next navigation step • No limit on drill-downs and details depends on whether aggregate exists • Data immediately available for reporting, • Parallel drill-down to multiple dimensions no waiting on data load processes to data may not be possible anymore warehouseThe gross-to-net analysis report was generated in a fraction of a second using SAP HANA. This issignificantly faster than the minutes required to produce the same report using traditional technologies.Figure 3: The Gross-to-Net Analysis for a Company (all customers, all materials)
  • An SAP HANA CO-INNOVATION STORY WITH VISTEX AND IBM 11In addition to the superior speed of analytics, the detailed data is still retained and is available to drill deeperinto the analysis. Drilling into the report is equally as fast as the initial report generation, so there is no needto sacrifice details for speed or vice versa.Figure 4: The same Gross-to-Net Analysis demonstrating the ability to drill into details (one customer, each material)The same analytical capabilities demonstrated for Gross-to-Net analysis can also be applied to particularcomponents of the profitability analysis. The following reports demonstrate drilling into the profitcomponents for Sales Incentives and Sales Rebates.
  • An SAP HANA CO-INNOVATION STORY WITH VISTEX AND IBM 12Figure 5: Drilling into the Sales Incentives component of the Gross-to-Net ReportFigure 6: Drilling into the Sales Rebates component of the Gross-to-Net Report
  • An SAP HANA CO-INNOVATION STORY WITH VISTEX AND IBM 13The demonstrated speed of analysis and delivery of the report enables the use of mobile devices forrequesting and reviewing revenue and spend data.Figure 7: Gross-to-Net Analysis delivered to a mobile device (Apple iPad shown)Analyses can be filtered on several dimensions and components of the analyses can be drilled into as shownbelow.
  • An SAP HANA CO-INNOVATION STORY WITH VISTEX AND IBM 14Figure 8: The Sales Incentive component of the Gross-to-Net report is filtered on fiscal period (Apple iPad shown)6 ConclusionAlthough each company’s transaction data will vary and its approach to revenue and spend analyses willdiffer, the scenario demonstrated by Vistex in the SAP Co-Innovation Lab proved that significantimprovements in analytical capabilities can be achieved without sacrificing delivery speed or data latency.SAP HANA enables Vistex to provide revenue and spend insights faster than traditional technologies. Thedata used in the analyses performed by SAP HANA can be obtained in real-time without impacting otherbusiness processing operations. The business analyst can drill into the delivered results with equal speed tofind insights that are masked by summarization. The full data record from the original source can beavailable in SAP HANA and displayed in the report without impacting performance.The benefits of this speed and capability are obvious to the business user requesting and viewing the analysis.The benefits to the business itself are realized by the faster detection of challenges to be overcome, such asincreased expenses in cost to manufacture or trade spend affecting profitability; and quicker discovery ofopportunities to pursue, such as underperforming channels or below-forecast sales to certain customers or ofparticular products.Copyright/Trademark
  • Copyright© Copyright 2012 SAP AG. All rights reservedSAP Library document classification: PUBLICNo part of this publication may be reproduced or transmitted in any form or for any purpose without the expresspermission of SAP AG. The information contained herein may be changed without prior notice.Some software products marketed by SAP AG and its distributors contain proprietary software components ofother software vendors.Microsoft, Windows, Excel, Outlook, PowerPoint, Silverlight, and Visual Studio are registered trademarks ofMicrosoft Corporation.IBM, DB2, DB2 Universal Database, System i, System i5, System p, System p5, System x, System z, Systemz10, z10, z/VM, z/OS, OS/390, zEnterprise, PowerVM, Power Architecture, Power Systems, POWER7,POWER6+, POWER6, POWER, PowerHA, pureScale, PowerPC, BladeCenter, System Storage, Storwize, XIV,GPFS, HACMP, RETAIN, DB2 Connect, RACF, Redbooks, OS/2, AIX, Intelligent Miner, WebSphere, Tivoli,Informix, and Smarter Planet are trademarks or registered trademarks of IBM Corporation.Linux is the registered trademark of Linus Torvalds in the United States and other countries.Adobe, the Adobe logo, Acrobat, PostScript, and Reader are trademarks or registered trademarks of AdobeSystems Incorporated in the United States and other countries.Oracle and Java are registered trademarks of Oracle and its affiliates.UNIX, X/Open, OSF/1, and Motif are registered trademarks of the Open Group.Citrix, ICA, Program Neighborhood, MetaFrame, WinFrame, VideoFrame, and MultiWin are trademarks orregistered trademarks of Citrix Systems Inc.HTML, XML, XHTML, and W3C are trademarks or registered trademarks of W3C®, World Wide WebConsortium, Massachusetts Institute of Technology.Apple, App Store, iBooks, iPad, iPhone, iPhoto, iPod, iTunes, Multi-Touch, Objective-C, Retina, Safari, Siri, andXcode are trademarks or registered trademarks of Apple Inc.IOS is a registered trademark of Cisco Systems Inc.RIM, BlackBerry, BBM, BlackBerry Curve, BlackBerry Bold, BlackBerry Pearl, BlackBerry Torch, BlackBerryStorm, BlackBerry Storm2, BlackBerry PlayBook, and BlackBerry App World are trademarks or registeredtrademarks of Research in Motion Limited.Google App Engine, Google Apps, Google Checkout, Google Data API, Google Maps, Google Mobile Ads,Google Mobile Updater, Google Mobile, Google Store, Google Sync, Google Updater, Google Voice, GoogleMail, Gmail, YouTube, Dalvik and Android are trademarks or registered trademarks of Google Inc.INTERMEC is a registered trademark of Intermec Technologies Corporation.Wi-Fi is a registered trademark of Wi-Fi Alliance.Bluetooth is a registered trademark of Bluetooth SIG Inc.Motorola is a registered trademark of Motorola Trademark Holdings LLC.Computop is a registered trademark of Computop Wirtschaftsinformatik GmbH.SAP, R/3, SAP NetWeaver, Duet, PartnerEdge, ByDesign, SAP BusinessObjects Explorer, StreamWork, SAPHANA, and other SAP products and services mentioned herein as well as their respective logos are trademarksor registered trademarks of SAP AG in Germany and other countries.Business Objects and the Business Objects logo, BusinessObjects, Crystal Reports, Crystal Decisions, WebIntelligence, Xcelsius, and other Business Objects products and services mentioned herein as well as theirrespective logos are trademarks or registered trademarks of Business Objects Software Ltd. Business Objectsis anSAP company.Sybase and Adaptive Server, iAnywhere, Sybase 365, SQL Anywhere, and other Sybase products and servicesmentioned herein as well as their respective logos are trademarks or registered trademarks of Sybase Inc.Sybase is an SAP company.Crossgate, m@gic EDDY, B2B 360°, and B2B 360° Services are registered trademarks of Crossgate AG inGermany and other countries. Crossgate is an SAP company.All other product and service names mentioned are the trademarks of their respective companies. Datacontained in this document serves informational purposes only. National product specifications may vary.These materials are subject to change without notice. These materials are provided by SAP AG and its affiliatedcompanies ("SAP Group") for informational purposes only, without representation or warranty of any kind, andSAP Group shall not be liable for errors or omissions with respect to the materials. The only warranties for SAPGroup products and services are those that are set forth in the express warranty statements accompanyingsuch products and services, if any. Nothing herein should be construed as constituting an additional warranty. 2