Delivering Real-Time Business Value for Banking

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This deck is a Suite on HANA Executive positioning document in 3 parts for Banking.

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Delivering Real-Time Business Value for Banking

  1. 1. July 2013 Delivering Real-Time Business Value for Banks SAP Business Suite Powered by SAP HANA Public
  2. 2. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 2Public Banks must seek new competitive advantages in response to changes in customer trust, demographics, and demands, as well as to profit margins reduced by higher capital requirements, compliance costs, and lower fee income.  Create new and innovative products that excite customers  Respond rapidly to evolving trends  Ensure business processes are flexible, efficient, and cost-effective The real-time opportunity
  3. 3. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 3Public Delivering the future of banking today Business priorities in banking… Finance  Accelerate closing process  Get a single source of truth  Enable easier reconciliation Sales and services  Convert loyalty into revenue by utilizing predictive analytics  Focus on the right markets by gaining insight in customer analytics  Get a true 360-degree view of the customer Risk and compliance  Minimize access risk and prevent fraud  Reduce the cost of access management and ongoing compliance activities
  4. 4. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 4Public SAP Business Suite powered by SAP HANA The next-generation business platform Real-time business In-memory Business transactions Digital connections Collaborative business CloudSocial Big DataMobile One platform bringing it all together Advanced analytics
  5. 5. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 5Public Industry value map for retail and commercial banking Delivering the future of banking today Retail Banking Operations Retail Deposits Retail Lending Centralized Payment Processing Finance Finance Transformation Performance Management Finance and Risk Data Management (IFRA) Collaborative Finance Operations People and Talent Core Human Resources and Payroll Talent Management Workforce Planning and Analytics Procurement Supplier Discovery and Lifecycle Management Strategic Sourcing and Contracting Procurement and Order Collaboration Collaborative Invoice to Pay IT Management Application Lifecycle Management IT Infrastructure Management IT Portfolio and Project Management IT Service Management IT Strategy and Governance Multichannel Mobile Customer Internet Banking Call Center Automated Teller Machines Sales and Service Customer Acquisition Customer Management Social Media Engagement Risk and Compliance Credit Risk Management Liquidity Risk Management Governance, Compliance and Surveillance Enterprise Risk Reporting Commercial Banking Operations Cash and Liquidity Management Commercial Lending Leasing Financial Services Network Technology Solutions Analytics Consumer ExperienceData Management Enterprise Mobility SAP HANA Platform Application Develop-ment and Integration
  6. 6. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 6Public Industry value map for retail and commercial banking Real-time value for key end-to-end processes Retail Banking Operations Retail Deposits Retail Lending Centralized Payment Processing Finance Finance Transformation Performance Management Finance and Risk Data Management (IFRA) Collaborative Finance Operations People and Talent Core Human Resources and Payroll Talent Management Workforce Planning and Analytics Procurement Supplier Discovery and Lifecycle Management Strategic Sourcing and Contracting Procurement and Order Collaboration Collaborative Invoice to Pay IT Management Application Lifecycle Management IT Infrastructure Management IT Portfolio and Project Management IT Service Management IT Strategy and Governance Multichannel Mobile Customer Internet Banking Call Center Automated Teller Machines Sales and Service Customer Acquisition Customer Management Social Media Engagement Risk and Compliance Credit Risk Management Liquidity Risk Management Governance, Compliance and Surveillance Enterprise Risk Reporting Commercial Banking Operations Cash and Liquidity Management Commercial Lending Leasing Financial Services Network Technology Solutions Analytics Consumer ExperienceData Management Enterprise Mobility SAP HANA Platform Application Develop-ment and Integration Initial focus for SAP Business Suite on SAP HANA for banking
  7. 7. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 7Public Industry value map for capital markets Managing capital for economic growth Sales and Trading Real-Time P&L Management Market Making and Trading Market Data Analysis Finance Accounting and Financial Close Collaborative Finance Operations People and Talent Core Human Resources and Payroll Talent Management Workforce Planning and Analytics Procurement Supplier Discovery and Lifecycle Management Strategic Sourcing and Contracting Procurement and Order Collaboration Collaborative Invoice to Pay IT Management Application Lifecycle Management IT Infrastructure Management IT Portfolio and Project Management IT Service Management IT Strategy and Governance Brokerage Services Prime Brokerage Client Services Trading Analytics Risk and Compliance Real-Time Risk Management Liquidity Risk Management Governance, Compliance, and Surveillance Enterprise Risk Reporting Technology Solutions Analytics Consumer ExperienceData Management Enterprise Mobility SAP HANA Platform Application Develop-ment and Integration
  8. 8. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 8Public Industry value map for capital markets Real-time value for key end-to-end processes Sales and Trading Real-Time P&L Management Market Making and Trading Market Data Analysis Finance Accounting and Financial Close Collaborative Finance Operations People and Talent Core Human Resources and Payroll Talent Management Workforce Planning and Analytics Procurement Supplier Discovery and Lifecycle Management Strategic Sourcing and Contracting Procurement and Order Collaboration Collaborative Invoice to Pay IT Management Application Lifecycle Management IT Infrastructure Management IT Portfolio and Project Management IT Service Management IT Strategy and Governance Brokerage Services Prime Brokerage Client Services Trading Analytics Risk and Compliance Real-Time Risk Management Liquidity Risk Management Governance, Compliance, and Surveillance Enterprise Risk Reporting Technology Solutions Analytics Consumer ExperienceData Management Enterprise Mobility SAP HANA Platform Application Develop-ment and Integration Initial focus for SAP Business Suite on SAP HANA for banking
  9. 9. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 9Public Today Delta KPI improvements compared to average peer group are high-level estimates and will have to be validated for each customer situation. With SAP Business Suite on SAP HANA Enterprise risk and compliance Business value for access control role analytics  Most companies face a high volume and ongoing increase of unused and orphaned roles  Scheduled batch jobs are required to analyze a transaction log with millions of records (such batch jobs usually take hours to complete)  The cost of ongoing role maintenance can be high – one customer estimated active ERP role maintenance costs at around US$4,000 annually  Unused roles and orphaned roles constitute unneeded access risk to the organization (and possible compliance issues).  Conflicts associated with segregation of duties (SoD) via continuous monitoring of access risks.  Accelerated analysis of role usage isolates unused and orphan roles  Deeper insight into roles will help uncover any potential risk for the organization  Role usage and assignment information provides valuable insight to business executives during business reengineering and reorganization  Trigger the assigned workflow directly from your analysis to remove unused roles assigned to users  Expose orphaned roles across the system landscape quickly to begin the decommission process Identify unused and orphaned roles Consolidate Reduce most-frequently- used (active) roles noncompliance and overall access risk
  10. 10. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 10Public Today Delta KPI improvements compared to average peer group are high-level estimates and will have to be validated for each customer situation. With SAP Business Suite on SAP HANA Customer acquisition Business value for line-of-business (LoB) marketing  Missed market opportunities due to lack of visibility and inefficient processes  Data explosion, driven by new level of connectivity of consumers via mobile devices and social networks  Data in disparate data sources, which prevents true 360-degree view of the customer  Agile marketing to respond faster to changing market dynamics and opportunities  New analytical and data mining functionality on Big Data (social media, predictive)  Near real-time monitoring and reporting on marketing performance  One central place for collecting all customer data, leading to 360-degree view of customers in real time  Precision marketing to personalize every interaction with the customer Improve profitability 0.5% Optimize Increase return on marketing investments 15% customer satisfaction 30%
  11. 11. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 11Public Today Delta KPI improvements compared to average peer group are high-level estimates and will have to be validated for each customer situation. With SAP Business Suite on SAP HANA Customer management Business value for LoB sales  Difficult to distinguish profitable customers from customer pool  Inability to identify gaps in sales pipeline leading to missed targets  Extracting actionable information from the enterprise-wide customer information (Big Data) to maximize the chance of a sale  Minimal insight into buying preferences of customers in social data context  Easier identification of profitable customers with account intelligence analytics  Faster transaction search capabilities  Complete transparency into sales pipeline (such as in commercial banking) based on real-time information with unlimited drill-down functionality  Real-time analysis of Big Data to better understand buying patterns  Real-time access and assembly of all data including social/sales data Improve profitability 0.5% Increase Improve percentage of sales reps achieving quota 17% offer win rate
  12. 12. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 12Public Today Delta KPI improvements compared to average peer group are high-level estimates and will have to be validated for each customer situation. With SAP Business Suite on SAP HANA  All inbound communications can be routed to the best resource Call center Business value for contact management with interaction center  High volume of customer records and interactions result in increased search times and greater difficulty locating specific customer records  Customers demand consistent service across channels  When responding to social media queries, service reps struggle to get all relevant customer information, leading to inefficiency and dissatisfaction  Searches in the interaction center are significantly faster, including account searches, interaction history, and the customer fact sheet  Reps can quickly identify customers and get a complete 360-degree view in real-time Increase calls handled by call center 6% Improve Reduce first-call resolution and customer satisfaction 97% service cost
  13. 13. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 13Public Today Delta KPI improvements compared to average peer group are high-level estimates and will have to be validated for each customer situation. With SAP Business Suite on SAP HANA Finance transformation Business value for entity close  Long-running processes  Time-intensive reconciliations  Limited time for analysis  Inefficiencies due to manual processes and low automation  Missing financial excellence, resulting in higher cost of equity at the capital markets  Difficulties in supporting parallel financial reporting standards on a global basis and in scenario simulation  More time for analysis, less over- time, or earlier publishing of financial results through faster period-end processes and better reconciliations  Increased efficiency through smarter reconciliations and reporting, reducing operating costs and improving stakeholder satisfaction  Real-time analytics down to the lowest level of detail – delivering quality at source, transparency, and process efficiencies Minimize time to close the entities’ books 13% Reduce Enhance cost of finance 15% compliance and accuracy 18%
  14. 14. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 14Public Today Delta KPI improvements compared to average peer group are high-level estimates and will have to be validated for each customer situation. With SAP Business Suite on SAP HANA Performance management Business value for planning, budgeting, and forecasting  Planning performance limited to online analytical processing (OLAP), staged cubes for transactional and master data  Data load performance driven by the amount of data extracted from SAP Business Suite  Reporting, loading, and retraction performance that limits planning iterations  Drill-down within OLAP cubes and navigation to SAP Business Suite applications and online transaction processing (OLTP) data occur within standard times  Seamless replication of master and transactional data from SAP Business Suite  Availability of more granular data to support planning  Big Data challenge negated, allowing for faster extract and DataStore object (DSO) activation times  Iterative planning and real-time simulation supported through improved performance  Improved performance for drill down (expand) and consolidation (collapse)  Fast drill-through and live view of transactional data in SAP Business Suite Improve service level performance Reduce Minimize cycle times and manual effort 9% operating costs 15%
  15. 15. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 15Public Today Delta KPI improvements compared to average peer group are high-level estimates and will have to be validated for each customer situation. With SAP Business Suite on SAP HANA Performance management Business value for profitability and cost analysis  Data latencies and processes delay impacting the ability to react to issues/opportunities  Lack of data depth and user self- service affecting internal decision making  Long-running processes  Time-intensive data queries  Mostly manual data analysis  Substantial amount of effort (time spent) not directly value-adding  Suboptimal resource efficiency and effectiveness  Timely execution of critical business processes that supports decision making and increases the ability to swiftly act (insight to action) in dynamic market environments  Critical transactions and calculations that run quickly  Instant response times on queries  Prebuilt analytics to automate the data analysis process  Leaner processes from data capture through data analysis  Increased productivity through process-optimized analytics and mobile support Improve service-level performance 17% Reduce Minimize cycle times and manual effort 4x operating costs
  16. 16. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 16Public Today Delta KPI improvements compared to average peer group are high-level estimates and will have to be validated for each customer situation. With SAP Business Suite on SAP HANA Performance management Business value for financial and managerial reporting  Risk of noncompliance due to unfulfilled audits  A lot of data; decision-relevant information not readily available  Data analysis not supported or automated  Long-running batch jobs/reports  Time-intensive data analysis  Large number of time-consuming and non-value-added processes required to provide access to accurate, up-to- date information  Timely execution of compliance- relevant validation tasks  Increased end-user satisfaction (accurate, detailed, visualized, timely, and actionable information)  Key critical-path processes and reports accelerated  Instant response time on most data analysis queries  Workarounds and data latencies eliminated  End-user data analysis enabled through self-service means (via SAP BusinessObjects business intelligence solutions) Improve service-level performance 18% Reduce Minimize month-end closing time 12% operating costs 17%
  17. 17. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 17Public Today Delta KPI improvements compared to average peer group are high-level estimates and will have to be validated for each customer situation. With SAP Business Suite on SAP HANA Collaborative finance operations Business value for payables management  Expensive and error-prone manual process steps  High cost per invoice due to large amounts of tasks  Need to improve compliance and audit turn-around time  Inability to determine exact moment of payment  Inability to influence cash position  Inability to understand where control over invoice-to-pay cycle is lost  Inability to make use of cash discounts  Risk of supply chain interruptions with key suppliers  Loss of supplier loyalty, affecting contract renewals  Scalable automation of invoice-to-pay reconciliation process  Actionable insight with live access to items in process and multidimensional insight to AP process performance  Extensive control over influence factors to days payables outstanding (DPO)  Optimization of cash position through precise timing of supplier payments  DPO lower than net payment terms, allowing strategic decision making on payment along cash position  Additional dynamic discounts able to be offered or leveraged Decrease days payables outstanding 45% Optimize Reduce working capital lost supplier discounts 30%
  18. 18. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 18Public Today Delta KPI improvements compared to average peer group are high-level estimates and will have to be validated for each customer situation. With SAP Business Suite on SAP HANA Collaborative finance operations Business value for SAP Shared Service Framework software for finance  Vendor, customer, and employee queries generate a high load on the shared services organization (SSO). This demands an extremely efficient working environment for agents in the SSO.  Agents in an SSO spend a lot of time searching for vendor, customer, and employee data  SSOs are under constant pressure to improve the quality of service and to lower the costs of providing those services  Acceleration of in-box performance with SAP HANA speeds navigation within the in-box. This allows the agents in an SSO to review and prioritize their work more efficiently  Faster identification of vendors, customers and employees allows the SSO agent to provide more responsive service, which leads to improved satisfaction of the agents as well as their clients  Reduced costs and faster response times allow the SSO to meet its service-level and budget objectives, and improve their key performance indicators (KPIs) Increase productivity for shared services agents 15% Improve Reduce employee satisfaction overall costs of delivering services
  19. 19. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 19Public Today Delta KPI improvements compared to average peer group are high-level estimates and will have to be validated for each customer situation. With SAP Business Suite on SAP HANA Core human resources and payroll Business value for payroll processing  Responses to management ad hoc inquiries about trends of high-volume payroll information causes significant costs to HR IT  Business users have a very limited ability to analyze payroll results  Addressing employee inquiries around payroll is time-consuming and expensive activity, while HR is under pressure to increase the quality of service provided to employees and to lower the costs of providing those services  HR IT resources freed to focus on the execution of organizational strategic tasks  Thresholds leveraged as a steering mechanism to optimize business performance  Simplification of payroll data analysis with optimized representation of data  High-speed read access based on SAP HANA that slashes need to time access and analyze critical payroll information  Faster response times to employees, increasing employee productivity and satisfaction Increase productivity of users responsible for payroll management 10% Improve Reduce employee satisfaction overall costs of payroll processing
  20. 20. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 20Public Today Delta KPI improvements compared to average peer group are high-level estimates and will have to be validated for each customer situation. With SAP Business Suite on SAP HANA Core human resources and payroll Business value for effective shared services delivery  Employees direct queries into the shared services organization and expect to get prompt, accurate answers  SSO agents spend time searching for employee data using employee identification  SSOs are under constant pressure both to improve the quality of service provided to employees and to lower the costs of providing those services  Acceleration of in-box performance based on SAP HANA speeds navigation within the in box, allowing SSO agents to review and prioritize their work more efficiently  Faster employee identification allows the agent to provide more responsive service, which leads to improved employee satisfaction  Reduced costs and faster response times allow the SSO to meet its service-level agreements and budget objectives, and improve KPIs Increase productivity for shared services agents 14% Improve Reduce employee satisfaction overall costs of delivering services
  21. 21. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 21Public Today Delta KPI improvements compared to average peer group are high-level estimates and will have to be validated for each customer situation. With SAP Business Suite on SAP HANA * Visualizations will be delivered as part of HR renewal. Workforce planning and analytics Business value for transactional analytics  Translation of organizational strategy into HR metrics requiring significant effort or special expertise  Decisions often based on hunches  Difficult to zero in on underlying transactions from high-level KPIs  Time-consuming data loads in traditional reporting tools  Integrated and personalized cockpits that provide insight into metrics that matter most*  Ability to leverage thresholds as a steering mechanism to optimize business performance*  Powerful predefined workforce and time management–related KPIs for managers with the ability to navigate into details  Embedded analytics inside business transactions  Prebuilt virtual data models for real- time transactional analytics  Simplified architecture Increase revenue per employee by using analytics to identify strategic advantages 20% Optimize Reduce your business with reliable real-time HR data time and costs of operational reporting
  22. 22. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 22Public Today Delta KPI improvements compared to average peer group are high-level estimates and will have to be validated for each customer situation. With SAP Business Suite on SAP HANA Procurement and order collaboration/collaborative invoice to pay Business value for operational procurement  Missing real-time insight into operational procurement reporting  Lack of capability to dynamically create operational procurement- related reporting in a modern user interface  Slow and costly paper-based processes  High transaction costs  Long-running transactions while posting documents with high volume of line items  Frequent errors yielding to maverick spend  New configuration options for procurement analysis  Modern and easy-to-consume user interface  Complete visibility into end-to-end procurement activities  Real-time insight and easier-to- manipulate information  Accelerated long-lasting processing of purchasing documents Increase transparency Lower Increase procurement operations cost 17% process effectiveness 12%
  23. 23. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 23Public Next step Business scenario recommendation and value discovery workshop  SAP offers a proven methodology and approach to discover the customer-specific business improvement areas and quantify value potential.  We suggest such a workshop with your line-of-business and IT experts.  As starting point, we recommend a performance and usage analysis of your current system.
  24. 24. © 2013 SAP AG or an SAP affiliate company. All rights reserved. Thank you
  25. 25. © 2013 SAP AG or an SAP affiliate company. All rights reserved. Appendix with detailed customer cases
  26. 26. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 26Public Reference banks Summary, validated scenarios Feasibility Businessvalue Legend LowHigh Low High SAP Business Suite on SAP HANA SAP HANA Applications SAP HANA Platform (Near) real-time liquidity optimization Total income – retail, wholesale, investment banking: US$10 billion Event-based marketing Next-best action/ real-time EMI offer management Real-time simulation of interest rate sensitivity Pricing Fraud prevention for retail banking/ fraud analytics Real-time customer segmentation and de-duplication Single view of capital across divisions Phase – deployment road map 1 Short term FIN: Real-time liquidity (improving net interest income, liquidity coverage ratio, net-stable funding ratio, productivity ratio) Accelerate fast close (finance transformation) CRM: Next-best action (cross-sell, up-sell offers that result in a sale [%], average number of products per client) GRC: Fraud prevention (reduce fraud related loss, increase customer satisfaction levels) 2 Medium term CRM: Real-time customer segmentation (increasing customer retention, customer satisfaction level, operating income) Interest rate sensitivity (improving net interest income, customer churn, new customer acquisition ratio) FIN: Single view of capital (reduce reserves due to a more precise risk estimation) SAP HANA Platform: customer-specific SAP HANA products: SAP NetWeaver BW on SAP HANA, high-performance applications (HPAs), apps powered by SAP HANA SAP Business Suite on SAP HANA SAP HANA use case SAP HANA use cases mapped to industry value map end-to-end solutions

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