Optimise SAP Business Processes For Maximum Value


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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 for improved business processes and reduced support and project costs are not recognised or remain unexploited.

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Optimise SAP Business Processes For Maximum Value

  1. 1. Optimise SAP ROIIncrease SAP Value With West Trax 11/02/13
  2. 2. How Do You Expect To Get Value From ERP If You Don’t Measure It?A paper in February 2010 by Bill Swanton and Lucie Draper of AMR Research (nowpart of Garner, Inc.) opened with the following statement: -“With the down economy, IT is under pressure to get value out of ERPinvestments. A new study of value management practices, though, shows thatonly a minority of companies actually measure value. Those that do achieve ahigher percentage of their business case and attain it earlier as they adopt morevalue management and benefits realization best practices identified in a survey byAMR Research, ASUG, and SAP”.Of 186 companies surveyed only 37% actually measured the business value fromtheir ERP projects.Read the full article at How Do You expect To Get Value? ®West Trax International Ltd. 2013 2
  3. 3. What’s The Problem?Organisations buy from SAP to benefit from highly standardised softwareand best practice business processes. BUT----In many cases business and IT executives lack appropriate metrics toevaluate and optimise how effectively their SAP systems are supporting theirbusiness operations after they go live.Major potential to improve business processes and reduce support andproject costs not recognised or exploited. ®West Trax International Ltd. 2013 3
  4. 4. What’s The Cause? Application Lifecycle ManagementEffort Design Development Testing Ops, Support, ProjectsCosts 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. ®West Trax International Ltd. 2013 4
  5. 5. What Are The Consequences?West Trax benchmark database contains details of over 1,400analyses completed to date in 100+ companies and 13industries.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. ®West Trax International Ltd. 2013 5
  6. 6. West Trax Standardisation KPI Productivity SAP ROI IdealHigh StandardisationOptimisation Potential Typical KPI ValueLow Standardisation Degree Of 50% 70-80% Standardisation Standard Standard No. Used Standard Transactions X 100 Total No. Used Transactions ®West Trax International Ltd. 2013 6
  7. 7. 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 59.9% Automotive 83.6% 34.3% 58.8% Government 76.7% 41.6% 53.4% Pharma 67.1% 37.8% 52.0% Manufacturing 74.0% 28.0% 51.3% Telco 78.8% 32.3% 51.0% Chemicals 74.7% 24.0% 50.7% Healthcare 61.0% 41.6% Degree of Standardisation KPI Consumer 50.7% 71.0% Goods 22.4%®West Trax International Ltd. 2013 47.3% Service 65.7% 20.0% Standardisation Benchmark Data 47.1% Transport 59.7% 18.5% 46.5% Finance 62.7% 29.5% Average 46.4% Energy 57.2% 30.8% 44.7% 65.2% Measured Worst Case Insurance Measured Best Practice 31.5% 7
  8. 8. Unused Standard Potential KPI ®West Trax International Ltd. 2013 8
  9. 9. Average 100.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 67.6% Pharma 52.6% 75.7% Measured Worst Case Measured Best Practice 67.7% Chemicals 40.3% 85.7% 68.4% Manufacturing 40.3% 94.1% 74.1% Automotive 52.3% 87.1% Consumer 77.3% 69.2% Goods 91.0% 80.3% Service 66.8% 93.7% 81.8% Transport 67.1% 93.9% 83.5% 68.8%®West Trax International Ltd. 2013 Telco 89.5% Unused Standard Benchmark Data Unused Standard Potential KPI 83.8% Insurance 72.7% 91.8% 84.2% Healthcare 77.2% 89.2% 84.3% Energy 75.6% 97.4% 85.7% Government 79.7% 88.6% 88.3% Finance 82.7% 9 96.9%
  10. 10. Unused Standard By Enterprise Area Typical Client Data Deployment of Standard Functionality Available Potential Used Potential100%90%80%70%60%50%40%30%20%10% 0% Product Data Management Management Management Management Procurement Customer Revenue & Distribution Controlling Accounting Service External Sales & Project Goods Cost Asset ®West Trax International Ltd. 2013 10
  11. 11. Are Your SAP Systems Best Positioned For: - 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? ®West Trax International Ltd. 2013 11
  12. 12. Maximising SAP ROI With West Trax 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. ®West Trax International Ltd. 2013 12
  13. 13. Why Is West Trax Different?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 SAPApplication Core Processes utilising the available standard transactions.Identification of Core Process gaps and use of custom code and non-corefunctionality.Measurement and comparison of Core Process usage, gaps and externalinterfaces to identify inconsistency of implementation, customisation andusage 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 anddeliver additional value.Recommended actions and implementation strategies to optimise thevalue derived from Core Business Processes and make major savings. ®West Trax International Ltd. 2013 13
  14. 14. Optimise SAP ROI With ®West Trax International Ltd. 2013 14
  15. 15. When West Trax Adds Value KPI Scan® Planning Phase Establish CurrentWest Trax Optimisation And KPI Optimiser® System Baseline And Benchmarking Optimisation Plans Services KPI‘s, Benchmarks Develop Lean Risk Free Action plans Business Cases And Cost / Benefit Analyses Implementation Strategies Project Plans Implementation ImplementationPartners And Tool Design, develop, convert, test Phase Vendors West Trax Post Project Phase Quality Assurance KPI QA® Establish New Service System Baseline Track Goal Achievement ®West Trax International Ltd. 2013 15
  16. 16. Benefits For Clients (1/2) Optimal Deployment Of SAP Best Practice Core ProcessesIdentification of opportunities to improve productivity and profitabilityby 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 workloadand costs. Savings identified range from €200,000 to over €1 million p.a.Value derived from optimising alignment with core business processestypically 5 - 10 times the savings from eliminating unnecessary custom code.Increased ROI on the SAP asset. ®West Trax International Ltd. 2013 16
  17. 17. Benefits For Clients (2/2) Optimal Deployment Of SAP Best Practice Core ProcessesDevelopment 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. ®West Trax International Ltd. 2013 17
  18. 18. About West TraxWest Trax is an international company that specialises in increasing the businessvalue delivered by SAP ® systems.This is achieved by identifying the potential to optimise the use of SAP ® systems inthe areas of cost, productivity, performance and quality and providing a financialvaluation of the business and IT benefits .With KPI Scan®, KPI Optimiser® and KPI QA® West Trax offers solutions thatensure business processes are effective and efficient .Typical applications are SAP system re-standardisation / modernisation associatedwith business process optimisation, release upgrades, outsourcing, systemconsolidation and separation.West Trax also offers ​management information system solutions. Predefined modulescan be quickly implemented and deliver immediate client benefits.The privately owned company was founded in 2003 with headquarters in Germanyand 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). ®West Trax International Ltd. 2013 18
  19. 19. West Trax MethodologyAutomated analysis of SAP system usage provided in electronic form. Basedon reusable process models.Offline analysis rapidly provides transparency with minimal use ofresources.Template and rule-based process models enable comparing of different SAPsystems.Customisable models and simulation for the calculation of optimisationpotential 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 International Ltd. 2013 19
  20. 20. Contact David Long Chief ExecutiveT: +44 (0) 1989 780114M: +44 (0) 7774 808694E: Name @westtrax.comW: www.westtrax.com ®West Trax International Ltd. 2013 20