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Unit 7 Analytics and Strategic Planning. Dr. Supakorn Kungpisdan. Unit Overview. Provide an overview of various possibilities for reporting and analyzing data as well as the strategic planning functions available in the SAP Business Suite. Business Example. - PowerPoint PPT Presentation
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Unit 7: Analytics and Stratigic Planning 1
Unit 7Analytics and
Strategic Planning
Dr. Supakorn Kungpisdan
Unit 7: Analytics and Stratigic Planning 2
Unit Overview
Provide an overview of various possibilities for reporting and analyzing data as well as the strategic planning functions available in the SAP Business Suite
Unit 7: Analytics and Stratigic Planning 3
Business Example
Many departments in IDES require daily information of varying complexity from simple real-time list display reports to complex managerial statistical analysis reports.
Analytical results are used to plan future business targets, which again need to be communicated back to middle management and employees
Unit 7: Analytics and Stratigic Planning 4
Reporting VS Analysis
Online Transaction Processing (OLTP) refers to the type of processing typically performed in an SAP ERP system This reporting often refers to information requirements for day-
to-day work Online Analytical Processing (OLAP) provides
analysis that aggregate data for simple operational analytics
Analytic system must provide information about the important factors that an enterprise’s management needs for its business decision By selecting, assigning, and aggregating the information
available in the operational area
Unit 7: Analytics and Stratigic Planning 5
Reporting and Analysis
mySAP ERP(OLTP)
Database application
OLAP
Unit 7: Analytics and Stratigic Planning 6
OLTP VS OLAP
Unit 7: Analytics and Stratigic Planning 7
Differences btw OLTP and OLAP
Level of detail OLTP stores data at a very-high level of detail, whereas data in data
warehouse is compressed History
OLAP stores comprehensive historical data, where OLTP archives the data
Changeability Data in OLTP changes often where data in OLAP does not change
Integration OLAP has higher integration than OLTP
Normalization High normalization in OLTP, but low in OLAP
Performance OLAP environment is optimized for read access, where concerns more
in OLTP due to its functions e.g. change, insert, and delete
Unit 7: Analytics and Stratigic Planning 8
SAP Business Information Warehouse
SAP BW makes flexible reporting and analysis tools available
Enable strategic analysis an supports decision-making within a company
Authorized employees can access and evaluate historic and current data in different levels of detail
3 layers of SAP BW architecture Extraction Staging/storage Presentation/analysis
Unit 7: Analytics and Stratigic Planning 9
SAP BW Architecture
Data from SAP and external systems are treated as sources
Unit 7: Analytics and Stratigic Planning 10
SAP BW Architecture
Staging engine manages staging process for all data received from several source systems.
Storage Service manages and provides access to data targets in SAP BW and the aggregates that are stored in relational and multidimensional database management systems.
Analysis and access services layer provides access to the information stored in SAP BW.
Presentation services layer offers different options for presenting information to end users.
Unit 7: Analytics and Stratigic Planning 11
Decision Support
Management need to develop strategies to help them reach target
Need to be able to communicate strategy quickly to employees in order to understand how strategies affect day-to-day operations and help implement the strategies successfully
Need to establish a continuous feedback loop that allows the organization and the management team to learn constantly from strategy implementation and adjust tactics quickly
A decision support system is needed
Unit 7: Analytics and Stratigic Planning 12
Decision Support
Model and simulation
Unit 7: Analytics and Stratigic Planning 13
Decision Support (cont’d)
One type of decision support system, called Strategic Enterprise Management System, connects corporate strategy with operations and the actual value being created by executing management plans, rendering obsolete in many cases the time and resource-intensive process of annual budgeting
SAP SEM (Strategic Enterprise Management) and SAP BW (Business Warehouse) together provide a complete solution for all types of reporting and decision-support.
Unit 7: Analytics and Stratigic Planning 14
Data Mining
An analysis of large amounts of data in a database using tools which look for trends or anomalies without knowledge of the meaning of the data with the goal of automatic determination of significant patterns and hidden associations
Unit 7: Analytics and Stratigic Planning 15
Data Mining (cont’d)
Data Mining helps analyze and understand customer behavior by: Offering an analytical approach that looks for hidden data
patterns and relationships in large database Providing insights by analyzing past data Predicting future trends and behaviors Enabling organizations to make the critical jump from
retrospective (back to past) analysis to prospective (expecting) decision making
State-of-the-art data mining systems act as decision support systems (DSS) supporting human decision by providing information and analytical results
Two different methods for data mining: predictive and explorative
Unit 7: Analytics and Stratigic Planning 16
Predictive Methods
Unit 7: Analytics and Stratigic Planning 17
Predictive Methods: Scoring
The purpose of scoring is to valuate data records
3 function types to perform valuation: Weighted score tables
Create a model composing a number of fields and valuate each field, then create a weighted total
Linear regression and Nonlinear regression
Need to train using historical data
Unit 7: Analytics and Stratigic Planning 18
Predictive Methods: Decision Trees
A classification approach that uses the values of input variables to predict the value of a categorical variable
Decision trees allow user to: Generate readily-understandable rules with which to predict
customer behavior Evaluate the different values of possible outcomes and the
probability of reaching them Produce a graphical representation of how different factors
affect an outcome Create a segmentation scheme based on the decision tree
results
Unit 7: Analytics and Stratigic Planning 19
Explorative Methods
SAP BW offers various models for explorative data mining Clustering ABC Classification Association Analysis Weighted Score Tables
Unit 7: Analytics and Stratigic Planning 20
Data Mining: Explorative Methods
Unit 7: Analytics and Stratigic Planning 21
Clustering
Clustering creates groups of records that are: Similar to each other within a particular group Very different across different groups
Clustering helps user explore vast amounts of data and organize it in a systematic way.
You can identify both customers that are exhibiting similar characteristics within a cluster and characteristics that are different across clusters.
Based on this information, you can develop personalized marketing campaigns for each cluster
Unit 7: Analytics and Stratigic Planning 22
ABC Classification
Used to classify objects (e.g. customers, employees, and products) based on a particular measure (e.g. revenue or profit)
Offer a data mining method to establish and analyze a ratio between quantity and value within a given set of data
ABC analysis enables you to group customers typically into three groups whose members lie in a defined interval regarding their value, e.g. revenue or profit
Unit 7: Analytics and Stratigic Planning 23
Association Analysis
Association Analysis uncovers the hidden patterns, correlations, or casual structures among a set of items or objects
Commonly referred to as “association discovery” The patterns may be expressed in the form of
association rules such as: 72% of customers who buy milk also buy bread and eggs 80% of the time that a specific brand of toaster is sold,
customers also buy a set of chicken gloves and matching cover sets
A typical application is Market Basket Analysis, a modeling technique based on the theory that if you buy a certain group of items, you are more likely (or less likely) to buy another group of items
Unit 7: Analytics and Stratigic Planning 24
Weighted Score Tables
Each alternative is given a score for each criteria The score is then weighted by the importance of
each criterion All alternative’s scores are added together to
produce the total score. The alternative with the highest total score
should be the best alternative
Unit 7: Analytics and Stratigic Planning 25
Business Planning and Simulation
Due to the complexity of planning process, large number of staff from the most diverse parts of the enterprise are involved in the planning operations
A planning process includes: Defining planning forms, standards, approval procedures,
planning areas, and objects Setting up consolidation procedures and including planning
interdependencies Matching planning periods of the individual planning areas
and staff
Unit 7: Analytics and Stratigic Planning 26
Business Planning and Simulation
Unit 7: Analytics and Stratigic Planning 27
Business Planning and Simulation
Business Planning covers different levels: Strategic planning Operational planning Execution planning
Unit 7: Analytics and Stratigic Planning 28
Strategic planning
Define future direction of an enterprise e.g. product/service offering, ROI, company growth
A simulative process in which different scenarios are modeled and subsequently evaluated in order to calculate the expected value to be created
Strategy evaluation leads to target setting for the operational units which means breaking down high-level strategic goals
to targets on execution level (e.g. expected net revenue, sales growth rate)
Unit 7: Analytics and Stratigic Planning 29
Operational Planning
Allocating resource (labor, capital, assets) necessary to fulfill the targets and reconciling the resources across operational units.
E.g. sales volume has to be reconciled with production volume
Unit 7: Analytics and Stratigic Planning 30
Execution Planning
The result of the operational planning process may be used for detailed planning and scheduling in execution planning
SAP BW-BPS delivers tools for generic planning, supporting a planning process that allows for the construction of a planning model
This functionality brings planning, budgeting, and forecasting together with monitoring, reporting, and analysis, and bundles it all into one software installation
Unit 7: Analytics and Stratigic Planning 31
SAP BW Business Planning and Simulation ALV = ABAP List Viewer, a tool for creating / viewing rep
orts in SAP R/3 using ABAP Programming
Unit 7: Analytics and Stratigic Planning 32
Functions of SAP BW-BPS
Top-down planning and bottom-up contribution with a rich set of planning functions
A planning framework that lets you create and maintain planning models
A user interface for manual planning and analysis
Tools for process control (that is, status checking and monitoring)
Unit 7: Analytics and Stratigic Planning 33
SAP SEM (Strategic Enterprise Management) SAP SEM is an application component that completely
supports strategic enterprise management processes in an organization on all relevant levels
It comprises 5 functional software components that allow tight integration of SEM processes or component architecture
Based on SAP BW All SAP SEM component functions can operate on one
or several SAP BW InfoCubes InfoCubes are multidimensional data storage containers
for reporting and analysis of data.
Unit 7: Analytics and Stratigic Planning 34
SAP SEM (Strategic Enterprise Management)
Unit 7: Analytics and Stratigic Planning 35
Strategy Management
Provide tools, e.g. a support for Balanced Scorecard, that help organizations better translate strategy into action by defining and communicating strategies in areas e.g. product innovation, customer relations, and operational efficiency
Unit 7: Analytics and Stratigic Planning 36
Performance Management
Provide a Management Cockpit interface, the ideal framework for reporting performance results
The structure of the interface is predefined, yet flexible, and enables companies to deliver graphical, numerical, and verbal information to various levels within the organization
Users also benefit from fast access to information in a web-based environment
Strategy Management and Performance Measurement are also grouped under the term Corporate Performance Monitor
Unit 7: Analytics and Stratigic Planning 37
Business Planning and Simulation
Allow company to update budgets more frequently, meet changing business conditions, and combine traditional, bottom-up budgeting with top-down strategic planning
Encourage a more collaborative budgeting and planning process that involves a greater number of departmental and divisional managers, while
Help companies integrate strategic, operational, and financial plans to ensure that all business activities are in line with the business strategy
Unit 7: Analytics and Stratigic Planning 38
Business Consolidation (SEM-BCS)
Provide complete functionality for the legally required consolidation by company and segment (e.g. by US GAAP (General Accepted Accounting Principles), IAS (International Accounting Standards), and local GAAPs)
Help carry out management consolidations based on user-defined organizational units and user-defined hierarchies
Allow consolidation simulations, e.g. to determine the effects of mergers and acquisitions, different translation methods, or changed consolidation rules
Also used by SEM-BPS and Corporate Performance Monitor for consolidation of plan data and for reporting
Unit 7: Analytics and Stratigic Planning 39
Stakeholder Relationship Management
Long-term success depends on ability to establish relationship with stakeholders (e.g. investors, analysts, customers, employees, partners, suppliers, social groups, and state institutions)
Good, stable relationships with stakeholders represent “intangible assets”. They affects capital market’s evaluation of the enterprise
Stakeholder Relationship Management provides support for communicating enterprise strategy, current plan data, and strategic initiatives to different stakeholder groups Two way communications: need to know stakeholder
expectations and incorporate them into the strategic management processes
Unit 7: Analytics and Stratigic Planning 40
Stakeholder Relationship Management
Some stakeholders may have a great deal of information. Exchanging information with these groups may be time-consuming and costly
The system manages a stakeholder database to support communication functions. Enable enterprise, with justifiable expense, to issue and
administer registered stock, and thus keep and eye on the stakeholder structure
So, the enterprise can more actively manage the expectations of analysts and capital markets
Unit 7: Analytics and Stratigic Planning 41
Corporate Performance Monitor
Unit 7: Analytics and Stratigic Planning 42
Balanced Scorecard
Balanced Scorecard is an instrument to convert business strategies into understandable, communicable, and meaningful targets
Integrates financial and non-financial aspects of business transactions
The individual targets are assigned to a perspective: financial, customer, internal business processes, or
learning and growth
Unit 7: Analytics and Stratigic Planning 43
Balanced Scorecard (cont’d)
Financial The strategy for growth and profitability viewed from the
perspective of the stakeholder Customer
The strategy for creating value and differentiation from the perspective of the customer
Internal Business Processes The priorities for excellence in various business processes
that aim to increase customer and shareholder satisfaction Learning and Growth
Measures to create a climate that supports organizational change, innovation and growth
Unit 7: Analytics and Stratigic Planning 44
Balanced Scorecard
Unit 7: Analytics and Stratigic Planning 45
Management Cockpit
A tool with which uses high-quality graphics to process all data which is based on business decisions This data can be both internal and external to enterprise
E.g. illustrate relationship between your enterprise’s investment and the current state of the financial markets
This visual information units enable management to grasp even complex situations at a glance, and thus facilitate and accelerate management decision making
Unit 7: Analytics and Stratigic Planning 46
Management Cockpit
Unit 7: Analytics and Stratigic Planning 47
Management Cockpit (cont’d)
The Management Cockpit room has 4 walls: Black wall for financial figures and critical success factors Red wall for markets, customers, and competitor analysis Blue wall for monitoring internal processes White wall for monitoring strategic projects
Each wall shows specific key figures that should be attained
The measures can freely combine accounting, logistics, or human resources data
Logical view can be used to define a general business factor (e.g. product quality) that results from several key figures (e.g. scrap rate, sales returns, or guarantees).
Unit 7: Analytics and Stratigic Planning 48
SAPTEC
Fundamentals of the SAP Web Application Server
Unit 7: Analytics and Stratigic Planning 49
Outline
SAP Solutions Navigation The System Kernel Software Development in SAP Systems Communication and Integration Technologies Tools for SAP System Administration SAP NetWeaver and Enterprise Services
Architecture