Optimise SAP Business Processes For Maximum Value

Increase SAP Value With West Trax

11/02/13

Optimise SAP ROI

®West Trax International Ltd. 2013 2

A paper in February 2010 by Bill Swanton and Lucie Draper of AMR Research (now part of Garner, Inc.) opened with the following statement: - “With the down economy, IT is under pressure to get value out of ERP investments. A new study of value management practices, though, shows that only a minority of companies actually measure value. Those that do achieve a higher percentage of their business case and attain it earlier as they adopt more value management and benefits realization best practices identified in a survey by AMR Research, ASUG, and SAP”. Of 186 companies surveyed only 37% actually measured the business value from their ERP projects. Read the full article at How Do You expect To Get Value?

How Do You Expect To Get Value

From ERP If You Don’t Measure It?

http://download.sap.com/download.epd?context=B503B1F9DD3F346198CE4E48E7DD647D0C295D64972CF452DD313EADB90AEAE5A5CD21ECD12B1CD3DEB5FFD5D23C9102572037988CF1CCAC


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 to improve business processes and reduce support and project costs not recognised or exploited.

What’s The Problem?


Application Lifecycle Management

Design Development Testing Ops, Support, Projects Effort

Costs 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.

What’s The Cause?


West Trax benchmark database contains details of over 1,400 analyses completed to date in 100+ companies and 13 industries. 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.

What Are The Consequences?


High Standardisation

Productivity SAP ROI

Typical KPI Value

Ideal

50% Standard

70-80% Standard

Degree Of Standardisation

Low Standardisation

Optimisation Potential

No. Used Standard Transactions X 100 Total No. Used Transactions

West Trax Standardisation KPI


Degree of Standardisation KPI

52.0

%

51.0

%

50.7

%

50.7

%

47.3

%

47.1

%

46.5

%

44.7

%

83.6

%

76.7

%

67.1

% 74.0

%

78.8

%

74.7

%

61.0

%

71.0

%

65.7

%

59.7

%

62.7

%

57.2

% 65.2

%

34.3

% 41.6

%

37.8

%

28.0

%

32.3

%

24.0

%

41.6

%

22.4

%

20.0

%

18.5

%

29.5

%

30.8

%

31.5

%

59.9

%

58.8

%

53.4

%

51.3

%

46.4

%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

Au

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Go

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Ph

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Ma

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factu

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Co

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Go

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Se

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Tra

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ort

Fin

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En

erg

y

Insu

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ce

Average

Measured Best Practice

Measured Worst Case

Standardisation Benchmark Data


Unused Standard Potential KPI


Unused Standard Potential KPI67.6

%

67.7

%

68.4

%

80.3

%

83.5

%

83.8

%

84.2

%

85.7

%

88.3

%

52.6

%

40.3

%

40.3

%

52.3

%

69.2

%

66.8

%

67.1

%

68.8

%

72.7

%

77.2

%

75.6

%

79.7

%

82.7

%

75.7

%

85.7

%

94.1

%

87.1

%

91.0

%

93.7

%

93.9

%

89.5

%

91.8

%

89.2

%

97.4

%

88.6

%

96.9

%

74.1

%

77.3

%

81.8

%

84.3

%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

Ph

arm

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Ch

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Ma

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factu

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Au

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Co

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Fin

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Average

Measured Best Practice

Measured Worst Case

Unused Standard Benchmark Data


Deployment of Standard Functionality

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Goods

Managem

ent

Pro

cure

ment

Sale

s &

Dis

trib

utio

n

Pro

ject

Managem

ent

Asset

Managem

ent

Revenue &

Cost

Contr

olling

Exte

rnal

Accountin

g

Pro

duct D

ata

Managem

ent

Custo

mer

Serv

ice

Available Potential

Used Potential

Typical Client Data

Unused Standard By Enterprise Area


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?

Are Your SAP Systems

Best Positioned For: -


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.

Maximising SAP ROI With West Trax


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 SAP Application Core Processes utilising the available standard transactions.

Identification of Core Process gaps and use of custom code and non-core functionality.

Measurement and comparison of Core Process usage, gaps and external interfaces to identify inconsistency of implementation, customisation and usage 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 and deliver additional value.

Recommended actions and implementation strategies to optimise the value derived from Core Business Processes and make major savings.

Why Is West Trax Different?


With

Optimise SAP ROI


KPI Scan®

KPI Optimiser®

KPI‘s, Benchmarks Action plans

Cost / Benefit Analyses Implementation Strategies

Design, develop, convert, test

West Trax Optimisation

And

Benchmarking

Services

Implementation

Partners And Tool

Vendors

Planning Phase

Establish Current

System Baseline And

Optimisation Plans

Develop Lean Risk Free

Business Cases And

Project Plans

Implementation

Phase

Post Project Phase Establish New

System Baseline

Track Goal Achievement

KPI QA® West Trax

Quality Assurance Service

When West Trax Adds Value


Optimal Deployment Of SAP Best Practice Core Processes

Identification of opportunities to improve productivity and profitability

by 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 workload

and costs. Savings identified range from €200,000 to over €1 million p.a.

Value derived from optimising alignment with core business processes

typically 5 - 10 times the savings from eliminating unnecessary custom code.

Increased ROI on the SAP asset.

Benefits For Clients (1/2)


Optimal Deployment Of SAP Best Practice Core Processes

Development 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.

Benefits For Clients (2/2)


West Trax is an international company that specialises in increasing the business value delivered by SAP ® systems.

This is achieved by identifying the potential to optimise the use of SAP ® systems in the areas of cost, productivity, performance and quality and providing a financial valuation of the business and IT benefits . With KPI Scan®, KPI Optimiser® and KPI QA® West Trax offers solutions that ensure business processes are effective and efficient . Typical applications are SAP system re-standardisation / modernisation associated with business process optimisation, release upgrades, outsourcing, system consolidation and separation. West Trax also offers management information system solutions. Predefined modules can be quickly implemented and deliver immediate client benefits. The privately owned company was founded in 2003 with headquarters in Germany and 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).

About West Trax


Automated analysis of SAP system usage provided in electronic form. Based on reusable process models. Offline analysis rapidly provides transparency with minimal use of resources. Template and rule-based process models enable comparing of different SAP systems. Customisable models and simulation for the calculation of optimisation potential 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 Methodology


David Long

Chief Executive

T: +44 (0) 1989 780114

M: +44 (0) 7774 808694

E: Name @westtrax.com

W: www.westtrax.com

Contact

Technology

Optimise SAP Business Processes For Maximum Value