Transcription
S/4HANATransformBuilding Products withSAP S/4HANA 2016 SAP SE or an SAP affiliate company. All rights reserved.Public1
AGENDASAP S/4HANA : Overview for Building Products3Finance and Procurement8Sales and Order Fulfillment9Manufacturing and Operations Excellence10SAP S/4HANA: Value Proposition for Building Products13Customers Are Achieving Value from SAP S/4HANA14-2- 2016 SAP SE or an SAP affiliate company. All rights reserved.Public2
SAP S/4HANA : OVERVIEW FOR BUILDING PRODUCTSTransform Your Firm’s Digital Core with SAP S/4HANAThere are massive changes impacting companies in thebuilding products industries. Standard of living is increasing,and the middle class is growing. End consumers andhomeowners are increasingly involved in purchasedecisions. Sustainability remains an important factor.There are tremendous opportunities for the industry.Thought-leading companies are transitioning from puremanufacturers of products to technology and innovativesolution providers for living and the environment. Newapproaches are also creating challenges for organizationsto fully transform and compete within the new rules of thegame. Information technology can help dramatically.Digital Transformation DriversThe transformation of the building products industry isbeing driven by trends that are directly related to and can beimpacted by digital technology. Information consumers. Customers, suppliers, andemployees all expect the same digital experience theyhave in their private lives to also be used in their worklives. Some examples are how-to videos for B2C, accessto detailed product data and order status at thecontractor to review recent business for B2B, andreceiving work orders or status alerts through mobileapplications for internal employees.Ubiquity of cloud, mobile, and sensors. Smartphones,and mobile devices, including wearables, are becomingpart of daily life for many. Electronically controlledfaucets and R&D projects using 3D printing are real.Sensors, the Internet of Things (IoT), and Big Data willsoon become essential for the building productsindustry.VectusCompetition from everywhere. Competition is fierce, andbuilding products leaders will need greaterdifferentiation to protect and elevate the brand as well aschanging business models to align with customers.Omnichannel commerce and social media marketing arenew ways of doing business that leverage real-time dataand knowledge to drive customer satisfaction. Instead ofoffering a finite set of products, the trend is to offercomplete solutions with all materials, services, andknow-how in one package as well as highly individualizedversions of the same offering.Building products companies can use digital technology toevolve and thrive on top of these trends. Firms will not onlyneed to reengineer their business processes, but they willalso have to evaluate if they have the right technologyplatform that can deliver on that vision. This platform requires an IT architecture that provides bothstability and long-term reliability for core enterpriseprocesses, and, at the same time, allows for flexibility inareas where change is happening on a constant basis. Thedigital core is the foundation for the core processes thatneed to run consistently and flexibly. It providesuninterrupted, real-time transactions and analytics, theability to work with Big Data, and connectivity to line-ofbusiness extensions that enable supporting processes suchas talent sourcing or networks.SAP S/4HANA was specifically developed to representthe digital core in this “bi-modal IT architecture.” It providesbuilding products firms with a proven framework to adoptindustry best practices while attaining operationalexcellence – specifically across core financial, sales, andmanufacturing processes. 2016 SAP SE or an SAP affiliate company. All rights reserved.Vectus deployed SAP S/4HANAand has decreased its days salesoutstanding . Customers nowexperience excellent service andon-time delivery. (source)15%Reduction in operations cost50%Faster access to and visibility ofreal-time data60%Increase in operational efficiencyKurlonKurlon (furniture) expects anadditional 10% value added tothe bottom line.“The idea is to measure the supplychain efficiency, quality aspects,and induce visibility in the businessprocesses. This ERP [SAPS/4HANA] will be operating theentire gamut of operations in aseamless approach,“Dhananjaya P, CIO, Kurlon (source)-3-Public3
SAP S/4HANA: OVERVIEW FOR BUILDING PRODUCTSSAP S/4HANA: Sources of ValueThe value from SAP S/4HANA comes through simplification of the user experience, architecture, and process:Simplified user experience: across all devicesSAP S/4HANA empowers front-line users with a user-centric, consumer-grade experience because, for buildingproducts firms, it’s both the front-line and back-office employees that add value to clients. SAP is drivingsimplification and innovation in how business users work with a role-based, consistent user experience availableon any device.Simplified architecture: no aggregates – no redundanciesThe simplified data model of SAP S/4HANA delivers an advanced digital data architecture that provides, in realtime, a single source of the truth for both transactions and analytics. This enables extensive flexibility to adapt tochanging business models, such as simulating the impact of business reorganizations in minutes rather than days.Simplified processes: key industry capabilities of SAP S/4HANA*Finance andprocurement Sales and orderfulfillmentManufacturing andoperations Accounting and financialclose Sales order management andprocessing Material requirementsplanning Accounts payables andinvoice management Bid and proposalmanagement Production control Cash and liquiditymanagement Sales monitoring andanalytics Asset strategy and planning Enterprise risk andcompliance management Goods issues/receiptMaintenance planning andscheduling Warehouse managementInventory management Maintenance executionIncident management Transportation management Health and safetymanagement Billing and invoicing forphysical goods Financial planning andanalysisProcurementSupplier evaluations andprocurement analysis* This is a subset of the complete industry portfolio shown later in the “Portfolio of Solutions for Building Products from S AP” section.-4- 2016 SAP SE or an SAP affiliate company. All rights reserved.Public4
SAP S/4HANA: OVERVIEW FOR BUILDING PRODUCTSEXAMPLE: User Experience and Process SimplificationSAP S/4HANA enables an anywhere, any-device, mobile-first, role-based user experience that simplifies and enhances employee engagement and productivity,transforming the way the finance team gets work done.SAP S/4HANA for use in receivables managementTraditional ERPManager must ensure payments aremade in a timely fashion Data retrieval from many reports Irregular execution since timeconsuming Lack of collaboration betweensales and finance Higher days sales outstanding(DSO)ReceivablesmanagerReceivables informationInformation received withhigher risk of errors, delaysand not prioritized correctlyInvestigate thestatus of paymentsExtract a list ofoverdue receivablesSAP S/4HANAManager is able to counter increasing levels of DSO whilespending more time on strategic topics Automated process with fewer manual steps Alerts for exceptions only KPIs based on real-time data Improved collaboration like working capital management Root-cause behavior analysis includedView payment history Calculate forecasted Manually prioritizefor customerdue dateoutstanding accountsreceivables issuesReceivablesmanagerReceivables intelligence andworking capital analysis Receivables manageropens new receivablescockpit in SAP S/4HANA5%‒10%17x‒20x5%‒25%Reduction in days sales outstanding*Faster end-to-end process*Reduction in A/R write-offs* Cockpit publishes a prioritized list of openaccounts-receivables alertsAlerts linked to transaction and/orcustomer informationA/R team handles more accounts,increasing productivityView effect on DSO and other KPIs* Benefits are based on early adopters of SAP S/4HANA or conservative outside-in benefits due to moving from a traditional ERP to enhanced SAP S/4HANA and LoB/cloudcapabilities as each enterprise is at a different level of maturity, our recommendation is to work with you to determine the value proposition for your enterprise.-5- 2016 SAP SE or an SAP affiliate company. All rights reserved.Public5
SAP S/4HANA: OVERVIEW FOR BUILDING PRODUCTSEXAMPLE: User Experience and Process SimplificationSAP S/4HANA provides reengineered and simplified business processes that can yield significant benefits, transforming the execution from multistep, batch-drivenprocesses with latency in terms of key performance indicators to real- time processes with actionable insights to avoid errors and protect profitability.SAP S/4HANA for use in sales and order fulfillmentTraditional ERPWhen trying to ensure high qualityorder fulfillment, issues and exceptionsare typically identified by workingthrough multiple disparate lists– a timeconsuming and error-prone processSales managerEnsure perfectorder is deliveredSAP S/4HANASimple, role-based cockpit shows a list of issues andexceptions to help sales employees easily identify andresolve issues and exceptions in the order fulfillmentprocess. This improves customer satisfaction andretention.Open sales ordermonitorIdentifyincompleteordersDelivery issuesBilling issuesIdentify reasonsand solve themMonitor deliveryDelivery shipped,often with lower ontime delivery or withcostly expeditedcarrierDelivery shipped with higher ontime performance and standardshipment ratesSales manager One singlepoint of entry 10%‒15%25%‒30%Improvement in internal sales productivity*Improvement in subscription invoiceprocessing time*Use alert to identify problemsShare and resolve findings withdepartments like finance andshippingEfficient sales order fulfillment* Benefits are based on early adopters of SAP S/4HANA or conservative outside-in benefits due to moving from a traditional ERP to enhanced SAP S/4HANA and LoB/cloudcapabilities as each enterprise is at a different level of maturity, our recommendation is to work with you to determine the value proposition for your enterprise.-6- 2016 SAP SE or an SAP affiliate company. All rights reserved.Public6
SAP S/4HANA: OVERVIEW FOR BUILDING PRODUCTSEXAMPLE: User Experience and Process SimplificationSAP S/4HANA provides reengineered and simplified business processes that can yield significant benefits, transforming the execution from multistep, batch-drivenprocesses with latency in terms of key performance indicators to real- time processes with actionable insights to accelerate cash flow and protect profitabilitySAP S/4HANA for use in manufacturing and operations excellenceTraditional ERPDaily MRP runs Long running MRP Multiple batch process No view of decision impact Reliance on tables and listsMaterial plannerMaterial plannerPlannedorderEnsure materials areavailable to coverproduction and salesrequirementsSAP S/4HANAMultiple MRP runs per day support ability to reactquickly to changing market conditions Real-time analysis of material flow Improved visibility into plant operations Improved decision making using simulationsRun MRPprocess overweekendEvaluate MRPlists and stockrequirement rManually change documentsto ensure smooth operationsAfter time-consumingand error-proneprocess, MRPcompleted confirmingmaterial availabilityMRP cockpitMaterialplannerEnsure materials areavailable to cover productionand sales requirements10x7x10%Faster MRP planning run*Fewer fields filled, increasingproductivity with SAP Fiori (UX)*Reduction of total manufacturing cost*Evaluate and execute MRP decisionsbased on real-time demand and supplyanalysis Monitor operational status with KPIs Identify most-urgent issues from alerts Make and execute the right decisionusing preevaluated proposals Improve operational excellence withoutoverstocking inventories* Benefits are based on early adopters of SAP S/4HANA or conservative outside-in benefits due to moving from a traditional ERP to enhanced SAP S/4HANA and LoB/cloudcapabilities as each enterprise is at a different level of maturity, our recommendation is to work with you to determine the value proposition for your enterprise.-7- 2016 SAP SE or an SAP affiliate company. All rights reserved.Public7
FINANCE AND PROCUREMENTTypical challengesDelayed close activities do not begin until periodend.Traditional ERPSAP S/4HANA enhancementsEffort-intensive reconciliations and eliminations areperformed, preventing an accurate intraperioddepiction of the organization’s performance.Periodic batch processes are required to providerealized revenue and margin reporting and are notprovided at detailed level.Multiple ledgers and subledgers are utilized thatrequire time- consuming and error-pronereconciliations.Foundation for soft close, for example, real-timederivation of profitability characteristics, single sourceof the truth, and extension ledgerFoundation for soft close – for example, real-timederivation of profitability characteristics, single sourceof the truth, and extension ledgerMultiple batch-run dependencies causebottlenecks that delay downstream activities.Frequent delays in batch processing and post-closeactivities create protracted cycle times.Real-time processes, such as revenuerecognition, profitability analysis, cashallocation, and working capital analysisVisibility into reporting is delayed as data is storedacross multiple ledgers.Disparate ledgers without integration createaccounting blind spots.Predefined reports and configurable reporting tools toleverage general ledger, subledgers, and consolidationapps; central finance function that integrates allledgers and subledgers into one source of the truth.Basic multicurrency support requires manualintervention during the conversion process.Limited number of local currencies are supported.Manual processes and inconsistent informationflow across supply chain creates procurementinefficiencies.Searching for existing purchase orders is timeconsuming with little prefilled content andprovisioning of existing documents.Identifying the best sources of supply is difficult asdata is spread across disparate sources likecontracts, scheduling agreements, info records,source lists, and quota arrangements.Time-consuming and complex process for buyersand suppliers to collaborate on purchase orderUser has to search separately in purchase informationrecords, contracts, scheduling agreements, and inforecords to identify source of supply.New, freely defined currencies available in theuniversal journal; real-time currency conversionavailable for all currency typesBy starting the SAP Fiori app to manage purchaseorders, existing purchase orders and purchase inforecords are preprovisioned to facilitate manualpurchase order creation.SAP Fiori app enables purchaser to jointly search andmanage purchase information records, contracts, andsource lists, including simulation of sourceassignment.Ariba Network integration nativeto SAP S/4HANA for purchase order change, orderconfirmation, and advanced shipping notificationAnalyzing procurement information iscumbersome and time consuming. Requires time-consuming data extraction intobusiness warehouse to perform spend analysis No insight-to-action capabilitiesA separate add-on needs to be implemented on top ofERP to exchange messages with the Ariba Network.Live calculation of key performance indicators toanalyze managed and nonmanaged spend, contracts,and suppliersBenefits* 20%–40% reduction in audit cost* 5%–10% reduction in business andoperations analysis/reporting costs* 40%–50% reduction in days to closeannual books* 20%–40% reduction in general ledgerand financial closing costs* Improved transactional procurement,employee productivity, and reducedcycle times Increased sourcing savings – better unitprice reduction Improved supplier compliance Enhanced supply chain planningproductivity Increased collaborative sourcing savings(services spend) Continuous improvement in spendunder e-procurement* Benefits are based on early adopters of SAP S/4HANA or conservative outside-in benefits due to moving from a traditional ERP to enhanced SAP S/4HANA and LoB/cloudcapabilities as each enterprise is at a different level of maturity, our recommendation is to work with you to determine the value proposition for your enterprise.-8- 2016 SAP SE or an SAP affiliate company. All rights reserved.Public8
SALES AND ORDER FULFILLMENTTypical challengesLack of visibility into the order managementsystem results in slow resolution of orderfulfillment issues with risk of delayed delivery.Traditional ERPSAP S/4HANA enhancementsBenefits* Responsible employee has to check multiple reportsto get a holistic view of all process related issues Prioritized list with key characteristics ofoutstanding sales orders for internal sales Prior communications and decisions cannot betracked in the system Relevant insights, contacts, and collaborationfeatures for internal salesLimited insight in process cycle time hampers theimprovement of the sales process quality.No available capability for process performancemonitoringPrebuilt content to monitor and analyze order-to-cashprocess performance allows insights into processcycle times and enables process manager to improvethe service level for customers. Improved sales effectiveness andreduced selling, general, andadministrative (SG&A) expensesLack of accurate, up-to-date inventory data, leadtimes, and procurement timing leads to aninefficient planning process; lack of live visibilityinto inventory reduces throughput.Inventory analysis is possible using a separateanalytical system with data integration issues anddata latency; inventory throughput may reachboundaries depending on business scenario.Live inventory transparency and managementthrough a redesigned data model; ability to change lotsize to one, enabling better customer service Reduced levels of inventory requiredComplexity in valuing inventories in multiplecurrencies and for different valuation methods(legal/profit center/reporting purposes) Material ledger activation available along withfunctionality of actual costing; however, inventoryvaluation data exists in multiple aggregated tablesMaterial ledger available as a default option; allinventory valuation data exists in material ledger,removing all redundancies; faster actual costing dueto optimized code based on SAP HANA , fasterreporting as needed for actual costing, with multiplecurrency and valuation methods This leads to slow processes (actual costing,redistribution, revaluation) and inefficient reporting Lack of adequate reporting and operational toolsto analyze, review, and control billing processesNo robust analytical tools for billing administrators tohave quick insight into the ongoing billing process Inability to manage a high level of granularity fordiscrete billable items associated with an invoice.Difficulty in generating invoices and running bulkcollection and payment processes in a timelymannerNative SAP Fiori apps simplify the administration ofstandard billing apps with user-friendly operationaltools. Increased customer satisfaction Increased on-time delivery Improved internal sales productivity Reduced inventory obsolescence andwaste Prerequisite for more-targeted, one-toone sales Reduced supply chain planning costs Better visibility into actual profitabilityallows for margin optimization Increased billing staff productivity Improved subscription invoiceprocessing time Invoices go out sooner: reduced dayssales outstanding (DSO)Normal billing runs well, but bulk processes areconsiderably slower using traditional relationaldatabases.Faster and better billing, accommodating bulkprocesses through enhanced capabilities of SAPHANA Reduced DSO for large customervol
SAP S/4HANA for use in receivables management Receivables manager Investigate the status of payments Extract a list of overdue receivables View payment history for customer Calculate forecasted due date Manually prioritize outstanding accounts receivables
