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The insideEdge (SAPinsider Vol. 10, Iss. 2)

by Chakib Bouhdary | SAPinsider

April 1, 2009

Today's economic challenges will affect the performance of every company. Those companies with business model agility and processes that are integrated on a single platform won't just survive — they will thrive.
 

Chakib Bouhdary
Chief Value Officer
SAP AG

Why do some companies survive, and even thrive, during times of economic turmoil? Successful companies can rapidly adapt their business models to the economic times, so they can compete more effectively. Any business model is made up of a collection of end-to-end business processes. Companies with a high level of agility and flexibility can quickly distinguish between those processes that are core to their business and those that are contextual. Core business processes, such as time-to-market or quote-to-cash, are managed and controlled very tightly, while contextual processes might be outsourced or provided as a shared service.

One way to measure a corporate IT team’s ability to support business model agility is to look at the number of business applications per billion dollars in sales. Benchmarking results from SAP Value Engineering suggest that, for best-run IT departments, this number is less than five. Simplifying the IT portfolio not only lowers IT costs, but also supports leaner operations and forms a more agile platform that encourages growth, innovation, real-time enterprise visibility, and the scalability to grow or shrink in line with — and at pace with — the organization’s overall business needs.

Based on our benchmarking findings and customer experience, companies with an integrated platform can achieve impressive results. They can:

  • Reduce overall operating costs by 25% to 40%

  • Increase productivity per employee by 20%

  • Achieve 23% higher cost savings and improve effectiveness by 32% in shared services over those companies without an integrated platform

  • Increase average annual savings on indirect and direct materials by more than 40% by operating a single, integrated procurement system

  • Lower overall IT costs by as much as 25% to 50%

These are powerful numbers. A standardized platform enables a leaner and more innovative company — simply put, a best-run business. This is why SAP’s new SAP Business Suite 7 is a major milestone. SAP Business Suite 7 takes an end-to-end, process-centric view of the business, spanning traditional functional boundaries and reducing overall IT costs. Most importantly, SAP Business Suite 7 is designed around value scenarios that enable those key processes that provide the most benefit for your organization. I highly recommend that you evaluate SAP Business Suite 7 and its ability to create value for your company, simplify your IT portfolio, and improve your business model agility.

Today’s economic challenges will affect the performance of every company. Those companies with business model agility and processes that are integrated on a single platform won’t just survive — they will thrive.


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