|Enterprise management plays a key
role in creating value. SAP offers a powerful tool to support management
decisions: SAP Strategic Enterprise Management/Business Analytics.
Enterprise management has made major advances in the past several years,
both in theory and in practical software support. Breakthroughs in strategic
management include value-based management and balanced scorecard methodology,
benchmarking and “beyond budgeting” to assist performance
management, and campaign management and supply chain operations reference
(SCOR) metrics to support operational management. On the software side,
transaction processing has been largely separated from analytical processing.
The key elements are online transaction processing (OLTP), online analytical
processing (OLAP), business intelligence, and analytical applications.
Available solutions are shifting from individual “best-of-breed”
vendors to systems that offer comprehensive support, especially integration
with operational systems.
The Management Challenge
Enterprise management involves focusing a company (or division)
simultaneously on long-term value creation and mid-term profitability,
while optimizing day-to-day business to meet these longer-term goals.
This complex challenge involves the management of several nested feedback
loops, and can encompass an entire company or individual business units.
The strategic planning loop involves
developing a strategy and drawing a consistent picture; it can entail
quantitative simulation models and scenario planning. It is essential
that the models, calculations, and documents be permanently available
to all those involved in the process. The resulting strategy must be described
in clear terms in the strategy and business management loop and
converted to specific targets, metrics, and quantitative amounts. These,
in turn, are then disseminated to the organization as a whole, or at least
communicated to the business units as clear goals. Any measures that go
beyond day-to-day business must be defined as specific projects.
The operational management loop
is based largely on operational planning (sales, headcount, cost planning).
To promote decentralized management, organizations give the employees
charged with executing the operational processes targets, ground rules,
and a defined scope for decision-making. These processes are tracked in
the management system in the form of metrics. The metrics are continuously
compared with the defined operational goals within the framework of a
(rolling) forecast. They also flow as feedback into the strategic planning
loop. In the investor relationship loop, the strategy and its
implementation progress are communicated to the stakeholders — including
investors and staff from other divisions of the company.
The SAP Solution
SAP’s answer to the enterprise management challenge is
SAP Strategic Enterprise Management/Business Analytics (SAP SEM/BA). SAP
SEM supports the strategic planning loop, the strategy and business management
loop, and the investor relationship loop; Business Analytics focuses on
the operational management loop. SAP SEM/BA is an analytical application
based on technology implemented in the SAP Business Information Warehouse.
SAP SEM is divided into these functional
- Strategy management with balanced scorecard and risk management
- Performance measurement with value driver tree and management
- Business planning and simulation with general functions
and predefined applications
- Business consolidation with management consolidation and
- Stakeholder relationship management with address management
and contact management
Business Analytics includes these functional
- Financial analytics with profitability management and working
- CRM analytics with sales planning and campaign planning
- SCM analytics with supply chain performance analysis
- PLM analytics with concurrent costing and product portfolio
- HR analytics with personnel cost planning and commission
SAP SEM has been available for several
years and is in continual development; Release 3.2 is now being delivered.
Enhancements to SAP Business Analytics are under development, with some
already available. The ramp-up for SAP SEM/BA 3.5 is scheduled for the
second quarter of this year. Experience shows that customers often start
with the implementation of the SAP Business Information Warehouse (SAP
BW) and follow up with SAP SEM/BA; integration of the analytical applications
is the next logical step following an SAP BW project.
Typical combinations include planning
and simulation (balance sheet planning and operative planning, particularly
sales planning, profit planning, and overhead cost planning) with consolidation
and financial reporting (first legal consolidation, then management consolidation).
Other popular combinations are strategy management and performance measurement
(management cockpit and balanced scorecard) with CRM analytics and financial
analytics (analysis of customer behavior and customer-specific profitability
For practical reasons, SAP customers usually
start with individual components, which by themselves offer a good return
on investment. In the long term, customers tend to approach enterprise
management step by step — from strategic enterprise management to
mySAP Financials Online
SAP Service Marketplace
SAP Strategic Enterprise Management
Enables companies to execute strategies quickly and successfully,
and manage business performance throughout the entire organization.
Strategic enterprise management also supports integrated strategic
planning, performance monitoring, business consolidation, and effective
stakeholder communication, thus enabling value-based management.
Records quantities and values from financially relevant transactions,and
maintains a consistent, reconciled, and auditable set of books for
statutory reporting and for management reporting and analysis.
SAP Financial Supply Chain Management
Provides greater visibility into working capital, allowing enterprises
to streamline cash flow activities throughout the organization.
It reduces costs associated with billing and payment processes,
and optimizes your transactions with customers, vendors, and suppliers.
SAP Real Estate
Integrated tools that improve decision-making and enable more effective
management of real estate assets, investment portfolios, and risk.
Offers comprehensive project support for efficient use of resources,
more efficient monitoring of project planning and implementation,
and more cost-effective management of outsourcing services.
SAP Travel Management
An integrated, online managed solution that can lead to considerable
savings in direct and indirect travel costs. It can handle the entire
business trip, empowering travelers and helping reduce unnecessary
and unproductive administrative tasks.
SAP Incentive and Commission Management
Helps to develop effective incentive programs, including sales and
brokerage commissions, profit sharing, and bonuses.
Financial Portal Solutions
Provides finance employees, business managers, and business partners
with access to financial and business information as well as related
Sinzig is Vice President for Product
Management in GBU Financials at SAP AG.
He joined SAP AG in 1983, and has held
positions as Program Director in the areas
of Profitability Management and Strategic
Enterprise Management. He studied industrial
engineering and management at the Technical
University of Darmstadt, and holds a Ph.D.
from Frankfurt University, with a focus
on Database-Oriented Management Accounting.