SAP Business Process Management (BPM) is an area that is currently enjoying a lot of attention. Many companies are exploring the possibilities of SAP BPM, but are struggling with the question for which processes they should use SAP BPM. Based on an example, this blog provides some typical characteristics of processes that are ultimately suitable for using SAP BPM.
Which processes with SAP Business Process Management?
As an example we will use a typical offer to cash process, in which external sales agents provide written quotations to the internal sales department, who in turn enter them into a non-SAP application. Next the quotation is created in the SAP system using an interface. Before the quotation is eventually converted into a sales order a lot of interaction takes place between the customer, the external sales agent and the internal sales department, where creative discount structures are used to finalise the deal. The sales manager is willing to give his external sales agents the room to finalise these deals, but he wants to approve all sales orders that contain discounts above a certain threshold or percentage. After the approval the sales order is released permanently, delivered, billed and paid for.
Figure 1: typical offer to cash process
Current IT solution: SAP supplemented with custom development
For this business critical quotation and sales order process custom code has been built to enter the quotation into a non-SAP application and then again for a file interface to create the quotation in SAP. Additional custom developments have been created to make it possible to enter discounts at various levels in the quotation. This is frequently still insufficient and the internal sales department then has to manually correct the quotations and sales orders.
Using a workflow, the sales manager can ultimately approve sales orders with discounts above a certain threshold or percentage. If the sales manager wants to change the threshold or the percentage he has to file a change request with the IT department as this requires adaptations in the custom code. The minimum lead time for such a change request is 2 weeks, mainly because of the administrative steps.
The standard SAP solutions for the logistical and financial completion of this process are used as they function perfectly for this company.
Figure 2: the current IT solution in standard SAP (yellow flows) supplemented with custom development (red flows)
The Business as the Driver for process improvement
The sales manager is not satisfied with the current process flow and wants to optimize the process by:
1. Letting the sales agents deliver the quotations and changes to quotations digitally, which significantly decreases the lead time of the quotation process, improves efficiency and considerably reduces the chance of errors.
2. Only allowing discounts at certain levels in the quotation, which he can dynamically change over time, to enable his sales agents to independently acquire more turnover with a sufficient profit margin.
3. Approving sales orders that contain discounts above a certain threshold or percentage, whereby he is able to determine these boundaries flexibly, without having to file a time consuming change request with the IT department every time.
IT as an Enabler for process improvement
The IT Manager is struggling with his colleague’s request. Even more custom code would be required to grant the request from the business in the current SAP environment. While at the same time the IT Manager would like to limit the amount of custom code in SAP. Furthermore, he doubts whether the required user interfaces and business rules would even be achievable with the tools that are currently available.
With the introduction of SAP BPM this IT Manager has the possibility to grant the sales manager’s request. Using the SAP Composition Environment (CE) he can develop one or more process oriented and user friendly Composite Applications containing Business Rules that can be flexibly defined. With the addition of Enterprise Services (ES), data can be exchanged with underlying SAP and non-SAP systems. With this solution, new and potentially complex custom code can be avoided and existing custom code could even be removed.
In this context SAP BPM forms the flexible but standard connection between Business and IT.
Figure 3: BPM as technology and philosophy (Source: Sogeti)
Solution with SAP BPM Composite Applications
In our example a possible solution with SAP BPM could look as follows;
Figure 4: SAP BPM solution with Enterprise Services (dotted lines)
Through a web browser the sales agents gain access to a Composite Application “Offer“, with which they create new quotations and change existing quotations. By means of standard SAP Enterprise Services these quotations will be updated both in the non-SAP as the SAP ERP system.
The manual entry of quotations by the internal sales department and the corresponding interface to SAP ERP is no longer necessary. The lead time of the quotation process is significantly reduced, as well as the chance of errors.
The sales manager also has access to this quotation application and has defined a number of business rules with which he can establish at which levels of the quotation the sales agents are allowed to give discounts. This means that he is now capable of maintaining the decision matrix himself in the central SAP Composition Environment.
The existing custom code in SAP ERP has now become redundant, while the sales manager can adjust the business rules much faster. This allows him to give his sales agents the freedom they need to achieve their turnover and profit targets.
In addition the sales manager has access to a Composite Application “Order” in the Portal where he can see all unreleased sales orders. This data is retrieved from the SAP ERP system by means of an Enterprise Service. He can easily change the permitted discount amount and percentages in the process flow.
It is no longer necessary to send change requests to the IT department in order to change the permitted discount amount and percentages.
Finally the sales manager has a “Sales Order Task list” in his Portal with which he can approve or reject unreleased sales orders with excessive discounts. Approved sales orders are released for delivery in the SAP ERP system by an Enterprise Service and in the case of rejection, the sales agents receive an e-mail about their rejected quotations.
The existing inflexible workflow in SAP ERP is replaced with a flexible solution.
Which processes are principally suitable for SAP BPM?
Naturally every company should answer this question for itself, however there are a number of characteristics that are typical for processes that are principally suitable for SAP BPM. These mainly concern processes that:
- Currently have a lot of custom code
When a process already has a lot of custom code (like in our example the quotation process) this means that the SAP standard solution did not suffice for the business requirements. For every desired optimisation in such a process, additional custom coding is almost certainly required. Though it is true that with SAP BPM a Composite Application will have to be developed, the Enterprise Services will enable the (re)use of standard functionality available in the underlying SAP systems. In short, by using SAP BPM the current custom code can be replaced and future additions prevented.
- That deviate from a standard SAP solution
Many business processes do not fit in the standard SAP process flow. With the SAP BPM process engine, custom processes can be modelled and deployed, without being bound to the process flow in standard SAP. By using the SAP Enterprise services, standard SAP functionality can be (re)used.
- Run through multiple systems and departments
With Enterprise Services in SAP BPM a process can be started in several different systems. In our example the quotation is registered simultaneously in a non-SAP as well as an SAP system. This prevents the use of point-to-point interfaces.
With the SAP BPM process composer and process desk, tasks can be appointed to departments or persons, so that follow up steps in a process can be directed automatically to the appropriate person. In the offer-to-cash example the sales agents and the sales manager both have a good overview of the status of all open quotations.
- That require flexible business rules
With the SAP BPM business rule engine, business rules can easily be documented and amended if necessary, without having to file a change request with the IT department. In our example the business rules are very suitable to document at which levels in the quotation a discount may be given, including the allowed maximum amount and percentages.
- With which companies want to distinguish themselves from their competitors
Processes with which companies want to distinguish themselves from their competitors are especially suitable for SAP BPM. These processes often do not fit in the SAP standard solution (at least not without significant custom developments and should be open for quick updates preferably by the business themselves.
- That demand a lot of user interaction and cooperation
The human interaction functionality within SAP BPM offers the possibilities to develop custom interfaces quickly and easily resulting in the accessibility of the same process through various channels. (E.g. a browser on a PC or with a separate application on a Smartphone).
Does this mean that SAP BPM should be used for all business processes within a company?
No, most certainly not. When a standard SAP solution adequately supports the business process there is no necessity to use SAP BPM. In this case you can use the SAP standard Best Practices in ERP or the Business Suite, and the additional functionality that is available in the Enhancement Packages.
SAP BPM is a logical choice when the SAP standard does not suffice.
Schematically this is summarized as follows:
Figure 5: Which processes with SAP BPM (Source: Sogeti)
For extensive and up to date information on SAP BPM check out the SDN site: http://www.sdn.sap.com/irj/sdn/nw-bpm or contact the author.
Senior SAP Integration Consultant
Sogeti Nederland B.V.