Traditional Business KPI approach vs Business Process Monitoring
In one of my previous blogs I already mentioned that a large majority of SAP customers is not using their SAP systems to the full extent, i.e. there is (very) significant potential for improving their existing business processes (see Protect your SAP ERP investment & improve your core business processes). Confronting the respective customers with our Business Process Analysis results, based on facts from the corresponding backend system, is usually leading to many surprised faces and the main question raised is “how come that we did not recognize this before where we have so many KPI dashboards in our company?”. The short answer is “you are not looking at the right places from the right angle”. A somewhat longer answer is given below in this blog.
Traditional Top-Down approach
Customers usually measure (strategic) Business KPIs with the help of different tools, e.g. SAP BW or SAP Business Objects. These key figures are often measured percentage wise. The reason behind is often that this would make it easier to compare different organizational units. It is also very typical that those key figures do make a “positive” measurement, i.e. customers say that 98% of there sales orders are fully delivered on time. As long as the business is satisfied with the KPI value nobody cares about the 0.1 or 2 or 5 % of sales orders that are not fully delivered on time. Only once the KPI drops below an anticipated level, e.g. less than 95% then people will start thinking about how to improve the KPI again. Then people evaluate what are possible influencing factors for the corresponding KPI that shall be improved. This is usually done on a theoretical basis and if one influencing factor is overseen or forgotten it will be very difficult to improve the overarching KPI. Once the influencing factors are identified then one starts to define and measure the lower level key figures in order to track the progress.
This top-down approach is very good for reporting in order to keep the status quo, but it is not really good for improving things as you cannot learn much from positive examples (the 95% of successful sales order) but you can rather learn from bad examples (the 5% of exceptions).
Bottom-Up approach with Business Process Monitoring & Business Process Analytics
That’s why the Business Process Monitoring (Functional Scope of Business Process Monitoring in SAP Solution Manager) and the Business Process Analytics (New functionality “Business Process Analytics” – how to improve your business processes) approach works just the other way around. You start bottom-up with operational key figures coming out-of-the-box that were designed for checking exactly those areas where typically problems occur. This knowledge was derived from hundreds of customer cases where SAP supported critical customer situations and escalations. So those key figures are exactly looking at the 5% of exceptions from the example above. You can then perform a root cause analysis (supported by the tool as it allows forward navigation into the single business document on the respective backend system that raised the exception) for every key figure in order to find out if you have systematic problems (e.g. master data or configuration) or if you encountered real (business) exceptions. By resolving the respective root cause on this operational level you might then also improve related strategic Business KPIs that are already collected elsewhere.
This bottom-up approach is specifically designed in order to stabilize and improve business processes and can be seen complementary to the top-down reporting capabilities that are most likely already established within your company.
You can find all necessary information about Business Process Analytics in this document.
Frequently Asked Questions about Business Process Monitoring and Business Process Analytics are answered under http://wiki.sdn.sap.com/wiki/display/SM/FAQ+Business+Process+Monitoring andhttp://wiki.sdn.sap.com/wiki/display/SM/FAQ+Business+Process+Analytics respectively. The following blogs (in chronological order) provide further details about Business Process Monitoring functionalities within the SAP Solution Manager.
- New Business Process Monitoring functionalities in SAP Solution Manager – ALE / IDoc Monitoring
- New Business Process Monitoring functionalities in SAP Solution Manager – qRFC Monitoring
- New Business Process Monitoring Functionalities in SAP Solution Manager – functionalities For Inconsistencies in SAP Solution Manager
- SAP Business Process Monitoring within SAP Solution Manager
- New Business Process Monitoring functionalities in SAP Solution Manager – BPMon Trend Analysis Reporting
- Best Practice: Business Process Monitoring for Manufacturing
- Best Practice: Business Process Monitoring for Procure to Pay
- Best Practice: Business Process Monitoring for Order to Cash
- Business Process Monitoring – Template configuration available for download
- FAQs about Business Process Monitoring
- Typical Use Cases for Business Process Monitoring in SAP Solution Manager
- New Business Process Monitoring functionalities in SAP Solution Manager – Customer Exit
- New key figure catalog for Business Process Monitoring available
- Why SAP offers different tools for Business Process Monitoring & Business Process Optimization
- Create your own auto-reaction messages in Business Process Monitoring via BAdI exit
- Protect your SAP ERP investment & improve your core business processes
- Refresh Solution Landscape cache for Business Process Operation Work Center
- Create your own customer-specific key figure for Business Process Monitoring within 5 minutes
- Best Practice: BW Process Chain monitoring with SAP Solution Manager – Part 1
- Best Practice: BW Process Chain monitoring with SAP Solution Manager – Part 2: Setup Example
- New key figures for BusinessProcess Monitoring in SAP Solution Manager, especially for CRM Marketing
- New functionality “Business Process Analytics” – how to improve your business processes
- New key figures for Business Process Monitoring in SAP Solution Manager, especially Lead Time measurements