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How S/4 HANA pays investment money back ?

S/4 HANA is the latest innovation by SAP, has many features such as: real-time analytics by HANA-live, beautiful User Interface on any device, on anytime, anywhere, re-imagined and simplified business logic and database.

On top this native runs in-memory and columnar base on HANA platform. Available both on-premise and cloud. IoT platform, bigdata and predictive capabilities…

We have really understand and well learned, all those features are great to have, but how the cash realization will be done.

I really do not want to add many more other paragraphs to explain the intangible or indirect benefits of S/4 HANA.

Let’s pick up only 2 KPIs which will explain how S/4 HANA will turn to cash: resource : Business KPIs – Business KPIs – SCN Wiki

Price Impact on Revenues

The sales price changes due to various reasons such as discounts, free offers, sales campaigns, etc. Price impact on revenues reflects the direct effect of the change in selling prices on profit. Positive price impact on revenues indicates that managers have been successful in extracting value form the marketplace – either because of product superiority or weakness in competitors’ product positions and it results in increase in gross profit per unit, provided that cost of goods sold keeps constant. Negative price impact on revenues indicates mostly that average selling price declines due to more intense competition and results in negative impact on gross margin per unit.

KPI Formula: Price Impact on Revenues = ((((Average Selling Price-Current Period) – (Average Selling Price-Base Period)) * (Selling Quantity-Base Period)) / (Total Revenue-Base Period)) * 100%

Before HANA, with the help of SAP BW on anydb, we all tried to calculate this formula with latency, period of day, week or month. We had great information after the opportunies has gone, or celebrate our success, but we might make more money that we had made.

With the help of HANA Live brought by S/4HANA, this KPI can be calculated real-time. What does it mean? This means money !

The impact of the sales campaign can be monitored by Fiori Launchpad by the managers on their smartphones or tablets real-time. They can immediately control the campaign and capture any information about the sales, market or revenue.

Inventory Days of Supply – Finished Goods

The Inventory-Days-of-Supply allows to estimate for how long a stock level of a certain material will be sufficient to match upcoming requirements – basic assumption is a steady demand function.

KPI Formula: IDS-fgd [BPX:days] = SUMn (IDS_goodn-classified-as-FGD) / n [BPX:days]

This KPI is very much related with the first KPI called Price Impact on Revenues. The worst case in trade is not covering sales orders on time.

This means only one thing: un-happy customers, many complaints and spending more money to gain customer back. Again with the help of real time analytics, monitor this KPI for each FG which is pushed by a campaign. Drive the whole process accordingly. And use predictive engine to perform more accurate forecast or operation. Make happy customers and more money.

These are my small portion of KPIs, there are many.

Please do not hesitate to add yours in comment section



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