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Is your business successful….

Your market offerings must provide customers a unique added value. This added value is created by analyzing value chain: the way you innovate, design, produce, promote, sell, deliver and provide after-sales services. This is achieved by linking the internal and external processes together of the organization, so that they work more efficiently and cost-effectively.

Successful market strategy….

By analyzing your market trends, customer’s future requirement empowered with innovation and technology will help you in being ahead of competitors. Reinvent your business to create sustainable growth. Value Chain is the key to achieve the goal.

1. Value Chain Analysis

A value chain is the entire gamut of activities in your business processes — including design, production, marketing and distribution — businesses go through to bring a product or service from conception to delivery and after sales services including customer feedback.

The purpose value chain management is to ensure that those in charge of each stage of the value chain are communicating with one another, to help make sure the product is getting in the hands of customers as seamlessly and as quickly as possible.

“Competitive advantage cannot be understood by looking at a firm as a whole, It stems from the many discrete activities a firm performs in designing, producing, marketing, delivering and supporting its product.

                                                                                    –Michael Porter


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Source: http://research-methodology.net/illy-value-chain-analysis/


Porter looked at the organization as a collection of key functional activities that could be separated and identified as primary activities (inbound logistics, operations, outbound logistics, marketing and sales, and service) or support activities (infrastructure, human resource management, technology development and procurement). Porter arranged these activities in a value chain. Maximizing the linkages between the activities increases the efficiency of the organization and the marginal availability for increasing competitive advantage or for adding shareholder value. Integration occurs between the primary activities in each value chain, and is enabled by the support activities. It can also take place between activities in different organizations, and in some cases, the support activities also share resources. Thus, ERP systems aid the integration of these various functional processes within the organization’s value chain.

Steps in Value Chain Analysis

Value chain analysis has following sequential steps:

(1) Break down a market/organisation into its key activities under each of the major headings in the model;

(2) Assess the potential for adding value via cost advantage or differentiation, or identify current activities where a business appears to be at a competitive disadvantage;

(3) Determine strategies built around focusing on activities where competitive advantage can be sustained

Note: structured approach was developed by Harvard Business School Professor Michael Porter in his book “Competitive Advantage”.

2. ERP SAP & Value Chain

SAP business solution leads organizations to be agile, innovative and maintain competitive advantage by bringing in the efficiency in your business processes by analyzing the value chain of the entire business.

With the latest SAP innovations in analytics, mobile, and databases – powered by the SAP HANA® platform – you can leverage this Big Data by embedding exciting, new, readymade functionality in your products to:

  • Increase product revenue
  • Develop new service-based business models
  • Enhance software development efficiency

When organizations make buying decisions about enterprise software, they typically look at two dimensions:

2.1  Business value – Line-of-business (LoB) executives seek solutions that enable key functional areas required to run their core business processes and execute on their corporate strategy. When evaluating solutions, LoB decision makers look for industry-specific functional coverage, process integrity, process flexibility, and return on investment.

2.2  IT value – IT executive seek IT systems that are agile and scalable so they can respond in real time  to present  and future business challenges in a flexible and cost-efficient way. ERP Solutions need to be safe, secure, and maintained at a reasonable total cost of ownership (TCO). When evaluating ERP solutions, they look for platform and ecosystem simplicity, change automation, low cost of ownership and maintenance, and built-in integration methods.

ERP Solution must be able to reconcile the needs of business and IT so they can build multi-industry value chains that drive profitable growth.

3. SAP Product Portfolio

Comprehensive overview of SAP Products are as follows

    3.1 Analytics: Analytic applications from SAP enable specific planning, risk management, and performance optimization processes for individual industries. It is a      comprehensive integrated platform that helps unlock the real value in your data for business manager for decision making. It significantly contributes in organizations who      successfully leverage analytics: stretching their competitive advantage, driving innovation, and improving lives. Analyzing, predicting and better decision makingSAP      Solutions for Analytics comprises several solution categories – Analytic Applications, Business Intelligence, Enterprise Information Management, and Enterprise      Performance Management.

              3.1.1 Business Intelligence BI Solutions

Boost your organization’s collective IQ with business intelligence tools that provide real-time insight into your organization. SAP BusinessObjects business intelligence (BI) solutions simplify data manipulation, allowing users to access, navigate, analyze, format, and share information across a corporate environment. The following products allow a wide range of processes, from search and navigation to advanced analytics, enterprise query, reporting and analysis, dashboards and visualization, and information infrastructure management.

Empower your people with 24/7, user-friendly access to the business intelligence (BI) and Big Data mining tools they need to make faster, more informed decisions. Our BI software and solutions – including ad hoc reporting, self-service data visualization and dashboards, predictive analytics, mobile apps, and more – can help business users improve performance and become more effective in everything they do.

3.1.2  Predictive Analytics

With dynamic competitive environment, organizations need forward looking insights with Predictive Analytics detect and prevent threats, and guide frontline decisions. Translate goals into results – with SAP software for enterprise performance management  (EPM), also referred to as corporate performance management. Our solutions cover everything from planning, budgeting and forecasting to financial consolidation and disclosure management – and can help you take revenue and profitability to the next level. Capture objectives, determine initiatives, cascade scorecards and metrics throughout your organization and measure performance to drive accountability and keep goals on track.

              3.1.3 Enterprise Performance Management (EPM)

It is the process of monitoring performance across the enterprise with the goal of improving business performance. EPM is the next generation of BI that allows companies to take the decisions they made through the BI system and strategically align these decisions with their corporate goals. Where BI covered the decision process starting at monitoring, then analysis, and finally actions based on key performance indicators (KPIs). EPM defines the way an organization should operate based on a clear, corporate business strategy containing actions and processes that align to the strategy with identification of KPIs and progress tracking.

              3.1.4 Governance, Risk, and Compliance (GRC)

Successful companies manage performance across their enterprise using risk-balanced strategy management, through embedded risk-based controls in their business processes and by managing authorizations and access to information.

4.      Data Management

Turn vast amounts of data into meaningful insights that your organization can act on.  Data management products from SAP allow you to collect and manage data, store and retrieve data from one or more sources, and distribute that information to one or more audiences quickly and accurately.

5.      Content & Collaboration

Manage knowledge assets to meet operational and strategic requirements. Content and collaboration products help support initiatives, processes, strategies, and systems that sustain and enhance the storage, assessment, sharing, refinement, and creation of knowledge.

6. Enterprise Resource Planning: Improve the performance of your core business and business support processes inside and outside your organization. Our enterprise resource planning products support end-to-end business processes that span organizational boundaries and can be integrated with other business partners.

7. SAP S/4HANA

SAP S/4HANA is a next generation business suite built on advanced in-memory platform, SAP HANA, offering a personalized user experience with SAP Fiori. Deployable in the cloud or on-premise, SAP S/4HANA is built to drive instant value across lines of business and industries.

8. Supply Chain Management:

The process starts with procurement of goods or services, transforming them into finished product and finally distributing it to your customers. SAP SCM Accelerates and optimize end-to-end procure-to-pay process. It enables to integrate processes and enforce contract compliance for both supply-side and supplier-side requirements – throughout the extended supply chain as well as distribution.

9. Financial Management

Streamline and automate finance, controlling, and asset management. Financial management products from SAP enable you to support critical business processes for essential corporate functions.

10. Supplier Relationship Management

Improve centralized sourcing, procurement, and contract management and interact with suppliers through multiple channels. Our supplier relationship management products can help you accelerate and optimize the end-to-end procure-to-pay process by integrating processes and enforcing contract compliance.

11.  Customer Relationship Management

Organizations seek to retain their best customers and maximize the effectiveness of every customer interaction–whether it’s sales, service, or marketing. Provide marketing, sales, and service professionals with complete customer intelligence to manage relationships and customer-related processes. Customer relationship management enables to define customers based on their industry and personalize the customer experience.

12.  Human Capital Management

Develop, manage, and empower your people to succeed. Human capital management products from SAP can help your organization hire and retain the right people, manage the work environment, streamline HR processes, ensure legal compliance, and create a people-centric organization.

13.  Product Lifecycle Management

Design, build, and manage production with greater visibility and control. SAP products that cover all aspects of portfolio and product management can help you manage, track, and control all product-related information over the complete product and asset lifecycle.

14.  Conclusion

SAP provides ERP solution beyond process production management and human resources areas to support a full range of horizontal and vertical business processes. With increasing customer expectations, complex supply chain networks, concentric & conglomerate diversification to manage complex and vast data in real time, organizations needs to revisit their value chain and find the gaps where they can improve. SAP ERP solutions helps in improving business process through their world class products which are technologically upgraded to meet the present demand of business such as SRM, CRM, Business Intelligence (BI), SAP HANA, Fiori (Mobile Platform) to enhance value chain and thus better Return on Investment to orgnisations. The present business demand is to improve operational effectiveness at the expense of both a unique strategy and a tightly integrated value chain.

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