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This series is designed to offer a closer look at business value acceleration – driven by the design principles of SAP S/4HANA. The technology-induced implications of the digital economy are huge, though the technology itself is only a catalyst to achieve a fundamentally different business outcome.

The selected use cases, related to SAP S/4HANA Release 1709, are designed to emphasize and visualize the value behind it.

A framework has to be in place which can reflect the success and where use cases and applications are compared. Generally, there are three dimensions that drive and make organizational transformation measurable. Good old balance score card, welcome back.

Increase efficiency

Efficiency can easily be described as “doing things right.” Simply said, as the fundamental definition of business, you achieve more output with the same input or the same output with less input.

As a first simple example, giving people the right information, better and faster analytics provided by a digitized core, makes decision making more precise and efficient.

Keep in mind, we are not talking about a profound status and comfort zone companies are in. We are talking about fast-changing markets and new competitors, perfectly settled to disrupt existing markets. Efficiency is not a nice-to-have option now as it was in a pre-digital world.

Increase effectiveness

In contrast to efficiency, effectiveness can be described as “doing the right thing.” This can be expressed in different ways such as reaching the goals you set, or by collecting all the resources you need to do so.

Put into practice, we could see more time for actual value-adding tasks – the right things – because many processes can be automated. Think of low to zero touch orders as a consequence of the new promise from a digital storefront. It is no option to improve the existing order processes by another 10%, it is about fundamentally redesigning an order process to manage the new expectations.

“Right things” can also be the new service models your customers have been waiting for, or a transition into a subscription model with your products.

Increase agility

The last dimension – agility – is a mix of flexibility and speed.

In an organizational context, this is the ability to respond fast to a change within the constantly changing environment. In other words, your processes are flexible enough to adapt to changes fast and improve service levels or other aspects of your business. In practice we can see faster deployment of new organizations or processes. Your entire company is a living organism. In inventory management, your stock is as well. The better you are able to run your IT in sync with the physical reality, the better you are.

Products can then be adapted and changed more flexibly according to customer needs and demand, which ultimately can increase things like your Net Promoter score. More flexible and easier to use processes lead to higher inventory throughput, lower security stocks, or a higher employee engagement.

More context and background can be found here:

http://www.digitalistmag.com/digital-economy/2016/02/04/digital-force-awakens-03989829

http://www.digitalistmag.com/digital-economy/2016/02/16/digital-force-awakens-part-2-04011333

http://www.digitalistmag.com/digital-economy/2016/03/02/digital-force-awakens-part-3-04052780

http://www.digitalistmag.com/digital-economy/2016/03/15/the-digital-force-awakens-part-4-04077000

 

I this blog I will recap the impact with a short summary of the use cases and the different value levers. In general, there are three dimensions, or value levers, which can be considered to drive value in the digital economy:

 

Value Levers of the SAP S/4HANA 1709 use cases

Looking back on the use cases for SAP S/4HANA 1709, we have had positive impact on all three dimensions. As our Finance use case proved, Finance alone drives positive impacts across all lever categories as we are delivering additional embedded analytics, enhanced real-time accounting and closing capabilities, innovative cloud apps on SAP HCP and most importantly: first machine learning scenarios for finance.

Efficiency

Based on machine learning algorithm, the full contract consumption of a purchase contract is predicted, before it happens – Thereby not only speeding up signal to action, but also raising process intelligence.

SAP S/4HANA Fashion enables fashion companies to transfer business models, reengineer business processes and reimagine their work, so they can intelligently match their demand and supply, act as an integrated unit and unlock business innovation.

Through the automation capabilities in both planning and execution phases, as well as through using real-time information consistent from order management through freight handling, we can accelerate execution at optimal cost, ensure higher business productivity.

Effectiveness

We provide full demand transparency and provide well-founded decision support and instant reaction and resolution of issues as a new dimension of effectiveness, that allows to fully redesign processes. Configuration allows to link up various functions avoiding manual product set up activities. This makes manufacturing planning a pull through process.

With the centralized transportation operations and standardization, increased transparency to trigger appropriate actions, you can now increase the spend savings and improve cash flow through accurate costing and settlements by tackling the right issues at the right time.

Agility

We enable immediate production of individualized products and retire data tables and process steps in between, ensure high service levels to cater to the expectations of the new generation of live businesses. With the new algorithms, we ensure state of art evaluations based on constraint modelling.

If you want to learn more about SAP S/4HANA, you can sign up for our new openSAP course “Extending SAP S/4HANA Cloud and SAP S/4HANA”. This free open online course will provide an overview of the SAP S/4HANA user experience, simple extensions, advanced extensions, and embedded analytics.

For more information on SAP S/4HANA, check out the following links:

SAP S/4HANA release info: www.sap.com/s4hana

And follow us via @SAP and #S4HANA or myself via @BeSchulze 

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