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The value of RISE with SAP: Quantifying the benefits – Part1

Introduction

This is my second blog in the series of blogs on “The value of RISE with SAP”. Here, I will talk about two ways in which companies can benefit from offerings of RISE with SAP.

  • Improving the TOP LINE and fueling your growth engine
  • Improving your TRANSFORMATION READINESS with cloud delivery capabilities

Recap

In the introductory blog, I talked about two broad categories of value from which a company can benefit from the offerings of RISE with SAP. The framework I described can be used to quantify the dollar value of business benefits and create a business case. You can read it here in case you missed it. I will provide a summary below.

RISE with SAP enables two sources of value (A and B).

1) Value source A 2) Value source B

Value from differentiating business capabilities and outcomes. With these, it is possible to achieve tangible benefits which favorably impacts:

·       Top line

·       Bottom line

·       Green line

Incremental value from cloud delivery capabilities which supports:

·       Transformation Readiness

·       Service experience

·       Operational resilience

·       Predictable lower TCO

I will detail out both the sources with examples in my blog series. In this blog, let me pick up one topic each (Top Line and Transformation Readiness) from the two value sources mentioned above.

1. RISE with SAP: Improving the TOP LINE and fueling your growth engine

Manage the top line: your strategy, your people, and your products, and the bottom line will follow.”

– Steve Jobs

 

Business model innovation is at the core of every CEO’s agenda to thrive in the digital world. The organization needs to align on a clearly defined goal and strategy. Organizations can often deploy more than one type of business model innovation to unlock a new revenue stream. One way to generate new revenue streams is to create value through outcome-based business models, where companies, in addition to focusing on products, also focus on positive experiences with outcomes that deliver value. As an example, industrial manufacturers in addition to pure machine sales and leases, are moving towards revenues linked to improvement in customer productivity. Below are few value drivers that can be used to quantify the additional revenue generated.

  • Increase in revenue from new business models
  • Increase in revenue from cross sell/up sell opportunities
  • Reduction in time to market for new products and services

The process and the IT backbone for the organization needs to transform itself to serve this new business model, where revenues and profits are recognized in entirely different ways. With such models, the finance function needs to be integrated into the cloud service-delivery model at a more fundamental level — because revenue and profit are often based on consumption. What’s needed here is a way of monitoring usage and calculating prices systematically and ways to measure delivery performance across variables across operations. All of this has an impact on everything from deal structuring and execution to invoicing and cash collection.

With SAP S/4HANA Cloud, the core offering of RISE with SAP, you can take control of processes, adapt quickly, and deliver new outcome-based services. As data flows in and out of new outcome-based business models, organizations are in a unique position to generate insights — which matters the most in a digital economy. Below are some of the benefits which SAP customers have realized.

Up to 20%

Increase in service revenue from new business models

15%

Reduction in time to market for new products and services

2. RISE with SAP: Improving the TRANSFORMATION READINESS with cloud delivery capabilities

“If I had one hour to save the world, I would spend fifty-five minutes defining the problem and only five minutes finding the solution. “

– Albert Einstein

 

Below is the value framework for cloud delivery capabilities of RISE with SAP.

As mentioned before, I will detail out the first value pillar – ‘Transformation Readiness’. Transformation projects are associated with high risks due to the following challenges:

  • Digitizing a non-optimized process
  • Technical challenges during the project run phase
  • Integration of processes across heterogeneous IT applications
  • Lack of expertise and know-how

RISE with SAP offering helps in reducing such risks by ensuring organizations have adequate support during the transformation journey. Along with managing the risks, the cloud capabilities can also accelerate adoption of latest innovations from SAP. Let’s talk about the 3 value dimensions for the first value pillar

  1. Achieving process excellence
  2. Leveraging transformation tools and services
  3. Easier integration and extension of digital core

Achieving Process Excellence

A detailed process analysis study based on system data can help in identifying process inefficiencies. Some of the process inefficiencies could be due to siloed processes, redundant process steps, poor system integration leading to lack of insights.

RISE with SAP provides process discovery report via Business Process Intelligence (BPI) and SAP S/4HANA. This report can be run on your SAP ECC (and SAP S/4HANA as well) productive system to benchmark the process performance at a transactional level. This report can create an awareness on the need for change. It can also provide tailored recommendations for SAP S/4HANA capabilities, SAP FIORI Apps, and automation opportunities. Click here to know more and request process discovery for your SAP ERP system. Mentioned below are some of the related value drivers and the benefits which SAP customers have realized.

Improved

Process efficiency

Faster

Time-to-value

Leveraging transformation tools and services

RISE with SAP supports the transformation journey for existing SAP ERP customers to migrate to SAP S/4HANA and provides essential tools such as Readiness Check and Custom Code Migration App.

Readiness check helps customers to take the next step to realize the improvements identified in the discovery report and provides technical guidance for moving to SAP S/4HANA. It explores the implications of a move to SAP S/4HANA by identifying the changes and the related effort drivers. Thereby, it enables the reduction of transformation risk by running the check during the discovery and planning phases of the project.

Custom code migration app helps in analyzing custom code in current SAP ERP impacted by SAP S/4HANA conversion. It guides on the unused custom code which can be left behind. Thereby, it enables safeguarding of the existing investments in SAP ERP and reduction of the custom code footprint at the same time. Mentioned below are some of the related value drivers where benefits can be achieved.

Reduced

Transformation risk

Reduced

Custom code footprint

Easier integration and extension of digital core

RISE with SAP offering brings together the best solutions from SAP portfolio ( SAP S/4HANA, Business Technology Platform, Business Networks, Industry Cloud, HXM, etc.) to optimize and extend end-to-end processes that enable acceleration of cloud innovations, both within and beyond the organization boundaries (see this page for the latest information on RISE with SAP offering). Most of the value benefits coming from these process extensions will be use-case and industry-specific. However, all RISE with SAP customers can expect a benefit of faster time to market for innovations with the use of pre-built integrations and extension tools. Mentioned below are some of the related value drivers where benefits can be achieved.

Faster

Time to market for innovations

Improved

Employee engagement with task automation

Key takeaways

  • RISE with SAP can help improve the top line by facilitating the new business models and revenue streams along with increase in cross-sell/up-sell opportunities
  • RISE with SAP can help in improve transformation readiness with the Business Process Intelligence (BPI) capabilities, tools and services and easy extension of digital core

To know more about the RISE with SAP value framework click here

Next Steps

Depending on the starting point of organizations (existing SAP ECC / SAP S/4HANA / net new customers), they can expect to achieve benefits across value sources A and B. Let’s get started on this journey of understanding the value. To determine the value proposition of RISE with SAP for your organization, you can contact us at valuemanagement@sap.com

In the next blog, we will explore how RISE with SAP can help improve bottom line performance of companies. We will also detail out the second pillar of the cloud value framework – ‘As-a-service’ experience”.

 

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