Lesson learned from ambitious abroad Small and Medium-sized enterprises
This article describes an insight from Value Engineering in Japan and communications with Value Advisors in abroad.
Value Advisor’s role is to help customers develop business strategy with Value Engineering, utilizing operational data on SAP Value Lifecycle Manager and the metrics improvement data performed by SAP solutions.
As mentioned above, Value Advisors are set not only in Japan but around the world to strive to provide value to customers through proactive communication.
Through discussion with abroad colleagues, I sometimes felt that what Small and Medium-sized enterprises in abroad expect to SAP and what Small and Japanese Medium-sized enterprises companies expect is different.
Therefore, I have considered offering what abroad enterprises are satisfied with to Japanese companies which are sometimes said as still domestic-mind.
1. Facts about “Small and Medium-sized enterprises”
With 77% of the world’s transactions are touching SAP solutions.
In Japan, SAP solutions are often said as “for large enterprises”, therefore that figure could be regarded as being derived from business transactions of large enterprises.
However, when we look around the world, SAP solutions are utilized regardless of the size of the company, in countries developed or developing.
In fact, 80% of SAP customers are Small and Medium-sized enterprises that have less than 1,000 employees.
According to foreign Value Advisors, ambitious Small and Medium-sized enterprises abroad tend to :
- Check the enterprise’s position in the industry frequently and quantitatively by accessing SAP Value Lifecycle Manager and benchmarking in collaboration with SAP sales members
- Set the target METRICS with the top-down management based on management strategy
- Consider reinventing operations and building digital applications
In addition, according to the IDC survey result,
- 73% of Small and Medium-sized enterprises in the world that have implemented digital applications have met or exceeded their planned expectations.
That result indicates that the program is effective. (Reference: Potential Digital Transformation Potential for Small and Midsize Enterprises in the World – SAP Japan Press Room ).
According to foreign Value Advisors, executives of Small and Medium-sized enterprises overseas intend to expand their business in foreign countries, grasp the current state and set future goals proactively, as a large enterprise of the future.
And regarding setting strategy, they have two challenges for their further growth.
- To become a “borderless company” which can start business operations immediately after deployment in other countries, standardization of business operations is necessary as preparation.
- Even though the number of employees or departments increases with the development of their enterprise, executives should understand the current situation, and set & change goals adequately.
The SAP Benchmarking program contributed to the resolve these issues.
2. SAP Benchmarking Program
SAP offers “SAP Benchmarking Program” that allows customers to measure the performance of their core operations compared with benchmark data including top 25%, average, and bottom 25% performance.
SAP has developed content and services since 2004. As of 2022, SAP Benchmarking Program has collected anonymous data from over15,000 customers in Japan and abroad, and provides metrics data of 12 operations including finance, supply chain, manufacturing, procurement, and more than 630 metrics data of 35 industries.
Customers leveraging this program can check their current position in their industry by comparing their business operations data with population data.
The program is delivered as a web service whose name is SAP Value Lifecycle Manager and is available to anyone in the world by using the following link:
SAP has received three main feedbacks from our customers.
l SAP collects data from more than 15,000 companies worldwide, analyzes and organizes the data, and has more than 630 global standard METRICSs. That means that not only executives or middle-class managers but also field members can know the global standardized metrics which can be a common language that facilitates comparison with other companies in different countries.
l SAP benchmarking program facilitates setting goals through grasping the performance level with comparing with other enterprises and enable us to clarify business process maturity.
l SAP Value Lifecycle Manager is easily accessible from within and outside the enterprise, and internally sharing objectives boosts achievement levels by efficiently and effectively analyzing and aiming for a single goal across the company, since the SAP benchmarking program is offered as a web service.
3. To leverage SAP Benchmarking in Japan
Benchmarking utilizing SAP Value Lifecycle Manager seems to be more used in Japan, but unfortunately, it is not yet popular compared to overseas, even though Japan has amount of enterprises that are also aiming to be borderless.
There may simply be two challenges.
- Value Advisors and sales representatives have not sufficiently informed this methodology.
- Sense of resistance against services in English
Firstly, regarding providing information, we will be actively communicating through seminars, etc., as well as arrangement of direct offering from SAP Japan sales representatives.
Secondly, regarding language problems, a web browser’s translation function could help well.
The original output of the financial METRICS “Finance costs: the ratio of all costs of finance operations per revenue” and the original output of “Days to close annual books: the number of days to finalize annual finance data”.
The English original version is shown below.
The version auto-translated to Japanese is shown below.
Actually, translation of “Days to close annual books” is not perfect, but it is possible to grasp the meaning. Translation mapping table etc can help customers understand well.
Above all, in light of the “cost of finance area is average level but time to close the books is long,” moving on to discussion of what goal is and how we improve is a key approach and discussion point.
The importance of corporate management is adequate growth and its continuation, and there can be less executives who desire to conduct business only in Japan.
We recognize that “Small and Medium-sized enterprises” are a company based around the globe that intends to expand their business borderless, by gaining markets and customers which don’t stay in Japan, before becoming a “giant global company.”
I hope that the SAP Benchmarking Program helps you consider how the enterprise perform and what is needed with acknowledging current performance level not only in Japan but also countries in which still domestic-mindset remains.