Company Confidential 0

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Company Confidential
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Increase ROI on SCM Investments with
Composite Applications

Raghunath Mahalingam

05 May 2008
Company Confidential 2
Contents
Inhibitors to ROI realization

Will SOA improve my ROI Realization?

CAF Scenarios

Extending CAF with SAP standard functionality

Road Ahead





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Inhibitors in ROI realization in SAP Investments
Common end user thoughts
My business process in unique. Large generic ERP / SCM
applications cannot meet my unique needs
I can change my business model much easier than my own
software programs
Legacy applications are critical to my organization and few people
know them
Real time data integration between heterogeneous systems are
nice to hear, difficult to achieve
I should be able to run my business with MS-Office, Intranet and
Blackberry Apps. I dont care about back end systems
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Will Service Enabled Business Architecture improve my ROI
Facts
Even the best ERP systems may not address all the unique business
processes of customer organization. However, they provide robust
back end for core processes
Business model changes are the order of the day. Need an
application which has flexible design and easy maintainability &
upgrade path
Some of the existing legacy application may be unique and may not
map to equivalent functionality in ERP/SCM Applications
Good news - Ecosystem ready for SOA as many customers have
upgraded to SAP ECC 5.0/6.0 that is service enabled

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What is CAF & how is it useful?
Definition
The Composite Application Framework from SAP is a development environment where end
users can model the business processes. CAF enables the separation of services from the
underlying business logic & creates a reusable repository of component objects


What does that mean to me ?

Processes are user centric and need solutions with easy interface and work flows
CAF ensures Code-free modification of process flows using reusable process components
Provides relevant customization opportunities within the process
Enables enterprise-wide collaboration
Can be installed and adapted in a very short time

Let us see the value of CAF through some scenario examples
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Scenario 1 Enhanced Warehouse Analytics
Robust product segmentation tools required to hedge
Reduced life cycle and faster obsolescence
High demand uncertainty coupled with a high supply uncertainty
Frequent New Product Introductions
Low reuse of parts
Frequent promotions and Markdowns
Seasonal Demand
xApp fitment
Use forecast to predict product behavior and thus leverage benefits of
advance planning systems
Define and track action plan easily on slow and non movers
Accurate product segmentation and product specific action control
Early disposition of unwanted SKUs to reduce SKU carrying costs
Maintain Smaller and Stronger Portfolio of Products
Focus on High Performing Products
Business Value
SAP Gaps
Past history may not be only factor to decide slow movers / non
movers
Easy tracking of user actions on slow movers/ non movers not available
Industry
Challenges
43% of true new
products, 51% of line
extensions, and 77% of
so called me-too
products are dead or
almost dead within
one year of their
introduction

Loss on disposal of
obsolete
inventories = 1%
of COGS
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Enhanced Warehouse Analytics Screenshot
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Scenario 2 - Replenishment Dashboard
Actual demand for a given product is highly unpredictable
Inventory carrying cost is high
To achieve reduced inventory levels with out occurrences of stock outs,
collaborative replenishment strategies (e.g. VMI or CMI) with top retailers is
recommended
xApp fitment
Comprehensive Order Dashboard built on top of SCM system
Simulate and decide perfect order quantity to replenish
Provisions for collaboration and consensus
Reduced manual effort for VMI planners to validate planning results
Easy to use decision management tool with replenishment order
create, modify and delete facility
Business Value
SAP Gaps
Standard SAP SCM order data view contains only basic order data (i.e.
Product, Quantity, date )
In order to know other critical parameters (like target cover, etc.)
users needs to switch to different screens. No simulation features
Industry
Challenges
64.3 76.4 31.1 Total Inventory Days of Supply
Median Average Best in Class Cash-to-Cash Cycle Time Component Metrics
83.2% 77.7% 99.2% Scheduled Orders to Customer Request
Median Average Best in Class Delivery Performance (%)
64.3 76.4 31.1 Total Inventory Days of Supply
Median Average Best in Class Cash-to-Cash Cycle Time Component Metrics
83.2% 77.7% 99.2% Scheduled Orders to Customer Request
Median Average Best in Class Delivery Performance (%)
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Responsive Replenishment Dashboard Screenshot
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Scenario 3 : Distributed Order Management Process
Create Sales Order
Workflow Based
Pending Task
Invoke Outbound
Delivery
Create Outbound
Delivery Request
Outbound Delivery
Request
Pick - Pack - Ship
SO Closure
Create Post
Goods Issue
Inputs for KPI
Confirm Outbound
Delivery Request
NY Logistics Inc Distributor /
Customer
Patni Computer Systems
UDDI
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Other CAF enabled Business Scenarios
Compliance management (CAPA) in pharma/ life-sciences
Dollarize SAP SCM planned order recommendations for quick
S & OP decisions
Supply Chain Events/Exception notification in Intranet / MS Outlook
MS-Excel download of Production Orders, quick adjustments, and
what-if analysis in MS-Excel (e.g. real time capacity simulations) and
upload back to SAP

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Available list of services from SAP!
Automatic Identification Label Processing
Confirmation and Inventory
Customer Freight Invoice Request
Processing
Customer Requirement Processing
Delivery Collaboration
Delivery Schedule Collaboration
Demand Planning
External Procurement Trigger and
Response
Inbound Delivery Analytical Source Data
Inbound Delivery Processing
Interchangeability Group Management
Inventory Collaboration
Invoice Collaboration
Kanban Processing
Location Data Management
Logistics Area and Storage Management
Manufacturing Work Order Collaboration
Outbound Delivery Processing
Process Tracking
Product Data Maintenance
Product Demand Influencing Event
Collaboration
Product Forecast Collaboration
Purchase Order Analytical Source Data
Purchase Scheduling Agreement Processing
Replenishment Order Collaboration
Retail Planning
Return Delivery Instruction Collaboration
Sales Order Analytical Source Data
Service Parts Planning
Shipment Processing
Site Logistics Processing
Source of Supply Determination
Supplier Freight Invoice Request Processing
Supply and Demand Matching
Supply and Demand Matching (Foundation
Layer)
Supply Chain Exception Collaboration
Transportation Customer Quote Processing
Transportation Order Processing
Transportation Request Processing
Transportation Supplier Quote Processing

Services in SCM . More extensive list available for SAP ERP !
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CAF Implementation - Salient points
Identify scenarios where service enablement yield maximum ROI
Map business process with available SAP service and undertake gap
analysis
Assess service capability of current IT landscape
Leverage available enterprise architecture framework
Use available adaptors for legacy applications to fast track integration
Setup a Governance Model for Application Lifecycle Management
Close interaction with SAP for faster resolution of technical issues for
newly introduced services




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Extending CAF with Additional Functionality in Standard SAP
Have I used all the features of standard SAP?
Have I re-invented the wheel or customized with out understanding
actual power of configuration and standard contents ?
Can I integrate SAP data to other common office tools like Microsoft
products (outlook , excel , intranet) and devices like Blackberry


Scenario Example - Evaluating supply chain efficiency through
analytics
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Measure KPIs using SAP BI SCM Analytics
Standard SAP BI
Pre Packaged Analytic Capability
No extra purchase In Built Ready to
Go Installations
KPIs defined by SCOR
Easy Interpretation of delivered reports
incorporating business process variations
KPIs across the entire Supply Value
Chain
Patni add-on using CAF
Integration with Heterogeneous IT
Landscapes via Patni Tool Kit
Closed Feedback loop capability to
Source System
Information Broadcasting over different
communication mediums
Black Berry At your finger tips
Visual Composer Enterprise Portal
Business Objects Visualize / Simulate
What if Analysis - Predictive Analytics
Have I exploited full power of standard BI content ?
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KPIs At your Fingertips
Perfect Order Fulfillment SCOR Level 1 Metrics
Logon to Blackberry
Perfect Order Fulfillment =
[(% Orders delivered in full) +
(Delivery performance to Customer commit date) +
(Perfect Condition)] / 3
Send MAIL to responsible person
Mobile Analytics Perfect Order Fulfillment - Level 1

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Perfect Order Fulfillment SCOR Level 2 Metrics
% Orders Delivered in Full =
Delivery Quantity Accuracy
Delivery Performance to Customer Commit
Date =
[(% Orders shipped on due date) +
(% Shipments delivered on time)] / 2
Perfect Condition =
[(% Orders delivered damage free) +
(% Orders delivered defect free)] / 2
Mobile Analytics - Perfect Order Fulfilment - Level 2
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Perfect Order Fulfillment SCOR Level 3 Metrics
% Orders Delivered Defect Free =
1 [(Items returned for defects by customers
incoming inspection) / (Total number of items
delivered) * 100]
% Orders Delivered Damage Free =
1 [(Items returned for damage on
delivery) / (Total number of Items
delivered) * 100]
Send MAIL to responsible person
Mobile Analytics - Perfect Order Fulfilment - Level 3
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Perfect Order Fulfillment
Damaged Deliveries (Root Cause Analysis)
Mobile Analytics - Perfect Order Fulfilment - Level 4
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STANDARD SAP BI










Patni add-on










Identify
Performance
measures
Map Measure
in SAP BI
Install
SAP BI
Content
Perfect Order
Fulfillment
Return
Analysis
STEP 1 STEP 2 STEP 3
Implementation Timeline
STEP 4
Setup
Business KPIs
1 Week
1 Week 1 - 2 Weeks 1 Weeks
STEP 5
Closed
Feedback
to Source
What if
Analysis
3 Weeks
Black Berry
Integration
Implementation Methodology for BI Content Activation
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Road Ahead
Re-look your implementation to identify unrealized benefits of SAP
standard features
Identify a candidate for CAF which brings maximum value on your IT
investment - key customization or Integration with legacy in your
organization
Explorer IT vendors who are ready to built risk free CAF prototype
as proof-of-concept
Evaluate and decide GO / NO-GO
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Patni SAP NetWeaver COE
Strong vertical focus
Solution Architects from each
vertical business unit provide
domain knowledge
Specific labs like lab for
research in specific domain
SAP Partnership enables early
ramp-up on new product
releases
Deep application and SAP
architecture knowledge
Organizational focus on
expertise - Architectural CoEs:
SOA/EA, BPM, Microsoft, IBM
Over 200+ consultants
Fast ramp up on new
technology implementation
Patni Strength
Consulting Services
Focused eSOA SOA workshops and
requirement elicitation workshops
Architecture evaluation
Help customers define "road map"
for moving to the new architecture
Implementation Services
EP, MDM, BI Implementations
Implementing Enterprise Services
Model based on business strategy,
existing IT portfolio and business
processes
Web Services Enabling of Legacy
Applications
POCs for different SOA scenarios
Integration Services
Cross-Application Integration using
PI
Portal Integration with SAP/other
applications
Integration & extension of Mobile
Infrastructure
SOA Product centric application
integration
Service Portfolio
We welcome you to visit us at Booth No. 572
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Thank You
We welcome you to visit us at booth No. 572
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