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Maximize Value from Your SAP Investment with Business Intelligence and Performance Management
Produced by SearchSAP.com Presenters: Mark Smith and Karen Kirby Sponsored by
Copyright 2008 Cognos, an IBM Company. All Rights Reserved. Reproduction, adaptation, or translation without prior written permission is prohibited, except as allowed under the copyright laws. Design Copyright 2008 TechTarget. All Rights Reserved. Cognos_11_2008_0001PT
This document is based on a Cognos, an IBM Company/TechTarget webcast entitled Maximize Value from Your SAP Investment with Business Intelligence and Performance Management. Ronald Shaw: Hello, and welcome to "Maximize Value from Your SAP Investment with Business Intelligence & Performance Management." My name is Ron Shaw, and I'm the moderator. This document is brought to you by Cognos, an IBM company.
It's my pleasure to introduce today's first speaker to you: Mark Smith, CEO and Executive Vice-President of Research at Ventana Research. Mark is responsible for the overall direction of Ventana Research and drives the global performance management research agenda, covering both business and technology areas. He defined the blueprint for Performance Management as the linkage to gather people, process, information, and technology across organizations to drive effective results. Mark is an expert in Business Intelligence and Information Management areas. As an industry veteran with more than 18 years of experience, Mark worked at companies including SAP, META Group, Oracle, and IRI Software before founding Ventana Research. He has experience in banking, consumer products, food and beverage, insurance, manufacturing, pharmaceutical, and retail and consumer services. Mark, welcome and thank you for joining us today. Mark Smith: Thank you so much. Ronald Shaw: Mark, I'm now going to hand things over to you. Mark Smith: Okay. Thanks so much. I'm glad to be here to talk about a critical topic about gaining the most value from your SAP investment with Business Intelligence Performance Management. Clearly, the need for getting data from your transactional applicationswhether it's financials, HR, or management supply chainis critical, as well as getting access to the data sources and making sure that the information is useable. Obviously, it helps to maintain or reduce cost to make sure that you can actually get the data and use it successfully.
Most people are familiar with Ventana Research. We have been leading the industry in our benchmark research and advisory services, as well as in providing in-depth analysis of what organizations are doing with technology to get the information, to advance your processes. Of course, in today's environment, the ability to get that datamake sure it's available, make sure it's usableis at the top of almost every organizations priority list, especially when it comes to the large, vast volumes of data being put into SAP across your enterprise and ensuring that the capabilities for what you are trying to accomplish are realized.
In today's environment, managing performance and ensuring that organizations are able to manage their business with the appropriate data and metrics has become not just an interest but a mandate by business and executive management. This includes the ability to take metrics and goals, plans and initiatives, the ability to perform, and, most important, to outperform the competition and stay with the pace of business that runs on a daily cycle. Many organizations run on an hourly cycle as the reality of 7x24 operationscustomers coming in online, suppliers manufacturing and distributing products for you, filling servicesare all part of the areas in which performance management plays a critical role. The challenge for most organizations is that enabling performance management has become too complex. Getting the data from our applications is not a difficult exercise, but in many cases our IT infrastructureour business methodshave not been updated to support the needs for performance management and to leverage the data that comes from our SAP environments.
The pressures are clear. BI performance management is a must have. Organizations are not gaining the full value from their investments. Executives are getting tired of waiting. In most organizations, people see that their data is still locked up in their application infrastructure. And if not automated and streamlined, it is difficult for the data from those systems to populate into appropriate business intelligence and applications for performance management so that we can actually help the frontline business users make appropriate decisions for improvement.
We are seeing a mainstream set of organizations using SAP understanding that managing performancenot transactionsis the area of focus, ensuring that we have got the right kind of management processes and information to be able to support performance management, which is about supporting the people and processes throughout the organizations with the right information. But with the right context on having information, you can enable this decision-making process and support performance management processes. And as we look at performance management, it's a three-step process. We look at areas to align performance. How do we understand how we doing with regard to reaching those goals and objectives? How do we make sure that we have the right kinds of initiatives, incentives, and rewards? Alignment is about making sure that we are making our best efforts to achieve the performance targets and goals. And then we focus on optimizing performance. How do we put the appropriate planning and forecasting collaboration in place to help gather together the people to decide what needs to change in order to realign to market opportunities or potential issues and respond more effectively? The third step is understanding performance. How do we understand how well we are performing, get the information about our business, and then bring these three steps into a single unified environment? There Maximize Value from Your SAP Investment with Business Intelligence and Performance Management
has not been enough conversation about the importance of having a uniform platform that can support the three-step performance management and ensure that we don't have a significant path transition of having different products, different architectures, copying and pasting, and spreadsheets that actually increased the time, increased the cost, and clearly increased the risk of organizations not achieving their ultimate goal of improving performance.
We recently saw this in our research in decision-making and performance management. We investigated the business analysts, the directors, senior vice-presidents, and looked at the biggest concern in managing performance. Organizations are shifting toward how to align performances. About 78% of organizations are most concerned about aligning their people and processes to the goals and targets and responding efficiently. Fifty-five percent were concerned about optimizing performance: how do we do the what if, the forecasting, and the planning to determine what kinds of changes are needed, as well as the impact to those goals and targets. And then 36% around understanding performance. This is where you find a lot of dashboards, reporting. And remember on the business side that many of them see a lot of disk per system that they use for understanding performance, but theyve got to use those data points to figure out what has to change. These are the top-level concerns. Most organizations (as we identified in our research) are at earlier levels of maturity in how they use their information and technology to be able to support these performance management needs. As you think about thisfrom how do we now do this on top of our data from SAPwe need to figure out how to build a business intelligence foundation that can be extended and leveraged directly within our organization.
Speaking to business intelligence, the conversation of BI has been going on for some time. I think that many organizations are realizing that a lot of the technology for BI has not necessarily always been Maximize Value from Your SAP Investment with Business Intelligence and Performance Management
balanced with the business needs of BI. What I mean by that is that the purpose of business intelligence is the business user is using to make good decisions, drive actions, and drive improvements. And we need to make sure we have a balanced set of criteria in evaluation for how we use BI to manage our business, grow our business, optimize our processes, leverage and extend our investments in our people, our technology, and investments like SAP. How do we use BI to address the business side of business intelligence, which is in essence the most important element? Many organizations have got themselves into more features and functions than looking at what does it mean to be able to have a common set of capabilities that are available on a consistent manner across the organization.
What I mean by that is that business intelligence is all about getting a blueprint, a framework for your organization to have a common foundation to leverage analytics, leverage information, integrate data from your SAP systems, and be able to get this blueprint so that you can start to reduce the complexities, get better consistent interactions with our systems, and support the business analyst and management's needs for harnessing the full value. Regardless of whether you are trying to do reporting, present data, model data, dashboard, search, or planning, we need to make sure that we have a common data foundation to support these capabilities. Because, in essence, this is the foundation for enabling performance management processes. And what we want to do is reduce the time and overload of having issues that result from running different sites or systems across our business.
One of the key things that I think has come finally for many of us that have been in the industry for more than a decade is getting the full understanding that a dedicated focus on business intelligence and enabling performance management has proven to be the right path. The scrutiny of should we do this in our ERP system, should we do this in our CRM system had finally passed as organizations realize that Maximize Value from Your SAP Investment with Business Intelligence and Performance Management
these systems like ERP have been focused on driving transactions and doing accounting, doing HR or bill materials, tracking, but they are not the systems that you use for planning and performance management. Although ERP stands for Enterprise Resource Planning, it was not fulfilled on the vision of planning performance management, which is why organizations are turning toward dedicated platforms and capabilities for supporting this. Many organizations have used a lot of cycles and consulting. They have tried to force many products that were not specifically designed to meet the challenges in the 21st century for performance management. Organizations have reached this realization and now understand that weve got to build systems that can actually support our environment.
This dedicated focus has been realized as the conventional wisdom: we now understand that just as we had dedicated systems for ERP and supply chain and CRM and PLM, we need to have a dedicated system for supporting BI performance management. We need to harvest the value of these investments. We need to integrate data from specific areas and then be able to provide the right operational BI needs, all the way up to the strategic BI needs. And then, put it into the right context, which is about the performance management process that I spoke about in making us become a serious reality.
Unfortunately, many organizations are still working through politics and biases. Instead of getting on with life and understanding that we need to establish the business requirements, the user requirements, the information requirements, and the functionality requirements for business and get the right system that meets that purpose instead of just getting caught up with why we bought that vendor and getting caught
up with lots of other political issues about multiple investments. We now need to move forward and minimize the risk point of not having the right data, having the right systems to advance things forward.
Many of you realize that leveraging your SAP investments and understanding where you need to get your data from these systems is not an easy task. Many organizations and many frontline business analysts have turned to copying and pasting and other methods. This is not a good step. We need to actually enable technology to do the appropriate data integration from our SAP systems and bring this into a uniform environment and then be able to provide the broad range of BI needs and enable performance management processes. Now, as many of you realize, there are many things that we can do to help support this. Data integration and supporting your information management needs on top of SAP is a common and very important step.
As we look at establishing a new framework to leverage our SAP investments, we need to make sure that we are encompassing all of the different ranges, versions, and instances of SAP in our environment. No matter if we are running CRM, ERP, a supply chain, or even BW, weve got lots of different systems that are interfacing through enterprise applications. If we can focus on layering up a framework by using a common information management technologies, building that uniform platform, and enabling performance management, we can now start to rationalize the requirements and needs to determine the best path to get not just the technology but the information and the right context for our people and processes. We need to start to normalize this infrastructure so it can support these kinds of needs.
We cant just get caught up on architecture and technology, because frankly the interim purpose is to make sure that we simplify the business analysts day on how they can use this data for improvement. Recently, in some decision-making and performance management research, we found that the top two time-consuming items are about reviewing data for quality and consistency issues and trying to determine the root cause of the current situation. So what we have today is lots of infrastructure and data thats not been very well aligned. And analysts are spending too of their time working through the lack of infrastructure.
Now, as we look at making life simple for business analysts, we have to realize that we now need to audit, integrate, or eradicate spreadsheets. What I mean by that is that spreadsheet should be integrated into your BI environment. We need to look at standalone spreadsheets and find a way to automate and improve this environment. BI technology can do a great job by using spreadsheet add-ins to embrace and extent. And use spreadsheets as a fine tool, not as the data storage tool. As we do that, we can also find ways to make sure the spreadsheet can actually now start to harvest the value from these SAP environments and bring them into a common environment.
With regard to establishing requirements, you also need to make sure we establish a set of shared requirements. Shared requirements from BI and performance management, looking at it from both a business and IT perspective. As we look at this, we should look at a question of five areas that we have outlined here: business and financial, organizational and business process, usage scenarios across business, capabilities and functionality, and technology and architecture. If we look at these, the benefits of having a balanced framework is that we can now start to ensure that we balance the IT need for having high quality and secure infrastructure all the way to the business side of gaining the best results. Clearly, all of these are going to agree that having this common set of shared requirements, evaluating how to make improvements, and leveraging your SAP investments is the right path forward. We need to make sure that we are selecting the right tools for the right job for the right benefits.
Many organizations are still caught up in different kinds of reviews and evaluations. You have to also realize the impact of no action. I know that many organizations have been holding back over the last three or four years to make the tough call of getting a dedicated environment for BI performance management. Clearly, in these economic times and opportunities and global environments along with regulatory compliance and other initiatives, we must realize that there is significant risk of not taking actions to drive improvements. Business kinds of issues include increasing risks or diminishing competitive preparedness, hindering the organizational potential. On the financial side, if we are not able to respond and understand information that's happening within our enterprise, we have basically lengthened time cycles for not managing toward the probability or making changes. We don't have visibility. And for many organizations, governance and review processes have become critical. BI becomes a conduit for many of these tasks.
On the operational side, every day that we don't drive the right kind of action decision, you lose some business. Days have become 24-hour days, because most organizations are operating across the planet and need to be able to respond quite rapidly. I encourage you to think about that, because it's not that this is all going to happen at no cost. It's that the impact of not taking any action is quite large.
At the same time, how do we start to look at the requirements for success? Many organizations have engaged to discuss how we can make sure that we get not just a balanced set of criteria, but to consider the kind of critical success factors required for a successful initiative to expand BI performance management. Clearly, having agreement across levels of the business and IT is critical. I think in many organizations, we don't make sure that we have the right kind of programming plan and efforts to ensure we have the agreement. The commitment is not just sponsorship. It's the leadership. And then we must ensure that we can support these things. Technology plays a key role. You can't enable the performance management process without having the right technology, generating the right information, and putting it into the right context. Also, we must have the right dialogue, because we need to continue to have this interactive dialogue in supporting collaboration and interactions and making sure we have the right quality of data and that we are working much closer together than ever before. And if we are going to standardize particular methods and reduce complexities, we must make sure the IT projects are successful and that we actually make those kinds of improvements.
The top five things shown here will help you as you look toward successful engagement BI performance management SAP. The top five inhibitors to success that we have seen in organizations are, number one, Maximize Value from Your SAP Investment with Business Intelligence and Performance Management
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turf protection and politics. Too many people worry about what previous decisions have been made, what technology is supposed to be what, instead of just moving forward and thinking about how can we make it better. Two, lack of business and IT collaboration. Not having a common balance for the requirements. A program and a plan didn't help. People all understand what's happening. It is important to make sure that we are making the incremental steps in the right direction. Number three, the one vendor and low TCO myth. Whether or not it's a range of vendors, we find that companies get too caught up in thinking that they are going to find one vendor, and it's all going to be low cost. Haven't we already bought these capabilities? The reality is that we have to think about the business needs. Not enabling these benefits and not making steps in the right direction can significantly impact your organization. Four, multi-year business transformation projects. I find so many organizations caught up with trying to overload a transition to a new version of SAPa rationalization of SAP infrastructuretrying to wrap this all into one big project. This is not a step in the right direction. Number five, business and IT outsourcing in off-shoring efforts. We find a lot of CIOs in IT organizations letting other cost reduction exercises get in the way of not finding the full value in their investment of SAP.
Now, let's focus on the positive side. What are some of the steps to success, and what can you do to drive better improvements? Number one, assess the existing business, user requirements, and priorities. Make sure you have the right kinds of capabilities. Number two, ascertain the conflicts and negotiate resolution. Engage these dialogues. Make sure we can help and minimize the tension. Number three, establish shared evaluation criteria. It is critical to ensure you have complete buying across the board. Number four, assess the short and long-term costs in trade-offs. And number five, let's make sure that we build a business case that includes both current and new investments and maximize those effectively.
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So far, I have outlined what you can do to maximize the value from your SAP investments with BI performance management. Clearly, having a balanced team of business and IT professionals and finding a way to focus on the outcomes and results can help you minimize delays, make better decisions, and get the entire organization excited about what's possible, focused on decision making, interact with the information in a much more impactful way, and gain the kinds of support that you need in your organization. With that I will pass it back to Ron. Ronald Shaw: Great, thanks Mark and thanks. It's my pleasure to introduce Karen Kirby, an SAP Marketing Executive with Cognos. Karen, welcome and thank you for joining us today. Karen, go ahead and take it away. Karen Kirby: Thanks Ron. I'm going to focus on how IBM Cognos 8 Version 4 can embrace, enhance, and extend your investment in SAP. Here is a little background about IBM Cognos 8 in SAP. Cognos has been an official SAP software partner since 1997. At present, there are over 300 IBM and Cognos software resources located in Waldorf, Germany focused on solutions with SAP.
The IBM Cognos 8 solution is SAP certified, specifically using the OLAP BAPI interface as a means of connecting to the SAP business warehouse. Furthermore, we provide certified solutions to connect either SAP R/3 or ECC, also known as the SAP Business Suite. Customers have the option of deploying on the SAP web application server. They can deploy in the SAP. We are reportedly using IVUs that are provided as a part of Cognos 8. Cognos 8 provides comprehensive business intelligence and performance management capabilities that leverage SAP as a data source. Some of the largest business warehouse Maximize Value from Your SAP Investment with Business Intelligence and Performance Management
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customers maximize the value of their SAP investment with Cognos 8. With regard to some of the SAP product milestones, we have been working with this for quite some time. Cognos is one of the first BI vendors to obtain SAP certification.
Let me just talk about some of the major milestones. In 2003, we received the SAP power by SAP NetWeaver certification. In February 2008, we released Cognos 8 version 3. We re-certified in NetWeaver 7, and in November 2008 we are releasing Cognos 8 version 4.
Taking a look at the IBM Cognos Performance Management System, you can see the richness of what we provide. If we focus on the light blue half of this and we started the performance management platform. This provides a unified Services Oriented Architecture that allows you to access and optimize information, organize and capture content, deploy and manage applications architect, and integrate solutions. On that common platform and that common technology infrastructure, we started building up. You can manage dimensions, build data sets, define your metrics, capture content, and take advantage of the wide range of universal capabilities in Cognos 8. Query, reporting, analysis, scorecards, new capabilities with Go! Dashboards, planning. And deploy those solutions and deploy that information in the format that you need for your end-user community, depending on the language, the format in a web browser on mobile devices with Go! Mobile, and so on. And at the top we have business applications and blueprints that put some business logic around the technology stack. Now if we look at the bottom and look at the information infrastructure and embrace the strength of IBM and IBM's abilities around data quality, master data management, Infosphere, InfoServer, and so on,
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Cognos 8 version 4 continues the integration extension into those areas. I will talk a little bit more about that later.
What's the value of this integrated platform, this unified platform? Consistency, consistency around data access, a single metadata layer, single architecture delivered across our capabilities. There is seamless interoperability. You can share capabilities. You can create an ad hoc query in one area, take that query, turn it into a fully formatted report, incorporate it into the dashboard, and deliver it to the mobile device. Especially in a tight economy where access to business information is critical (as is the ability to react to different types of this information and shift in priorities), getting that information out to the business user community and in a format that makes sense for them so they can take the right actions and make the right decisions is critical.
Lets talk more about IBM Cognos 8.4 and this greater synergy with IBM's information infrastructure. This includes InfoSphere's data warehousing, business glossary, data integration, and data quality MDM industry models, as well as data management DB2 and content management and FileNet.
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We are SAP certified powered by SAP NetWeaver. We work within the SAP portal using the iView that we package with Cognos, and we integrate with SAP security.
How do we embrace SAP's infrastructure, the skills that you have invested in SAP, and your data assets in SAP? It's the interoperability. We access all your structures, info providers, info queries, as well as multiple versions and instances of BW. No matter how complex your organizationand most global organizations are complexwe access all of that. We support, provide native support for business rules, hierarchies, and problems in BW. We extend your investment and expertise and index queries. Talking about Cognos 8 integration with SAP BW, we have a patent-pending next generation integration, which is unique to Cognos. I will detail that later. We have enhanced cashing. We have enhanced MDX tuning to fine tune and maximize that code. We use the BW authentication and authorization without replication so there is no duplication of effort and the possibility of becoming out of sync.
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We provide the IBM Cognos 8 capabilities with SAP BW, including things you expect from Cognos: business intelligence, query, analysis, event management, metrics reporting, scorecards, and some of the additional options with Go! Office. If you want to embrace Microsoft Office, provide the information on a mobile device and new capabilities with Go! Dashboards and version 4. And if you look at the whole performance management platform, planning and forecasting is around sales and operation planning, enterprise planning, financial management control, and industry best practices.
What are some of the common challenges that organizations face around information? Is the information static versus dynamic? Are we looking at business data? Are we looking technical sources of data? Is the data available as information or just as technical data? What's the reality of an IT environment? There are lots of data sources not only with SAP but potentially with other ERP systems, maybe CRM, maybe sales force, maybe mainframe, and legacy applications, as well. And then there are different tools for different needs. There is a lot of overlap and redundancy around different types of capabilities and maybe redundant applications during some of the same functionality. Last of all, quality IT resources you do not trace. The issue is how do you leverage IT for their IT skills and expertise where they have limited availability, limited bandwidth, as well as where they are dealing with backlogs and trying to prioritize for the technical side and for the business. And using IT professionals for what they arewhat they are intended to do versus becoming an information teller.
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Providing open access to information in different formats. I talked about whether it's in Officeyou want to incorporate some refreshable content into your PowerPoint presentation. Providing search capabilities, you can find answers and the ability to find related content to the business information for which you are looking. Go! Mobile provides information for a field organization, for an executive organization on their mobile devices, enhance dash boarding with Go! Dashboards in version 4, and some express authoring to provide some access for business analysts to create statement style reporting.
What are some of the benefits? Efficiency, reduce reliance on IT. Looking through some of these steps, how long does it take to get the report, build it, and how many iterations are required? When you work through all that, it could take six weeks or more to generate a report. Can your business wait? How do you become more efficient on the IT side and put some of that in the hands of the business users? This is a quote from the U.S. Army ARDEC talking about exactly that. Does this allow them to put reports in the hands of the users and become much more efficient and adding much more value and getting value out of their SAP investment?
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Flexibility. Better decisions by utilizing all data and applications. This is the reality of organizations. You have different data sources. You have different user audiences. You need to provide the information in the format that makes sense to them, and you need to provide a single version of truth. This is a quote from our customer at Quick, who said this is the dream of a CFO that they have diminished the number of applications that they use for data. They all communicate through Cognos. It's a single source of information, single source of data, single source of truth.
And then, finally, agility. This is probably one of the toughest things. How do you get the information to the users as quickly as possible? Talking about some enhancement on the technical side to put it in the hands of the users more quickly. Our customer Checkfree is talking about turnaround time. The data refresh rate has been improved from 24 hours to hourly. They have put the information in the hands of the business users in a format that allows more time for analysis versus users trying to collect information, combine that information, and turn it into information for their specific analysis. It is important in the context of a tight economy to have tighter controls on the data side and also respond to a changing business focus.
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The patent pending next generation access to BW. This is just walking you through the approach. The SAP provider in Cognos based on what they are trying to do. They access SAP and look at what provider is being accessed in this query, this data access, and how much data will be provided. That information is then sent back to Cognos. Based on that, optimize MDX is created and passed into BW. Knowing exactly how that should be structured to best collect that information. The benefit is that it improves performance. And returning that information, it has also put less stress on BW and the MDX processor.
Talking about one of our customers: maximizing their ROI from SAP. So this is their specific example over some of their challenges. There are lots of reports, a lot of people having to be an analyst to create them, lots of numbers, different revisions, debates over numbers, different sources for sales data, and no real single access for business decisions.
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They were able to streamline the process. They created a single dashboard that linked to detailed opportunities. There are lots of downstream advantages. Tactically, the sales teams know what their next steps are. There is more focus on calls and opportunities, but it also provides better visibility. There is a more accurate sales forecast, and they would more accurately be able to look at providing visibility into overall fulfillment.
They also were able to take advantage of the functionality of Cognos with Go! Mobile and provide that information to their field in their mobile devices on their Blackberry devices.
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What were the benefits? It eliminated multiple reports, increased visibility, synchronized the view of sales and the effectiveness of sales, increased precise decision making, increased the ability to be nimble at the end of the quarter, and resulted in better coordination with other areas of the organization with supply chain and sales.
To summarize, what are some of the technical differentiators? Cognos provides the industry's only unified complete platform for performance management. A single unified technology provides a lower total cost for development and maintenance, one solution to learn, and one place to go for any performance management capability. It's a consistent solution roadmap focused on innovation. Going forward, you can develop today without fear of future redevelopment downstream. It provides business access for users through self-service. There is increased business agility, which is critical for any business organization. It reduces time to decisions. Its data source agnostic provides broad heterogeneous application and data support to embrace all of your investments and data assets and provide business value. There is also the flexibility to adapt to evolving infrastructure landscape. Finally, we have a patent pending integration with SAP network, NetWeaver, which is optimized access to SAP BW, and maximize leverage of all existing structures and desk queries. Ron, I will pass it over to you. Ronald Shaw: Thank you Karen. I would like to thank Mark and Karen for taking the time to join us today. I would like to thank our sponsor Cognos, an IBM company for making this event possible. This is Ron Shaw. Have a great day.
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Maximize Value from Your SAP Investment with Business Intelligence and Performance Management

Produced by SearchSAP.com Presenters: Mark Smith and Karen Kirby Sponsored by

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