How You Benefit From SAP Value Engineering
SAP Value Engineering Provides Tools For You To Maximize Your SAP ROI
Profiting From Your SAP System Should Be Your Top Priority
With more than 300,000 customers worldwide, with a heavy concentration in the United States and the United Kingdom, as well as Europe, SAP has developed a highly refined approach to ensuring their customers get a positive ROI (Return on Investment) from their investment in SAP using advanced cost analysis techniques. This methodology, known as SAP Value Engineering is nothing new. It consist of many highly structured phases, including:
- Information Phase
- Development Phase
- Deployment Phase
These phases can more generally be thought of as Assessment, Diagnostic, Prescribe, Deploy, but various industries call them by slightly different names.
A Methodology Born of Necessity and Forged in Steel
The concept of Value Engineering has been well established since at least the 1950s when the US government mandated its use across the Department of Defense. Originally pioneered by GE's (General Electric) Lawrence Miles during WWII, he found himself in charge of procurement of raw materials during WWII when manufacturing was running at a wartime induced, fevered pitch.
He also found extreme difficulty in procuring materials, and like any good procurement manager, started to explore alternatives. Surprisingly, he often found alternative materials that were both cheaper and of higher quality. This realization led to the technique known as Value Analysis. Today, analyzing the life cycle cost of an item, from simple items to complex defense programs, is the norm.
From Mil-STD-105 Sampling to Statistical Process Control
While most manufacturing during World War II relied on random sampling using Mil-Std-105D and subsequent revisions, Dr. W. Edwards Deming was also engaged during the war and later, by the Japanese, to bring Statistical Process Control (SPC) to bear on the problem of identifying and eliminating unwanted cost to poor or unacceptable quality.
Many Industries Use Value Engineering
Industries such as the construction industry, equipment manufacturers, medical instruments makers and hundreds of others constantly strive to achieve a balance between cost and quality while still meeting demanding quality performance standards of their customers. SAP ERP is a key enabling technology for this process and value engineers and the product design team leverage the many capabilities of SAP for continuous value management.
SAP Uses The Customer Engagement Lifecycle To Determine the Best VE Tool To Use
Benchmarking can be used before, during and after a SAP implementation. What SAP provides is the SAP benchmarking service, which is open to SAP Customers and allows them to compare themselves to other participating SAP customers. These benchmarks are especially valuable when you are working on improving your business strategy and execution.
- POV (Point of Views)
These VE products provide a SAP point of view about particular industries and typically, SAP solutions. They fall well within the Thought Leadership category of products and can be custom designed and built for particular customers upon request.
- OI (Outside In)
Typically used during the pre-sales process, they are useful for helping a customer understand where the greatest potential payoff is of the proposed solution. They incorporate data about the customer as well as information from other SAP customers.
- CVA (Collaborative Value Assessment)
These are developed by the SAP value engineering team in conjunction with the customer and involve a high degree of interactivity and deep analysis. The output of these CVA exercises is typically a comprehensive long term SAP roadmap. They will typically include full life cost estimates and reflect a phased in project implementation approach. This is critical when you have well over 1,300 solutions to offer and the customer needs help in not only selecting the solution, but just in knowing they exist.
- Business Transformation Study
Delivered by a BTS (or sometimes BTC) these are really one of the most in-depth value analysis and discovery exercises that SAP, customers and partners can work on. They are, as the name implies, a transformation study, which is designed to not only open your eyes as to the possibilities of what you could do with SAP, but help you select which of the possibilities to pursue.
The key difference between this and all other services is that the BTS team is not limited to just SAP solutions or even SAP services. Taking a holistic team approach, they can and do bring in outside expertise, outside even the SAP eco-system, subject matter experts from within the company across industry, to design solutions to big picture problems.
These are 'bite-sized' tools that allow you to compare yourself to up to 5 other similar companies and normally focus on a specific area of the business, say financial close times. Normally delivered as interactive tools, you can use them to trigger discussion about which areas to focus on.
- SAP Insight
These are more high level thought leadership type studies, focused on the subject du jour. Think impact of IoT (Internet of Things enabled by SAP Leonardo) on healthcare type studies. As the operating spirit of the SAP eco-system is sharing information, this is one more of many methods used to cross-fertilize the customer base with what is being learned about what works and what doesn't.
- Light Health Check
This is a type of 'lite' value diagnostic and can involve using various diagnostic tools, onsite gatherings and other types of approaches that allows SAP to help customers discover 'low hanging fruit' with their system.
- Enterprise Health Check
This is a whole enterprise look exercise. Since SAP, an ERP system, typically touches every business process improvement effort taking place in your business, there is a need to periodically examine how every process is performing and to make Business Process Improvement (BPI) recommendations.
- Value Business Case
This is an approach to developing a business case where the focus is on value, which isn't really that different from any other business case development approach. The main difference here is the focus on getting further value from your SAP investment as well as identifying further tools and processes you could use.
- Value Academy
This is the deepest level of customer engagement in the SAP Value Engineering approach. It normally involves the customer working with SAP onsite at one of the main SAP facilities, such as Waldorf, Germany.
A typical scenario is that a customer is looking for functionality that either doesn't currently exist within the SAP Solution portfolio or wants to extend or combine existing functionality in new ways.
For instance, customers who have linear assets, such as roads, powerlines or railroad tracks have been asked to work with SAP to help perfect the SAP Linear Asset Management solution.
Other companies have worked closely with SAP to develop the SAP Transportation Management (SAP TM) solution, which has then been incorporated into Value Academy sessions with other Logistics Service Providers (LSP) to develop a comprehensive transportation solution that also incorporates the sales and marketing requirements of LSPs.
Learn More With Our Guide to Value Engineering Service Offering Types
In it, we do a deep dive into the various Value Engineering Service Offerings and explain when you should use each one. Just complete the form to get your copy today.
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