SAP

This week I got a chance to get a view from senior management of two companies on Activity Based Costing (ABC) for their organizations. Neither of these companies is using ABC, nor do they have any plans to go for it in a near future. In this part of the blog series - “How can IT help in implementing Activity Based Costing?”, let’s discuss the perspective of these two companies. Let’s also see how IT can make ABC viable for more and more organizations.

The first of these two companies is an India based Consumer Product Goods (CPG) company with revenue in tune of ~ 40 million USD. The manufacturing facility of this company is predominantly concentrated at a single location which is close to its predominant market. The CFO explains that the company doesn’t need ABC at the moment as its direct cost constitutes the majority of the cost. The CXO’s of this company feel that there are enough improvement opportunities available which should be taken up before an ABC program. I completely agree to this.

The second one is a fast growing global services company, headquartered in India. This company was using ABC till 6-7 years back. With the fast growth of the organization and frequent organizational restructure (every 3-5 years), this company found that ABC is too complex and inflexible to carry on. And it dumped its ABC system for simplicity and flexibility. There are many companies like the second one, which either implemented ABC or tried to implement or at least evaluated ABC, but dumped it on their way. This is not because they didn’t see value out of ABC but primarily because of complexity, inflexibility and cost.

In the part 1 of this blog, we agreed that IT has a definite role to play in adaption of ABC. It promises to make ABC simpler, flexible and cost-effective. One of the critical success factors in successful implementation of ABC is the selection of the right software. As there is no single tool that fits all, the evaluation has to be carried out on a case to case basis. The major evaluation criteria are: 

1. Transactional or Analytical ABC system: An ABC system can be part of transactional system (Eg.- ERP). This is best suited for management reporting, operational decision making, budgetary control, compliance like inventory valuation, COGS valuation etc. Another option is Analytical ABC system. This can fetch data from heterogeneous sources. These are more suited for tactical & strategic decision making and what-if simulations. Analytic systems also provide more modeling flexibility than transactional systems.
2. Business Requirement Fitment: Organizations have different purposes and requirements for their ABC system. The software must be evaluated against those requirements.
3. Integration with other IT systems: The software should easily integrate with the overall IT landscape
4. Scalability, Flexibility and Performance
5. Total Cost of Ownership (TCO): The TCO (license cost, implementation cost, training cost and maintenance cost over a period of time) should be lower. There may be tools which has higher upfront cost and still offer lower TCO because of intuitive user experience and business self support.

Let’s stop at the evaluation criteria for now. The subsequent blogs will focus on the tools available for analytical ABC system, implementation methodologies, analyst view and standing of SAP’s product in this area. Till then please send across your comments and feedback. 

Posted by Vivek Madhav at 9:36 AM | Permalink | Comments ( 5 ) | TrackBacks ( 0 )

If one closely examine the working model of the Pharma companies than at the core of it are the Standard Operating Procedures which are a result of inputs from validated and compliant processes framework (GxP’s, GCP, GLP, cGMP, FDA guidelines 21 CFR Part 11etc) which Pharma companies have to follow to stay compliant with the regulatory authorities. Will it be safe if these are Offshored? The Pharma processes themselves are complex be it Manufacturing, Inventory, Sales etc wherein the underlying IT applications and systems are validated systems and electronics records of each access, process steps and associated documentations are to be maintained. Would we lose control over these processes? Would my data and information be safe? Is there a proven case? These are the typical questions which Pharma companies tries to find an answer for and such questions and apprehensions are to be addressed to significantly boost the Pharma IT Offshoring.

Security of Data, Validation and Compliance adherence is what Pharma companies will like to achieve from their Offshoring venture. Not all IT Service provider may have knowledge in these aspects. Also, the operational processes and tools may differ from one Pharma companies to another. Thus, to be successful the Pharma IT companies should first build a Offshoring model with robust process framework which has a same Validation and Compliance level as if work is being executed from Pharma Companies own offices. For this, in arrangement with IT service provider, trained and certified Pharma Quality Managers should be put in place for each of the IT Projects and Support engagement. Implement the Security and Authorization policies with relevant access. A better arrangement is to have the dedicated floor space with monitored and restricted entry/exit access to project personnel only. Such an arrangement mimics as if work is being done from an onsite location and has the same quality and process adherence. Each work package executed from offshore should be checked and audited by the Pharma Quality Managers in place for these tasks. This would also further raise the confidence level that Offshore work meets the required adherence. Perform quarterly audits over the process compliance from Offshore and plug the gaps. The Offshore Pharma Quality Managers should form the extended team of the central Validation and Compliance department of the Pharma company. Monitor the Non-conformance and process violations from Offshore and include these in the Offshoring KPIs. Once this is sustained for six months to a year than in subsequent phases IT Offshoring volume can be increased to realize the full potential.

Presently, the Pharma companies doing IT offshoring successfully are the ones which have entered into long term relationship with the IT Service providers as both the parties have to incur the intial investment to build and operate the sustainable model. There are successful examples of Offshoring of critical enterprise applications e.g. SAP support and maintenance engagements and SAP Implementation and Upgrade projects to name a few.

Posted by Deepak Kumar at 2:45 PM | Permalink | Comments ( 0 ) | TrackBacks ( 0 )

Erik Rasmussen, Founder of the Copenhagen Climate Council, explains: "Reducing the emissions that until now have been so linked to our economic growth and betterment will be an enormous, unprecedented global challenge but will also provide significant opportunities for sustainable growth, green jobs, development and innovation."

"Economic recovery and urgent action to tackle climate change are complementary – boosting the economy and jobs through investment in the new infrastructure needed to reduce emissions." - The Copenhagen Call.

Since the last two decades there has been an increased focus by the global councils towards the required efforts for the global temperature control and you might have already come across similar statements during the last few months. Speeches like these from the global leaders and the environment specialists seek agreement on effective measurement, reporting and verification of emissions by businesses, and the requirement to gauge the correctness of incentives like carbon credits rewarded for scientific & technological advancements in operations for reduced emission targets. Though I am a supporter to this need of the hour, but here the reason to highlight these excerpts is not to debate on these, but to present an idea about how an SAP offering can help businesses worldwide take advantage of this climate issue to boost their growth.

Now with the initial draft in place, I wish to shift your attention towards one of these lucrative incentives impacting business finances, Carbon Market and Emission trading, the foundations for which were laid in early 1970’s. In short this administrative approach rewards the organizations for reduced emissions while others pay charges for polluting by buying these credits. So, finally what we converge to is a topic to interest our P&L statements.

With these articles and increasing global focus on emissions, a question which preoccupied my mind was “We all know and probably our business work with carbon credits. Do we have technology to calculate the actual profit and help businesses increase profitability through their Carbon Management?”

The answer is “Yes”. SAP has comprehensive offerings for Sustainability Performance Management, but I would restrict this discussion to SAP BusinessObjects Profitability and Cost Management (SAP PCM). SAP PCM is designed to calculate and evaluate the costs associated with individual business drivers and assign these costs at the primary activity/ operational level. This helps businesses gain deeper insights for informed arbitrations for the activities and their impacts through multiple costing & management models like Activity Based Costing. The Activity based costing model helps business assign direct & indirect costs to each business process & activity, for precise strategic business decisions.

With this idea, I wish to say thanks & “adieu”, and also promise to get back soon with details on how SAP BO PCM can help businesses wealthier with Carbon management.

Posted by Abhishek Jain at 9:06 AM | Permalink | Comments ( 0 ) | TrackBacks ( 0 )

Upon visiting the basics of business value and continuing the thread of avenues of adding value to the business  in my last blog - Business Value Articulation for Sustenance - let us now look at a few potential  areas that can help to bring this activity in practice. In the subsequent post in this series I will elaborate on how business value can be articulated.

After assimilating the nuances of the business, the fundamental way of value addition in steady state environment is challenging users’ requirements. Upon receiving any change request from the business ensuring that the requirements are justified with the implications on the business process and are not arising from user’s wish list is a key task, although often assumed to be done well. Ensuring the standard solutions are preferred and reducing the number of changes with custom objects in the SAP ERP leads to business processes mapped in line with the industry standards and best practices. It also results in reduction in the support cost. Some of the must ask questions while screening user’s requirements are as follow. What is the best practice from SAP for this task/activity in the given industry?  Is this available in standard SAP? Is there anything already available in the company (all regions, all SAP instances, and all languages)? What are all the possible options we have and which one is better for business? Is this a one-time requirement or periodic/repetitive? Can this task be made easier by delegating to the Business User with adequate training? Such constructive confrontation on the user’s stated requirements can lead to effective and sustainable solutions to the challenges faced by the business.

Addressing the missing link through SAP ERP can lead to effective utilization of the investment already made in SAP application and can even obviate the need of another IT application, in turn can add value through a simplified process. The activities where a business process or its stage is still carried out off-SAP and can be brought into SAP as a new functionality can create remarkable value for the business. This can not only replace another inefficient application but also bring in a manual task into an organized IT application.  At several enterprises it is observed that all the modules of SAP ERP do not receive the due attention for implementation. Some of the SAP ERP modules may get a back seat in implementation project scope and instead a new interface gets developed with the legacy tools for similar functionality that must be in use for many years. A leading business literature publication, CIO, has mentioned interesting findings on usage of SAP based on a study conducted by IT Consultancy West Trax. The findings stated “in those business areas where some SAP standard transactions had been used by companies, a very high proportion of the available functionality was still going unused”. The take away is that a reality check on the effective utilization of the running SAP application is a good idea for adding value to the business.

Making the SAP ERP more User-friendly is another potential area for creating value. Reducing the system user’s effort to carry out transactions can add value by allowing the user to spend more time on the Business side of his work. It can be a tiny change technically, but as long as the business process realizes a benefit it should qualify as value add. For example, in the ‘Help’ menu available on each SAP ERP screen adding a business specific help option (and creating relevant content at the backend) gives easy and quick access to the business specific way of running the transaction which is typically stored in a Business Process Procedure (BPP) in the document repository of the company. In the absence of such quick help on screen, the user has to all the way reach to that right and updated document in the document repository, read, understand and come back to the SAP screen to execute the transaction. Needless to mention, in this longer route, there are challenges of time and ease of finding the right document which cause loss of productive business effort.

The next promising area for helping the business with the SAP ERP is the Master Data Process Standardization. Having a single version of clearly defined master data creation and editing processes and ensuring user community as well as support staff is updated on it can result in considerable value with the goodness of the data that acts as backbone of business processes. Many a times poorly maintained master data halts business transactions and in turn affects agility of the business.  At a client it was seen that SAP Purchasing master data was maintained by particular users with their own specialized ways (read custom programs) for different countries with practically no useful documentation. There were offline files like MS Access used just to identify the next available number while creating a material master record, since the number was to be used in other ERP instances as well and for retaining the identity of the product in multiple instances the same code was seen as a way out.  One of the main reasons for such arrangement was multiple SAP and non SAP instances and isolated business and support staff hierarchies. The issues with this arrangement were many like not so good quality of master data, inflated lead times for creation and editing master data records, low productivity of the combined SAP support team, high dependencies on the few support staff, custom programs with limitation of modifications etc. The single answer to all such issues is to have single process for master data maintenance across sites, instances, languages and training entire support team on this common process increasing the data quality and availability.

In the next blog in this series I will focus on ways of articulating business value added from the SAP ERP. Please share your views and any more such avenues of BVA with SAP ERP.

Posted by Hemant Pathak at 5:54 AM | Permalink | Comments ( 0 ) | TrackBacks ( 0 )

 Using BSP Element Expressions (BEEs) in HCM E-Recruiting:

Introduction:

 I got requirement to add custom fields for Standard HCM E-Recruiting Page, which is totally responsible for particular Infotype . Its can be easy to display custom fields in any standard BSP page, but updating the new custom field in the same Infotype and also to retrieve the same info in different portal BSP page is not a easy task. We should enhance several class methods to implement the same.

 I got an idea to use BEE methods in Class CL_HRRCF_UI_SERVICES .

 Instead of Enhancing class and Layouts we can use the BEEs to do the same with very less effort.

 Benefit:

By using this approach we can save great coding and layout designing effort.

Getting Started:

I am going to add one Drop down BOX in my Candidate-Job Description Standard BSP page.

Historically functional requirements have remained the key focus of organizations working with enterprise applications such as SAP. However, in their race to meet the functional requirements of business users, many times non-functional requirements (NFR) and usability may take back stage and are not updated.

Business demands for flexibility and responsiveness have always put pressure on IT departments to increase the speed at which new applications are created or changes are implemented. Newer tools (such as Portal, MDM, Composites etc.) and new way of architecting (SOA, Virtualization etc.) the solution are being used by IT for being quick and efficient to support business of the enterprise. Each of these new tools and architecture has their own demands for NFR (performance, availability and security) and usability.

From performance point of view, following four key layers play important role:

• Browser layer
• Network layer
• Application server layer
• Database layer

Browser plays important role for browser based applications. A proper configuration at both server and browser can go a long way in enhancing the application performance over WAN and poor network situations.

Minimize calls to backend servers –

Calls from client to backend server can be minimized by caching the pages (i.e. JS, CSS,  text and other type of files) at client side. This way when the page is opened, browser first checks for it in the local folder rather than making call to server. This improves the browser response time. There are configuration parameters that are required to be set at server side (i.e. Cache control for J2EE HTTP) related to page life by setting up the days for which page remain live.

For enabling client side caching, “Automatically” option should be selected under “Check for newer versions of stored pages” in the Settings dialog box as show below-

Further, it is important to keeping the cached pages intact and allow them to be stored at client side by setting the disk space for the cache to a reasonable value (100 – 250 MB).

However, if web cache is to be kept in disk then there is need to also enable “Advanced cache settings” otherwise entire cache will be erased as soon as the browser is closed. To enable advance cache, following property should be unchecked in Advanced tab:

• Do not save encrypted pages to disk
• Empty Temporary Internet Files Folder when browser is closed

Minimize amount of data to be travelled between Browser and server over the Network-

Even after enabling client side caching, pages will still be pulled from server after they reach their expiry date. Further, data will still travel between client and server. Hence, the next possibility is to compresses the traffic over the network between client and server. Compressed data due to its lower size will need less time to travel over the network and will also significantly reduce network traffic. Again, configuration is required at both client and server side. HTTP settings at server side need to be enabled as “Always compressed” for selected set of file types alongwith MinimumGZipLength.  MinimumGZipLength should not be less than 1024 bytes as it can cause the client to consume more resources when decompressing the compressed content.

Client side caching configuration is set by enabling HTTP1.1 standard known as content-encoding protocol. HTTP1.1 enabled browser indicates to the server that it can accept content-encoding, server then compress the data and transmit it. The browser then decompresses the data from the server, and then renders the page.

Further, in case of JavaScript files on Netweaver server, configuration settings for the  scriptset property should be set as “Optimized”. This will ensure that JavaScript files when sent to browser does not comments and unnecessary spaces and hence will be smaller in size.

Minimize browser side processing to eliminate any delay caused by client side activities (read, write, toolbars and Add-ons)-

Minimize or eliminate any browser side components that slow down page loading. Toolbars/Add-ons are such components. They usually slow down the page loading because they require resources or add more processing overhead. For this “Manage Add-ons” under Tools in IE should be selected to disable the components that are not needed.

Finally, keep your browser up-to-date and add the domain of your application to the white list so that pop-blocker is disabled for the application.  There is a patch published for Internet Explorer 6 that solves slow Web browser performance when browsing pages with JavaScript code.

In the next edition, I will blog about Server related issues for performance.

Posted by Ashish Tewary at 12:49 AM | Permalink | Comments ( 1 ) | TrackBacks ( 0 )

The healthcare industry is one of the fast growing industries in the world. Some of the major segments of the Industry include:

• Hospital Management Services
• Clinical and Patient Management Services
• Biotechnology, Medical labs and Research
• Medical equipment and supplies

The healthcare industry on the present day faces many challenges. Some of them include: improving patient care, controlling costs, meeting government regulations and effective clinical services.

Key healthcare organization objectives include:

• Better quality of care
• Improved patient outcomes
• Increased productivity and workflow efficiency
• Better information at the point of care
• Improved and integrated communications
• Privacy and protection of patient information

Growth drivers of the Hospital Industry

Even in this technology driven 21st century, health remains a basic need of mankind and ‘healthcare-events’ dominate or at least influence life of most of the people. Here are some of the ‘growth drivers’ of the hospital industry:

• Medical Tourism
• Medical informatics & Telemedicine
• Outsourcing
    1. Healthcare services outsourcing
    2. Diagnostic services
    3. Healthcare business management services
• Increased awareness
• Medical Insurance
• Aging Population
• Growing urbanization
• Low cost treatment

Healthcare Industry - Key Challenges

Key challenges in general:

• Managing  complex business structures
• Working with multiple legacy systems
• Rising healthcare costs and low reimbursement rates
• Rapid technology advances in treatment process
• Qualified workforce shortages
• Increasing competition (such as Physician run outpatient surgery centres, specialty hospitals and diagnostic centres)
• Ever stringent government regulations

IT challenges:

• Dependency on multiple small packages and SMEs for day to day operations
• Integration and formal communication among the existing systems are low
• Overall service levels and patient satisfaction levels are low
• Too much dependency on manual processes, paper work resulting in  regular and unusual delays in operations
• High cost dependency on independent product vendors adding into increase in maintenance costs
• Too much workload on employees often resulting in non productive work

The future of healthcare lies in critical convergence of the diverse aspects of this industry towards patient-centric care. This trend obviously results in focusing on:

• Personalized ‘patient based’ medicine
• Consumer directed health plans
• The global, patient owned, electronic health records( EHR )
• Disease and preventive management
• Individual pharmaceutical risk and safety management
• Patient empowerment driven relationships
• Web based, online service delivery

Learn how Infosys partnered with a healthcare major for their SAP Upgrade. Click here to register for the webinar.

Posted by Virupaksha Gopala Krishna Kalaga at 11:37 AM | Permalink | Comments ( 0 ) | TrackBacks ( 0 )

The question of business value of IT is a haunting element of the evolution of IT as a business enabler. Be it implementation, maintenance or upgrade assignment, the first challenge remains demonstrating business value to the decision makers.

Before pondering over the role of IT in business value, let us delve upon and revisit the basics of Business value. Michael Porter’s value chain analysis helps in understanding how an enterprise creates value through a set of primary (like operations and sales) and support (enabling) activities which provide competitive advantage to the enterprise and leads to creation of products or services for which customers become willing to pay a price. The support activities include enabling functions like IT. Moving forward with this school of thought, today we have the process view of business where the functionwise activities are transformed into a series of cross-functional steps to form end-to-end business processes, be it Order-to-Cash or Procure-to-Pay.  The incidence of values creation is now considered to reside in the design and execution of these process steps that finally leads to something worthy of its price in the eyes of the customer.

The business value has two facets  - tangible and intangible. The financial performance parameters like Revenue, Profit, Cost, and Market Capitalization are some of the key tangible parameters that constitute business value. The equally important intangible part includes areas like brand equity, competitive positioning, utility of the products or services to the consumers, social standing of the enterprise. All such elements put together lead to the business performance as well as potential of the enterprise. Any activity or arrangement that helps to boost such tangible or intangible elements should qualify as business value add.

In case of SAP ERP instances in steady state, the support activity is subject to operational efficiency like the consumption of Electricity. The basic expectations from the support team become ensuring continuous availability of the application and carry out minor changes to align with the business alterations. When it comes to major enhancement like more than one person-month of effort, it usually qualifies for a ‘project’ funded by the respective business unit. As a measure of business value the ROI and Cost-Benefit analysis are included in the ‘business case’ for any such new project proposed.

Being in the operational efficiency paradigm, the common arrangement of having SLAs for each task and aligning the support team with it helps just to administrate support environment. Beyond the operational efficiency there remains a considerable scope and it leading to innate expectation of business value add from the SAP support team as business enabler.

Let us now look at what it really takes to do business value add and articulate it. The biggest source of ideas on business value as well as a radical prerequisite is the knowledge of the business.  The more the support team knows business processes, the higher are chances of promising improvement idea coming from the support team. I came across a requirement from the business to develop a report that was touching all modules involved in customer demand fulfillment. In Make-to-Order scenario the user wanted a report to know itemwise details in the following sequence – when the sales order was created and transferred for manufacturing, when was the production order created, if it is WIP how far the production order is complete when the report is drawn, if the raw materials required are available in adequate quantity , if the production order  is complete when was the FG confirmed, when was the QM inspection lot created and if it is cleared by QM, if any delivery is created against the sales order, if the shipping activities have started ,and lastly if  it is ready for goods issue or has any hurdle at any point in this whole chain of activities. Needless to mention this was a complex requirement for custom development. Now let us look at it from the Business perspective. The sales representative wanted to update the customer frequently on the progress of the high value orders placed and also wanted to know if there is any hurdle at any stage to follow up with concerned responsible person. Delivering on or before committed time was in tern linked to the KPAs of the sales representative. Hence the requirement was well called for.

In the sequel of this blog I will describe some of the key avenues of adding value to the business and articulating it. Please share your views.

Posted by Hemant Pathak at 8:30 AM | Permalink | Comments ( 1 ) | TrackBacks ( 0 )

Inadequate handling and management of Product complaints is one of the top findings in the FDA warning letters to the Pharma and Healthcare companies. Though these companies have Complaint Management systems and procedures in place but clearly there is a need for robust solution to meet the challenges of regulatory compliance, having an advance alert mechanism for relevant business decisions on account of product safety and most importantly of being responsive to customer and regulatory authorities.

The Complaint Management encompasses two major parts a) Logistics complaints consisting of damaged goods, wrong shipments, product returns, wrong invoice, etc and b) Complaints arising from Adverse drug effects, Side effects, Intereactions with other drugs. These are collectively known as Adverse Drug Events (ADE) and can be fatal for the consumers. The ADEs if not managed well could result in severe consequences from warnings,marketing suspension,fines,product recall,litigations and thus effecting Pharma companies in more ways than one.

To make the Complaint Mangement solution robust and agile, let us examine the overall process which consists of following steps:
a) Complaint Registration
b) Complaint Assignment and Processing
c) Root Cause Analysis including Corrective Action and Preventive Action (CAPA)
d) Reporting ,Alerts,Trending and Communication
e) Complaint Closure
f) Proactive Monitoring

The weakness in the above process management can be many. The underlying technical systems are low in technical and business value and require multiple manual interventions in the complaint life cycle. The systems are managed on regional basis and thus lack to give a global view of complaints on a given product. The integration between the systems catering to different parts of complaint stages may be missing totally or partially and thus inducing the delay in tracking and monitoring of complaints. The analysis of adverse drug events will involve multiple departments e.g. Quality,Research & Development,Product Life Cycle management teams and the complaint system should facilitate collaboration amongst various teams involved. Because of mergers and acquisitions it is quite likely that complaint handling process is not consistent across the organization.

It is critical for Pharma companies to have a standardized process for Complaint Management which is supported by solution advanced in both technology and functionality to meet the above challenges. The salient features of an effective solution are listed as follows:
• Web based application catering to all stages of Complaint life cycle
• Capability for Workflow, Alerts and Notifications
• Auto routing of Complaints
• Ability to manage documentation and attachments throughout Complaint life cycle
• Internal and Customer view of Complaints
• Tracking & Monitoring of Complaints
• Complaint Escalations
• Single database for all Complaints
• Multiple language capability
• Electronic Signatures and Audit Trail
• Integration with Enterprise Applications (ERP) , Quality Management, Product Life Cycle Management applications
• Integration with Adverse Event handling process
• Collaborative framework to manage complaint process across cross-functional departments
• Regulatory and Internal Reporting,Trend Analysis
• Minimum manual intervention
• Scalable Technical Architecture
• High Performance and Response times
• Security & Authorization for relevant access control

Apart from increased customer awareness and because of ever rising regulatory and market pressures on Pharma industry, there is renewed focus on Complaints Management.Pharma and Healthcare companies should review their Complaint Management processes and systems to incorporate the required capabilities that arenecessary to meet current market challenges.

A robust and effective solution will not only help in reduction of cost of compliance but will also result in increased customer loyalty through improved response times and better customer experience.

Posted by Deepak Kumar at 11:34 PM | Permalink | Comments ( 1 ) | TrackBacks ( 0 )