SAP Analytic App Provides Financial View Of B2B Ops

SAP AG has announced the availability of the SAP Net Margin Analysis analytic application to bring enterprises the most complete financial view of their business-to-business (B2B) operations. The application uses advanced analytics to capture cost-to-serve metrics — the indirect costs hidden in supply chains that service and support customers. Data captured by SAP Net Margin Analysis is readily accessible, helping businesses reduce costs at a granular level and perform better.

SAP Net Margin Analysis addresses the increasing complexity businesses have in servicing their customers effectively and efficiently. As the number of channels, services and stakeholders has grown exponentially, it has become much more difficult for organisations to get an accurate financial picture of an entire B2B ecosystem. “Who are my most profitable customers? Who are my most significant loss makers? Are there costs I can’t account for? If so, where are they occurring?” SAP Net Margin Analysis enables users to answer these questions and more by providing full visibility into all costs. The application goes below the surface to uncover expenses and lines of profit that were not visible before. SAP estimates that enterprises can save up to five percent on indirect costs in the first year after implementation.

“SAP Net Margin Analysis provides actionable data on costs that up to this point were below the radar of many enterprises,” said Karen Lynch, Vice President, Global Wholesale Distribution, SAP. “Previous offerings could only provide a ballpark figure on such costs. Users can now drill down into that data and isolate it precisely to see who their profit and cost generators are. Detailed metrics that took months to produce can now be viewed and acted upon immediately.”

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With the analytic application, cost-to-serve metrics are presented via role-based dashboards and graphic reports that provide a full view across operations. Organisations can analyse indirect costs in sales, marketing and product management to quickly understand how product mix, order frequency, channel, distribution and customers served impact profitability. The solution can also pinpoint indirect costs across customers that share identical revenue numbers.

Armed with this data, users can intricately fine-tune their B2B sales and operations to better curtail these costs, or to better utilise the segments that are the most profitable for the business. SAP Net Margin Analysis offers a “what if” analysis tool so stakeholders can see the possible impact of their actions before they are implemented. Possible courses of action include the elimination of redundant services; creating, eliminating or minimising discounts and reward options; and taking the best practice of a profitable segment and applying it to other areas of the business. Organisations can ultimately decide which scenario best fits their operations and since the data is shared in a unified view to all decision-makers, it is easier to align strategy with execution.