Executives will push IT and their staff to support top-line revenue growth and profitability actively; and, of course, IT professionals will do their best to accommodate leadership. The lines that separated business units from I.T. are disappearing. While I.T. is pervasive too many executives fail to understand that SAP core systems were designed to enable business processing and financial analyses – not revenue and profitability. So what role can SAP play in supporting growth, driving revenue and profitability without deviating from its core of process execution and business analytics?
In recent years, SAP developed many modules aimed squarely at supporting companies as they grapple with the Digital Economy. S/4 HANA, Leonardo, and Hybris represent a new wave of SAP business solutions. Further, these solutions enable prospect acquisition, customer retention and satisfaction of users and constituents generally as the technology aligns with and allows more natural digital experiences. This enablement leads to increased revenue and profitability.
To ensure the decisive role of SAP technology in influencing top-line growth, the revenue creation side of the equation must be pre-defined before starting an enterprise-wide project. Bolting on powerful new systems, after the fact, will not enable a complete adaptation to the digital world. Early planning for enterprise-wide SAP development or upgrade must focus on critical top-line metrics and business processes to:
- Stay competitive
- Enhance the selling process
- Create great customer experiences
- Build loyalty
Keeping it simple – top-line growth is fueled by gaining new customers, retaining old customers, and adding new products and services for customers to buy. Growth is all about the customer. Customers seek out singular experiences which are convenient, natural, mobile and thoughtful. Companies that provide these will enjoy the rewards of loyalty and advocacy.
In typical implementations, SAP is good at reducing costs by integrating operational processes with accounting data across the enterprise. However, when using SAP to drive revenue and profitability, that particular adaptation requires accessing a different layer of data, various analytical tools and ultimately aligning these with sales processes that sit on top of the operational/accounting procedures
A company’s revenue and profit data must synchronize with the sales and marketing strategy to achieve top-line growth. With this in mind, the typical focus of SAP on process improvement, business automation, cycle-time reductions, and other common operational issues is not enough. Revenue generation and profitability require digital adaptations to the typical SAP implementation. The lesson here is not to leave it till too late to consider this requirement.
The Cautionary Tale – A Good Example of a Bad Example
An independent executive sales leader for a consumer goods company recognized the need for prioritization, identifying strengths and gaps and the value of third-party expertise and perspectives, when describing their SAP challenges, the best:
“The whole system did not work when it was launched, and to this day (2014) there are glitches and problems. Many representatives couldn’t even get logged into the new website, and once you got in, the system was not accepting orders, it wasn’t saving orders properly, and it wasn’t reserving inventory. We couldn’t use it.”
Let’s not forget this ghastly corporate failure damaged the reputations of all involved. It also derailed revenue generation for months and tanked profitability.
Among other things one of the main culprits was the back-end operational and process systems which were never designed to work with the front-end sales systems; in particular, the sales representatives.
That was Then; This is Now
A lot has changed in the intervening years. SAP is still, at its core, a business process, and operations improvement system. As discussed in our previous SAP blogs, delivering exceptional customer experiences requires understanding behaviors. This understanding is achieved by capturing vast amounts of free-flowing data and then the ability to create valuable insights by analyzing this data. Smooth supply chains then enable the fulfillment of the promise. Once you push the “order” button, it’s all about the technology “behind the scenes.” As we have all begun to realize, adapting to the digital world is a tricky business and requires careful orchestration across the enterprise and relies on technology from dependable partners like SAP.
Wherever your company is on the journey to digital adaptation, it is and will be engaged in a drawn-out process. Executives, managers, and workers will make thousands of decisions and will rely on teams of people that may or may not stick around to finish the job. I did mention that digital adaptation is a tricky business.
Ok, But Can SAP Drive Top-Line Growth?
Yes, SAP can enable top-line growth. Almost every company seeking to use SAP to enhance revenue and profitability needs to start with a quality design and expert technical guidance. Moreover, nearly every company begins the journey to improve top-line growth by building on top of their legacy computing systems.
Of course, these older systems can’t and won’t lead to complete digital transformation, but they provide a foundation, upon which digital adaptation usually begins. Transformation is a scary concept. Adaptation is a more practical description of what happens and includes adapting valuable technology from reliable partners.
As we have said before; you can rarely buy your way to success. Of course, you need to participate in the Digital Economy, but you must deal with your realities today, and that means keeping the lights on. Your in-house SAP technical resources may need extra help in supporting the present while specialized experts help you move the organization, step-by-step, into the future. Wise and prudent spending demands that precious financial resources be used to drive the company from milestone to milestone, not to fund a wild leap into the unknown.
If you want SAP to drive revenue and profitability, sales and marketing must be involved from the beginning to integrate their strategies, plans, KPIs, and other quantifiable criteria into the blueprint. When that happens, IT can understand and support those processes. SAP does not exist in a void; it is dependent on data derived from discrete or calculated business metrics throughout the enterprise.
While maximizing the use of existing technologies, you need partners to secure the present (supporting current systems) or help deliver the future (that SAP digital experience). These partners need to be digitally capable, technologically competent, and culturally creative. To learn how we can help you with your SAP challenges contact us at SAPinquiry@ruralsourcing.com.
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