Valuing the Millennium Enterprise

1
Valuing the Millennium Enterprise

• Huh?

2
Introduction

• How to measure and maximize value to
  stakeholders
  
• How to use SAP capabilities to execute and
  implement our enterprise strategies

3
Overview

• Enterprise Stakeholders
• Aspects of Enterprise Value
• Enhancement of Measures of Performances by SAP
• Value-based Management
• Balance Scorecard
• SAP Strategic Enterprise Management

4
Enterprise Stakeholders

• Customers
• Students
• Patients
• Who else?
• Investors
• Vendors
• Managers
• Employees

5
Aspects of Enterprise Value

• Customers
• Price
• Quality
• Flexibility
• Utility
• Range of Options
• Responsiveness
• Reliability
• Standardized interfaces
• Durability
• Maintainability
• Upgradeability
• Support
• Service
• Innovation

6
Aspects of Enterprise Value

• Shareholders
• Increased future cash flows
• Assured future cash dividends
• Share price appreciation
• Accounting Information
• Relevance
• Reliability
• Neutrality
• Fidelity
• Verifiability
• Comparability
• Consistency

7
Aspects of Enterprise Value

• Managers
• Freedom to articulate the vision of the
  organization and translate the same into
  objectives for the enterprise
  
• Latitude to focus on a select set of strategies
  and tactics
  
• Latitude to form the management team that
  believes in this vision and gels with this
  approach
  
• The facility to define the measures of
  performances for the organization as a whole as
  well as the individual business and operational
  managers

8
Aspects of Enterprise Value

• Managers (cont)
• Authority to allocate and deploy systems and
  resources for executing the plans
  
• Authority to institute and implement systems for
  measuring and reporting on performance for
  different functions and levels of the enterprise
  
• Latitude to mold the policies and procedures in
  line with the companys vision
  
• Latitude to commit research and development
  efforts
  
• Remuneration commensurate with risks and targeted
  tasks

9
Aspects of Enterprise Value

• Vendors
• Steady order commitments
• Optimal lead times
• Immediate information on deliveries, rejects,
  returns and so on in terms of the quantity and
  control information
  
• Systematic invoice verification
• Prompt payments for verified and accepted
  invoices
  
• Interfaces with an enterprise wide system like
  SAP

10
Aspects of Enterprise Value

• Employees
• Opportunities for participating and contributing
  significantly to the activities of the
  enterprise
  
• Reasonable compensation
• Opportunities to learn, develop skills, and
  handle challenging roles
  
• Access to all relevant information and resources
  for making decisions and discharging their
  responsibilities creditably
  
• Opportunities for recognition and reward
• Opportunities for advancement
• Opportunities for training

11
Enhancement of Measures of Performances by SAP

• See attachment

12
Value-based Management

• VBM ensures implementation of a corporate
  strategy by directly linking the strategy,
  finance and operations within a company.
  
• Links strategic objectives to resource
  allocations
  
• Focus operational decision making on strategic
  objectives
  
• Combine internal, external, historic and
  predicted views with unfolding actual results
  

13
Value Based Management the four steps

• Understand what factors drive value
• Determine where value is created or destroyed
• Establish value as the criterion for decision
  making
  
• Embed value into the corporate culture

14
Balance Scorecard (BSC)

• VBM system based on four perspectives of
  performance financial, customer internal and
  learning
  
• Aims to provide a balance between
  internal/external, short term/long term,
  financial/non-financial, and lagging and leading
  indicators.

15
SAP Strategic Enterprise Management (SEM)

• Software functions and processes
• Based on BSC to translate strategy into action
  faster and more efficiently
  
• Provides integrated, real time view of corporate
  performance information across business
  structures to assess and enhance corporate value
  for all stakeholders

16
SAPSEM

• Enables executives to simulate, analyze,
  implement monitor, optimize and communicate the
  strategies at the operational level within the
  company.
• Scenario simulation
• Five integrated analytical application components
  operating on the multi-dimensional Business
  Warehouse
  
• Based on Key Performance Indicators

17
SAPSEM

• Business Planning and Simulation
• Business Information Collection
• Business consolidation and Sourcing
• Corporate Performance Monitor (Cockpit)
• Stakeholder Relationship Management

18
SAP AGs ValueSAP Program

• Program to assist SAP customers in evaluating
  their investment in SAP solutions.
  
• Covers all stages of implementation
• Programmed set of questionnaires
• Management activities
• Business processes
• Technical management
• Development activities
• Knowledge transfer
• Help and care
• Program recommends measures in conjunction with
  SAP tools to maximize the value of the
  implementation
  

19
ValueSAP (cont.)

• Program recommends measures in conjunction with
  SAP tools to maximize the value of the
  implementation
  
• Deliverables
• Continuous Business Improvement services

20
Whew!