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How Does S/4 HANA Help Earn the Money You have Invested?

02 Apr 2015 1:30 pm || 0

S/4 HANA is known to be the latest innovative thought process by SAP and been designed with quite a few interesting features. Some of these being a good looking USER interface available on any device, which can be seen anywhere, anytime can be re-imagined and even simplified by virtue of database and business logic. To top it all S4 HANA runs in-memory and columnar base on the HANA platform. This has been made accessible both on-premise and cloud along with being available on bigdata, IoT platform, and not too miss even on the predictive capabilities.

Price Impact on Revenues

We all know and would agree to the fact that the sales price is revised a couple of times depending on various factors such as free offers, discounts, sales campaigns, etc.  The price impact on revenues directly effect of the change in selling prices on the profit. The Positive price impact on revenues tends to showcase the effectiveness of the managers who have turned out to be successful in extracting the value form in the marketplace. This is because of either the product was superior or it was weak as compared to the product offered by the competitor. These reasons are good enough for the varying product positions in the market and it always results in increase in gross profit per unit, provided that cost of goods sold is kept constant. The Negative price impact on revenues always tends to indicate that mostly that average selling price declines because of the strong and fierce competition and results in negative impact on gross margin per unit.

KPI Formula: Price Impact on Revenues = ((((Average Selling Price-Current Period) - (Average Selling Price-Base Period)) * (Selling Quantity-Base Period)) / (Total Revenue-Base Period)) * 100%

Much before HANA was rolled out SAP BW on anydb came to our resort and thanks to this a formula for calculating the period of day, week or month. All of this was quite helpful in gathering all the information required for celebrating our success, and we surely made lots of money too!!
S/4HANA enables the user to calculate KPI on a real-time. What does this mean? Well it definitely means lots more money earning opportunities. 

SAP Fiori Launchpad can be referred to for understanding the impact of the sales campaign which was launched by their managers on their smartphones or tablets on a real-time basis. With the help of this they could immediately control the campaign and also capture any information about the sales, market or revenue, which proved quite helpful.

Inventory Days of Supply - Finished Goods

The Inventory-Days-of-Supply allows the user to estimate the duration for how long a stock level of a certain material will be adequate to match upcoming requirements – the basic assumption is always known to be a steady demand function. 

KPI Formula: IDS-fgd [BPX:days] = SUMn (IDS_goodn-classified-as-FGD) / n [BPX:days]

This KPI is quite related with the first KPI, which was known as Price Impact on Revenues. The worst case in trade is certainly not covering the sales orders on a timely basis.

This would certainly lead to more number of un-happy customers, lot many number of complaints and would lead to spending more money to gain back the customers. Real time analytics enable the monitoring of this KPI for each FG which is pushed by a campaign. The whole process can be driven accordingly and the predictive engine can be used to perform more accurate forecast or operation, thus leading to more and happy customers and earning more money.