• Reporting architecture and its forward-looking vision – How does it fit in? I will explain the key role reporting plays within your SAP solution.
• Real-time reporting – The information in SAP is real time. What does this mean for your reporting strategy? We will look at how information can be categorized in SAP.
• BI – What is BI? We will look at the core aspect of what BI means for your reporting strategy.
• The difference between data and information – Let’s not forget that we are seeking information. Data is not equal to information in this sense.
• UDFs – We will take a thorough look at UDFs. UDFs are key aspects of every SAP implementation, and you will be able to understand their purpose and create your own.
• Reporting strategy – How can you apply the concepts in this chapter to your own project? I will help you understand the key aspects of a successful reporting strategy for your business.

Reporting architecture

What is reporting? Reporting is the analysis or slicing and dicing of business data to identify key performance indicators. These key indicators are used to navigate your business through the ever-changing challenges it encounters during operation.

The true value of a system, such as SAP Business ONE, can be evaluated when it comes to reporting against the data that was collected during its operation. Remember the settings we discussed in the Financials section, such as the Chart of Accounts settings? This was the financial skeleton that we established, which will eventually hold all of the financial data. This system has to comply with the local legal requirements and it uses the so-called double-entry bookkeeping system. In this system, each transaction is represented by a monetary value associated with a credit and a debit that are of equal value.

The accounting skeleton collects all of the relevant data based on the transactions entered in the system with the underlying G/L Account Determination settings. Consequently, all transactions will be documented in the Chart of Accounts as per our settings in the “G/L Determination Settings”.

This is the first crucial aspect to understand when it comes to reporting. SAP Business ONE provides a reporting system based on double-entry bookkeeping accounts, plus the system settings that help us collect key performance data about the business.

Reporting requires a forward-looking vision

The art of reporting lies in a forward-looking vision that prepares the system with additional fields and parameters to collect relevant data as we operate our business. For example, we may sell lemonade as a part of the business. However, it may be a good idea to categorize the type of lemonade we sell to later analyze which type of product had the best sales. In addition, we may categorize the location where we sold the final product. To further apply our case study, we may also want to run a report on a per-salesperson basis to gain information about the salespeople’s performance. It is often quickly decided who the best customers are. Business owners commonly take pride in knowing this. However, it is a good idea to include all of the available information and analyze the data. For example, who may look like a good customer because of the fact that they are responsible for most of our workload, may not lead to most of the businesses’ profit.

A customer may return products often, or complain about them. This may cost the business excessive time and money. Let’s consider the infamous 80-20 rule as an inspiration. This rule basically claims that 80% of the customers are responsible for 20% of the profit and 20% of the customers are responsible for 80% of the profit. Understanding the 20% that drive our business and collecting the right information so that we can learn more about them and improve our services is the challenge at hand. It is an interesting fact that in order to design an efficient reporting system against past data, we need to have a forward-looking vision that enables us to define the data collection framework in the system.

Real-time reporting

The SAP Business ONE solution has an integrated financial skeleton and a Business Indicator Architecture which will be the basis for our reporting. All of the business information is collected in a single system without the need for synchronization or re-entering.

In today’s digital age, it is easy to collect too much information. This often leads to data graves with information that cannot be used. It is therefore important to collect the right information for analysis.

The SAP Business ONE system provides reporting tools that collect the right information for the following areas:

• Financial reporting based on legal requirements
• Business management reporting
• Compliance requirements

What is BI—business intelligence?

An ad hoc definition of business intelligence is “the aggregation of data from different sources and presentation of this data in an integrated format to provide new information.”

It is a fact of today’s business world that the amount of data collected exceeds the information which will be extracted from this data. However, modern tools (such as Crystal Reports) provide sophisticated means to access the data, process it, and present it in a desired format.

Business intelligence comprises the process of using tools (such as Crystal Reports) and automating the reporting process.

The difference between data and information

Let’s focus a bit more on data and information. Data is not information. What does this mean? Let me explain this with relation to the SAP Business ONE system. Only entering sales orders and collecting data in the SAP system will not provide all of the information we need to make informed decisions about our business. We need to think ahead and design the information framework that will collect data based on the way we want to run the business. Let me give you an example which will make this concept clearer. For example, as part of the Lemonade Stand Inc case study, we may want to collect information about the following areas:

• Best salesperson
• Sales per street
• Returning customers
• Most sold lemonade flavor
• Orders with special instructions

Therefore, by using a forward-thinking SAP configuration, we can make sure that all of the relevant information will be automatically collected.

In SAP Business ONE, this essentially means that we add fields in the relevant forms that allow us to specify the required information. For example, we may add a so-called user-defined field to most of the SAP forms.

User-defined fields

User-defined fields (or UDFs) are a simple way to add custom fields to the SAP Business ONE forms. For example, we may want to collect specific information that is not presently accounted for in SAP. It is then possible to easily add a custom field which will allow us to collect the designated information. It is a simple feature that has a great value. In most systems, we need to write a custom program to modify an existing form. I have worked with many accounting and business management solutions, and during the years it has become clear that there is great risk in programmatically changing an ERP system. It basically renders the system non-compliant to any updated or maintenance patches released. Therefore, I recommend the use of programming to implement custom features with caution. The SAP way of using UDFs for simple form adjustments is a good feature because it allows us to make changes without programming. Therefore, the system is still release-ready. This means SAP will continue to support it.

Introducing key terms and concepts

We will introduce the key terms and concepts related to the SAP world. The following areas will be covered in the process:

• Real time and islands of data
• Positioning SAP Business ONE against other SAP products
• Profitable growth
• Establishing metrics
• Prototyping
• The virtual enterprise
• SAP 100-word definition

Real-time information instead of islands of data

The SAP Business ONE system provides better information in real time. Therefore, it helps to minimize the risk involved with the daily decisions the entrepreneur or business owner has to make.

Many business owners have taken a don’t-fix-it-if-it-is-not-broken approach and stay put with their solutions that are already in place. The solutions are most often a combination of a small accounting package and some home-grown software to fix a business need. As their business evolves, new solutions are added, which will lead to a patch-worked solution. In order to make the right decisions, usually Excel reports are created to analyze data for reporting. You may also consider license requirements, different platforms, and programming languages that ultimately lead to a scattered environment with a high cost.

In this environment, manual steps are often required to synchronize data. Extra effort is needed to prepare the reports and they are never 100% accurate. This is not exactly a 360-degree view of a business. However, a complete view of the key performance indicators of a business is precisely what is required to make the best decisions.

The patchwork approach of managing a small business facilitates the status quo environment. However, in today’s business world, change is a permanent factor. The scenario mentioned above most commonly leads to islands of data and inadvertently tends to paralyze the business as key information is not obtained. This happens because the existing system produces not enough or too much information in multiple locations.

The aforementioned scenario, which is described as islands of data, also surfaces in the best-of-breed approach. The best-of-breed, also known as the best-in-class approach, is a valid strategy for larger companies where software solutions are selected on a departmental level in order to meet the needs of every individual in a department.

The departmental level that contributes to the value chain of a business is described as an enterprise resource. Traditionally, enterprise resources were highly specialized and disparate systems. Companies were faced with systems that could not easily communicate. It was virtually impossible to obtain real-time reports because the information was hard to integrate and analyze. On the one hand, the systems produced a massive amount of information, and on the other hand, the information could not be used as it was impossible to integrate the data with the other information sources.

To make the point, I will ask you some questions about your business. You may call this the Observer Effect in Business. The questions range from sales to inventory and service. Basically, I am focusing on the entire value chain. This is a key idea in an integrated software package such as SAP. The added value of having an integrated process versus disparate systems that require synchronization.  

Sales leads and follow-up

Do you have a sales process, and is it organized in stages?

Can you run a report and get information about the stages, and thereby forecast the expected sales?

What happens if one of your best sales people leaves? Can you continue the sales and manage the customers? 

Are you using Act!, 

salesforce.com, Microsoft CRM, and need to synchronize with your finance back-end?  

Delivery

Can you provide tracking information for customers?

Do customers need to call you to get tracking information, or do they get an

updated email once the order leaves your warehouse?

Will you get a notification about a successful delivery that can be opened from the sales order?

Inventory

Do you have excess inventory?  

Do you also run into situations where there is not enough inventory for an important order?

Do you manage inventory shortages by

Are you using an Excel spreadsheet to manage your inventory reorder times and quantities? 

 overstocking?

Warehouse 

 Do you have a method to verify the deliveries before they leave and enter the warehouse?

 Do you know the cost of any mistakes?  

 Service and support

Can you relate a large sales opportunity to incoming service calls? For example, can you manage a service call for a customer with large proposals on the table differently than for a customer who has not ordered in a long time and is behind in payments?

Can customers check the tracking numbers via a web portal? 

Can customers review past orders and re-order easily? 

Is it possible to place service calls via the Web? 

Are sales people aware of the current sales calls for large opportunities? 

  Manufacturing

Can you easily replace a component in a BOM (Bill of Material) with a new one?

Can you trace any item from the sales to the initial purchase of parts, assembly, and delivery?

E-commerce

Does your e-commerce provider charge an extra fee for taking credit card orders?

Do you have to synchronize your web orders with your accounting system? 

Can you track customer activities on the Web?

Can you send customized newsletters to customers based on their buying behavior? 

Do you receive an alert once a new web order is placed?

Do you have newsletter tracking information for customers that you can evaluate during the sales process?

Can you contact customers based on their newsletter reading activity and past purchase history?

 Is your web intelligence integrated with your customer management system? For example, it would be good if a customer calls and you could see his or her open quotes, open service calls, newsletter activity, and order history. 

How long does it take you to start a web site with e-commerce? Just think about it for a second. This should be an automated process. You should be able to have dozens of sites up and running, send out newsletters, track feedback, and measure success. 

 Industry

Are you using form fields in your system for different purposes because it does not provide the right naming based on your industry?Are you using an industry solution for one part of your business and have a  standard finance package that does not quite integrate?  

ROI and budget for your own system 

All of the above questions address common business issues, which result in additional time and money spent. Essentially, by automating the processes and providing the right information where it is needed, you can save money and make better decisions. Therefore, for your own business, you can ask yourself the questions above and assign a monetary value to each one. The monetary value is either a plain number, or a calculation based on the time you spent to get the information. For example, if you indeed manage your inventory re-order quantities in an Excel spreadsheet, imagine this could be done automatically without your manual intervention. Once you add up all the numbers, you have your budget for a potential new system that overcomes these issues.

SAP software is:

• Affordable for small businesses and midsize companies
  Every business is unique, which is why we offer a complete portfolio of business management and business intelligence solutions designed to fit the way you do business – and your budget.
• Designed with your company in mind
  SAP solutions for small and midsize companies are designed to be complete – offering the breadth and depth of functionality you need to run your business; easy to use – enabling quick adoption with little training; and flexible – they can scale and adapt as you grow your business. Every solution we offer is based on best practices learned from more than 35 years of SAP’s experience working with best-run companies.
• Easy to implement and maintain
  From affordable on-premise solutions, to on-demand solutions with a monthly subscription, our solutions can be implemented within weeks by SAP and our large network of qualified SAP partners. We’ll work with you every step of the way, before and after you go live, to make sure your implementation is a success.