SAP Innovation Awards 2019 Entry Pitch Deck - Innovation in Control on Margin Deviations for Services Schneider Electric
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Innovation in control of margin deviations for services
Innovation in Control on Margin Deviations for Services
SAP Innovation Awards 2019 Entry Pitch Deck
Innovation in Control on Margin Deviations for Services
Schneider Electric
Innovation in Control on Margin Deviations for Services
Schneider Electric
“Quote” Challenge
“This is a great step
toward digitizing the
analysis of the Margin
by job” Vincent Solution
Barakat, Global Field
Services Finance VP.
“Definitely this new Outcome
tool is something we
have needed for a
long time and without
doubts will be of great
help for the economic
monitoring of
Great improvement in
services”, Leonardo 25% Customer Order
15% Margin growth communication between sales
Sansone, IT Project Changes process
and operations teams.
Manager.
2
Partner Information
Schneider Electric
SAP Logistic Consultant
“”
“Special thanks to our SAP expert (Guillermo) who made it happen”, Inès d'Agrain Blanchot,
Finance BP, International, China & Operations
“This functionality to control gross margin deviation is receiving excellent feedback from the
business / GFS Finance”, Jean-Pierre Samilo, VP Field Services Domain.
“Consolidating quoted/planned and actual costs will give a job-by-job financial understanding,
allowing us to capture and control our costs through reporting and corrective action”, Jamie
Evans, General Management | Cross-Functional Projects (Australia)
3Business Challenge & Objectives
From the CRM (Salesforce) and the Mobility Tool (ServiceMax), planners manage work orders that
are mapped to SAP service orders, but could not obtain direct information to compare the version
of the quote cost with the actual cost situation. This was generating unexpected margin deviations
and communication problems.
Even after the work was done, there was no collective report to compare the final picture of the
quoted costs and the expected quoted margin with the real cost and margin in a single reporting
tool, so there was no way to compare the expected margin with the real final margin and analyze
these results by service offer, sales districts, business units, customers or periods. This lack of
visibility prevented the Business from determining the best investment decisions and real
profitability.
Provide the planner with a simple tool to have visibility of the estimated costs and, therefore, take them into account as
"objectives" when planning the work and execute it, in addition to being able to know the real costs that are generated.
On the one hand, each Front Office planner can access this information for each individual WO to verify the cost of the
quote and compare it with the current cost.
On the other hand, the Controllers can visualize the a report with the final picture of all the costs, expected margins and
current margins of all WO that have been executed, grouping them by several criteria such as sales team, territory, profit
center, customer, service material and period.
Creation of a community of users to define strategies, procedures and global rules of sales and interactions with the
clients so that they assume the changes in the prices in the cases of margin deviations caused by changes in the
requirements of the client after the acceptance of the offer, and the issuance of the purchase order.
4Project / Use Case Details
Schneider sends a sales representative to a customer in the Boston area.
The Request is to maintain a production line control panel.
The Sales Representative calculates 3 working days ($ 200 / d) and $ 100 battery and $ 150 breaker to replace in the
control panel, plus $ 50 of total travel expenses (the total cost of the quote is $ 900).
The price offered was $ 1500 with an expected margin (backlog) of $ 600.
The customer accepts it and the order is created.
The Boston area planner receives the order in the CRM tool and calls the customer's contact person to confirm the
intervention date.
The person mentions that the production lines work during the week, so the visit is only possible during the weekend.
With the new Margin Diversion Tool, the planner can verify (1 click) that the quote did not include the weekend rate
(which is $ 250 / d). Therefore he detects a deviation of $ 150 ($ 50 x 3 days, new cost 1050) and asks the sales team
for a change in the order.
After the negotiation, the new price was $ 1600 (the contribution margin was reduced to $ 850).
Now the planner assigns an available Field Service Technician to the work order.
The Field Service Technician receives the order on his IPad and accepts it.
As there were no company vans available that weekend, he rented a van increasing the expenses (from $ 50) to € 100.
5Project / Use Case Details
The planner can check with the new Margin Deviation Tool a new deviation of € 50, so the new expected margin
is now $ 800.
The Field Service Technician detects that one of the control panels also requires the change of its switch. This
switch costs $ 50 and to change it, the Field Service Technician needs an additional working day ($ 150).
The planner can see with the Margin Deviation Tool a new deviation of $ 200, as well as can verify that the
margin remains positive: $ 600.
The order is completed and invoiced. The financial team executes the global BI report and verifies that the
expected margin for 2018 was 9M, but the final margin was 6M, and notes that the rate of many orders changed
due to the execution that took place during the weekend and not always considered in the quote; so they ask
the sales team to include this question during the quotation process. Also, the change is not good enough and
they ask the Purchasing team to look for a new supplier.
This scenario is covered with the Margin Diversion Tool that allows all the stakeholders to verify the status of the
cost of the order in a single (for planners) or global call (for Controllers) to SAP from the CRM and BI tools.
The quote information is entered into an easy t-code to be complied with any quote tool.
The cost is allocated in the standard SAP system and displayed in a special panel (future improvement with
Screen Personas).
In addition, each SAP Federation is storing the information daily in a single table that is sent to BI, where the
information is displayed in a global report (in Tableau) available for high-level analysis.
6Project / Use Case Details
Users community
This project was also the kick-off for a Global Service User community that is now in full interaction and
offers excellent results such as:
- Help improve the solution and channel new global requirements.
- Answer specific questions from users to all (example: margin deviation %> 100).
- Define global strategies and procedures to manage the interactions of sales rules with customers to assume changes if the reasons of the
deviation are changes caused by the customer after the offer was closed or to determine a validated order change process.
- Announce follow-up initiatives (example: Australian E2E variation process project or global BI project).
- Report updates and improvements for each release new features of the functions and participate in global UAT to test new them.
- Share experiences and suggestions among countries on how to deal with deviations and improve sales and execution communication.
- Find global points in common.
7Project / Use Case Details
History of success around the world
USA is one of Schneider's major global service markets. They were the first users of the CM tool (Pilot). They have
entered more than 4500 orders in the last 6 months. All sales teams had been trained to enter estimates. Now they
have a clear visibility of the margins, understanding the deviation reasons and improving both the quotation process
and the execution process. In addition, now with this new visibility, the Business is moving to improve the variable
that produces more revenue based on territories, service offerings (SKU), sales districts and Customers.
Contact: Jae Kim
Australia was the second country to use this solution. As USA, they are very satisfied with the result and now that
they have visibility of the real margin for each execution, they are now implementing a follow-up project to determine
the actions in case of unexpected margin deviations, such as the renegotiation with the customer or adding
coverage clauses in the contract for changes in the initial price in sales documents.
Contact: Jamie Evans
Austria was the first non-E2E connected country that started using this tool and also the first country in Europe. The
answer is good and every day new orders are updated with the quote information.
Contact: Michaela Pribil
Argentina is also a non-E2E country connected. They are using the solution and also providing feedback to improve
the tool.
Contact: Leonardo Sansone
New Zealand started using the tool successfully and followed Australian Order Change action plan..
Contact: Debra Jones
8Project / Use Case Details
Future Roadmap - Countries that will start using the CM solution on 2019
Germany defined budget and roadmap to implement. As they are in another SAP system (SAP BeNeDeSh), they need to copy
and paste the code to use the solution.Contact: Jan Megarry
The Netherlands will benefit from the implementation of Germany, following them in the use of the tool. At this time, they are
improving the allocation of costs to be prepared to implement the solution. Contact: Rob Oudhuis
Mexico is in the close target as they are working in SAP Bridge and with a similar structure than USA. Actually USA entered 2
quotations for them. The plan is to provide training and start during Q1.Contact: Gabriel Gutierrez
Singapore is also in SAP Bridge, so they are expecting to start during Q1. Contact: Doreen Chua
Same situation for Slovakia. Contact: Eva Klimova
Russia plans to start in parallel with the implementation of E2E, scheduled for Q1-Q2 of 2019. Contact: Zdenka Nekovarikova
France is in a similar situation than Russia, adding that they are adapting the service flows to be aligned with this solution.
Contact: Beatrice Charlet
Following Argentinean deployment, Chile will start during Q1 2019. Contact: Leonardo Gabriel Sansone
Iberia SAP system opened an internal demand for Capgemini to implement the solution in their SAP during 2019.
Spain, Portugal and South Africa are expecting to take advantage of the implementation. Contact: Meritxell Espinosa.
MEA SAP system opened a Change Request to introduce this tool in their system. MEA Business is pushing to prioritize
their implementation. Contact: Anees Ahmed
UK and Italy have their own SAP systems managed by Capgemini. Both countries received the Level of Effort Analysis and
have been included in the prioritization list for 2019
9Benefits and Outcomes
Business / Social IT Human Empowerment
Guide the business on the right Interaction that acquires the best
path to success. of new technologies and
combines them with the most
Reduce the waste of resources solid aspects of classical SAP.
and useless activities. Improve communications
Simplify connections from 1 to n between sales and operations
Visibility on variables of good and quote tools. teams.
bad margins.
Pave the way for a multi-platform Grow the Services Business,
Improve relations with customers solution. approaching the client.
and the quotation process.
Unify the data extraction strategy.
Increase the efficiency of the
process. Generate simple architecture for
multiple SAP federation
interactions.
10Architecture
11Deployment
Date of Deployment or POC: March 2018 – First Pilot Go-Live (US)
Number of live users: 250
SAP Technologies Used:
SAP ECC6 Live – Now ECC6
SAP Concur Live – Live to enter expenses
SAP BI Live – Live in some countries
SAP Screen Personas POC – Objective to improve the view of Costs
SAP Hana POC – Planning to move to Hana
Server Processor: unknown
Linux Distribution: unknown
12Emerging Technologies and Use Cases
The following Emerging Technologies and use-cases are part of the project and describe the
contribution
Technology or Use Case Yes/No Contribution to Project
1. Machine Learning / Artificial No
Intelligence
2. IoT No
3. 3D printing No
4. Blockchain No
5. API Economy / Integrate the No
Intelligent Enterprise
6. Cloud Native / Event Based No
Architectures
7. Extending the digital core with SAP No
CP / ABAP in SAP CP
8. SAP Leonardo Application ( extending No
SAP application, using Industry
Innovation Kits or result of Design
Thinking workshop)
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