delivering real-time business value for banking

July 2013

Delivering Real-Time Business Value

for Banks SAP Business Suite Powered by SAP HANA

Public

© 2013 SAP AG or an SAP affiliate company. All rights reserved. 2 Public

Banks must seek new competitive advantages in

response to changes in customer trust,

demographics, and demands, as well as to profit

margins reduced by higher capital requirements,

compliance costs, and lower fee income.

Create new and innovative products that excite customers

Respond rapidly to evolving trends

Ensure business processes are flexible, efficient, and

cost-effective

The real-time opportunity


Delivering the future of banking today Business priorities in banking…

Finance Accelerate closing process

Get a single source of truth

Enable easier reconciliation

Sales and services Convert loyalty into revenue by utilizing

predictive analytics

Focus on the right markets by gaining insight

in customer analytics

Get a true 360-degree view of the customer

Risk and compliance Minimize access risk and prevent fraud

Reduce the cost of access management and

ongoing compliance activities


SAP Business Suite powered by SAP HANA The next-generation business platform

Real-time business

In-memory

Business

transactions

Digital

connections

Collaborative

business

Cloud Social

Big Data Mobile

One platform bringing it all together

Advanced

analytics


Industry value map for retail and commercial banking Delivering the future of banking today

Retail Banking Operations

Retail Deposits

Retail Lending

Centralized Payment

Processing

Finance Finance Transformation Performance Management Finance and Risk Data

Management (IFRA)

Collaborative Finance

Operations

People and

Talent

Core Human

Resources and Payroll Talent Management

Workforce Planning

and Analytics

Procurement Supplier Discovery and

Lifecycle Management

Strategic Sourcing

and Contracting

Procurement and

Order Collaboration

Collaborative Invoice

to Pay

IT Management Application Lifecycle

Management

IT Infrastructure

Management

IT Portfolio and

Project Management IT Service Management

IT Strategy and

Governance

Multichannel

Mobile Customer

Internet Banking

Call Center

Automated Teller Machines

Sales and Service

Customer Acquisition

Customer Management

Social Media

Engagement

Risk and Compliance

Credit Risk Management

Liquidity Risk Management

Governance, Compliance

and Surveillance

Enterprise Risk

Reporting

Commercial Banking

Operations

Cash and Liquidity

Management

Commercial Lending

Leasing

Financial Services Network

Technology

Solutions

Analytics Consumer Experience Data Management Enterprise Mobility

SAP HANA Platform

Application Develop-ment

and Integration


Industry value map for retail and

commercial banking Real-time value for key end-to-end processes

Retail Banking Operations

Retail Deposits

Retail Lending

Centralized Payment

Processing

Finance Finance Transformation Performance Management Finance and Risk Data

Management (IFRA)


Operations

People and

Talent

Core Human

Resources and Payroll Talent Management

Workforce Planning

and Analytics



Strategic Sourcing

and Contracting

Procurement and

Order Collaboration


to Pay


Management

IT Infrastructure

Management

IT Portfolio and

Project Management IT Service Management

IT Strategy and

Governance

Multichannel

Mobile Customer

Internet Banking

Call Center

Automated Teller Machines

Sales and Service

Customer Acquisition

Customer Management

Social Media

Engagement

Risk and Compliance

Credit Risk Management


Governance, Compliance

and Surveillance

Enterprise Risk

Reporting

Commercial Banking

Operations

Cash and Liquidity

Management

Commercial Lending

Leasing

Financial Services Network

Technology

Solutions


SAP HANA Platform


and Integration

Initial focus for

SAP Business Suite on

SAP HANA for banking


Industry value map for capital markets Managing capital for economic growth

Sales and Trading

Real-Time P&L Management

Market Making and Trading

Market Data Analysis

Finance Accounting and

Financial Close


Operations

People and

Talent

Core Human Resources

and Payroll Talent Management

Workforce Planning

and Analytics



Strategic Sourcing and

Contracting

Procurement and

Order Collaboration


to Pay


Management

IT Infrastructure

Management

IT Portfolio and Project

Management IT Service Management

IT Strategy and

Governance

Brokerage Services

Prime Brokerage

Client Services

Trading Analytics

Risk and Compliance

Real-Time Risk Management


Governance, Compliance, and Surveillance

Enterprise Risk Reporting

Technology

Solutions


SAP HANA Platform


and Integration


Industry value map for capital markets Real-time value for key end-to-end processes

Sales and Trading

Real-Time P&L Management

Market Making and Trading

Market Data Analysis

Finance Accounting and

Financial Close


Operations

People and

Talent

Core Human Resources

and Payroll Talent Management

Workforce Planning

and Analytics



Strategic Sourcing and

Contracting

Procurement and

Order Collaboration


to Pay


Management

IT Infrastructure

Management

IT Portfolio and Project

Management IT Service Management

IT Strategy and

Governance

Brokerage Services

Prime Brokerage

Client Services

Trading Analytics

Risk and Compliance

Real-Time Risk Management


Governance, Compliance, and Surveillance

Enterprise Risk Reporting

Technology

Solutions


SAP HANA Platform


and Integration

Initial focus for

SAP Business Suite on

SAP HANA for banking


Today

Delta KPI improvements compared to average peer group are high-level estimates and will have to be validated for each customer situation.

With SAP Business Suite on SAP HANA

Enterprise risk and compliance Business value for access control role analytics

Most companies face a high volume

and ongoing increase of unused and

orphaned roles

Scheduled batch jobs are required to

analyze a transaction log with

millions of records (such batch jobs

usually take hours to complete)

The cost of ongoing role

maintenance can be high – one

customer estimated active ERP role

maintenance costs at around

US$4,000 annually

Unused roles and orphaned roles

constitute unneeded access risk to

the organization (and possible

compliance issues).

Conflicts associated with segregation

of duties (SoD) via continuous

monitoring of access risks.

Accelerated analysis of role usage

isolates unused and orphan roles

Deeper insight into roles will help

uncover any potential risk for the

organization

Role usage and assignment

information provides valuable insight

to business executives during

business reengineering and

reorganization

Trigger the assigned workflow

directly from your analysis to remove

unused roles assigned to users

Expose orphaned roles across the

system landscape quickly to begin

the decommission process

Identify unused and

orphaned roles

Consolidate

Reduce

most-frequently-

used (active) roles

noncompliance and

overall access risk


Today



Customer acquisition Business value for line-of-business (LoB) marketing

Missed market opportunities due to

lack of visibility and inefficient

processes

Data explosion, driven by new level

of connectivity of consumers via

mobile devices and social networks

Data in disparate data sources, which

prevents true 360-degree view of the

customer

Agile marketing to respond faster to

changing market dynamics and

opportunities

New analytical and data mining

functionality on Big Data (social

media, predictive)

Near real-time monitoring and

reporting on marketing performance

One central place for collecting all

customer data, leading to 360-degree

view of customers in real time

Precision marketing to personalize

every interaction with the customer

Improve profitability

0.5%

Optimize

Increase

return on marketing

investments

15%

customer satisfaction

30%


Today



Customer management Business value for LoB sales

Difficult to distinguish profitable

customers from customer pool

Inability to identify gaps in sales

pipeline leading to missed targets

Extracting actionable information from

the enterprise-wide customer

information (Big Data) to maximize the

chance of a sale

Minimal insight into buying preferences

of customers in social data context

Easier identification of profitable

customers with account intelligence

analytics

Faster transaction search capabilities

Complete transparency into sales

pipeline (such as in commercial

banking) based on real-time

information with unlimited drill-down

functionality

Real-time analysis of Big Data to

better understand buying patterns

Real-time access and assembly of all

data including social/sales data

Improve profitability

0.5%

Increase

Improve

percentage of sales

reps achieving quota

17%

offer win rate


Today



All inbound communications can be

routed to the best resource

Call center Business value for contact management with interaction center

High volume of customer records and

interactions result in increased

search times and greater difficulty

locating specific customer records

Customers demand consistent

service across channels

When responding to social media

queries, service reps struggle to get

all relevant customer information,

leading to inefficiency and

dissatisfaction

Searches in the interaction center are

significantly faster, including account

searches, interaction history, and the

customer fact sheet

Reps can quickly identify customers

and get a complete 360-degree view

in real-time

Increase calls handled by

call center

6%

Improve

Reduce

first-call resolution

and customer

satisfaction

97%

service cost


Today



Finance transformation Business value for entity close

Long-running processes

Time-intensive reconciliations

Limited time for analysis

Inefficiencies due to manual

processes and low automation

Missing financial excellence,

resulting in higher cost of equity

at the capital markets

Difficulties in supporting parallel

financial reporting standards on a

global basis and in scenario

simulation

More time for analysis, less over-

time, or earlier publishing of financial

results through faster

period-end processes and better

reconciliations

Increased efficiency through smarter

reconciliations and reporting,

reducing operating costs and

improving stakeholder satisfaction

Real-time analytics down to the

lowest level of detail – delivering

quality at source, transparency, and

process efficiencies

Minimize time to close the

entities’ books

13%

Reduce

Enhance

cost of finance

15%

compliance and

accuracy

18%


Today



Performance management Business value for planning, budgeting, and forecasting

Planning performance limited to

online analytical processing (OLAP),

staged cubes for transactional and

master data

Data load performance driven by the

amount of data extracted from SAP

Business Suite

Reporting, loading, and retraction

performance that limits planning

iterations

Drill-down within OLAP cubes and

navigation to SAP Business Suite

applications and online transaction

processing (OLTP) data occur within

standard times

Seamless replication of master and

transactional data from SAP

Business Suite

Availability of more granular data to

support planning

Big Data challenge negated, allowing

for faster extract and DataStore

object (DSO) activation times

Iterative planning and real-time

simulation supported through

improved performance

Improved performance for drill down

(expand) and consolidation (collapse)

Fast drill-through and live view of

transactional data in SAP Business

Suite

Improve service level

performance

Reduce

Minimize

cycle times and

manual effort

9%

operating costs

15%


Today



Performance management Business value for profitability and cost analysis

Data latencies and processes delay

impacting the ability to react to

issues/opportunities

Lack of data depth and user self-

service affecting internal decision

making

Long-running processes

Time-intensive data queries

Mostly manual data analysis

Substantial amount of effort (time

spent) not directly value-adding

Suboptimal resource efficiency and

effectiveness

Timely execution of critical business

processes that supports decision

making and increases the ability to

swiftly act (insight to action) in

dynamic market environments

Critical transactions and calculations

that run quickly

Instant response times on queries

Prebuilt analytics to automate the

data analysis process

Leaner processes from data capture

through data analysis

Increased productivity through

process-optimized analytics and

mobile support

Improve service-level

performance

17%

Reduce

Minimize

cycle times and

manual effort

4x

operating costs


Today



Performance management Business value for financial and managerial reporting

Risk of noncompliance due to

unfulfilled audits

A lot of data; decision-relevant

information not readily available

Data analysis not supported or

automated

Long-running batch jobs/reports

Time-intensive data analysis

Large number of time-consuming and

non-value-added processes required

to provide access to accurate, up-to-

date information

Timely execution of compliance-

relevant validation tasks

Increased end-user satisfaction

(accurate, detailed, visualized, timely,

and actionable information)

Key critical-path processes and

reports accelerated

Instant response time on most data

analysis queries

Workarounds and data latencies

eliminated

End-user data analysis enabled

through self-service means (via

SAP BusinessObjects business

intelligence solutions)

Improve service-level

performance

18%

Reduce

Minimize

month-end

closing time

12%

operating costs

17%


Today



Collaborative finance operations Business value for payables management

Expensive and error-prone manual

process steps

High cost per invoice due to large

amounts of tasks

Need to improve compliance and

audit turn-around time

Inability to determine exact moment

of payment

Inability to influence cash position

Inability to understand where control

over invoice-to-pay cycle is lost

Inability to make use of cash

discounts

Risk of supply chain interruptions

with key suppliers

Loss of supplier loyalty, affecting

contract renewals

Scalable automation of invoice-to-pay

reconciliation process

Actionable insight with live access to

items in process and

multidimensional insight to AP

process performance

Extensive control over influence

factors to days payables outstanding

(DPO)

Optimization of cash position through

precise timing of supplier payments

DPO lower than net payment terms,

allowing strategic decision making on

payment along cash position

Additional dynamic discounts able to

be offered or leveraged

Decrease days payables

outstanding

45%

Optimize

Reduce

working capital

lost supplier

discounts

30%


Today



Collaborative finance operations Business value for SAP Shared Service Framework software for finance

Vendor, customer, and employee

queries generate a high load on the

shared services organization (SSO).

This demands an extremely efficient

working environment for agents in

the SSO.

Agents in an SSO spend a lot of time

searching for vendor, customer, and

employee data

SSOs are under constant pressure to

improve the quality of service and to

lower the costs of providing those

services

Acceleration of in-box performance

with SAP HANA speeds navigation

within the in-box. This allows the

agents in an SSO to review and

prioritize their work more efficiently

Faster identification of vendors,

customers and employees allows the

SSO agent to provide more

responsive service, which leads to

improved satisfaction of the agents

as well as their clients

Reduced costs and faster response

times allow the SSO to meet its

service-level and budget objectives,

and improve their key performance

indicators (KPIs)

Increase productivity for shared

services agents

15%

Improve

Reduce

employee

satisfaction

overall costs of

delivering services


Today



Core human resources and payroll Business value for payroll processing

Responses to management ad hoc

inquiries about trends of high-volume

payroll information causes significant

costs to HR IT

Business users have a very limited

ability to analyze payroll results

Addressing employee inquiries around payroll is time-consuming and expensive activity, while HR is under pressure to increase the quality of service provided to employees and to lower the costs of providing those services

HR IT resources freed to focus on

the execution of organizational

strategic tasks

Thresholds leveraged as a steering

mechanism to optimize business

performance

Simplification of payroll data analysis

with optimized representation of data

High-speed read access based on

SAP HANA that slashes need to time

access and analyze critical payroll

information

Faster response times to employees,

increasing employee productivity

and satisfaction

Increase productivity of users

responsible for payroll

management

10% Improve

Reduce

employee

satisfaction

overall costs of

payroll processing


Today



Core human resources and payroll Business value for effective shared services delivery

Employees direct queries into the

shared services organization and

expect to get prompt, accurate

answers

SSO agents spend time searching for

employee data using employee

identification

SSOs are under constant pressure

both to improve the quality of service

provided to employees and to lower

the costs of providing those services

Acceleration of in-box performance

based on SAP HANA speeds

navigation within the in box, allowing

SSO agents to review and prioritize

their work more efficiently

Faster employee identification allows

the agent to provide more responsive

service, which leads to improved

employee satisfaction

Reduced costs and faster response

times allow the SSO to meet its

service-level agreements and budget

objectives, and improve KPIs

Increase productivity for shared

services agents

14%

Improve

Reduce

employee

satisfaction

overall costs of

delivering services


Today



* Visualizations will be delivered as part of HR renewal.

Workforce planning and analytics Business value for transactional analytics

Translation of organizational strategy

into HR metrics requiring significant

effort or special expertise

Decisions often based on hunches

Difficult to zero in on underlying

transactions from high-level KPIs

Time-consuming data loads in

traditional reporting tools

Integrated and personalized cockpits

that provide insight into metrics that

matter most*

Ability to leverage thresholds as a

steering mechanism to optimize

business performance*

Powerful predefined workforce and

time management–related KPIs for

managers with the ability to navigate

into details

Embedded analytics inside business

transactions

Prebuilt virtual data models for real-

time transactional analytics

Simplified architecture

Increase revenue per employee by using analytics to identify strategic advantages

20% Optimize

Reduce

your business with

reliable real-time

HR data

time and costs of

operational reporting


Today



Procurement and order collaboration/collaborative invoice to pay Business value for operational procurement

Missing real-time insight into

operational procurement reporting

Lack of capability to dynamically

create operational procurement-

related reporting in a modern user

interface

Slow and costly paper-based

processes

High transaction costs

Long-running transactions while

posting documents with high volume

of line items

Frequent errors yielding to maverick

spend

New configuration options for

procurement analysis

Modern and easy-to-consume user

interface

Complete visibility into end-to-end

procurement activities

Real-time insight and easier-to-

manipulate information

Accelerated long-lasting processing

of purchasing documents

Increase transparency

Lower

Increase

procurement

operations cost

17%

process

effectiveness

12%


Next step Business scenario recommendation and value discovery workshop

SAP offers a proven methodology and approach to

discover the customer-specific business

improvement areas and quantify value potential.

We suggest such a workshop with your

line-of-business and IT experts.

As starting point, we recommend a performance

and usage analysis of your current system.


Reference banks Summary, validated scenarios

Feasibility

Bu

sin

ess v

alu

e

Legend

Lo

w

Hig

h

Low High

SAP Business

Suite on

SAP HANA

SAP HANA

Applications

SAP HANA

Platform

(Near) real-time

liquidity

optimization

Total income – retail, wholesale, investment banking: US$10 billion

Event-based

marketing

Next-best action/

real-time EMI offer

management

Real-time

simulation of

interest rate

sensitivity

Pricing

Fraud prevention

for retail banking/

fraud analytics

Real-time customer

segmentation and

de-duplication

Single view of

capital across

divisions

Phase – deployment road map

1 Short term

FIN: Real-time liquidity (improving net interest

income, liquidity coverage ratio, net-stable

funding ratio, productivity ratio)

Accelerate fast close (finance transformation)

CRM: Next-best action (cross-sell, up-sell offers that

result in a sale [%], average number of products

per client)

GRC: Fraud prevention (reduce fraud related loss,

increase customer satisfaction levels)

2 Medium term

CRM: Real-time customer segmentation (increasing

customer retention, customer satisfaction level,

operating income)

Interest rate sensitivity (improving net interest

income, customer churn, new customer

acquisition ratio)

FIN: Single view of capital (reduce reserves due to

a more precise risk estimation)

SAP HANA Platform: customer-specific SAP HANA products: SAP NetWeaver BW on SAP HANA, high-performance applications (HPAs), apps powered by SAP HANA SAP Business Suite on SAP HANA

SAP HANA

use case

SAP HANA use cases mapped to industry value map end-to-end solutions

delivering real-time business value for banking

Business

service management

infrastructure management

project management

pl management market

cost of access management

sap ag

customer risk

banking finance