ROI series: Building a business case for SAP: BW

Read expert advice on how to build a business case for SAP BW in this tip from BI/BW expert Jay Narayanan.

Don't miss the rest of this three-part ROI series
* Building a business case for SAP: NetWeaver
* Building a business case for SOA

Q: "I'm the IT director for a mid-sized business. I have to give a presentation for the front office next month,

and I'd like to convince them that SAP BW is the right choice for our organization. We are already running plain-vanilla SAP R/3. Can you help me design a business case for BW?"

Jay NarayananSearchSAP.com expert: BI/BW
If you're making business intelligence decisions or working with SAP BW, then you'll love the advice from our resident expert Jay Narayanan. Jay has over 16 years of experience in the IT industry in various roles, the majority of which has been the ERP area. Jay is a Senior SAP Business Information Warehouse (SAP BW) Consultant and founding partner of CoeusMind LLC. He has been working on SAP BW for the past six years right from SAP BW 2.0A to 3.5 at present. He is an accomplished and frequent speaker at various SAP conferences such as ASUG and TechEd.

Click here to browse BI/BW Q and A

A: I'd be happy to provide an overview of implementing SAP BW from a corporate perspective for the deployment of business intelligence (BI) solutions and a management reporting strategy.

Clearly, many organizations over the past few years have been investing in core systems -- SAP R/3 and CRM as well as non-SAP systems -- and have been accumulating valuable data. This valuable information is held at various systems like inventory, purchasing, finance and HR, and it will be of great value to the organization to overhaul its global systems and processes. It is essential that these organizations first acknowledge that the ability to plan, deploy and execute strategy on a global basis is the key to maintaining growth and market leadership.

Transforming this important data into useful actionable information for management and operational business functions is important. Companies considering the deployment of a BI solution as a part of a continuous growth strategy and to improve overall business performance may consider implementing SAP BW to achieve this goal.

Strategic alignment
SAP BW can be used as a standard reporting solution, and it's the first step toward building an enterprise data warehouse that integrates widespread data across the enterprise. The right product choice and the implementation methodology will provide a broad range of tactical and strategic benefits that can help any enterprise stay ahead in the competitive market. Implementing the right BI solution will help management identify opportunity to reduce costs and increase sales.

In addition BW will provide timely information to management to help them carry out critical business decisions, and give a clear view of performance across global operations of the company. Lastly it will provide better data visibility across the company and will help with more accurate and more consistent reporting.

Project description
BW offers an extensible data warehouse data model that represents the operative models of the SAP applications and a large number of industry-specific solutions as part of the BW Business Content. BW is a software package that can be used in any SAP or non-SAP environment and contains tools for extraction, transformation, loading and storage as well as front-end tools for reporting, OLAP, ad-hoc queries and data mining.

SAP BW allows more reporting flexibility and power and reduces the load on the main SAP R/3 systems. Many global companies make a significant investment in order to unify their operative landscapes by implementing SAP R/3. As a result, the ideal prerequisites for a central enterprise data warehouse approach emerge. These prerequisites include integration of data models into the SAP R/3 data model and the building of an operative R/3 landscape that takes the company organizational and technical conditions into account. Important elements of a corporate BW strategy are architecture, consistent application development and data integration concepts.

Business benefits and operational impacts
BW can be used to integrate all applications and access data spread across the company in various heterogeneous systems. With BW organizations can better analyze the data on spend, sales, finance, vendor, customer and other information to identify opportunities to reduce cost, increase sales and provide the right information to right individuals to improve operational performance.

BW is tightly integrated with other SAP systems like R/3, CRM, SEM, APO and many other functional areas. Existing data extractors for SAP R/3 make integrating data from R/3 source systems into SAP BW an easy task. With the help of SAP BW any enterprise can integrate large quantities of data from SAP and non-SAP systems into its reporting and information delivery activities. SAP BW can be used not only to improve the data quality, but also to harmonize business terms and technical definitions. Both of these benefits will make the organization competitive in the long term.

In addition BW data warehouse offers the following benefits:

Implementation
SAP BW comes with standard business content that contains thousands of objects to be used in various applications. These can be implemented easily in a short period of time. For most companies this business content can be activated without much customization for most standard applications.

Analysis and reporting
BW also provides a set of tools like BEx and Web application designer for reporting with drill-down functionalities. Also, the OLAP engine embedded in BW system helps to query and analyze large amount of operational and historical data. OLAP engine allows multidimensional analysis of data from various business perspectives. Building applications for the Web in BW is fast and easy. Its openness ensures that it can be easily integrated with any internal or external datasource using third-party reporting and analysis tools or planning applications.

The BW data warehouse layer is centrally administrated and not subjected to arbitrary projects. The data warehouse layer is the common source for all the data provided in data marts. Extraction, staging and integration are managed and monitored centrally.

BW also offers a wide spectrum of support for extraction and contains predefined, modifiable extractors for practically all SAP application data. It is also possible to generate extractors for customer-specific SAP applications. Data extraction from flat files is possible without much development effort. Integration with third-party products like Ascential's Datastage are possible.

The operational data store supports operative reporting, whereas data marts are data structures for tactical and strategic reporting and analysis. BW data can also be accessed from mobile devices. This makes it possible for sales representatives to find more about customers, products and sales performance while traveling.

All versions of BW from 3.5 on are an integral part of SAP Netweaver, SAP's integration and application platform which facilitates the implementation of Enterprise Service Architecture (ESA). It is the BI environment that connects to SAP software offerings and is designed to easily connect with external processes. Tools like Web Dynpro, BEx query and report designer make it easier to create formatted Web reports and build Web applications easily. BI accelerator also helps to query large databases and return results in just a few seconds. With BW 7.0 it is possible to extract data in real time.

With the new BI integrated planning functionality, BW provides a platform to build integrated analytical applications that contain planning and analytical functions.

Support
In addition to efficient online support, training guides, documentation and how-to guides are available from SAP. BW supports an architecturally-based, consistent, corporate data warehousing solution.

Project risk assessment
* Quality of data held within the core systems
Providing consistent, accurate and reliable data is important for the success of any BI project. The quality of data depends on the source it is extracted from. Most companies have multiple sources of data and it is possible that the data being extracted may not be clean especially the ones which are extracted from non-SAP systems. Due to this reason much time and importance should be given to the testing phase of the project. Inaccurate or inconsistent data can affect the management's ability to understand the company's current and future problems and could lead to the user dissatisfaction. So it is important to take special care on the data quality to gain the confidence of the user community during implementation phase.

* Experience and expertise of the project team involved
The project team should have the knowledge and expertise on business processes and BW architecture. The team should interact closely with business users throughout the BW implementation period, from requirement analysis to the go live date.

Cost benefit analysis
For any organization planning to implement SAP BW, it is important to understand the cost implications before the start of the project. Project costs are mainly acquisition costs, infrastructure costs, implementation costs and support and life time costs.These include software costs and hardware costs like new servers and PC upgrades, annual maintenance costs, and traning costs for the IT staff and end users.

Conclusions and recommendations
SAP BW helps any company to achieve the goal of bringing its extended data warehouse activities together in one place, and it also provides the set of tools to build BI applications which will provide sufficient, accurate and timely information to the right people in the organization. SAP BW helps companies make the most out of its R/3 implementation, maximize ROI, and help narrow the gap between business and IT.

Careful implementation processes are important for the success of any BI project. In addition some other important factors are: sponsorship from the business side and management support. Initiation of the project should come from business users.

Expertise in both functional and technical areas is mandatory for the success of the project. End user training is also an imperative area to be considered during the implementation, since the success of BW depends on how well the users can access valuable data through reporting and analytics. In closing, improving the knowledge level of the user community is mandatory for the success of any BW project.

This was first published in April 2006

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