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Reduce Operational Costs with SAP Integration

March 11, 2020 | By: enosix

Improve business performance and optimize spending with SAP integrations

Cutting operational costs in a smart and healthy way should always be a priority of any business. With internal and external costs constantly rising, being conscious of how and where money is spent is necessary to survive.

With so much else going on, looking for ways to cut these costs manually is not realistic. Businesses are investing more heavily in SAP integrations to automate as many processes as possible or at least make them more efficient. 

Integrating SAP has tremendous potential to reduce operational costs by improving from the supply chain to marketing campaigns. Optimizing and reducing SAP licenses is another opportunity for businesses to significantly reduce spending. 

Here are some of the ways to reduce costs in both time and money so your operation can be as efficient as possible.

How SAP integration reduces operational costs

Sales

Many businesses waste time and energy on manually updating duplicate system records that not only lack efficiency but may be based on outdated or irrelevant information. This affects every aspect of the business, leading to redundant and time-consuming work that wastes time, resources, and money.

SAP integration can drastically reduce operational costs simply by optimizing the customer experience. Connecting disjointed systems makes your sales cycle more competitive and your sales team more efficient. This begins in the quote and proposal phases of a customer relationship.

Having all the information from your ERP system of record readily available for your sales team means they can provide immediate and accurate quotes that will help win more customers. An integrated pricing system, for instance, removes a large sales obstacle. Sales teams spend too much time and risk losing customers by relying on manually-gathered and outdated pricing information. A cloud-based SAP integration can provide them complete and modern data to react to customers faster.

Marketing

No matter how big or small your marketing efforts are, the more information you can gather to support them, the better. Integrating SAP back-office systems with those in production and sales gives you insight into customer behaviors and patterns. 

An integrated approach allows you to create targeted campaigns and scale them across multiple channels. No more time and energy wasted on generic marketing efforts with limited automation capabilities. SAP integration gives you the ability to be anywhere you need to be with the best data possible to deliver the best message.

Supply chain

SAP integration can drastically reduce operational costs by gathering your supply chain and production line data in one place for you to review and analyze. Seeing the big picture and how processes are working together will help you more easily identify where there is unnecessary spending.

This has huge potential for manufacturers. You can better manage inventory, optimize delivery, and streamline processes for ordering and fulfillment. This information allows you to predict future behaviors as well, which means you can automate certain purchases based on historical data. Integration will also help you analyze supplier and vendor behaviors to better understand their purchasing and selling habits. 

SAP gives you reliable and current data about all aspects of your operation, which allows you to make better decisions, react more quickly, and reduce redundant or futile work. By integrating SAP with quoting, production scheduling, and CRM systems, everyone in your organization will have the data necessary to do their jobs at a faster pace and with greater accuracy.

SAP licensing

One of the biggest ways companies can reduce operational costs is by strategically managing their SAP licenses. SAP has more than 40 license types that range in price from $60 to $7,000. Each type has various permissions and usages attached to it depending on the needs of the user. New options include licenses based on the number of transactions being created from integrated systems, which may make it more economical to open front-end systems to many more users than previously made sense.

It’s the responsibility of the customer to manage their licenses and select the appropriate type for each user. Lack of information and the chaos of running a business can lead to mismanagement of license types, resulting in over purchasing, under purchasing, duplicates, and other issues that can cost thousands of dollars.

Inactive users

Larger enterprises will have a more difficult time staying on top of SAP licenses without a process in place. Users change responsibilities and jobs quite frequently. If there is no regular internal audit, businesses may be paying for licenses of users that are no longer active.

Duplicate users

It’s not uncommon for users to have various responsibilities across an organization, resulting in the need for different kinds of access. If not managed carefully, users may be given two or more licenses with different usernames to give them this access when they only need one. Identifying these duplicates and removing them will allow you to reassign licenses to others.

Support

A significant amount of the cost associated with SAP licensing comes from support and maintenance, about 20% in fact. There are many ways to reduce this spending. First, certain users and licenses may not need the support and maintenance the way others do. Consult your SAP agreement to see whether you’re eligible to eliminate this cost on some of your licenses.

Engines

Engines are the packages and add-ons that customers can add to their SAP system depending on need and functionality. Each engine measures licensing needs differently. It could be based on the total number of records in that application, its overall consumption, or something else altogether. Staying on top of how each application measures licensing will help you optimize licensing needs and reduce extra spending.

Optimize your SAP integration experience

SAP integration can improve your business performance in so many ways. Don’t let its potential to reduce operational costs go unnoticed. 

enosix SAP integration seamlessly connects SAP ERP or SAP S4/HANA to your front-end systems. The reporting, streamlining, and consolidating benefits that we discussed earlier will be magnified even further by bringing these features into the system that your entire team uses.

Check out our case studies to learn how other businesses and manufacturers are creating better customer experiences and accelerating operations with enosix. Then contact us to schedule a demo to learn how this integration can work for you.