Project Insight: Analytic Prototypes

1. Project Insight: Analytic Prototypes Summary of Findings: Business Analysis for Category Management Pipeline Performance Management Corporate Consulting TeamDecember 13, 2004

2. Expert user (e.g. business analyst) Data producers (e.g. accounting clerk) High Knowledge workers (e.g. brand manager) Intensity of interaction Information consumers (e.g. sales managers) Low Executives Low High Flexibility of interaction Framework for Discussion • The CCT has partnered with design firm IDEO for the development of two software prototypes targeted to the decision support needs of information consumers and knowledge workers (diagram 1). • The business scenarios pursued for these prototypes are: • Business Analysis of Category and Brand Management for the CFO/Controller and brand manager roles • Pipeline Performance Management for Sales Managers, their Managers and Key Account Manager/Account Executives Diagram 1 – Business User Segmentation This presentation shares the preliminary results of these scenarios, including the identified short and mid term opportunities for SAP Source: CCT

3. Agenda What we set out to do What we did Pipeline Performance Management Analysis for Category/Brand Management Summary of Thoughts: Desirability, Feasibility, Viability Appendix: CCT Design Process Insights

4. Information Consumers (1) • Line managers, sales managers and executives (typically 10-15% of employees) • Look for easy access to business information –require limited flexibility • Typically use MS Word, MS Outlook, PDF files, and web scorecards in daily process • Decision makers for organizational and process changes • Increasingly less supported by business analysts Knowledge Workers (1) • Corporate controllers, marketing campaign managers, sales operations. (typically about 10-50% of employees) • Generate insight from business information within the process in which they are involved • Typically use MS Excel to gather and enhance business information • Less inclined to work with databases and queries • Decision makers for operational changes Focus: Enable Better Business Decisons Made by Information Consumers and Knowledge Workers Analysis for Category Management • Retail, CPG • Brand/channel manager, controller, CFO/COO • Deliver an easy to use interface to extract and derive personal trend and comparison analysis for the customer/product/ channel mix on an individual and aggregate level • Strong US foot print in retail/CPG, multi-dimensional information challenge, strong demand for packaged analytic software Pipeline Performance Management • Hi-Tech (Direct Sales) • Account Executives, Sales Managers, Sales VPs • Deliver an easy to use interface to analyze and manage pipelines, close gaps, effectively manage pipeline changes, prioritize opportunities and increase sales force effectiveness • Strong US foot print in HiTech, multi-dimensional information challenge, strong demand for CRM analytics, competitive pressures Scenario Key Industries: Roles: Purpose: Rationale: (1) Source: CCT White Paper – SAP Analytics Strategy

5. Alpha Project – Enabling the Category Management Process Category Management – The Process Category Performance & Potential Analysis Account Evaluation & Joint Goal Setting Category Definition 2 3 1 Category Definition - Account View Performance Review 4 Assortment & Placement Account Review Promotions & Pricing 8 5 7 6 Source: SAP ISM

6. Category Performance & Potential Analysis The Project Focused on Improving the Access and Utilization of Information Required to Measure Performance Category Performance Analysis Syndicated Market Data POS/Scanning Data 2 This step provides internal (and external) insights and includes consumer, market, retailer and vendor data. The identified opportunities determine and emphasize the remaining steps of the planning process. It also determines the most promising projects. Category Performance Analysis • POS data analysis (e.g. sales (value/quantity), promotional sales analysis) • Retail- & household-panel data (e.g. market share, price analysis, consumer propensity, target consumer (loyalty, spending)) • Socio-demographic analysis (e.g. closure rate, market penetration, basket size analyses, buying behavior) • Market share/growth reports, gross margin/sales share, assortment analysis (own and competitors) Source: SAP ISM

7. Sales Pipeline Process Flow: Sales Team Account Executive qualifies & works on opportunities VP/Sales Managers set targets for year and quarters Sales Manager reviews Pipeline for efficiency and effectiveness Sales Manager reviews Pipeline Performance to targets Sales Manager adjusts Forecast Review sales pipeline and discuss progress Agree on and document action items Account Manager works on advancing and updating opportunities Areas of Focus = Source: Project Team

8. Sales Operations Manager Lead management Activity management ... Accounting Pipeline Performance Management The project focused on making the opportunity pipeline transparent to maximize revenue conversion and organizational effectiveness related to managing opportunities Sales Manager Roles VP of Sales Account Executive Pipeline Performance Management Performance management Assumptions: Opportunity data • exists • is accurate Order management Collection management Customer-related processes OpportunityManagement Commission management Resourcemanagement Supporting process In focus View Pipeline stages to identify gaps and bottlenecks Compare aggregate pipeline to targets Simulate options for closing pipeline gaps Analyze stage-to-stage conversion rates and associated root causes Win/Loss analysis by various dimensions to identify when and how deals were lost, as well as potential remedies, such as best practices Evaluate sales team performance

9. Understand & Observe Alpha Prototype Synthesize Rapid End User Feedback Prototype Design Applying the CCT Design Methodologies Understand and Observe • Observe end users at SAP, non-SAP, and analogous sites • Research the design problem • Evaluate SAP and competitor offerings • Engage with thought leaders • Initial Business Case development Synthesize • Identify unmet needs and opportunities • Brainstorm around design solutions • Create paper prototypes, strawman designs, and storyboards of early ideas • Rapidly iterate prototypes Alpha Prototype • Deliver a dynamic prototype to SAP Development • Document product requirements and architectural design decisions • Present high level alpha business case Design and Prototype • Further prototype design solutions in design workshops • Detail visual design through wire framing and navigational flows • Implement visual design • Validate with end users, formally and informally • Document highlighted features • Produce prototype Source: CCT

10. Agenda What we set out to do What we did Pipeline Performance Management Analysis for Category/Brand Management Summary of Thoughts: Desirability, Feasibility, Viability Appendix: CCT Design Process Insights

11. CCT Methodology Provides Multiple Sources of Inspiration for Design Sources of Input Synthesize Findings Deliverables End-users: experience significant pain pipeline management tools • SAP, non-SAP • Large, Small Customers End-user pain points / root causes Competitor approaches to resolving pain points / root causes Analysis of Pipeline Management Practices Identified Opportunities: The Leapfrog: Provide a single tool for managing pipelines that is intuitive, proactive and adaptable Identified Solutions: 1. Pervasive Alerting: Alerts that lead to the root cause in context. 2. Data Views: Data that can be saved, modified through filters and monitored through alerts. 3. Intelligent data: Tools that allow for exploration of data. 4. Smarter search tools: Tools that allow users to seek knowledge (experts, best practices) as well as data. 5. Actionable representations of opportunities: Opportunities can be accessed and viewed in the pipeline 6. Gap Simulation: Iterate how gaps in the pipeline can be closed 7. Join OLAP and OLTP: Maintain opportunity data within a data view Thought leaders: have identified Best and Next practices and validate the needs in this area • Analysts • Consultants • Academia Competitive analysis: no vendor has an all-encompassing solution • CRM Vendors • Traditional BI vendors • Microsoft • Niche Vendors SAP internal: UsingBEx and CRM for internal use • SAP Sales Ops • VPs of Sales • Account Executives • Solution Engineers User requirements and potential SAP solution areas for 2005 and beyond

12. Observations • Targeted for IT and Power Users to build custom reporting • Offers the ability to create a wide range of analytic web applications • Lack of user-friendly tools that support Information Consumers to personalize analytic reporting • No graphics and table in same views • Views are pre-defined by IT • Lack of user defined dashboards • System response time sluggish • Limited integration with MS Office, and other PC tools SAP Pipeline Performance Management Opportunity Pipeline as in IDES CRM 4.0 Source: IDES – CRM 4.0, Project Team

13. Sales Analytics – the Competition Compelling display of sales pipeline Printing and modifying easily accessible Not clear how easy this is to personalize Easier to read table format Simple to access and modify No overload of data Source: Competitor Web-Site Review

14. Findings Were Revealed Through End-User "Deep-Dives” and Validated in “Shallow Dives” Understand User Interaction Requirements around Pipeline Performance Management for Direct Sales in the High-Tech Industry • Who? What? Observe end-user interaction: • Process Flow • Communication Flow • Tools used • Actions performed • Pain Points Non-SAP Customers SAP Customers Non-CRM SAP Customers CRM * Using CRM Pipeline Management 39 Total End User Observations * Using CRM Pipeline Management * Analogous observation Focus On : Deep Dives Shallow Dives* Account Executives 8 2 Sales Management 15 10 Sales Operations 8 1 * Still in progress

15. What We Did Focus on Pipeline and Opportunity Management Observations at the participant’s work station Where allowed, digitally recorded the observation User observations of SAP and non-SAP sites Lessons Overcome barriers to seeing end users: both from SAP and from customers. Don’t underestimate prep and interview time; don’t rely only on clients Observe in pairs Engage in in-context conversions, not a formal interview Jumpstart the conversation with quick Q&A Document the experience with digital media, and/or other tools Look for interaction with tools used for topic at hand (ie Blackberry, Daytimers) LISTEN – do not jump to conclusions Gaining Empathy for the End-User Voice of the End-User Photo Removed

16. Insights of Business Users Photo Removed “Users often perceive SAP as meaningless numbers and return to Excel for processing…” • Current tools slow users down and take time away from value added tasks. • xxxxx, Senior Director xxxxxx Photo Removed “I don’t bother to look into the details. I delegate that. I prefer to sit down with my employees and explain what I want.” • Users rely on Excel, Outlook, the phone & face-to-face interactions, not SAP CRM. • xxxxx, VP Sales xxxxxx Photo Removed “If you put data into the system, you need to be able to get it out.” • If the system has no perceived value, it is less likely to be used. If it is not used then the data cannot be reliable. • xxxxx, Senior Manager xxxxx

17. Insights of Business Users cont’d Photo Removed “I don’t add value in doing reports manually. I add value in analyzing the data.” • Sales Managers spend a lot of time adjusting data, not analyzing or strategizing. • xxxx, District Marketing Manager xxxx Photo Removed Photo Unavailable “How much you go off the software system versus the verbal varies by the company culture and the manager within the company.” • Corporate culture and personal style have not been taken into consideration by today’s systems. • xxxx, Division Manager Sales Operations, xxxx Photo Removed “Software should make life easier for the Sales Executive ...with explanations and suggestions for fixing shortfalls” • Rather than presenting users with a wealth of data but no way through, the system should provide proactive user guidance with true support. • xxxxx, Partner CRM Practice xxxxxxx

18. Guiding the Prototype Design - Pipeline Performance Management Design Principles Description Approach • Contextualized alerts • Views, which are windows onto specific data intended to answer a questions • Simulations offering suggestions to key analytical issues Provide users alerts that help them find information to resolve the problem at hand easily with contextual tools such as views, or what-if analysis. Guide Users Present user with relevant information, provide visual indicators to help prioritize, and progressively disclose more detailed data. Aid the user in the search for data. Prioritize Information • Opportunity briefing card • Exploratory analytics that allow users to find things when they don’t know what they are looking for Recognize that the user wants to get in and out of the system and accomplish his task as quickly as possible and needs tools that aid him this need. • Report templates that are collections of views that can be refreshed and exported Efficient Flow of Work • Flexible but sophisticated filters within a view allowing for change of parameters • Customizable analytics home page • Scrapbook Provide an easy to personalize interface and intelligently pre-configured analytical tools with the option to customize. Adaptable Tool • Opportunities are accessible and actionable within the pipeline Allow changes to data right within a data table, focusing on key fields only. Reliable Data

19. Prototype – Analytics for Brand/Category Management What to look for in the Prototype: The number of touch points where analytics help the user answer one of 3 primary questions: Where am I? How did I get here? What am I going to do about it? Click Here to Start

20. Informal End User Testing – 2nd Cycle 2 EFS Campaigns started on 12/6 Sales Manager View of the Prototype Account Executive View of the Prototype • Synopsys • Intel • SAP • Molex • McKinsey Face-to-face customer visit at Infineon: “Closing View is very realistic for us – we’d like to see this on the home page”;“ Really like the combination of a list and the ability to change the opportunity from within one screen”.“ Would use a tool such as the commonality analysis for Win/Loss reporting.”

21. Agenda What we set out to do What we did Pipeline Performance Management Analysis for Category/Brand Management Summary of Thoughts: Desirability, Feasibility, Viability Appendix: CCT Design Process Insights

22. CCT Methodology Provides Multiple Sources of Inspiration for Design Sources of Input Synthesize Findings Deliverables End-users: experience significant pain with data management tools • SAP vs. non-SAP • Large vs. Small Customers • Different industries End-user pain points / root causes in the category management process for selected companies/industries Competitor approaches to resolving pain points / root causes Analysis of Category Management Practices Identified Opportunities The Leapfrog: Transfer the Power of Information Access from IT to the End-User 3 pillars of the analytic lifecycle: • SEARCH • INSIGHT • SHARE Use Cases in Prototype • Intuitive search capabilities • User-centered data management (i.e., graphing, mutli-dimensional analysis, adding metrics, etc.) • Collaborative Workspace Thought leaders: have identified Best and Next practices and predict growing customer demand • Analysts • Consultants • Academia Competitive analysis: no vendor has an all-encompassing solution • Industry focused vendors • Traditional BI vendors • Microsoft • Information Service Providers User requirements and potential SAP solution areas for 2005 and beyond SAP internal: UsingBEx and BW for internal use • SAP Controlling and Planning • Product management • Account Executives

23. Observations • Targeted for IT and Power Users to build custom reporting • Offers the ability to create a wide range of analytic web applications • Lack of user-friendly tools that support Information Consumers ability to build their own analytic reporting • No graphics and tabular data in same views • Tabular display is only available in ½ the screen • Views are pre-defined by IT • Lack of user defined dashboard integration • SAP’s offering is a tool-kit instead of a solutionresulting in longer implementation project cycles SAP Category Management Source: IDES - Category Management Demonstration, Project Team

24. Retek IRI – Demand Drivers • Targeted for the Information Consumer • Simple graphics of difference performance views • Ability to create user defined views with simple drop-downs • Thumbnails of alternative reports offers • Cockpits / Dashboard feel • Wizard-based visualization • Web-enabled interface • Targeted for the Information Consumer • Combines tabular and graphic data in the same view • Makes use of color-coded indicators • User-defined chart capabilities Industry Focused Offerings Source: Competitor Web-Site Review

25. Interviews: 25 18 Findings Were Revealed Through End-User "Deep-Dives” and Validated in “Shallow Dives” • Developed insights through 8 deep-dives • Identified candidates based on industry, size, and geography (US focused) • In addition to target observations, analogous observations are conducted as a source for key learning • Several days of preparation, iteration and synthesis • Each visit involves direct one-on-one end-user interaction with several participants • Broad range of perspectives including brand/category managers, marketing, and controllers • Identified process, systems, pain points and potential solutions • Validated and refined insights through 14 shallow-dives Focus Deep-dives SAP Customer(1) Shallow-dives SAP Customer(1) Ace Hardware Beltramo’s Spirits Whole Foods Kellogg's Wrigley Miller Brewing Con-Agra Office Max Sanford Kraft P&G General Mills Ulta Cosmetics Warner Home Video Clorox Colgate-Palmolive No Yes Yes Yes No Yes Yes No No No Yes Yes Yes Yes Yes No Target Observation McKesson Analogous Observation City of Palo Alto McDonalds IDEO IT SAP Finance SAP Sales Yes No No No Yes Yes 43 Total Observations Details in Appendix (1) Running applications supporting the use case Note: Approaches, interview guides and findings are documented in backup materials

26. What We Did Research on brand/category management End-User observations at the participant's work station Where allowed, digitally recorded the entire visit User observations of SAP and non-SAP sites Conducted “analogous” observations to immerse oneself in the problem and broaden the definition of competition Lessons Overcome barriers to seeing end users: both from SAP and from customers. Don’t underestimate prep time; don’t rely only on clients Observe in pairs Engage in in-context conversions, not a formal interview Jumpstart the conversation with quick Q&A Document the experience with digital media Look for real-life use; demos are not enough Gaining Empathy for the End-User Voice of the End-User Photo Removed

27. Insights of Business Users Photo Removed “SAP? What’s that? I don’t even know if I use that…” • SAP is not the center of the universe for any users. - xxx, Design Manager xxx Photo Removed “Excel is not aprofessional analytics tool…It’s a spreadsheet.” • By default, Microsoft Excelis the primary tool & operating environment. • xxxx, Executive Director, Data Mgmt xxxxx Photo Removed “When I’m digging into information, I’m always repackaging it.” • User roles are much more fluid than segments might suggest. • xxxx, Category Market Intelligence Mgr. xxxx

28. “If it takes more than 10 minutes to create a report then there’s something wrong with the tool…or there’s something wrong with you.” • xxxx, VP, Category Mgmt. xxxxx “If a software vendor tells us they can do data integration, we assume the vendor doesn’t know what they’re talking about.” • xxx, Sr. Analyst xxxxx Insights of Business Users cont’d Photo Removed • SAP has a large library of tools, but no real “offering.” Photo Removed • Analytic solutions requiring ongoing IT-based configuration are not competitive. Photo Removed “To be honest, BEx is horrible to use for business users.” • Current analytics tools make it difficult for users to be strategic instead of tactical. • xxxx, Sr. Analyst xxxxxx

29. Guiding the Prototype Design – Analytics for Category Management Design Principles Description Approach • Search Status Updates • Scale-to-Fit Information • Report Presentation Tool Automate routine processes to enable focus on analysis and strategy, rather than on the gathering and sorting of information. Automation Provide relevant feedback to instill trust in peoples' interaction with the data source, as well as increase their trust in the data itself. Reassurance • Backtracking • Making Data Points Visible Recognize that people transition between roles. Design access and manipulation of data that is as fluid as their roles. • Smart Saving • Smart Filtering Flexibility • Personalized Dashboard • Simple Search • Workspace vs. Scrapbook Give people permission to leverage several information sources from a single tool. Access • Annotation Notes • Anchored Workspace • Activity Timeline • Attaching Relevant Files to Graphs Promote collaboration by creating a tool that anticipates the exchange of information and packages it appropriately for internal and external sharing. Sharing

30. Prototype – Analytics for Brand/Category Management What to look for in the Prototype: The number of touch points where analytics help the user answer one of 3 primary questions: Where am I? How did I get here? What am I going to do about it? Click Here to Start

31. Preliminary Results(1) Informal End User Testing – 2nd Cycle What We Did • Validation of scenes from near-final prototype • Tested for visual appeal, understandability and relevance of solution with EFS • Extended focus to select deep dive and shallow dive customers Deep Dive Colgate-Palmolive Clorox General Mills P&G Ulta Cosmetics & Retailing McKesson Warner Home Video Shallow Dive Kellogg Wrigley Office Max Miller Brewing Con-Agra Overall pretty good but if a manager level screen there needs to be more about who is doing what - Malcolm, Colgate-Palmolive I think your on the mark with this - flexibility is the key - and I think there's a ton here. - Dan, General Mills (1) Scores as of 11/16/2004

32. Agenda What we set out to do What we did Pipeline Performance Management Analysis for Category/Brand Management Summary of Thoughts: Desirability, Feasibility, Viability Appendix: CCT Design Process Insights

33. Successful Design Needs to Address Three Major Criteria: Desirability, Feasibility and Viability Does the user research support a high level of End user demand? From the technology perspective, are we able to build it? Desirability Feasibility Only when all three criteria are met, will the product or solution design be successful Viability Is there validation that the marketplace will value the design? The project teams created and evaluated both prototypes according to those three criteria* * Detailed findings are available as a separate document

34. In Pipeline Performance Management Pervasive Alerting: On the desktop, within Outlook and within the analytics home page Views: Instances of data that can be saved, modified through filters, and monitored through alerts Tools that enhance the exploration of data Smart search tools that allow users to seek knowledge (i.e., experts, best practices) as well as data Actionable representations of the pipeline are accessible as a briefing card and an opportunity worksheet Desirability: End User Research Indicates High Demand for Key Innovations in Both Prototypes In Analytics for Campaign Management Make the components of the software simple enough to facilitate independent use Easy transition from query to analysis to sharing Create a tool designed to support multiple roles (e.g., analyst, marketer, executive, etc.) in the same environment Empower people to do things on their own, rather than relying on others to support Focus on universal interactions around finding, modifying & packaging information Desirability Feasibility Viability

35. Desirability Feasibility Viability Feasibility, Viability: Addressed Through Interaction with Key Stakeholders in Field and Solution Management Feasibility: Can we build it? • For both prototypes, we have grouped the required Application and NetWeaver features into three major categories: • Currently supported by SAP • On roadmap and/or prototype available • Not available and not on roadmap • These findings are validated with the respective stakeholders in Apps and NetWeaver Solution management / Development* Viability: Will the market value it? The project teams did so far not focus on detailed business cases for the scenarios However, as part of the Analytics strategy work, both scenarios were selected in close interaction with the Field organization, which indicated high market demand, especially in the US A more detailed business impact analysis will be done in tight cooperation with the respective Solution management teams * Detailed findings are available as a separate document

36. Next Steps • Engage with Solution Management + Development Management • Share outcome/findings of competitor study • Share outcome/findings of end-user interviews • Share use cases • CCT and Solution Management to evaluate and prioritize potential solution opportunities for improving end-user usability, especially in areas where SAP today has little or nor presence (e.g. flexible query, flexible graphing, etc.) • Short-term • Long-term • CCT and Solution Management to evaluate and prioritize the leveraging of MSFT tools in overall solution • CCT to further synthesize findings from usability scenario in regards to the PIL and Solution Production processes

37. Agenda What we set out to do What we did Pipeline Performance Management Analysis for Category/Brand Management Summary of Thoughts: Desirability, Feasibility, Viability Appendix: CCT Design Process Insights

38. What We Did Research on brand/category management End-User observations at the participant's work station Where allowed, digitally recorded the entire visit User observations of SAP and non-SAP sites Conducted “analogous” observations to immerse oneself in the problem and broaden the definition of competition Lessons Overcome barriers to seeing end users: both from SAP and from customers. Don’t underestimate prep time; don’t rely only on clients Observe in pairs Engage in in-context conversions, not a formal interview Jumpstart the conversation with quick Q&A Document the experience with digital media Look for real-life use; demos are not enough Gaining Empathy for the End-User Voice of the End-User Photo Removed

39. Lessons What We Did • Synthesize on the road (as well) to tailor future observations • Use post-its to capture individual ideas — and regroup as necessary to create new connections • Don’t jump to solutions too soon • Large teams cannot collaborate — divide and conquer • Focus on optimal experience — don’t constrain yourself to what the current system can do Synthesized findings from observations into solution opportunities Identification of unmet user needs Conducted brainstorm sessions around design solutions Developed initial paper prototypes of early design ideas Proposed design directions to explore in the design phase Synthesis of Findings

40. Lessons Make editing a community experience by making it physical and tangible Scenario & Design Concepts What We Did Type up a storyboard and interaction flow to capture essential components Cut up the printed document to enable quick and easy rearrangement of the flow itself. Created wire frames of initial design concepts

41. What We Did Lessons • Personal interviews with original observation participants to test early concepts • Tested for understanding of business process as reflected in the storyboard • Tested for validity of design principles • Focused on deep dive customers: • Share feedback on early prototype soon after return • Encourage users to annotate their ideas on paper • Use the sessions to spark new ideas • Document the testing session with digital media • Document the feedback with digital media, especially if you can’t document the actual user testing session Informal End-User Testing – First Cycle

42. What We Did Lessons • Developed prototype script with roles and collaborative processes • Used as roadmap for prototype development • Demonstrated key features identified during prior iterations • Includes the development of relevant data sets to support the story • Fully develop the story and data sets prior to starting any development • Multiple people can develop the visual assets, although only one should develop the interaction • Review for quality early and often – assets are re-used throughout the session • Validate with customers as soon as possible – even if not complete • EFS facilitates this phase Script Writing & Prototype Development