Embedded Analytics are Key to Success in the Digital Solutions Economy

This new installment in our on-going series on The Digital Solutions Economy™ (DSE) focuses on the key role that embedded analytics plays in overall DSE success.

First, here's a quick review of the six key aspects that are critical to implementing and managing any DSE program.  As shown below, a holistic approach to DSE must include, Customer Engagement, Order Creation & Management, Delivery & Fulfillment, Billing & Invoicing, Payments & Collections, and Revenue Management.

But none of these key functional areas can operate independently of all the others.
That's where system-wide, embedded analytics come into play.

Let's take a look at just a few of the inter-relationships:

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  Entitlement Management: If the customer contracts for the right to access a product or service, the actual usage of this ongoing Entitlement needs to be tracked over time and decremented against the originally contracted access level.
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  Inventory Management: When selling physical goods in a DSE model, it is critical that the Delivery & Fulfillment process have visibility into inventory and supply chain data and into the Customer Engagement and Order Creation processes in order to predict demand levels.
• 
  Billing and Payments Management: The dynamic nature of most DSE models puts the customers in charge to "have things their way" but this creates the need for tight integration of invoicing and payments to match consolidated customer invoices with related transaction details in backend fulfillment and accounts receivable (AR) systems.
• 
  Revenue Management: DSE models still must comply with revenue accounting standards (ASC 606 & IFRS 15) so analytics are key to capturing DSE revenue data and organizing it to meet disclosure and reporting requirements.

In addition to using embedded analytics for drilling down to understand the above relationships and drilling through to see specific transaction detail, managers and executives also will depend on end-to-end analytics to see the big picture for effectively managing DSE.

As we've worked with numerous clients to help design and implement their Digital Solutions Economy management systems, it becomes increasingly clear how comprehensive embedded analytics can make a huge difference for overall success.

This is another area where the SAP applications and analytics ecosystem brings added value. DSE-related application suites such as Billing & Revenue Innovation Management (BRIM) that run seamlessly with SAP S/4HANA are inherently able to cross communicate with other ERP and finance functions using S/4HANA's unified database model. 

Similarly, applications such as Revenue Accounting and Reporting (RAR), SAP Financial  Supply Chain Management (FSCM), SAP Entitlement Management (EM), and others that are native to S/4HANA provide vital pieces of the overall DSE picture - without having to manually integrate data from standalone or offline systems.

Perhaps most importantly for overall DSE management is the ability to leverage SAP Analytics Cloud (SAC) across the entire scope of SAP applications and even to integrate any legacy or third-party systems that may be a part of your particular implementation scenario.

The SAP Analytics Cloud solution combines BI, augmented & predictive analytics, and planning capabilities into one cloud environment. As the analytics layer of SAP’s Business Technology Platform, it supports advanced analytics enterprise-wide.

We have already gained deep experience in SAC capabilities by using it to manage many Revenue Recognition, Lease Asset Management, Treasury, and other finance related functions.  Several of our key value-added packages, such as RevRec and Lease Accounting disclosure and reporting applications have been built using SAC functionality.

That's why we've also standardized on incorporating SAP Analytics Cloud into all our Digital Solutions Economy projects. 

SAC not only helps managers stay on top of all the key interrelationships between functional elements of DSE; it also gives company executives comprehensive visibility into overall DSE performance along with easy to use dashboards and drill-down capabilities to target specific issues for analysis.

For more info, check out these DSE blog posts and watch videos:

• Supply Chain Considerations for the Digital Solutions Economy
• Managing Payments and Collections in the Digital Solutions Economy
• Finance, Treasury and Working Capital Considerations for the Digital Solutions Economy
• The Digital Solutions Economy is More Than Subscriptions. Will You Be Ready?
• Disruption is Happening. How Should You Deal with It?
• Webcast Video: Overview of the Digital Solutions Economy