Strategy Management

Efficiently managing the strategy of a large scale organization is one of the most challenging task for executives. The Business Scenario Map shows the example of a strategy management scenario that takes place between Strategic Controlling, Business Unit Management, Operational Management and the HR Department. Improving the understanding for the strategy, increasing employee motivation and finally achieving better financial results are the key benefits of the implementation of this scenario.

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Value Potentials	Business Benefits
71% of companies using the Balanced Scorecard achieve a higher Net income than the average of their competitors*	Improve Returns
83% of companies using the Balanced Scorecard achieved a higher Sales Growth in the last three years than the average of their competitors*	Foster Growth
73% of the enterprises in the study estimated that their operative Results would increase at least by 10% if the strategy was properly executed*	Increase Operational Efficiency
	No gap between strategic high-level plans and detailed operational action
	Timely feedback to the top level if deviations in project plans or target lead to an impact on the overall success of a strategy

Strategic Controlling

Business Unit Management

Operational Management

HR Department

Provide data on current economic situation

Visualize current strategy

Support cascading of targets to operational departments

Set up performance matrices

Formulate vision and mission of the business unit

Analyse and assess current strategy

Formulate new or update existing strategy

Evaluate scenarios based on planning data

Determine strategic and mid term plan data

Define strategic objectives

Set KPI targets

Launch strategic initiatives

Cascade targets to operational departments

Permanently monitor strategy execution

Perform operational planning based on strategic objectives and targets

Update compensation scheme based on performance matrices

Source:
*All numbers taken from a study of the German consulting firm Horvath&Partners (name of the study: "100 x BSC")

The value potentials shown in this table have been reported by selected SAP customers or independent third parties as referenced herein. However, there is no guarantee that such value potentials can be realized in any particular customer-specific business processes, and SAP does not make any representations and disclaims any liability as to the appropriateness of the referenced value potentials for any specific customer situation.
©SAP AG 2008

Business Benefits	Value Potentials
Better understanding of the strategy on operational level
Higher employee motivation when knowing about the contribution to the overall success of the company
Motivate executives to focus more on long-term strategic success than on short-term achievements


Strategy Management The single most important skill in business today is the ability to translate strategy into action. This is increasingly difficult in larger or more complex organizations, where the distance between those who formulate a strategy and those who carry it out can be significant. According to a FORBES Study, only 10% of all strategies that are properly formulated are executed according to plan. SAP Strategy Management supports the departments involved in the strategy management process in linking business unit strategy to operational action. Initially the vision and mission of a business unit is formulated by the Business Unit Management. With regards to vision and mission, Business Unit Management analyzes the current strategy with the help of data provided by Strategic Controlling. Depending on the result of this analysis, a new strategy is formulated, an existing one is revised, and broken down into operational terms like objectives, initiatives and KPI targets on all organizational levels. Supported by Strategic Controlling, the high level strategic parameters are broken down and communicated to subordinate organizational units. The effective execution of the strategy is constantly monitored and connected to individual compensation plans of the operational management to ensure accountability for the success of the strategy.