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SAP Introduces Net Margin Analysis

Business management software maker SAP recently launched a new analytics application, SAP Net Margin Analysis, which is designed to uncover the indirect costs hidden in B2B operations.

According to SAP, Net Margin Analysis helps companies answer the following four questions: Who are my most profitable customers? Who are my most significant loss makers? Are there costs I can't account for? If so, where are they occurring?

By grouping a user's customers into four different groups (Winners, Transformation, Sales Opportunity, and Low Potential), Net Margin Analysis enables companies to uncover unnecessary expenses and hidden lines of profit, explains Karen Lynch, vice president of global wholesale distribution at SAP.

"Net Margin Analysis stratifies your customers, giving you a deep understanding of your winners, your profit destroyers, and the components behind that so that you can make better decisions for your company," Lynch explains.

Earlier solutions could only provide ballpark estimates for such costs, Lynch adds, but Net Margin Analysis provides full visibility through role-based dashboards and graphic reports on the cost-to-serve metrics of a company's B2B interactions.

Even if customers share identical revenue numbers, the application is designed to identify indirect costs, such as shipping expenses, for example, which can reveal savings opportunities. This data can also be pulled quickly without having to wait months for results.

Based on results from clients that are already using the application, SAP claims that enterprise customers can eliminate implementation expenses by up to 40 percent and save up to five percent on indirect costs within the first year of going live with the application.

The application is offered as a rapid-deployment solution, and can be launched within 90 days.


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