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Transcript of Newport discussion corporate sustainability reporting using sap grc v3
This document is confidential and is intended solely for the use and information of the client to whom it is addressed.
March 2010
Newport Consulting Group, LLC
FOR DISCUSSION
Corporate Sustainability ReportingStrategies and Frameworks using SAP GRC Approaches
Newport Consulting Group
Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 1
1.
Introductions and Firm Overview
2.
Corporate Drivers of Sustainability Programs
3.
Global Reporting Initiative Considerations
4.
Enterprise Architecture using SAP Building Blocks
5.
Considerations for Roles-based Process Controls
6.
Framework for CSR Planning and Implementation
7.
Summary and Next Steps
Agenda
Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 2
Introductions and Firm Overview / 1
Newport Consulting Group is an independent consulting firm founded by several leading consultants from DMR Consulting Group and strategy firm Booz & Company
Our clients enjoy working with our experienced professionals who deliver large firm capabilitiesin the context of a boutique firm culture
We function as top-end, high-touch advisorsto our clients, unencumbered by large overhead cost models or downstream deployment agendas
Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 3
Introductions and Firm Overview / 2
Our clients represent a broad industry base– Commercial
Consumer Electronics & ProductsAutomotive & TransportationAerospace & DefenseIndustrial EquipmentMedical Device & Health Systems
– Non-commercialElectric and Water UtilitiesState GovernmentsMunicipal / County GovernmentsNot for Profit Organizations
We maintain strategic partnerships with leading enterprise software companies, service providers, and institutions– Under NDA with SAP America since 2005– Under NDA with Dassault Systems since 2008
Our Experience and CapabilitiesOur Experience and Capabilities
We retain our staff through teaming agreements creating a business affiliate model with low overhead and high performance services
Experience and Education Profile of StaffMinimum 20 years professional experience average per staffManagement experience at one or more Fortune 1000 organizationsPractice and delivery management experience at top-tier strategy firmsClient and delivery management experience at global system integratorsInternational experience working with customers and partners in Europe and Asia-Pacific
Additional experience in medical device, consumer electronics, and high tech
We are the experts in the field of enterprise performance management bridging “classic SAP” and strategy throughout the enterprise
We retain our staff through teaming agreements creating a business affiliate model with low overhead and high performance services
Experience and Education Profile of StaffMinimum 20 years professional experience average per staffManagement experience at one or more Fortune 1000 organizationsPractice and delivery management experience at top-tier strategy firmsClient and delivery management experience at global system integratorsInternational experience working with customers and partners in Europe and Asia-Pacific
Additional experience in medical device, consumer electronics, and high tech
We are the experts in the field of enterprise performance management bridging “classic SAP” and strategy throughout the enterprise
Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 4
Introductions and Firm Overview / 3
Newport Consulting is an “independent” firm alignedwith SAP since our founding in 2005
Our Principals and staff have provided Program Advisory, Planning, OCM, and Governance services
We have particular expertise in SAP Business Objects EPM and GRC solutions– We are writing the book on EPM for SAP Press– Under NDA with several clients to date
Our staff maintains current knowledge and experience in additional areas of SAP including ERP (FI/CO, MM, PP, SD), SCM, PLM, SRM, and GTS
Most of our clients operate in technologically diverse environments — as such, our staff is able to look at broad landscapes and topologies to consider the best solution
Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 5
Introductions and Firm Overview / 4
William Newman, CMC, MBAManaging Principal
Nearly 25 years of strategy and operations planning with various technologies across multiple industry sectorsOver 10 years experience planning and managing complex, global enterprise programs (ERP, GRC, PLM, SCM)Has developed recommended approaches for operations readiness, value realization, change management, global program structures, innovation management, and business transformationCertified Management Consultant (CMC) since 1995
William Newman, CMC, MBAWilliam Newman, CMC, MBAManaging Principal
Nearly 25 years of strategy and operations planning with various technologies across multiple industry sectorsOver 10 years experience planning and managing complex, global enterprise programs (ERP, GRC, PLM, SCM)Has developed recommended approaches for operations readiness, value realization, change management, global program structures, innovation management, and business transformationCertified Management Consultant (CMC) since 1995
Bill Rudiak Principal–Lead Consultant Strategy & Technology Practice
Over 20 years of business and technology consulting, software development, systems integration, and managed services experience for a broad range of clientsLarge-scale project and program management for significant change initiatives including workflow efficiency improvements, technology deployments, and global shared services for multi-cultural/multi-national teamsBroad base of technology expertise including IT systems management, ERP, PLM/CAD, GIS, and digital video
Bill RudiakBill Rudiak Principal–Lead Consultant Strategy & Technology Practice
Over 20 years of business and technology consulting, software development, systems integration, and managed services experience for a broad range of clientsLarge-scale project and program management for significant change initiatives including workflow efficiency improvements, technology deployments, and global shared services for multi-cultural/multi-national teamsBroad base of technology expertise including IT systems management, ERP, PLM/CAD, GIS, and digital video
David Tharp, PMP, MBA Senior Program Manager Risk & Program Management Practice
Over 20 years of business and IT professional experienceResponsible for managing all phases of large-scale key global IT projectsHas led multi-cultural/multi-national cross-organizational team in application development and system implementationinitiativesCertified Professional Project Manager (PMP) and IT Management Certified Professional
David Tharp, PMP, MBADavid Tharp, PMP, MBA Senior Program Manager Risk & Program Management Practice
Over 20 years of business and IT professional experienceResponsible for managing all phases of large-scale key global IT projectsHas led multi-cultural/multi-national cross-organizational team in application development and system implementationinitiativesCertified Professional Project Manager (PMP) and IT Management Certified Professional
Joseph Stockemer, MBA Principal–Lead Consultant Operations Practice
Over 20 years of business and strategy consulting, marketing, sales management,cost reductions, asset management, and capital funding for start-up venturesRecently served as interim COO for a high-energy food and beverage client, responsible for protoconcept development, initial product run, sourcing, and sales team hiringHeld several interim management positions for not-for-profit organizations, including community service and faith-based institutions
Joseph Stockemer, MBAJoseph Stockemer, MBA Principal–Lead Consultant Operations Practice
Over 20 years of business and strategy consulting, marketing, sales management,cost reductions, asset management, and capital funding for start-up venturesRecently served as interim COO for a high-energy food and beverage client, responsible for protoconcept development, initial product run, sourcing, and sales team hiringHeld several interim management positions for not-for-profit organizations, including community service and faith-based institutions
Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 6
Introductions and Firm Overview / 5
StrategyStrategy
OperationsOperations
Risk &Risk & Program ManagementProgram Management
TechnologyTechnology
Newport’s Services Model (“SORT”) allows our Clients to benefit from a broad, holistic perspective on key business issues and challenges, while focusing on deep experience in one or more critical areas.
What market and business strategies do I need to address post-crisis scenarios? What KPIs govern my initiatives and what do I do when KPIs are “out of bounds”?How do create a culture of sustainability?How do I strategically manage intellectual property?
What market and business strategies do I need to address post-crisis scenarios? What KPIs govern my initiatives and what do I do when KPIs are “out of bounds”?How do create a culture of sustainability?How do I strategically manage intellectual property?
How do I fit my organization to improve existing or introduce new operating models?How do I structure the functions, people, and resources in my organization to drive strategic initiatives?
How do I fit my organization to improve existing or introduce new operating models?How do I structure the functions, people, and resources in my organization to drive strategic initiatives?
What approaches do I use to structure and prioritize initiativesinside my organization?How do I manage and mitigate risk across my business operations?How do I drive maximum value from my portfolio of initiatives?
What approaches do I use to structure and prioritize initiativesinside my organization?How do I manage and mitigate risk across my business operations?How do I drive maximum value from my portfolio of initiatives?
Based on my operations and existing technology investments to date, how do I select and implement the best technology solutions to support my business?How do I manage that process from planning to go live?
Based on my operations and existing technology investments to date, how do I select and implement the best technology solutions to support my business?How do I manage that process from planning to go live?
Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 7
1.
Introductions and Firm Overview
2.
Corporate Drivers of Sustainability Programs
3.
Global Reporting Initiative Considerations
4.
Enterprise Architecture using SAP Building Blocks
5.
Considerations for Roles-based Process Controls
6.
Framework for CSR Planning and Implementation
7.
Summary and Next Steps
Agenda
Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 8
Corporate Drivers of Sustainability Programs / 1A recent McKinsey study shows that while improved risk management may be one value driver, increased market opportunities, operational efficiencies, and brand equity are key on the minds of executives as companies position themselves for the post-crisis economy.
Source: Valuing Corporate Social Responsibility, The McKinsey Quarterly, February 2009
3
24
35
39
43
52
79
27
24
36
9
24
42
39
61
79
Improving access to capital2
Strengthening competitive positioning 14
Improving risk management18
Improving new growth opportunities24
Improving operational efficiency and/or decreasing costs29
Meeting society’s expectations for good corporate behavior30
Attracting, motivating, and retaining talented employees55
Maintaining a good corporate reputation and/or brand equity75
CSR ProfessionalsInvestment ProfessionalsCFOs
Where CSR Value Comes FromPercentage of respondents (%)
Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 9
Corporate Drivers of Sustainability Programs / 2The Dow Jones Sustainability Index (DJSI) created in 1999 represents over $US 9 billion in total market capitalization. The DJSI STOXX40 has outperformed the nominal DJ STOXX50 by 7.5% to date (and up to 15-20% during the period preceding the financial crisis).
Source: SAM Sustainability Annual Review, September 3, 2009
The DJSI comprises publicly traded organizations that
follow the Global Reporting Initiative (GRI) for
Sustainability reporting
The investment community is giving increased weight to Corporate Sustainability to guide rating and investment decisions.
The investment community is giving increased weight to Corporate Sustainability to guide rating and investment decisions.
Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 10
Corporate Drivers of Sustainability Programs / 3Sustainability has Three Pillars — we find that while there may be an immediate focus on one key area of Corporate Sustainability, attention must be given to how reporting and decision-making occurs. This increases value drivers, reduces redundancy, improves operations, and manages costs.
Target Focus of Sample Fortune 500 CSR ProgramsSurvey of Selected Cross-section of Industries 2007-2009
Company Economic and Financial Environmental Social Responsibility
UPS Strengthen the Enterprise Protect the Environment Improve the Human Condition
Starbucks Sustainable Coffee Prices Minimize Environmental Impacts
Local Community Engagement
Kimberly-Clark Commitment to Ethical Business Practices Environmental Stewardship Safety and Health
Lockheed Martin Perform with Excellence Eliminate Adverse Impacts from Operations Safety of Every Employee
Source: CSR documents from each organization, selected from 2007-9 supplier manuals and other internal corporate documents.
Generally organizations focus on one particular domain of sustainability which needs immediate attention, however understanding the strategic interaction of the other Corporate Sustainability areas is essential and often required by reporting guidelines.
Generally organizations focus on one particular domain of sustainability which needs immediate attention, however understanding the strategic interaction of the other Corporate Sustainability areas is essential and often required by reporting guidelines.
Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 11
1.
Introductions and Firm Overview
2.
Corporate Drivers of Sustainability Programs
3.
Global Reporting Initiative Considerations
4.
Enterprise Architecture using SAP Building Blocks
5.
Considerations for Roles-based Process Controls
6.
Framework for CSR Planning and Implementation
7.
Summary and Next Steps
Agenda
Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 12
Global Reporting Initiative Considerations / 1In 2006, the Global Reporting Initiative (GRI) was created to provide guidelines and audit recom- mendations for organizations participating in corporate sustainability reporting (CSR) activities. These guidelines ensure a level of consistency and governance in the practice of corporate sustainability.
Sources: The Future of Corporate Sustainability Reporting, The Journal of Accountancy. The American Institute of Certified Public Accountants, 2006. Royal Dutch Shell, 2003 Corporate Sustainability Report (courtesy of AICPA).
CSR as a practice in accounting areas is still emerging, with general guidelines based on the objectives of the Corporate Sustainability program.
CSR as a practice in accounting areas is still emerging, with general guidelines based on the objectives of the Corporate Sustainability program.
How does GRI consider CSR?How does GRI consider CSR?
CSR “involves reporting financial and nonfinancial information to key stakeholders on the company’s operational, social, and environmental activities and its ability to deal with related risks.”Considers the “triple bottom-line” of reporting – Economic Performance– Social Responsibility– Environmental Compliance
Considers broader set of stakeholders beyond shareholders – Financial– Regulatory– Political – Others based on company program
CSR “involves reporting financial and nonfinancial information to key stakeholders on the company’s operational, social, and environmental activities and its ability to deal with related risks.”Considers the “triple bottom-line” of reporting – Economic Performance– Social Responsibility– Environmental Compliance
Considers broader set of stakeholders beyond shareholders – Financial– Regulatory– Political – Others based on company program
Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 13
Global Reporting Initiative Considerations / 2GRI reporting for CSR is a function of confirming that program initiatives, principles, and objectives are tracked, monitored, and reported correctly. Few specific guidelines outside of the broad principles of GRI have emerged, leaving management free to “do what you say” from an auditor’s point of view. UPS is an exemplar in this area as shown by their reporting presentation.
Source: 2008 Corporate Sustainability Report, United Parcel Service (used with permission). Newport Consulting Group record of client interviews and feedback, 2009.
Overall graphic, such as a Venn diagram, communicates the areas of importance to various stakeholders.
Areas of CSR program called out, then detailed against Key Performance Indicators (KPIs) in subsequent sections of the sustainability report.
Interactive Web sites allow stakeholders including shareholders to create personalized reports, graphics, and tables.
Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 14
Global Reporting Initiative Considerations / 3Companies may have several reasons for implementing a corporate sustainability program. While the initial or primary focus may be on fixing “hygiene” problems, organizations may exploit the opportunity to achieve more strategic objectives in corporate sustainability and corporate social responsibility.
ProblemsProblems
Manual (spreadsheet-based) systems are siloed, error-prone, and do not reuse data in enterprise systems
Roll-up processes to support audits and other reporting needs are cumbersome
Organizational accountabilities for sustainability are unclear
Risk of being out of compliance with changing global regulations
No systematic way to respond to crisis or other unforeseen event
No alignment with overall corporate sustainability goals
Manual (spreadsheet-based) systems are siloed, error-prone, and do not reuse data in enterprise systems
Roll-up processes to support audits and other reporting needs are cumbersome
Organizational accountabilities for sustainability are unclear
Risk of being out of compliance with changing global regulations
No systematic way to respond to crisis or other unforeseen event
No alignment with overall corporate sustainability goals
OpportunitiesOpportunities
Adopt a more proactive approach to supplier management
Anticipate and mitigate risk events; develop response plans should these events occur
Elevate profile of global corporate citizenship and enhance competitive brand position
Permeate sustainability initiatives anda culture of social responsibility throughout the organization
Improve efficiency of adjacent core processes (design, manufacturing, QA)
Incorporate sustainability in strategic planning and enterprise performance management
Adopt a more proactive approach to supplier management
Anticipate and mitigate risk events; develop response plans should these events occur
Elevate profile of global corporate citizenship and enhance competitive brand position
Permeate sustainability initiatives anda culture of social responsibility throughout the organization
Improve efficiency of adjacent core processes (design, manufacturing, QA)
Incorporate sustainability in strategic planning and enterprise performance management
Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 15
1.
Introductions and Firm Overview
2.
Corporate Drivers of Sustainability Programs
3.
Global Reporting Initiative Considerations
4.
Enterprise Architecture using SAP Building Blocks
5.
Considerations for Roles-based Process Controls
6.
Framework for CSR Planning and Implementation
7.
Summary and Next Steps
Agenda
Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 16
Enterprise Architecture using SAP Building Blocks / 1
SAP provides several platformssupporting CSR program goals– “Classic SAP” which provides real-time
information around emissions, product/ material consumptions, supplier compliance via SAP ERP, SAP SRM, SAP SCM, and SAP PLM platforms
– SAP BusinessObjects Enterprise Performance Management (EPM) which provides a platform for strategic formulation
– SAP BusinessObjects Governance, Risk, and Compliance (GRC) which provides a platform for program enablement and monitoring
Strategic enablement with real-time decision-making capability– This is the “secret sauce” for SAP, not
addressed in most other platform options (which by and large are spreadsheet driven)
– Linkage to other strategic initiatives (balanced scorecard, KPI / KRI tracking)
SAP offers a number of solution approaches consistent with CSR program structure and GRI reporting requirements, based upon the operating model and existing IT footprint of the organization.
FIFISDSD SRMSRM
MMMM QMQM
Operations
Strategy
Non-SAP data and applications
Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 17
Enterprise Architecture using SAP Building Blocks / 2
Source: SAP America, SAP BusinessObjects, as modified by Newport Consulting Group.
PortfolioPortfolio--driven driven Value and Outcomes Value and Outcomes
Enterprise Performance ManagementBetter control performanceIncrease organizational agilityProvide improved context for decision making
Enterprise Performance ManagementBetter control performanceIncrease organizational agilityProvide improved context for decision making
1Governance, Risk, and Compliance
Aggregate and manage key risk activitiesAutomate controls across processesMonitor risk & controls across disparate systems
Governance, Risk, and ComplianceAggregate and manage key risk activitiesAutomate controls across processesMonitor risk & controls across disparate systems
2
Business Intelligence/Business WarehouseAccess to all informationIntuitive experience for all peopleSingle information infrastructure
Business Intelligence/Business WarehouseAccess to all informationIntuitive experience for all peopleSingle information infrastructure
3Information Management
Trusted informationOperational excellence for ITFlexibility and agility
Information ManagementTrusted informationOperational excellence for ITFlexibility and agility
4
SAP BusinessObjectsSAP BusinessObjectsSAP BusinessObjects
Enterprise Performance Management Governance, Risk, and Compliance
Business IntelligenceInformation Management
Ensure Trusted
Information
Proactively Manage
Risk
Create Enterprise VisibilitySAP BusinessObjects™
SCM (APO, SNP)SCM (APO, SNP)
SRM (eSourcing)SRM (eSourcing)
PLM (NPI, PPM)PLM (NPI, PPM)
ERP (MM, PP, SD, PS)ERP (MM, PP, SD, PS)
Non-SAP Environments
Non-SAP Environments
Connectivity to…
ILLUSTRATIVE
Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 18
Enterprise Architecture using SAP Building Blocks / 3The sustainability solution map for SAP BusinessObjects GRC comprises seven domains, each providing functionality across operating areas. Companies can “menu select” building blocks based on CSR program objectives and monitoring/reporting needs.
Source: 2009 SAP AG public domain website, www.sap.com/sustainability.
1
2
3
4
5
6
7
Generally the SAP SPM solution is used with other
EPM products to drive CSR program objectives.
Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 19
Enterprise Architecture using SAP Building Blocks / 4The SAP BusinessObjects SPM application provides a global view of a sustainability program. Risk officers and C-levels can easily track Key Performance Indicators (KPIs) deemed important for CSR purposes, fed by real-time operational data from back office “classic SAP” functionality.
Source: “Improve Your Corporate Sustainability Program using SAP BusinessObjects Sustainability Performance Management,” GRCExpert, 2009.
Drop-down KPI library
Performance settings based on KPIs thresholds (“triggers”) that can be dynamically linked to operational data.
Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 20
Enterprise Architecture using SAP Building Blocks / 5KPIs generally are summarized by aggregating various individual indicators which can come from different areas in the organization. The relationship diagram of KPIs provides sustainability managers visibility into the decomposition of each top-level company KPI.
Source: “Improve Your Corporate Sustainability Program using SAP BusinessObjects Sustainability Performance Management,” GRCExpert, 2009.
The KPI “composer” feature allows for the networking relationship and mapping of source information to “build up” KPIs.
Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 21
Enterprise Architecture using SAP Building Blocks / 6SAP SPM offers balanced scorecard views which can be configured to specific goals of CSR programs. The scorecard view can also provide indicators for each goal area and specific goals for easy monitoring and reporting.
Source: “Improve Your Corporate Sustainability Program using SAP BusinessObjects Sustainability Performance Management,” GRCExpert, 2009.
The balanced scorecard feature can also be expressed as a strategy map, and tailored to the elements of each scorecard.
Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 22
Enterprise Architecture using SAP Building Blocks / 7SAP SPM can be linked to other SAP BusinessObjects EPM and SAP BusinessObjects GRC platforms, such as SAP BusinessObjects Strategy Management for strategic formulation of KPIs and SAP BusinessObjects Risk Management to view the impact of key risk indicators (KRIs) on financial targets and enterprise risk management (ERM).
Source: “Improve Your Corporate Sustainability Program using SAP BusinessObjects Sustainability Performance Management,” GRCExpert, 2009.
SAP BusinessObjects Sustainability Performance Management
CSR Program Boundary
SAP BusinessObjects Strategy Management
KPIs, triggers
SAP BusinessObjects Risk Management
KRIs, tolerances
Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 23
1.
Introductions and Firm Overview
2.
Corporate Drivers of Sustainability Programs
3.
Global Reporting Initiative Considerations
4.
Enterprise Architecture using SAP Building Blocks
5.
Considerations for Roles-based Process Controls
6.
Framework for CSR Planning and Implementation
7.
Summary and Next Steps
Agenda
Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 24
Considerations for Roles-Based Process Controls
/ 1
Responsibility Matrix fro Program Area A - ABC CompanyENGR MFG
Task # Task Requireme nt1 Collect OE / Industry Requirements R, A A R C2 Apply requirements to program objectives R, A R C3 Determine information reporting gaps and needs A I C4 Develop c losure plan for information reporting gaps and needs R, A A R C5 Determine product information source list A R C
… … … Final Acceptance Review
LegendR Review ENGR EngineeringS Support MFG ManufacturingA Approve PUR PurchasingC Create PMO Program OfficeI Inform
Program AreaPUR PMO
RASCI Diagram – Responsibilities by Work Step
Program Management
Key Process Area
1. Refine and develop the project plan2. Maintain the project plan3. Monitor progress against baselines (scope, schedule, cost) and targets using EVM metrics4. Craft and manage communications plan5. Conduct Project Status Meetings with Key Stakeholders6. Brief leadership on Project Progress7. …
Key Activities
Program Management
Key Process Area
1. Refine and develop the project plan2. Maintain the project plan3. Monitor progress against baselines (scope, schedule, cost) and targets using EVM metrics4. Craft and manage communications plan5. Conduct Project Status Meetings with Key Stakeholders6. Brief leadership on Project Progress7. …
Key Activities
A history of requirements review suggests the need for strong product configuration management. Program management presence is the single most critical factor in the successful delivery of compliance program at ABC.Summary
Program Compliance ManagerRundown Role
Program AdministratorSecondary Resource
Primary Resource
A history of requirements review suggests the need for strong product configuration management. Program management presence is the single most critical factor in the successful delivery of compliance program at ABC.Summary
Program Compliance ManagerRundown Role
Program AdministratorSecondary Resource
Primary Resource
Playbook – Roles & Responsibilities
… …
… …
1 … … … … … … …
Compliance Process – Work Steps
Product Business Unit Lead (VP, GM, Director level)
Sales Account and/or Purchasing Manager
Product and/or Quality Manager
Sustainability/Compliance Manager (enterprise-wide or per program area)
Environmental C
ompliance
Environmental C
ompliance
Managem
ent ProcessesM
anagement Processes
Roles Defined in the Organization
For sustainability initiatives, an approach that leverages roles, access, permissions, and processes in a structured Governance model, provides clarity in program design and execution.
Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 25
Considerations for Roles-Based Process Controls / 2From a solution architecture perspective, a compliance layer is used to define the stages, processes, and key activities for sustainability program compliance
Key questions to ask:– Where are the data most persistent (i.e. system of record)? How are data governed and managed?– What are the process and access controls used for compliance?– For product companies, is compliance largely design or manufacturing BOM driven?
PLMPLM SAP ERP HCMSAP ERP HCMSAP ERP (MM, SD)SAP ERP (MM, SD) SRMSRM
Product Business Unit Lead (VP, GM, Director)
Sales Account and/or Purchasing Manager
Product and/or Quality Manager
Compliance Manager (Enterprise-wide or Program-level)
Com
pliance Managem
entC
ompliance M
anagement
ProcessesProcesses
GRC ControlsGRC ControlsGRC ControlsSAP EH&SSAP EH&SSAP EH&S
GRC Compliance Layer(Data Content, Analytics, Reporting, Process Management, Governance)
GRC Compliance LayerGRC Compliance Layer(Data Content, Analytics, Reporting, Process Management, Governa(Data Content, Analytics, Reporting, Process Management, Governance)nce) WHOWHO
Access OK by Role, Department, and Cost Center?
WHATWHATAccess OK by
compliance process, product program?
Program Management
Key Process Area
1. Refine and develop the project plan2. Maintain the project plan3. Monitor progress against baselines (scope, schedule, cost) and targets using EVM metrics4. Craft and manage communications plan5. Conduct Project Status Meetings with Key Stakeholders6. Brief leadership on Project Progress7. …
Key Activit ies
Program Management
Key Process Area
1. Refine and develop the project plan2. Maintain the project plan3. Monitor progress against baselines (scope, schedule, cost) and targets using EVM metrics4. Craft and manage communications plan5. Conduct Project Status Meetings with Key Stakeholders6. Brief leadership on Project Progress7. …
Key Activit ies
A history of requirements review suggests the need for strong product configuration management. Program management presence is the single most critical factor in the successful delivery of compliance program at ABC.Summary
Program Compliance ManagerRundown Role
Program AdministratorSecondary Resource
Primary Resource
A history of requirements review suggests the need for strong product configuration management. Program management presence is the single most critical factor in the successful delivery of compliance program at ABC.Summary
Program Compliance ManagerRundown Role
Program AdministratorSecondary Resource
Primary Resource
Playbook – Roles & Responsibilities– Can be unique to each company
Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 26
1.
Introductions and Firm Overview
2.
Corporate Drivers of Sustainability Programs
3.
Global Reporting Initiative Considerations
4.
Enterprise Architecture using SAP Building Blocks
5.
Considerations for Roles-based Process Controls
6.
Framework for a Corporate Sustainability Program
7.
Summary and Next Steps
Agenda
Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 27
Framework for a Corporate Sustainability Program / 1A sustainability program should be approached based on three fundamental premises, which guide all phases of the initiative. This optimizes schedule performance, controls the costs through manageable budget/decision gates, and applies sound architecture principles.
A hypothesis-driven approach differs from other approaches that are typically analysis-driven or even experimentalThe program team very quickly develops and confirms a set of working understandings (i.e. hypothesis) during the initial weeks of the initiativeThis hypothesis serves as the basis for the preliminary design of the SAP solution and impacts to the organization
A hypothesis-driven approach differs from other approaches that are typically analysis-driven or even experimentalThe program team very quickly develops and confirms a set of working understandings (i.e. hypothesis) during the initial weeks of the initiativeThis hypothesis serves as the basis for the preliminary design of the SAP solution and impacts to the organization
Follow a HypothesisFollow a Hypothesis-- Driven ApproachDriven Approach
1
Leverage an IntegratedLeverage an Integrated Systems LifeSystems Life--Cycle DeliveryCycle Delivery
(SDLC) Methodology(SDLC) Methodology
2
Focus on a Core TargetFocus on a Core Target PlatformPlatform
3
Adhering to a common SDLC methodology reduces risk, optimizes schedule performance, and allows for a common vocabulary throughout all activities of the initiativeAny SDLC methodology should be viewed as a “guidebook”, not a “cookbook” – we have found success leveraging ASAP
Adhering to a common SDLC methodology reduces risk, optimizes schedule performance, and allows for a common vocabulary throughout all activities of the initiativeAny SDLC methodology should be viewed as a “guidebook”, not a “cookbook” – we have found success leveraging ASAP
Utilizing numerous point solutions to achieve sustainability goals will create very high integration complexity and cost in the eventual solution architectureIt is best to consider a small landscape of possible corporate sustainability solutions, leveraging a core target platform (like SAP) to satisfy the objectives of the sustainability initiative
Utilizing numerous point solutions to achieve sustainability goals will create very high integration complexity and cost in the eventual solution architectureIt is best to consider a small landscape of possible corporate sustainability solutions, leveraging a core target platform (like SAP) to satisfy the objectives of the sustainability initiative
Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 28
Framework for a Corporate Sustainability Program / 2
Generally successful sustainability programs follow ASAP, leveraging the planning phase to identify key objectives from the requirements documents– Select a preferred sustainability solution path– Develop an implementation plan
Typically the Project Preparation phase may be reflected as a sequence of tasks defined by deliverables that meet key sustainability objectives
At the end of the Project Preparation phase, the company should be ideally positioned to continue immediately with the subsequent phase (Business Blueprint) through the remaining phases of the sustainability program initiative, culminating in Go-Live and Support
Key success factors to maximize value realization from an SAP solution– Scope management– Sound architectural principles– Stakeholder alignment– Organizational change management– Risk management
Phases, tasks, and deliverables generally consider the following — starting with Planning and Project Preparation, which is the first phase of the ASAP methodology and approach.
Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 29
Framework for a Corporate Sustainability Program / 3In Phase 2 of the ASAP model, the team develops the “Blueprint” — how conceptually and functionally the selected solution will support the business. Functional Specifications across key “work streams” are mapped to core technologies, OCM and risk plans, and “RICEF” estimates.
Level 3Area Req # Business Requirement
(What)Business Reason for the Requirement (Why)
Comments Req # Business Requirement (What)
Business Reason for the Requirement (Why)
Comments
1 1
1.01
Ability to view inventory quantity and the following statuses at the plant, storage location, item and batch level
• Stock on-hand (booked, available)• Frozen/Blocked• Quarantined• Reserved (available, unfilled reserved request)• Enroute (shipped, not shipped) • O&S Enroute (“S” bldg)• Overage and Short • Month-to-date• Week-to-date• Today
The business needs to be able to view quantities and inventory statuses to perform the necessary replenishment and/or allocation activities
Storage locations can have different shipping points (due to being miles apart)
‘Month-to-date’, ‘Week-to-date’ and ‘Today’ values refer to production data and P/O receipt data only. 1.01
Ability to view inventory quantity and the following data elements at the plant, storage location and batch level for a specified material number:
• Stock on-hand (booked, available)• Frozen/Blocked• Quarantined• Reserved (available, unfilled reserved request)• Enroute (shipped, not shipped) • O&S Enroute (“S” bldg)• Overage and Short • Week-to-date• Actual Production and Purchase Order Receipt data (Month-to-date, Week-to-date, Today)
A custom report will be developed serving as an inventory dashboard.
SAP transaction MMBE can be used to view several of these fields. However, it does not meet all of the Bridgestone requirements. A new T-code, e.g. ZMMBE, will be developed
Security will be developed to control who can view the inventory by storage location. Specifically, Bridgestone wants to control who can view the inventories in storage location ‘MISC’.
2 2
2.01
Ability to valuate inventory appropriately
The business needs to accurately represent the value of inventory. 2.01
Ability to valuate inventory appropriately
Inventory valuation will be in SAP. The country-of-origin of the batch will be mapped to the country of the split valuation
2.02
Ability to verify that the inventory valuation increased by the split valuation amount for the country that produced this product
The business needs to accurately represent the inventory value for product/inventory produced in various countries.
A material number with multiple countries of origin have the same transfer price if one of the UPCs is made in the U.S. If a tire is made, for example, in Japan and in Thailand and is not made in the U.S., the transfer prices may be different.
2.02
Ability to verify that the inventory valuation is properly adjusted as the inventory changes at the batch level.
Inventory valuation will be in SAP The country-of-origin of the batch will be mapped to the country of the split valuation
3 3Ensure integrity of batch data The business needs to ensure the batch data
accurately represents the UPC data/class d ithi th t l ti f th l t
When a warehouse reclassifies i t th SAP
Ensure integrity of batch data As changes to the inventory Class Codes are occurring in COPS, these changes will be
fl t d i SAP b i t ti d
As inventory is moving from one class to
th l (
Level 1 & 2
Ability to perform inventory overview and analysis Ability to perform inventory overview and analysis
Ability to perform inventory valuation
Ability to monitor batch level inventory
Ability to perform inventory valuation
Ability to monitor batch level inventory
Level 3Area Req # Business Requirement
(What)Business Reason for the Requirement (Why)
Comments Req # Business Requirement (What)
Business Reason for the Requirement (Why)
Comments
1 1
1.01
Ability to view inventory quantity and the following statuses at the plant, storage location, item and batch level
• Stock on-hand (booked, available)• Frozen/Blocked• Quarantined• Reserved (available, unfilled reserved request)• Enroute (shipped, not shipped) • O&S Enroute (“S” bldg)• Overage and Short • Month-to-date• Week-to-date• Today
The business needs to be able to view quantities and inventory statuses to perform the necessary replenishment and/or allocation activities
Storage locations can have different shipping points (due to being miles apart)
‘Month-to-date’, ‘Week-to-date’ and ‘Today’ values refer to production data and P/O receipt data only. 1.01
Ability to view inventory quantity and the following data elements at the plant, storage location and batch level for a specified material number:
• Stock on-hand (booked, available)• Frozen/Blocked• Quarantined• Reserved (available, unfilled reserved request)• Enroute (shipped, not shipped) • O&S Enroute (“S” bldg)• Overage and Short • Week-to-date• Actual Production and Purchase Order Receipt data (Month-to-date, Week-to-date, Today)
A custom report will be developed serving as an inventory dashboard.
SAP transaction MMBE can be used to view several of these fields. However, it does not meet all of the Bridgestone requirements. A new T-code, e.g. ZMMBE, will be developed
Security will be developed to control who can view the inventory by storage location. Specifically, Bridgestone wants to control who can view the inventories in storage location ‘MISC’.
2 2
2.01
Ability to valuate inventory appropriately
The business needs to accurately represent the value of inventory. 2.01
Ability to valuate inventory appropriately
Inventory valuation will be in SAP. The country-of-origin of the batch will be mapped to the country of the split valuation
2.02
Ability to verify that the inventory valuation increased by the split valuation amount for the country that produced this product
The business needs to accurately represent the inventory value for product/inventory produced in various countries.
A material number with multiple countries of origin have the same transfer price if one of the UPCs is made in the U.S. If a tire is made, for example, in Japan and in Thailand and is not made in the U.S., the transfer prices may be different.
2.02
Ability to verify that the inventory valuation is properly adjusted as the inventory changes at the batch level.
Inventory valuation will be in SAP The country-of-origin of the batch will be mapped to the country of the split valuation
3 3Ensure integrity of batch data The business needs to ensure the batch data
accurately represents the UPC data/class d ithi th t l ti f th l t
When a warehouse reclassifies i t th SAP
Ensure integrity of batch data As changes to the inventory Class Codes are occurring in COPS, these changes will be
fl t d i SAP b i t ti d
As inventory is moving from one class to
th l (
Level 1 & 2
Ability to perform inventory overview and analysis Ability to perform inventory overview and analysis
Ability to perform inventory valuation
Ability to monitor batch level inventory
Ability to perform inventory valuation
Ability to monitor batch level inventory
Level 1 and 2 Functional Design (multiple design paths) Program Communication and OCM Plan
Program Implementation Risk Management Plan
INT # P1/P2 OBJECT NAME
1 2 AMTS -> SAP (Tire orders, auto parts, replenishment order tires, replenishment order auto parts)
2 2 SAP -> AMTS (Order confirmation) 3 2 AMTS -> SAP (Order receipt from AMTS C&F stores) 4 1 BFDI -> SAP (ATB) sync 5 1 BFDI <- SAP (Material Master Common Format) 6 1 BFDI <- SAP (Customer Master Common Format) 7 1 BFDI <- SAP (Zip Code Master) 8 1 BFDI / DR -> SAP (External billing input/bil ling credits - Common Format) 9 1 SAP -> BFDI (Government price books)
10 T COPS -> SAP (Item master synchronization) 11 T COPS -> SAP (Customer master synchronization) 12 T COPS -> SAP (Order reconciliation) 13 T COPS -> SAP (Customer orders) 14 T COPS -> SAP (Customer Change Orders) 15 T COPS -> SAP (Customer shipments) 16 T COPS -> SAP (Inventory receipts) 17 T COPS -> SAP (Bay lane inventory) 18 T COPS -> SAP (Inventory adjustments-scrap, lost inventory, etc) 19 T COPS -> SAP (Inventory reconcil iation) 20 T SAP -> COPS (Deliveries) 21 T SAP -> COPS (New materials) 22 T SAP -> COPS (Customer Orders) 23 T SAP -> COPS (Item master synchronization) 24 T SAP -> COPS (Order master synchronization) 25 T SAP -> COPS (Customer Change Orders) 26 T SAP -> COPS (Customer shipments) 27 T SAP -> COPS (Inventory receipts) 28 T SAP -> COPS (Bay lane inventory) 29 T SAP -> COPS (Inventory adjustments-scrap, lost inventory, etc) 30 T SAP -> COPS (Inventory reconcil iation) 31 1 DiForce (Warren) -> SAP 32 1 SAP -> DiForce (Warren - ASRS) 33 1 DiForce (LaVergne) -> SAP 34 1 SAP -> DiForce (LaVergne - ASRS) 35 1 DRP -> SAP (Stock transport orders) 36 1 SAP -> DRP (Finished ti re/tube inventory) 37 1 SAP -> DRP (Finished ti re/tube sales orders) 38 1 SAP -> DRP (Finished ti re/tube enroute) 39 1 SAP -> Central Forecast 40 1 SAP -> MPS
INTE
RFA
CE
S
41 1 MPS -> SAP
Interface Scenarios, Analytics, Reports, Enhancements, Forms
Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 30
Framework for a Corporate Sustainability Program / 4In latter phases of the ASAP model, the project team will configure the core functional and technical elements, implement the OCM and Risk Management plans, ready the technical environment for Go- Live, and plan and execute testing, system cutovers, and “sunsets” (retirements) as necessary.
Technical Environment Readiness
Program Risk Readiness
CostOutsourcer Contract buy Spot but Contract buy Ga
Process steps # transactions (mn) nternal (mn Supp (mn) Internal (mn) Supp (mn) Internal (000$) Supplier (000$) Internal (000$)
-$ -$ -$ Source Strategic 1,330,000 4 0 0 0
Exception <$500 1,820,000 6 0 0Other 350,000 0 0 15 10,150$ -$ 3,281$
Requisition and ap Strategic 1,330,000 0 0 0Exception <$500 1,820,000 0 0 0Other Expert (client) 175,000 10
Non-expert (clien 175,000 0 0 20 -$ -$ 3,281$ Order Vendor direct Expert (client) 3,150,000 4 5 0
SAP Non-expert (clien 0 0 0 0Expert (client) 350,000 0 0 5 5 7,875$ 9,844$ 1,094$
Ship / Receive Strategic 1,330,000 5 10Exception <$500 1,820,000 1 2Other 350,000 5 10 5,294$ 10,588$ 1,094$
Verify Strategic 133,000 1 0 0 0Exception <$500 1,820,000 0 0 0 0Other 350,000 0 0 0 0 83$ -$ -$
Invoice None 35,000 0 0 0 0Electronic 3,115,000 0 3 0 0Paper 350,000 0 0 0 3 -$ 5,841$ -$
Match None 1,820,000 0 0 0 02 w ay 1,330,000 3 - 0 0 0
vity 3 w ay 350,000 10 0 0 - 0 466$ -$ 2,188$ Approval Required 1,330,000 3 2 0 0 0
Required 350,000 3 0 2 4,156$ -$ 1,094$ Pay Electronic 3,150,000 0 0 0 0
Check 350,000 6 0 2 0 2 -$ 438$ 1,313$ Systems 3,500,000 27,000$ 3,000$ Finance Charge -$ 132,559$ -$
Total 55,024$ 159,268$ 16,344$
Cost Envelope Management
Organization Change Readiness (Playbooks, Procedure Enablement)
Value StreamValue Stream
1. Inventory Reduction
1. Inventory Reduction
2. Asset Utilization2. Asset Utilization
15. Supply Chain Efficiencies
15. Supply Chain Efficiencies
16. Sales Improvements
16. Sales Improvements
Value Capture MilestonesValue Capture Milestones
Site Deployments / Process Improvement UpdateSite Deployments / Process Improvement Update
Inventory UpdateInventory Update
BU Equipment Utilization UpdateBU Equipment Utilization Update
Forecast accuracy updateForecast accuracy update
Logistics - route optimization update Logistics - route optimization update
Materials cost reduction -improved forecastsMaterials cost reduction -improved forecasts
BU Call-Center DeploymentsBU Call-Center Deployments
Time-to-Repair reduction update Time-to-Repair reduction update
MonthsMonths
Value Capture Plan
BU GO Live1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
Months
29
...
Site 1 Site 2 Site 3 Site 4 Site 5 Site 6
Implementation Program Readiness
Go-live1 2 3 n
Functional & Technical Configuration
Like
lihoo
d of
Occ
urre
nce
Inherent Impact SeverityLow (1-2) Medium (3) High (4-5)
Low
(1-2
)M
ediu
m (3
)H
igh
(4-5
)
Quick win A - AccountabilityExecution T - Technical
Strategic P - ProgramS - Scope
A1
A2
A3 A4
A5
S1 S2S3
T1
T2 T3
T4
P1
P2
DEV ELOPM ENT
030
INTE GRATION
030
PRODUCTION
030
SA NDBOX
030
OTC
030
Pr ior S D Solution
030
040
BF D DE VELOPM ENT
BF QQUA LIT Y
B FP PROD UCTION
BF S SA NDBOX
B FT Pr ototype
B FB
4.5B Release
T ranspor t Path
System NOT in Transport Path
Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 31
1.
Introductions and Firm Overview
2.
Corporate Drivers of Sustainability Programs
3.
Global Reporting Initiative Considerations
4.
Enterprise Architecture using SAP Building Blocks
5.
Considerations for Roles-based Process Controls
6.
Framework for a Corporate Sustainability Program
7.
Summary and Next Steps
Agenda
Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 32
Summary and Next StepsNewport’s planning phase consists of the facilitation of business and system requirements, and development of stakeholder buy-in, recommended internal processes and monitoring controls, metrics and indicator formulae and mapping, and solution “building blocks” for downstream implementation.
Planning and Engagement Model8-week timeline of activities
Organization Change and Project Management
Project Launch and Scheduling
Confirm Solution
Hypothesis
Validate Indicators to
Operating Model
Kickoff Presentation
Engagement Workplan
Stakeholder Interview Schedule
Kickoff Presentation
Engagement Workplan
Stakeholder Interview Schedule
Guiding Principles
Understanding of Existing Landscape
Pro forma Balanced Scorecard
Guiding Principles
Understanding of Existing Landscape
Pro forma Balanced Scorecard
Updated Balance Scorecard
Key Indicator Formulation
Operating Model Implementation Considerations
Updated Balance Scorecard
Key Indicator Formulation
Operating Model Implementation Considerations
Align to Landscape of
SAP Solutions
Conceptual Application
Requirements
Initial Data Mapping
Conceptual Technical
Requirements
Conceptual Application
Requirements
Initial Data Mapping
Conceptual Technical
Requirements
Recommend “to be”
Process and Solution Set
Recommended Solution Set
Key Solution Requirements
Target Solution Vision
Recommended Solution Set
Key Solution Requirements
Target Solution Vision
Develop Business Blueprint Project Charter
Blueprint Transition Plan
High-level Engagement
Workplan
Monitoring Processes
Blueprint Transition Plan
High-level Engagement
Workplan
Monitoring Processes
1 2 3 4 5 6
Week 0 Weeks 1-2 Weeks 2-4 Weeks 4-5 Weeks 5-7 Weeks 7-8
Phase 1“Strategic Alignment”
Phase 2“Solution Positioning”Checkpoint
Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 33
Summary and Next Steps
Newport’s experience has been that as we engage with our clients, we discover additional opportunities, challenges, ideas, and observations that are tangential or even unrelated to the initial scope of our engagement
In these cases we will advise our clients of these areas and when appropriate will recommend staff and Newport partners who might be able to assist our clients in these areas:
– Leadership development– Organizational conflict resolution– Strategic and Operational Planning– Lean Manufacturing Practices– Idea and Intellectual Property Management– Other Functional IT solution capabilities– Enterprise Performance Management
Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 34
Contact
Newport Consulting Group, LLC
William Newman, CMC
Managing Principal
7286 North Village Drive
O 248-978-2000Clarkston, MI 48346 USA
M 248-635-9902
Newport Consulting Group, LLC
Bill Rudiak
Principal
7286 North Village Drive
O 248-978-2000Clarkston, MI 48346 USA
M 415-601-3152