SAP: Product Leadership - Hans Thalbauer

Companies are always keen to improve efficiency across all stages of the product lifecycle, seeking cost savings and faster time-to-market. Their search may well lead to a software platform that connects disparate systems and business lines to create a holistic, end-to-end view of all product processes, says Hans Thalbauer of SAP.

The difficult and unpredictable market conditions that have arisen from the global economic crisis are the prime concerns for almost every company in every industry, and their overwhelming response to this challenge has been to carve out costs wherever possible.

There is growing pressure to deliver products and services to market faster and more cheaply than before, but a major factor is the need to maintain and improve quality.

Lowering costs will be helpful to an organisation in the short term, but in the long term a sustainable business needs to keep feeding the process of innovation and turn ideas into successful products. ‘Everyone is aware of the situation we are in. Our customers are feeling the effects of the economic climate every day. They want to know how costs can be reduced, but it is important that companies remember to look at how they can innovate and bring relevant products to market,’ says Hans Thalbauer, head of solution management PLM for SAP AG.

Thalbauer is responsible for SAP’s product lifecycle management (PLM) solution within the company's Business Suite, which provides a single source for all product-related information.

In developing a solution that integrates the many diverse processes that go into making and selling a product, Thalbauer's team has had to develop a keen understanding of how its customers’ priorities are changing.

‘Consumers used to buy brands, but now they are making purchasing decisions based on price. Also, companies are no longer investing in growth, but in machines and technology to bring cost down,’ says Thalbauer.

‘They are also focused on sustainability. They want to make greener products and reduce their dependence on oil. Governments are driving this at the moment, and we can see that the US is working towards a greater focus on sustainability. This will be an ongoing effort not only in the US, but in Europe and Asia,’ he adds.

These trends mean companies are tightly focused on cost control and compliance, while balancing these considerations with the need to give consumers what they want.

For Thalbauer, the search for efficiency should lead to the implementation of end-to-end product processes. This is firmly within the realm of PLM, which helps companies innovate to differentiate and deliver the right product at an attractive price.

In the loop

Thalbauer says manufacturers should ask themselves three key questions:

  • How can I increase the speed of innovation to change existing products or develop new ones faster?
  • How can I understand what the market needs so I can define the process of innovation?
  • How can I reduce time-to-profit?

‘To answer these questions they need end-to-end processes that connect all the people who work on a product. This brings efficiency, which also improves when you include customers at the start of the product development process,’ says Thalbauer.

Driving continuous improvement through this kind of integration often requires a cultural shift.

‘SAP supports innovation, market insight and time-to-profit, and it is our belief that innovation requires end-to-end processes. But companies cannot have a silo approach to product development. We can help them achieve continuous improvement, integrate data and deliver it to the right people across all functions from marketing to manufacturing,’ adds Thalbauer.

Even when a product requires a high level of engineering complexity, SAP can efficiently integrate all parts of the development process and the technology involved.

Thalbauer also notes the growing trend in which companies are adapting their business models to include services with the sale of products. Essentially, there has been a shift towards selling a solution rather than simply a product.

In some cases, the product is actually secondary to the service. Apple’s sales of iPods on the back of the services available through its iTunes application offer an excellent example of how this model can work.

In such instances, SAP’s focus on product and service leadership comes into play. It recognises that some companies will rise to the challenges of the current market by pushing to lead on continuous innovation and that best-inclass performers may well be those who change their business model to focus on service delivery.

‘SAP can help deliver the integrated end-to-end view that companies need across different industries and business lines, so product development, for instance, can be linked to service delivery,’ says Thalbauer.

Software simplified

Achieving the necessary level of integration across many different software tools, information flows and teams within an organisation is a highly complex task. SAP has taken it upon itself to make that process simpler. SAP PLM is one element of the SAP business suite, which offers a modular approach to the software that underpins critical business processes.

The PLM element can help companies guide a product from initial concept through manufacturing to product service, all the while ensuring that they are meeting the needs of the end consumer. It allows products to come to market more quickly, but also ensures that companies are compliant with all industry standards.

Furthermore, improvements in the flow of information around an organisation enables faster decision-making processes, allowing a company to be more agile and able to carve out a competitive edge. PLM facilitates portfolio and project management through its focus on five key areas: strategic planning, resource and schedule planning, cost control, information transparency, and improved management oversight.

Many customers have been attracted by the prospect of lower project costs, greater resource efficiency, improved collaboration internally and with partners, better portfolio monitoring and the closer alignment of product process with budgets and strategy. These benefits accrue from PLM’s focus on four key stages that make up the end-to-end product process.

The first area is continuous innovation, which requires a company to gather information about its target market and evaluate the product ideas that emerge. PLM helps these companies create portfolios of product ideas and develop the project management structures to carry them forward. All the parties involved bring the initial idea into reality as a defined project and help establish milestones for execution.

Secondly, PLM brings these projects into an environment of integrated product development. It handles the documentation process and helps to create the bill of materials, for instance, to bring together the resources that will go into the manufacture of the product.

It also connects the many authoring tools in the engineering and design process, enabling a company to include input from the service and manufacturing departments at an early stage in the product development.

PLM also helps companies deliver products as a service, giving them the flexibility to adapt their business models. Finally, it embeds compliance and sustainability into product development, ensuring that the product and the processes that create it adhere to the different regulations that apply across a range of industries and jurisdictions.

‘We integrate people, systems and processes. We remove complexity and provide the right information to all the different roles so they can make faster decisions and reduce the time-to-profit for each product. But a holistic view of the entire product lifecycle is the most important element. Companies must understand that no single part of an organisation, or any one software tool, can achieve this,’ says Thalbauer.

‘Companies may not have asked themselves if they are doing the right thing. They may not have sufficient resources to improve their processes or they may have too many operational silos, which means information is not available to everyone. They may even have problems with limited accountability.’

‘Many customers are now taking steps to make a single person responsible for the whole product development process. We can help them by providing the tools to support better decision making and enable execution in line with strategic goals.’

If a company is willing to make the necessary cultural changes then they can greatly benefit from the kind of platform that SAP has to offer.

Hans Thalbauer, head of solution management PLM for SAP AG.