Wednesday, August 5, 2015

How to use KPI's in SAP Cloud for Customer


Business background

Sometimes when I ask a sales manager how he or she manages their salesreps, the response is often that the team is managed on sales turnover. Usually I reply with “OK! How do you do that?”… Do you have a magic button you push to increase sales volumes or something?”

Sales is a numbers game. Every sales organization keeps track of certain sets of numbers. It is easy to obsess over the obvious numbers like monthly or quarterly revenue or closing rates. Unfortunately, those numbers simply give you the “final score,” without giving you any insight on how your team plays their game.

Sales management simply wants to manage those activities that impact the increase of turnover and the performance of his team. For example they want to have better insight in the visit frequency of customers and how they vary in the sales team.

Organizations starting with CRM usually start with the basics such as planning and executing customer visits. To serve customers’ needs the salesreps should visit the customers regularly. A sales manager should have insight in the frequency of salesrep visits to their customers, what the individual performance is regarding customer visits and if sales is on track to meet their target.

SAP Cloud for Customer provides this insight but more often not in a straightforward way. Certainly, the reporting tool can provide the required data but involves many clicks to drill down to the right information. For this purpose SAP Cloud for Customers comes with standard functionality that gives sales management clear insight in the situation by defining KPI’s.


What are KPIs?

KPI’s are commonly used in a wide range of business processes. When you define a KPI it should be KEY to the success of your organization. For example, is there a direct relation between the number of visits and sales turnover?
It is related to PERFORMANCE so it should be SMART (Specific, Measurable, Achievable, Realistic, Time bound). A KPI usually has a target, benchmark or reference value.
It is used as an INDICATOR; in other words, it is something that gives leading information about future results.

The difference between Lagging Indicators and Leading Indicators

When discussing KPI’s it’s important to realize the distinction between Lagging Indicators and Leading Indicators. Lagging Indicators are outputs and results that are measured “after the fact,” and in most sales organizations these indicators get most of the attention. Simply, because they tend to be the metrics that go into reports to executives.
Leading Indicators are activities and actions that can be tracked or measured during the sales process. Leading Indicators can be for example how many calls a salesrep makes per month.

Example: Direct insight in the number of customer visits

Let’s assume that Sales management wants to have a better insight in the number of customer visits in the current month versus a set target value. Additionally they would like to see how many visits remain in status OPEN so that reports using the visit status use reliable data. This information should is presented to the sales manager in a chart to undertake immediate action if required. Sales management wants to have this information at their fingertips and available on their mobile device.

Based on these business requirements let’s start building the KPI. To use KPI in Cloud for Customer the following steps are described:
1. Find or create a report as a source for the KPI
2. Create the KPI
3. Assign the KPI to a business role and publish on the Home screen

A KPI uses a key figure from a report which gets its data from one or more data sources. Let’s not go into detail of building reports and the proper use of data sources. Let’s say we already have a report we can use like the Number of Visits report. This report uses the standard Visit Header data source. However this data source lacks the number of visits Key figure so I created a new key figure for that purpose. I also created a Relative Select (Month Start Date) so I can select all visits in the current month (or past 3 months, Last and current Months etc.)

In this example I have created a report (Number of visits Greece) and in the selection I use Country = Greece and Month (start date) = Current Month.



The report for this example case is presented as a horizontal bar chart which fits the purpose. I could make this report available to the Sales Manager and that's just that. What’s missing is a target value that informs the salesmanager of his sales team being on track. That is precisely what the KPI is used for.

Create the KPI

The KPI’s can be defined by the C4C administrator that has access to the Silverlight client. Go to Business Analytics-->Design KPI and click on New


On the General tab enter the KPI name and description. In the Current value section enter the report name and the key figure that is used in the KPI (Number of Visits). In this case C4C is used in multiple countries so I have created a selection for each country. Once the KPI is available on the home screen or mobile device you can tap/click on the KPI tile to show the underlying report. To do this you can assign the context report and select the correct report, view and selection.

On the Values and Tresholds tab I have set the Target value. This indicates how many visits sales should perform in the current month. Matching this with the current value shows you the deviation from the target. In this case I have set the target to 1.000 visits per month in the values section.

In the tresholds section I have set the threshold to 50 and 80 percent. This means that if the number of visits is below 500 (50%) my team is in the red zone. If the number of visits is below 800 (80%) but above 500, we’re in the orange zone. The direction of improvement is set to maximize (more visits is better).

In the preview mode you can see what your KPI looks like. You’ll see that the Actual and Target value are displayed as well as the correct context report. Once saved the KPI is available to show on the Homescreen.

Publishing the KPI

To publish the KPI you should assign the KPI to a business role first. Only users with this business role can view the KPI.
1. Log on as an administrator in the HTML5 client
2. In the HTML5 browser click on the Homescreen button.
3. Click on the cartwheel in the top right of your screen and choose Adapt
4. Select a businessrole to assign the KPI to
5. Click on the cartwheel in the top right of your screen and choose Edit



6. Click KPI and select the KPI you want to publish
7. Click on Publish
8. Click on the cartwheel in the top right of your screen and choose Leave adaptation mode
9. Now if a user with the assigned business role opens the Homescreen he or she should see the KPI presented as a tile

When you click on the tile the KPI is opened. In your browser it looks like this


10. It shows you the target versus the actual value and the context report.

In the Cloud for Customer app you don’t have the Homescreen available so no nice KPI tiles here. Instead you can use the Customer Insight app which you can download here.

Keep in mind that for future releases the Cloud for Customer app will offer a homescreen with KPI tiles. Download the SAP Cloud for Customer Extended edition here. It looks something like this.


When you open the Customer insight app directly or from the C4C app, you’ll see the KPI presented as a tile.


The tile itself can have different patterns which you can select.


The informed manager

Being a sales manager, what insight does it give you? Well, the target is set to 1.000 visits for the current month. In this example we’re halfway the month and over 50 % of the target (678 visits) therefor it’s safe to assume we are on track.


Some very active salesreps have already had more than 60 visits this month, a few are lagging behind. Time to encourage these salesreps to plan more visits. However there might be valid reason for their numbers like sick leave or vacation. One nice feature is you can add an annotation and send the report (actually a screenshot) by e-mail…. I know…it's not a very sensitive message!




I have created some more KPI’s and each one is presented as a tile. For a user these KPI’s provide direct information of actual vs target values, the direction it is moving in or which action the manager should undertake. This saves valuable time and he does not have to open multiple reports and drill down these reports to get the information he needs. However when you click/tap on the KPI tile, the context report is presented and you can easily drill down to any specific detail.

For impacting sales transformation, the most important KPIs are among the Leading Indicators. If you want to boost your Lagging Indicators, I advise you to focus on what you consider to be your most important Leading Indicators. As your sales team becomes more effective at executing these Leading Indicator Activities, the Lagging Indicators will improve.

Other functions

The set-up of KPI’s in SAP Cloud for Customer offers more functionality that is described in this blog but this will give you a head start in setting up KPI's yourself. One important lesson I learned myself is that, when creating reports and using or creating key figures, is to keep in mind how you can benefit from this by using KPI’s.

4 comments:

  1. Wow, the extended edition is superb.. CRM is all about reports & C4C seems to be having the best reporting capability in cloud CRMs..

    ReplyDelete
  2. Its a great tool for CRM , Implementation of reports is cumbersome and not suitable for Business Intelligence! I was looking at this to see if I can change the labels without changing the KPI! Can't see an easy option

    ReplyDelete
  3. Hi Guus,
    Awesome Article, This is what i looking for on KPI design.
    I have small query that can i remove "Reference" and "Target part" (Which shows at upper side) in KPI report.
    I just need to show target report there.

    Thanks

    ReplyDelete
  4. Hi Vincent,

    You can play around with the Reference and Target and you are free to use it in your KPI but I think it is always visible in the KPI no matter if you use target or reference values.

    Guus

    ReplyDelete