What a topic! I guess this is going to turn out to be a long blog, but I will do my best to keep it readable… Where to start? Ok, let’s first describe CPM (Corporate Performance Management). I’ll assume that if you are reading this blog you already have a good handle on the fundamentals of CPM, so I will skip that and go straight to how CPM translates into specific products at SAP…
Firstly, let’s take SAP’s acquisition of OutlookSoft. The OutlookSoft product (formerly called OutlookSoft 5) is now called “SAP Business Planning and Consolidations 5.0”, or SAP BPC for short… it wouldn’t be an SAP product if we couldn’t abbreviate it into another three letter acronym :-). As you could probably guess from the name, this product fills out two capabilities in SAP’s CPM portfolio, namely, Planning (including budgeting and forecasting) and Financial Consolidations (legal and management). Next up is “SAP Strategy Management” (SAP SSM), which was the former PilotWorks product from Pilot Software. SAP SSM is a scorecarding based solution, designed to monitor and manage organizational objectives, initiatives and metrics, as well as cascade these throughout the organization so that corporate strategy becomes relevant for all employees. Also a part of the SAP CPM portfolio is the SAP Business Profitability Management application by Acorn (SAP BPM by Acorn). Again, as the name implies, this solution is designed to model and optimize profitability, through the use of Activity-Based Costing methodologies (for those interested, I would also recommend reading this white paper on Time-Driven Activity Based Costing, which is a methodology that SAP BPC supports).
Last, but by no means least, is reporting. The SAP BPC and SSM products do come with built-in reporting and/or dashboarding capabilities for their respective solutions, however, as most readers will already know, SAP also has extremely sophisticated reporting and dashboarding capabilities in SAP NetWeaver BI. So today, we do have a number of options available for reporting, however, SAP NetWeaver BI does offer the most robust reporting capabilities and still remains the future direction for BI and reporting at SAP. However, the SAP BPC product in particular has some sophisticated Microsoft Office integration (particularly, but not limited to, Microsoft Excel), and was purpose built to provide some very nice capabilities for financial reporting. Therefore, as it stands today, financial reporting is possible through both the BEx Suite in SAP NetWeaver BI, as well as through the Microsoft Office client in SAP BPC. If you are interested in financial reporting, you should take a look at the capabilities of both products and see which solution is a better fit for your specific requirements. I will come back to the reporting topic a little later in the blog when I discuss how SAP is planning to move forward in the CPM space, but while we are on the topic of SAP NetWeaver BI, I just want to confirm that this is the strategic platform that all of the above products (SSM, BPC and BPM) will run on top of. Integration to the NetWeaver BI platform is the highest priority for us at SAP, and development is well under way for both SSM and BPC already. That does not mean that any customers running their solutions on the currently offered platforms will be forced to migrate off them as soon as the NetWeaver BI release is available – just that the NetWeaver BI option will become available for those who wish to leverage it.
Returning back to CPM now… I hope it is clear at this point what products and capabilities we are referring to when we at SAP use the term Corporate Performance Management. I think these products should completely cover any industry definition of CPM, and I believe SAP is one of the few vendors who could claim to have such a comprehensive CPM portfolio. However, for those with a bit of a history in the SAP world, you may well be asking “What about SEM?” (for those not familiar, SEM, or Strategic Enterprise Management, has historically been SAP’s offering in the CPM space). So let’s take the same approach and go through each of main products in the SEM portfolio.
First up… SEM-BPS (Business Planning and Simulation). Several years ago, the BPS product was transferred into the NetWeaver BI platform, and became known as BW-BPS. Since the release of SAP NetWeaver BI 7.0, the BPS product was no longer being enhanced any further, and BI Integrated Planning (BI-IP) took over it’s duties. So really, the question is not BPS vs. the Planning capabilities in BPC, but rather BI-IP vs. BPC. Fortunately for me, Prakash Darji has already written a SAP Business Planning & Consolidations (Outlooksoft) vs BI Integrated Planning. I won’t repeat anything he has already discussed, but to try and summarize, both of these two products bring a lot to the table, and each have different core strengths. The NetWeaver BI-IP solution offers an excellent infrastructure for planning applications that the BPC application will be able to take advantage of in the future. Therefore, SAP will continue to invest in both of these product lines because we are going to bring these two solutions together in the future. So you should feel completely comfortable with any investment you put into either of these two products. I know your next question is then probably “when and how are you going to bring them together?”. As I mentioned earlier, we are currently integrating the BPC product to SAP NetWeaver BI, and this takes time. You can expect the next BPC product to be completely integrated to BI (estimated for late Q2/2008), but this product will not be integrated to BI-IP, and nor will the BEx front-ends and the BPC front-ends be converged (i.e. we will still have 2 separate front-ends in the next BPC release). Front-end convergence, as well as having the BPC application leverage the BI-IP infrastructure, is planned for in the subsequent release, so more details about what this means from a product perspective will be available closer to the applicable release date.
So hopefully this answers your questions (at least the big ones) around the direction of planning. The next SEM product I would like to take a look at is the Balanced Scorecard and Management Cockpit solution. With SAP’s acquisition of Pilot Software, the future direction for scorecarding (not dashboarding… there is a big difference!) at SAP is SAP Strategy Management (i.e. these SEM components are not being enhanced any further, but continue to be supported by SAP). We see the SAP Strategy Management application brining a lot of to the table, including:
- A methodology agnostic approach, where the Balanced Scorecard is just one of many supported methodologies
- Advanced Operational Review/Briefing Book capabilities
- A highly collaborative solution that encourages discussions and explanations around the figures
- A modern and intuitive user interface
- Administration of the system by business users, with minimal reliance on IT
- The ability to use interactive, custom strategy maps/goal diagrams
- Support of both qualitative and quantitative KPI’s
- And many other benefits!
In terms of the Management Cockpit, similar results are achievable in SAP NetWeaver 7.0 through the BEx Suite and Visual Composer. Therefore, whilst there is no direct replacement of the Management Cockpit, the functionality it offered is readily achievable in SAP NetWeaver 7.0.
The last SEM product I wanted to discuss is SEM-BCS for consolidations. Obviously, BCS is a very functional product that SAP has developed over many years now, with many customers, for management and legal consolidations. Due to the breadth and distribution of SAP’s customer base, it has been enhanced over time to successfully support the language and regulatory requirements for all regions of the world. While the BPC solution for consolidations has not yet had the chance to go through the same scale of implementations to get to the same degree of robustness as BCS, it does provide business users with flexible, decentralized administration and reporting. That does not make one product more capable than other, it’s just that again, each product has its core strengths, and which one is right for you will depend on your specific scenario and requirements. However, you should feel totally comfortable investing in either solution today as both the consolidation capabilities of BPC and SEM-BCS are going to continue to be invested in by SAP. You may have seen the recent enhancements to SEM-BCS in Enhancement Package II, and more enhancements will be coming in future Enhancement Packages too. Of course the long term goal of SAP is to have one consolidations product, but the timing of when this will happen has not been finalized yet, which is why you will see SAP continue to be investing in both product lines. As I said, you should feel totally comfortable investing (or your prior investment) into either of these products.
Probably another burning question you might have at this point is what about migration between releases? SAP will be providing migration utilities to assist any upgrades to future product releases, but until we have the new product actually developed, we obviously can’t develop any migration tools. That means I can’t describe exactly what the migration tools will or will not do for each product, at this point in time. However, I can tell you that we are VERY conscious of this topic, we give it A LOT of thought, and we do intend to provide appropriate tools to minimize any work involved in upgrading from older product releases to newer ones. In fact, you can start to see the very beginning of the migration tools from SEM-BSC to SAP Strategy Management in OSS Note 1060670, where we have provided an export of the BSC customizing that will be able to be imported into SSM (note: this is just the beginning of the SSM migration tools as they are still under development, so this is not the complete offering of course).
So even though it was a bit long, I hope this blog has helped clarify some of the questions you might have around the next-generation CPM products we are working on. I of course don’t expect to have answered all of the questions you might have, but we will continue to provide more and more details over time.
BTW – We have recently launched a CPM Enterprise Performance Management (SAP EPM), so I would encourage you to post any questions on the overall CPM topic you have there, and we will also be launching a CPM page on BPX soon.