Time dependent hierarchy with BPC10 NW – Planning and Consolidations Use cases
Tried to explain this very powerful feature, introduced in BPC10 NW SP09, with some business use case examples
What is time dependent hierarchy – Hierarchies represent parent child relationship for a dimension that helps in aggregation/rollup of data. So the department figures roll up into company, products roll up into groups /categories etc. Time dependent hierarchy allows defining the hierarchies based on a time range and the roll up behavior will be different based on the time the data belongs to.
Use cases for time dependent hierarchy
- Employee re-organization – This is one of the most popular use cases for workforce planning wherein you need to change the hierarchies over time period – parent/child relationship based on the reorganization of the employees. Typically employees are moved across different departments or structure and this is time bound. Time dependent hierarchy is a very useful feature to take care of employee re-organization
- Legal entity restructuring – M&A, Company Restructuring – For financial consolidation in order to report consolidated financial statements, hierarchies play a very important role. Given the dynamic nature of current organizations where Mergers & Acquisitions are ongoing and also lot of company restructuring to avail certain benefits, hierarchy structure often change over time. Time dependent hierarchy is most relevant for such scenario where the consolidations can happen according to the hierarchy structure of the time period.
- Regional restructuring – moving region from Developed to Emerging – Many companies change their regional structures over time periods to optimize on the business opportunity. Typical example would be to pick a region and push it into an emerging market cluster. Time dependent hierarchy is good way to enable this region restructuring across time period very easily, so that planning and reporting can roll up into appropriate hierarchies based on the data.
- Chart of accounts restructuring – Though not a regular affair, it’s very much a key requirements to roll up accounts data in different ways across time, when the chart of accounts have been restructured.
- Customer reclassification – As customers grow, they are reclassified. It could be based on the relationship change with the customer. Typical example is moving customer from Medium Enterprise to Large Enterprise or to Key Accounts category. Time dependent hierarchy helps in ascertaining the right classification of customers depending on the time period they are analyzed or planned for.
- Product category changes – Often market drives changes in product category. E.g. Cars moved into a newly formed market category. Business users would also like to explore and find out what if the product category is changed over time, and the impact. Often organization changes involve product category changes as well. Time dependent hierarchy is once again very useful in this use case
As you see there are several use cases for time dependent hierarchy. The important point to note here is that it becomes even more powerful in the planning context, as business users would like to try out in a “what if” scenario and how the numbers roll up after a potential reclassification or category change. This makes is even more powerful feature for helping in business decisions
How does Time dependent hierarchy work with SAP BPC 10 NW
Business admin can create different time versions for a hierarchy, as you see in the below screenshot:
Now the business user would like to move Australia from “Established Markets” to “Emerging Markets” across different time periods for the Regional roll ups.
The idea is to see how the numbers would look like after moving a country – could be for an actual consolidations or just to simulate and review in a planning context. The user can create a report using EPM Add-in – by selecting Keydate as another context
Business user can also create two reports in a single view to see both the time dependent version of the hierarchy in EPM add-in
As you can see, with a very intuitive user interface, Business users can fulfill many of the use cases mentioned above through the “time dependent hierarchy” feature available in SAP Business Planning and Consolidations NW 10.0 product.
Questions, comments welcome…