On the Road with SAP Analytics Cloud Planning and Cost Allocation – with a Bit of Closed Loop Insights
In this installment of the On the Road with Analytics Cloud series, we’re taking a closer look at the planning capabilities. The fact that we do have planning capabilities together with live analytical insights and predictive analytics, in itself is already very special. We call this the closed loop of insights—at any moment in time, a user can step into the loop and start analyzing, predicting, or planning insights and see and simulate interdependencies.
The closed loop of monitoring (business intelligence), planning, and predictive analytics combined in ONE tool is unique and not available anywhere else in the market. SAP Analytics Cloud delivers on this promise. You might think, Very nice Iver, but why should I care? Well, consider the following advantages.
1)At any point in time, you as a user have actuals, budget, and predictive forecast numbers available for insights.
- No more big projects to consolidate actuals and planning numbers in a separate data store and build separate insights on top—it all is available in SAP Analytics Cloud.
- If you already did set up your planning flows in SAP Business Planning and Consolidation, SAP Analytics Cloud easily interacts (bi-directional) with that.
2)Since SAP Analytics Cloud allows users to work with versions of data so they can compare them (these versions are either private or public for all users).
- Why does this matter? Well, imagine you have a forecast set up and want to see what happens if you’d raise that forecast with xx%. You just make a separate version and apply the raise. SAP Analytics Cloud will distribute or spread the raise among the underlying attributes (according to the rules you can influence).
- Now it gets interesting—since you can compare your new version of forecast with the original version, it basically means you can do advanced simulation.
- There are even the Value Driver Tree and the variance reports that allow you to visualize your simulation. (See screenshot below.)
3)There are predictive analytics capabilities. They come in to play not only if you want to predict your forecast, for example, but also if you require insights of the correlations of dimensions to certain KPIs.
- If you want to know what attributes contribute the most/least to a certain KPI, SAP Analytics Cloud’s embedded algorithms show you through the Smart Data Discovery
- Imagine a use case on Spend analyses—you might want to know what suppliers, products or materials contribute the most to maintenance costs bearing a certain period in time.
4)It’s all Cloud based: no infrastructure to set-up, no big teams and big projects to initiate 360° insights projects, no nightmares about new versions and upgrade, and stunning performance because of underlying in-memory computing.
Cost Allocation and Drivers
One of the key use cases for using a planning tool is of course, cost allocation. Cost allocation is a process of providing relief to shared service organization’s cost centers that provide a product or service. In turn, the associated expense is assigned to internal clients’ cost centers that consume the products and services. For example, the CIO may provide all IT services within the company and assign the costs back to the business units that consume each offering.
The core components of a cost allocation system consist of a way to track which organizations provide a product and/or service, the organizations that consume the products and/or services, and a list of portfolio offerings (like a service catalog).
A second important component is the allocation-driver. For example, depending on whom you charge, you might want to add an uplift because of tax regulation rules. The driver is basically a definition/rule one applies to a (group of) allocation(s).
Below is video I created to show you an overview of the SAP Analytics Cloud for Planning features and capabilities. Of course, I can’t cover all of them, so in this video I focused on the process of allocating costs using predefined drivers. The allocations are either ‘1 on 1’, ‘1 to many,’ or ‘many to many’.
Another element of planning, forecast, and budget control is the distribution workflow of it. For example, if you did decide the forecast for next quarter needs to be raised by 4%, you might want to push this raise down to your delegates asking them to raise the volume of the product-sales-forecast so it matches your raise.
This push-back or distribution follows a workflow allowing you to see whether the raise is done, to adjust or even overrule it. It also allows you to consolidate the individual raises into a new adjusted forecast.
The same workflow can be performed for your budgeting or planning. In this video, my colleague demonstrates the working of this workflow. It’s all part of SAP Analytics Cloud !
If you want to know more on the planning capabilities of SAP Analytics Cloud, please consider these resources:
This post originally appeared on Iver van de Zand’s blog, and has been republished with permission.