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Using SAP BPC For Strategic Or Standard Financial Planning

Both standard and strategic financial planning have their benefits to a business. Standard financial planning tends to be more about developing a bottom-up model. The industry as a whole seems to be moving away from this sort of financial planning model and into one that is more driver-based. Strategic financial planning offers a business long-term scope. By aligning the business’ goals with its financial planning, it can achieve success without having to worry about hitting budget limits. Traditional financial planning is more concerned with confining operations to what the business can afford. Strategic financial planning, on the other hand, takes the needs of the company and then starts designing a budget around priorities.

Using SAP BPC for Strategic Modeling

SAP BPC is perfect for designing and implementing a strategic financial planning model. A company interested in going the route of a strategic business plan needs to address a handful of issues as a prerequisite for implementing the plan.

  • Define the Company’s Mission: Because strategic planning focuses on what the business intends to achieve, the goal of the business must be clearly defined. The achievements should be in keeping with the business’ long-term mission.
  • Break Down Goals into Attainable Chunks: Strategic goals need to be achievable. Instead of defining a single, monolithic target, instead, consider breaking the main goal up into smaller sub-goals. Building and proposing attainable goals not only allows for flexibility for the company in the event of a leadership change but also encourages those working on attaining those ideals.
  • Be Aware of the Strategic Issues Within the Company and Industry: Initially, the goals that are determined should be the long-term goals that are in line with the company’s mission. From there, the company can examine how to achieve those goals in practical ways. Understanding the factors that affect the industry as a whole, and the company specifically can help to design alternative projects. Management can then settle on a final plan of action based on where the company wants to be within a particular period.
  • Develop a Timeline: Goals without timelines are not worth anything. The company’s goals need to fit into a schedule for achievements so that deadlines can be determined. Having a short-term deadline and a long-term deadline are both critical to the success of the strategic financial plan.
  • Determine Trends and Motivators: Developing the timeline will allow the business to explore the further tends and motivators that will bring about the success of the plan within the desired time.

Long Term Success Relies on Assessment

The strategic budget is only one part of the entire plan to drive a company’s success. Together with the budget plan, the business needs to incorporate its long-range planning and short-range forecasting to ensure the business can adapt to challenges it is likely to face. The top-down nature of strategic financial planning enables the company to utilize results from the previous year’s budget to drive the short and long-term planning for the coming year. Planning along these lines can be done using an Excel plug-in for SAP BPC after implementing automated GUI testing.

Standard Financial Planning using SAP BPC

While the system is ideal for strategic financial planning, conventional financial planning can also be done with SAP BPC. The software is designed to deal with complex planning and consolidation efforts. SAP BPC has the backing of SAP BW, meaning that if the company has its ERP processes already being processed through SAP, then the overall function of the financial planning system is streamlined.

Even though it can work with other finance systems, SAP BPC works best with SAP ERP as its central component, with the Financial Accounting and Controlling (FI-CO) module installed and running on the SAP installation. SAP BPC replaces the need for companies to invest in a separate financial planning module for their SAP install.

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