Integrated Financial Planning for Hybrid ERP with SAP Analytics Cloud

Hybrid Cloud is the new black. If you have missed our earlier blog series, click here to demystify the hybrid deployment options.

In this blog post, we will look at how organizations can leverage Integrated Financial Planning for their Hybrid ERP systems with SAP Analytics Cloud.

We start with an introduction to Headquarter Subsidiary hybrid deployment model. Next we will see how SAP Analytics Cloud best integrates with SAP S/4HANA systems followed by a use case of how Headquarter (running on SAP S/4HANA On Premise) and Subsidiary (running on SAP S/4HANA Cloud) can perform Integrated Financial Planning in SAP Analytics Cloud. We then see in detail how Integration works in Financial Planning with an example. In the last section you find all important links, references to kick start & accelerate your financial planning journey with SAP Analytics Cloud.

Headquarter-Subsidiary Model – SAP’s Hybrid deployment model with SAP S/4HANA Cloud provides integration capability among multiple tiers and helps standardize the processes across the Tiers. The semantic compatibility between the SAP S/4HANA Cloud data model and SAP S/4HANA On-Premise makes SAP’s Hybrid ERP strategy the best choice for deployment in a Headquarter-Subsidiary setup of MNCs. For details on the benefits & use case of Headquarter-Subsidiary deployment model, refer to whitepaper.

SAP Analytics Cloud is fully integrated with SAP S/4HANA. Integrated Financial Planning for SAP S/4HANA business content comes with demo data in SAP Analytics Cloud and allows you to import your own data from SAP S/4HANA and to export your planning results back to SAP S/4HANA. The complete integration is part of the content delivery and is available out of the box. Revenue Planning, Cost Center Planning and Budgeting, Profitability Planning and Product Cost Simulation are based on the SAP S/4HANA data model in FI-CO and fully integrated with it.

Headquarter- Subsidiary deployment model – Use Case for Integrated Financial Planning Headquarter can do Group level business planning and input/edit to Integrated Financial Planning for Subsidiaries(on Actual data from Subsidiary system) in SAP Analytics Cloud. Different business users from both Headquarter and Subsidiary can get involved in the planning process.The planning data in SAP Analytics Cloud can be exported back to SAP S/4HANA systems and is available in Analytical reports for comparison with the actuals (Apps like Cost Center-Plan/Actuals, Cost Center-Plan/Actuals YTD, Internal Order-Plan/Actuals, Internal Order-Plan/Actuals YTD). Activity Cost Rates and Statistical Key figures planned can also be exported back to SAP S/4HANA systems, for details refer here.

Lets zoom in to see how Integrated Financial Planning works-Cost center planning, Product cost planning, Sales and Profitability planning and Financial Statement planning are fully integrated. This is how the integration works –
• Cost center activity cost rates can be used in product cost planning to calculate the product cost rates,
• Product cost rates can be used in sales and profitability planning to calculate the cost of goods sold,
• Sales quantities are used to calculate the overall resource consumption in product cost planning (total raw material and activity quantities),
• The total resource consumption can be used as an input for the cost center activity quantity planning and the following activity cost rate calculation,
• The sales revenue, sales deductions and cost of goods sold from the sales and profitability, planning can be used as input in the financial statement planning for the profit and loss calculation,
• The operational expenses from cost center planning can be used as input in the financial statement planning for the profit and loss calculation.

Lets see an example of how changes in raw material prices in Product Cost Rates Planning are reflected in the Profitability and Financial Statement Planning.

1) As pre-requisite we first prepare the data. We clear the plan data from the story ‘SAP__FI_BPL_IM_FINANICAL_STATEMENT_PLAN_ADMIN’

2) Open the ‘SAP__FI_BPL_IM_FINANICAL_STATEMENT_PLANNING’ story.
Click on the ‘Profit and Loss’ tab and use the Data Action Trigger to copy the gross margin from the profitability model.

3) Open story SAP__FI_BPL_IM_PRODUCTCOST_RATES and click on ‘Raw Material Prices’ Change Price of Piece –Click on the ‘Product Cost Rates’ tab Use data action to calculate the product cost rates based on the changed raw material price –4) Open story ‘SAP__FI_BPL_IM_PROFITABILITY_PROF_INPUT’. Click on tab ‘Product Cost Rates’. Use the data action to retrieve the product cost rates planned in the previous steps. Click on tab ‘Product Profitability’. Use the data action to recalculate the product profitability.5) Open the ‘SAP__FI_BPL_IM_FINANICAL_STATEMENT_PLANNING’ story. Click on the ‘Profit and Loss’ tab and use the Data Action Trigger ‘Gross Margin – Profitability Plan based’ to copy the gross margin from the profitability model.Here we see that Gross Margin Plan for 2021 changed based on changes made in raw material prices.

Thus we see how integration works in financial planning, how a change in raw material prices in Product Cost Planning makes a corresponding change in the Gross Margin in Financial Statement Planning.

Organizations can leverage Integrated Financial Planning content & integration which is available out of the box in SAP Analytics Cloud for Hybrid SAP S/4HANA systems.

Hybrid ERP systems requiring SAP Analytics Cloud for their Financial Planning solution should meet the technical prerequisites as stated here

Key references to accelerate your Integrated Financial Planning journey in SAP Analytics Cloud-
• For important highlights in Integrated Financial Planning in current release refer to Integrated Financial Planning
• For detailed steps on how to get started with SAP Analytics Cloud for Integrated Financial Planning refer to Getting Started with SAP Analytics Cloud
• For Setting up Import Connection between SAP S/4HANA Cloud and SAP Analytics Cloud, refer to Blog post
• For details on Planning Models, Stories, Data Actions in Integrated Financial Planning in SAP Analytics Cloud refer here
• For Importing Actual Master & Transactional Data refer here 
• For Exporting the Planning data, follow the instructions here

• SAP Note 2977560 – Integrated Financial Planning for SAP S/4HANA with SAP Analytics Cloud

SAP Best Practices References –
Scope Ids –
1YB -Import Connection Setup with SAP Analytics Cloud
4RC -Integrated Financial Planning

For any more questions or comments, please do message or write to me in comments section. Do like the blog post if you find it useful.

SAP Analytics Cloud is the recommended financial planning solution for SAP S/4HANA Cloud and On Premise. Stay tuned for more new planning features in SAP Analytics Cloud in upcoming releases.