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The Journey of SAP Profitability and Performance Management Sample Contents

“Tell me and I forget. Teach me and I remember. Involve me and I learn.” – Benjamin Franklin

Learning by example is the approach that we want to provide our partners and customers, because we create sample contents! They are exemplary configurations made available to customers to demonstrate best practices and ideas about how to model a variety of use cases using SAP Profitability and Performance Management. My name is Vladan and I am part of SAP Profitability and Performance Management sample content team for a last three years. Let me guide you through the history, current status, roadmap and usability of our sample contents, shed a light on how clients’ objectives and benefits have been defining our vision.

History

In 2017 SAP Profitability and Performance Management 3.0 has got new unified architecture and application functionalities. The first pack of sample contents came in January 2018 with four pioneer contents covering different cross industry requirements that could apply in each company, regardless of the industry it operates in. These first sample contents leveraged use cases of Profitability and Cost Management, Agile Plan and Forecast, IT Cost Management and Funds and Liquidity Transfer Pricing. Customers welcome these sample contents, so we have made some industry specific adaptions for Profitability and Cost Management in order to fulfill customers’ expectations from different industries.

Then next move was to respond to demand for calculating product carbon footprint, so we have extended costing models to analyzing carbon emissions following indicators and requirements for sustainability topic and developed Value Chain Sustainability Management content. With the feedback from the partners and clients we realized that we have achieved one more milestone topic, by natural extension from profitability to sustainability.

Besides Value Chain Sustainability and Profitability and Cost Management, driven by digital transformation, we established another two milestone contents: Transfer Pricing with Product and Service Costing and Tax Calculation and Reporting. With this, we opened new and big investigation areas.

During the second half of 2019 we were challenged by digital footprint and that was enough to jump into Process Mining topics, so at this point there are 7 different modules covered. In each service pack SAP Profitability and Performance Management is enriched with couple of new applications for Process Mining. This was another important milestone.

Allocation Hub, Liquidity Management powered by Process Mining, PCM to PaPM Activity Based Costing, Simple Cost Allocation Management and Financing and Investment Sustainability Management are further attractive use cases that we have created in the last couple of months. In the screenshot below, you can check available cross-industry sample contents.

We were inspired with advanced profitability analytics, so we have tailored Profitability and Cost Management use case to more industry-specific contents. From then on Sample Contents are structured into two big groups: cross-industry and industry-specific sample contents.

When it comes to industry specific use cases, there are plenty of subgroups such as: Consumer Industries, Discrete Industries, Energy and Natural Resources, Financial Services Industries, Public Services Industries and Services Industries. Inside every subgroup, we have customized Profitability and Cost Management use case to specific requirements, trends and KPIs from each industry. For example, offered applications come from the various industries: airline, telecommunication, retail, oiland gas, and many more. Check below list of available industry specific sample contents.

Current Status

By now we have developed 47 sample contents for SAP Profitability and Performance Management and each quarter we are improving the existing ones and producing new contents. Some of our sample contents have more than 10 versions, since we are trying to enhance them with up-to-date analytics capabilities, client feedback or market trend. Looking from business perspective we can roughly divide them into three pillars: Analytics and Sustainability, Finance and Operations.

The Analytics and Sustainability pillar is focused on the needs of the nowadays generations without making a compromise with the capability of future generations to satisfy their needs. This concept is composed by analyzing and balancing between three dimensions: economic, environmental and social. Sustainable management constraints the use of the resources through ecological and environmental pillars and provides a responsible scope for action, whereas economic dimension analyzes possibility of the long terms returns. Ideas presented above are further elaborated and implemented in the following sample contents: Value Chain Sustainability Management and Financing and Investment Sustainability Management.  Besides them, Tax Calculation and Reporting as well as Agile Plan and Forecast Modeling are part of the Analytics and Sustainability pillar.

Finance pillar is focused on development that follows trends and needs in the finance area, enables fast calculations, profitability analysis and cost tracking through various dimensions. Accelerated digitalization in global business models require new concepts that provide the insights of business performance at the channel level, by different countries, as well for each intercompany transfer. With these group of contents, we try to respond to many challenges one company faces on daily basis. Besides the first and the most known sample content from this group, Profitability and Cost Management that implements activity-based costing, this group contains Product and Service Costing with Operational Transfer Pricing content, IT Cost Management, Allocation Hub for integrating S/4 HANA either as an input or output of our content, as well as the content that transfers allocation logic from SAP PCM solution to SAP Profitability and Performance Management solution and many more.

The growing digitization managed to get companies around the world to compete in the operational excellence. Process mining is an essential element of achieving operational optimization in order to stay ahead of the competition. The focus of process mining is on gathering real-time event logs from company’s systems and analyzing them through visual flows. SAP Profitability and Performance Management contains different process mining modules: Order to Cash, Accounts Receivable, Purchase to Pay, Accounts Payable, Production Planning, Warehouse Management and Claims Management. Additionally, we are developing extensions to existing process mining contents, such as Liquidity Management powered by Process Mining.

Sample Content Vision

The purpose of creating simple use case calculations and reporting capabilities is to help a company and its corporate executives, business managers, and other operational workers to make better and more informed business decisions. Most proof-of-concept activities used to explain the features of the software solution are time-consuming, and companies cannot clearly know what are the capabilities that the software offers and are they flexible enough, easily integrated with their current infrastructure etc. But SAP Profitability and Performance Management sample contents are specifically created in order to serve this purpose: to cut the time for demonstrating the usability, showing high-speed during performance, interactive visualizations and simulation capabilities, tailored to the various industries. The common feedback that we have received is that SAP Profitability and Performance Management is a powerful tool to spot business problems or market trends from various financial or market data sources or to optimize internal business processes in order to increase operational efficiency like in process mining contents.

Now it is time to help you understand how to go from data to story, from a pile of numbers to a narrative that will best reach target audience. This is an exemplary structure, so you’ll be up and running with it very quickly and customize the reports for future use. The best practice of Content Development team is to start with demonstrating visualization options in reporting dashboard, with interactive “slice-and-dice” pivot-table analyses. Here is an example of report management for one of our sample contents.

Applications can rely on sales data, financial data from Profit and Loss Statement, or any other business data source that includes business performance management. Successful client stories and their use cases that are leveraged in the new versions of the sample contents provide valuable benchmark for other companies in the same industry. Dashboards can be used to show important KPIs that are calculated based on the latest actual and planned data, that may help improve decision making process.

Besides the reporting capabilities shown in Report Management, the contents have nicely structured processing functions that can be maintained in the Modeling Flow, as shown in the screenshot below.

Workflow of the activities where various groups of users can review their dependencies are shown in the Process Management screen, as shown in the screenshot below:

Future Roadmap

Planning of the future functionalities in sample content inspired the Content Development Team to think about new reporting visualizations, machine learning capabilities, dynamic processing, additional integration capabilities with SAP S/4 HANA, etc. In the next couple of quarters, we are looking forward to developing new Process Mining on S/4 HANA sample contents for Utilities and Credit Application modules as well as Process Mining – ERP Migration sample content. Additionally, there will be Budgeting and Planning sample content, Climate Change Risk Scenario Analysis, Accruals content, Free Trade content and many more. In the following link, you can find the Roadmap of SAP Profitability and Performance Management*, including detailed plan for future sample contents.

We are looking forward to sharing with you details of the specific sample contents, so stay tuned for detailed walkthrough of our favorite ones because they will be described in the next few blog posts.

Best regards!

Vladan Djokovic

 

*Legal Disclaimer:
The information in this presentation is confidential and proprietary to SAP and may not be disclosed without the permission of SAP. This presentation is not subject to your license agreement or any other service or subscription agreement with SAP. SAP has no obligation to pursue any course of business outlined in this document or any related presentation, or to develop or release any functionality mentioned therein. This document, or any related presentation and SAP’s strategy and possible future developments, products and/or platforms directions and functionality are all subject to change and may be changed by SAP at any time for any reason without notice. The information on this document is not a commitment, promise or legal obligation to deliver any material, code or functionality. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or noninfringement. This document is for informational purposes and may not be incorporated into a contract. SAP assumes no responsibility for errors or omissions in this document, and shall have no liability for damages of any kind including without limitation direct, special, indirect, or consequential damages that may result from the use of this document. This limitation shall not apply in cases of intent or gross negligence.
All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates, and they should not be relied upon in making purchasing decisions.
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