SAP BPC is one of the most effective modules that provide budget planning forecast and financial consolidation capabilities. It provides a single perspective of the financial and operational information in a unified solution that supports performance management processes.
Moreover, the solution also supports forecasting to speed up the budget and closing cycles.
This makes SAP BPC a critical component of business planning, as financial planning, budgeting, and forecasting are crucial for any organization that wants to run a business successfully.
SAP BPC overview
SAP BPC helps organizations streamline their financial planning and reporting processes by automating tasks such as data collection, budget preparation, and financial consolidation.
The solution can be deployed on-premise, in the cloud, or as a hybrid model. BPC is designed to meet the needs of finance departments and provides a flexible platform for financial planning and reporting that can be tailored to meet the specific requirements of an organization.
Unified Application
Planning and consolidation in one single product application minimize maintenance improves information integrity, and simplifies deployment. It also enables flexible planning and consolidation functions.
- It extends the value of your investment in SAP and non-SAP environments.
- Owned and managed by business owners
- Business owners manage the process models and reports with little dependence on them.
- Familiar or easy to use
- It is very easy to use, and supportive native Microsoft Office tools are also available. Web browsers access a central database.
- Aligning financial and operational lines.
- Helps in determining financial objectives and operational plans with strategic objectives.
- Reduce the budget cycle time next, and it helps minimize the budget cycle time.
SAP BPC Versions
SAP BPC for Microsoft
Currently, this version is under maintenance, and no new developments for this version have been observed. But developers might release new updates and service packs soon; these updates will fix issues in other software like Ms. office.
Sap BPC for NetWeaver
The SAP BPC 10.1 version is completely powerful, and it combines the benefits of BPC and BW integrated planning for the version that uses Hana in the memory database. This makes data handling quick, and the version also has a front-end portal. This allows the users to connect to the SAP analytics cloud, which facilitates hybrid planning. The version has two models, standard and embedded. The embedded model needs data modeling in business warehousing. On the other side, the standard model data modeling is performed by users in the front end.
SAP BPC Optimized
This version runs directly on SAP Hana, and the major advantage of using this version is that it removes any data replication. Due to real-time integration with the ERP layer, no extraction transformation and load methods are needed. This means the master data can be shared easily in the integrated environment since users can access transactional data in real-time.
Built-In Functionalities of SAP BPC
Strategic Planning
It helps the team formulate the vision, mission, and core values. The unit can develop strategic plans to uphold the competitive advantage in the marketplace while helping them answer questions like ‘what the corporation wants to be?’, ‘How to go there?’ and ‘How to measure what the corporation is doing?’.
Reporting
Ensures that the progress of the performance is monitored and the problems are solved in time while efforts are constantly improved.
Budgeting
It goes beyond predicting future results. It is all about learning actions and unexpected operations of the organization over the next year. Budgeting is done for proactive management and also measures corporate performance.
Forecasting
Enables predicting future outcomes. It is mainly done throughout the year to reflect all the changes that have occurred in the internal or external environment. It determines how the internal environment impacts the original plans. The primary goal is to provide accurate information or minimum risk management planning and decision-making.
There are mainly two platforms in the SAP BPC finance, and at least 80% of the functionality is the same; the only difference would be in the back end. In every platform, there are two versions:
- SAP BPC Ms Microsoft platform
- SAP BPC NetWeaver platform
Benefits of SAP BPC to Enterprises
Aligns the Company Together
As SAP BPC offers a single view of the organizational information, it can help you strengthen the strategic alignment across different operating units. SAP BPC encourages leaders to determine clear high-level objectives and expectations and create actionable goals to achieve them. In addition, the streamlined nature of the program can allow you to position your teams better to work together and reach all the company objectives.
Enhances Profitability
The platform allows organizations to make small profitable decisions based on real-time information, which accounts for the market conditions. The accurate projections give you the foresight to identify the risks and adjust the budget to reduce losses. The top-down view can also help you allocate resources effectively and reduce waste significantly.
Improves Productivity
SAP BPC architecture automates essential business processes, including consolidation and forecasting and can save your team time and shorten the budget cycle. In addition, the all-in-one nature of the solution helps you work efficiently instead of moving information between the programs.
SAP BPC Architecture
The SAP BPC architecture features Microsoft Excel and the NetWeaver version. They support different business rules and script logic for preparing and planning. The significant components are mentioned here.
- The SAP ERP environment recommends you use the EPM plugin for all the business models that follow BPC.
- The SAP ERP environment suggests you use the analysis plugin for the best integration in the business warehouse metadata transactions.
SAP analysis plugins would be managed and developed as an analysis for the office, which is released based on the recommendations given by SAP. Thanks to its Microsoft Excel capabilities, SAP has invested in improving the BPC tool.
Furthermore, BPC goes beyond its financial capabilities because it works like a solid analytical application development platform. It has developed in a way capable of solving different business needs to meet customer expectations in time. This tool allows the customers to be dynamic while designing the business planning and expanding the application development.
Creating an Effective SAP BPC Strategy
- It would help if you considered the checklist below to create an effective SAP BPC strategy.
- All the budgets and forecasts must be done at the same aggregation level.
- Simulation of the budget and forecast could be automatically produced or stimulated using any key business drivers, including the revenue growth estimates.
- The budget and forecast simulations can be produced automatically.
- It would help if you always moved towards accounting best forecast and used language your business understands.
Business Planning Best Practices for SAP
- All the budgets and forecasts would be done at the same aggregation level
- Simulation of budget and forecasts can be automatically produced, or results can be simulated using any of the benefits drivers
- Budget and forecast simulations can be automatically produced, and this capability is important for the overall decision-making assistance provided by the SAP enterprise performance management suite of the products provided in this app analytics cloud.
- Budgeting and forecasting are a continuous loop of measuring planning and simulation processes, which relies on updated insight from multiple functions and regions. Budgeting and forecasting take anywhere around nine months.
- Meet all the strategic objectives and plan from the bottom up.
- It is always good to move from the accounting-based forecast to a more business-driver-based one, and you have to use the language the business understands.
- Reduce the budget’s complexity and allow the users to supply extra detail wherever important.
- Standardized planning models are used throughout the company, ensuring consistency and comparability of the results.
- The annual budget would be tied back to the most recent forecast, and the company would use rolling forecasts as the basis of the budget.
- The forecasting system allows the users to directly access all the standardized input forms or electrically distribute the standardized templates at the start of the cycle.
- The forecasting system leads the user through the forecasting process without any training.
- The forecasting system also uses a central server environment to eliminate all the budget consolidations and manual data reentry. All the personnel responsible for the budget input would have web-based data entry systems.
- The planning and forecasting process is collaborative that allows the supervisors to review and approve all the statuses at any point in time while individuals collaborate and work together on plan creation and forecasts in the virtual team environment. It is the only reason facilitating effective teamwork is important to set up this process.
Conclusion
Business budgeting, planning, or forecasting is a challenging process. Studying the business environment demands sophisticated, simple, and powerful interactive tools to support all the functions. The process involves thinking about the business problems instead. Creativity, discipline, and numeracy are required for SAP consultants, partners, and customers to build, design, deliver, and constantly improve the process to achieve the desired outcome. Budget planning, budgeting, and forecasting are challenging processes in today’s business environment.
Sophisticated and powerful interactive tools are important to support thinking about business issues versus wrestling with the tool. Creative discipline numeracy is required for SAP consultants and SAP partners besides customers to design, build and deliver while constantly improving the process to achieve the desired objectives.
TekLink is a one-stop solution to provide advanced analytics. Our experts focus on making an impact via data. TekLink offers world-class business analytics and planning consulting services that help to delight customers.
