IBsolution Blog

How to modernize your planning applications with SAP

Written by Stefan Spieler & Holger Christes | Dec 7, 2022

Unpredictable events with global impact mean a high degree of uncertainty for companies. When sales markets abruptly disappear, raw materials are hardly available, and supply chains are disrupted, these developments are usually accompanied by rising prices and skyrocketing costs. It is true that there have always been macroeconomic changes to which companies have had to adapt in the past. However, the pace of change in the prevailing rules is currently much faster than it was ten or 15 years ago.

 

 

Would you like to modernize your planning in terms of processes and/or technology?

 

 

General conditions make modernization necessary

Companies are challenged to find suitable answers to the changing market conditions. It is essential to act quickly and efficiently – also in business planning, so that it can optimally support business decisions. The guiding principle for modern business planning is: flexibility and simplicity instead of time-consuming and highly accurate.

 

In this context, simulations, for example, are gaining in importance because they show the effects of changes based on company-specific KPIs. Forecasts enable upcoming developments to be predicted on the basis of algorithmic calculations and used for a rolling forecast. Potential areas of action that can play a role in optimizing planning also include the realization of system-supported planning with a high degree of integration and extensive automation in the planning processes.

 

What current planning solutions does SAP offer?

Over the course of time, SAP has repeatedly renewed its planning software and adapted it to the requirements of the time. One of the two current planning solutions from SAP is SAP Business Planning and Consolidation Embedded (BPC Embedded). This is an integrated IT tool that supports sound business planning and financial consolidation. The on-premise solution is based on the established planning technology SAP BW-IP (Integrated Planning) and combines it with the advantages of the SAP HANA database.

 

In addition to SAP BPC Embedded, SAP Analytics Cloud (SAC) is also available as a holistic cloud solution for planning, analysis and reporting. Users can directly access all the reports, dashboards and data models they need. SAC is SAP’s strategic product in the area of planning. This means that, in perspective, the majority of development resources will flow into the SAP Analytics Cloud.

 

Possible initial situations in planning

In terms of planning, companies bring with them very individual prerequisites that need to be considered in a modernization approach. We compare three possible starting situations as examples.

 

Non-SAP planning

Companies whose planning is not yet based on SAP solutions use appropriate tools from third-party providers. Experience shows that Microsoft Excel, for example, is still frequently used for planning. The planning processes usually have a low level of integration and are characterized by many manual interfaces. The result is time-consuming and rigid planning in which simulations hardly play a role.

 

If a stronger SAP focus is sought as part of the modernization of planning, the introduction of SAP BPC Embedded or the path to SAP Analytics Cloud are possible options. Whether a company opts for the on-premise or the cloud solution also depends on the company’s general SAP or IT strategy. There is also the option of using the content for financial planning in SAP S/4HANA.

 

SAP legacy systems

If companies already use SAP-supported planning tools such as SAP BW-IP or SAP BPC (not yet in the current embedded version), they are in a position to use them to map individual planning dimensions or even complete business planning. They feature deep technical and content integration, but their strong data focus makes them too cumbersome for extensive simulations.

 

The modernization of the aging SAP planning succeeds, for example, by switching to SAP BPC Embedded in the course of a migration or going to the cloud with SAC. Hybrid scenarios that combine SAP BPC Embedded and SAC are also well worth considering.

 

Current tools from SAP

In the third scenario, current SAP tools are already in use with SAP BPC Embedded or SAP Analytics Cloud. However, the companies are not yet using the available functionalities to their full extent.

 

Accordingly, modernization in this case is aimed at accessing the entire performance spectrum of the planning applications and, in the future, also using the functionalities that have not yet been used. In this way, companies make their planning even more powerful and faster.

 

Functionalities of SAP Analytics Cloud

Both SAP Analytics Cloud and SAP BPC Embedded enable data-oriented planning. SAC additionally offers different forms of presentation and a functional handling of the data. The use of value driver trees for overarching simulations enables a new view of the company data. The advantage of simulations: No full business planning needs to be performed to determine the impact of specific changes on one’s business results.

 

Comprehensive dashboard evaluations are available for analysis. The contents of the dashboards can be used for planning to provide users with information that accompanies planning. Portfolio planning offers a combination of graphical evaluation and data-driven scenario planning. In addition, SAP Analytics Cloud supports predictive approaches in business planning: the Smart Predict functionality enables simple forecasts of events or trends via the definition of classification, regressions and time series.

 

What is the future SAP strategy for planning?

As far as planning in SAP landscapes is concerned, there will be various options in the future. SAP S/4HANA basically offers the option of also using SAP Analytics Cloud and integrating SAC Planning as an add-on. This also allows operational planning applications to be implemented. Consolidation can also be mapped in SAP S/4HANA with SAP S/4HANA Group Reporting.

 

The available SAP planning applications enable companies to pursue either an on-premise or a cloud approach to their planning. From a technical perspective, there is no compulsion to choose a deployment option. The key here is to carefully weigh the arguments for cloud and on-premise.
In addition to planning applications, SAP Analytics Cloud brings other functionalities. For example, it offers various options for analyzing data and using predictive methods. The predictive engine determines predictions that can be used in the planning applications. This works equally well with connected on-premise and cloud systems. In addition, the SAP strategy envisages SAP Data Warehouse Cloud (DWC) as a uniform data basis for planning in the future.

 

Conclusion: Planning application must fit the company

It is not possible to formulate a generally valid recommendation for planning software. The decision depends not least on how a company has mapped its planning processes to date. In principle, cloud solutions are crucial to SAP’s future orientation, as they offer various advantages such as a shorter time-to-value. Ultimately, the planning application must above all fit sensibly into a company’s overall system landscape and IT strategy in order to develop its full potential and contribute in the best possible way to business success.