Financial Planning and Analysis with SAP: SAP Solutions for EPM

by Malcolm Faulkner, William D. Newman

Overview

Get a look at the inner workings and gears of your enterprise with this book! With expert guidance from the authors, you’ll learn to carefully map your business’s financial path. From planning through integration, you’ll understand the business steps and requirements needed to work with SAP’s solutions for enterprise performance management. Learn how EPM can help you create detailed financial plans, monitor actual costs against budget, and analyze profitability based on products or customer behavior.

1. Manage your Financial PerformanceUnderstand what enterprise performance management is, what it does to direct yourfinancial performance, and what best practices you should follow.

2. Financial Planning and Analysis LifecycleStrategy roll-out. Planning, budgeting, and forecasting. Profitability and cost management.Monitoring and reporting. Find the information you need to best implement these essentialpractices.

3. SAP EPM ApplicationsLearn about the SAP EPM applications and how they enable organizations to meet their strategicfinancial goals and performance improvement initiatives.

4. IntegrationKnow how to extend the reach of EPM. You’ll learn about options for integrating SAP EPMwith SAP ERP, BI tools, and more.

5. Move your SAP EPM Solution ForwardScope out the road map and latest evolutions in EPM applications, including rapid-deploymentsolutions, starter kits, and SAP EPM Unwired.

Highlights:

• Performance management lifecycle
• Planning, budgeting, and forecasting
• Financial close acceleration
• SAP Business Planning and Consolidation
• Financial Information Management
• Disclosure Management
• Integration
• Monitoring and reporting
• Profitability and cost management
• Strategy management

Product Details

ISBN-13:	9781592299553
Publisher:	Rheinwerk Publishing, Inc.
Publication date:	06/25/2014
Edition description:	New Edition
Pages:	440
Product dimensions:	6.90(w) x 9.00(h) x (d)

About the Author

Malcolm Faulkner is currently a senior director of product marketing and is responsible for product marketing of financial planning and analysis solutions within the Enterprise Performance Management (EPM) group at SAP. Malcolm holds a B.S. in computer science from Imperial College, London University, and an M.B.A. from New York University, Stern School of Business.Malcolm has over two decades of experience in the software industry, beginning as a software engineer. He spent several years as an adjunct lecturer at the University of California, Berkeley Extension, teaching a variety of continuing education computer programming-related classes. Before moving into product marketing in 2008, he had roles in technical training and pre-sales. He joined SAP in 2007. Malcolm is a regular speaker on FP&A and predictive analytics at SAP events, including SAP Financials, the SAP BusinessObjects User Conference, and SAPPHIRE. He has also presented on CFO.com webinars. He’s also a featured blogger on these topics on the-decisionfactor.com and blogs.sap.com/analytics.He currently resides in Colorado. In his spare time (when not writing), Malcolm enjoys cycling, yoga, and coaching soccer.

William Newman is the managing principal of Newport Consulting Group, a strategy firm aligned with SAP focused on EPM and GRC solutions. He has 25 years of experience in the development and management of strategy, process, and technology solutions for world-class manufacturing and service organizations such as Boeing, General Motors, Volkswagen, Northrop Grumman, Honeywell, and Intel. He holds a BS degree in aerospace engineering from the Henry Samueli School of Engineering and Applied Science at UCLA, and an MBA in management and international business from the Conrad L. Hilton School of Management at Loyola Marymount University. He is a member of the adjunct faculty at the University of Michigan-Dearborn, College of Business.

Table of Contents

Acknowledgments ... 19
Foreword ... 23
Introduction ... 25

Part I: The EPM Foundation ... 29

1. Introduction to Enterprise Performance Management ... 31


1.1 ... Enterprise Performance Management: What It Means ... 31
1.2 ... Performance Management ... 35
1.3 ... Financial Planning and Analysis Lifecycle ... 39
1.4 ... Key Organizational Issues and Concepts ... 42
1.5 ... SAP Enterprise Performance Management for the Finance Portfolio ... 52
1.6 ... Introducing an EPM Initiative ... 57
1.7 ... Summary ... 63

2. The Evolving Domain of Performance Management ... 65


2.1 ... Performance Management-Related Methodologies ... 67
2.2 ... Financial Planning Processes ... 87
2.3 ... Rolling Budget-Based Planning ... 90
2.4 ... Issues and Challenges in Eliminating the Annual Budget ... 94
2.5 ... Financial Consolidation and Disclosure ... 99
2.6 ... Risk Management and Mitigation ... 106
2.7 ... Profitability Analysis ... 109
2.8 ... Financial and Operational Reporting ... 110
2.9 ... Achieving Financial Excellence ... 113
2.10 ... Manage Financial Planning and Analysis with Solutions from SAP ... 115
2.11 ... Accelerating Financial Close to Disclose ... 119
2.12 ... Summary ... 123

3. SAP Enterprise Management Portfolio ... 125


3.1 ... SAP Strategy Management ... 126
3.2 ... SAP Business Planning and Consolidation ... 130
3.3 ... SAP Profitability and Cost Management ... 134
3.4 ... SAP Financial Information Management ... 136
3.5 ... SAP Disclosure Management ... 140
3.6 ... SAP Intercompany ... 141
3.7 ... SAP BusinessObjects Business Intelligence Tools ... 143
3.8 ... Considerations for SAP ERP Applications ... 154
3.9 ... Emerging Technologies ... 157
3.10 ... Summary ... 159


Part II: EPM Product Solutions from SAP ... 161

4. SAP Strategy Management ... 163


4.1 ... Strategy Planning and Execution Process ... 165
4.2 ... Key Features ... 176
4.3 ... Architecture ... 185
4.4 ... Integration with SAP BusinessObjects BI ... 188
4.5 ... Mobile Solution ... 191
4.6 ... Use Cases ... 193
4.7 ... Summary ... 194

5. SAP Business Planning and Consolidation (Planning, Budgeting, and Forecasting) ... 195


5.1 ... Business Challenges in Financial Planning and Budgeting ... 196
5.2 ... Overview of the Planning, Budgeting, and Forecasting Features ... 199

5.3 ... Versions of SAP Business Planning and Consolidation ... 205
5.4 ... Business Planning: Plans and Processes ... 209
5.5 ... Planning Solution Requirements ... 217
5.6 ... Key Capabilities ... 225
5.7 ... Data Manager ... 230
5.8 ... Summary ... 233

6. SAP Profitability and Cost Management ... 235


6.1 ... Challenges to Profitability Insight ... 235
6.2 ... Defining SAP Profitability and Cost Management ... 239
6.3 ... Key Application Components ... 247
6.4 ... Model Builder, View Builder, and Book Builder ... 250
6.5 ... Activity-Based Costing ... 255
6.6 ... System Infrastructure and Solution Architecture ... 259
6.7 ... Usage Scenarios and Benefits ... 268
6.8 ... Industry Cases ... 276
6.9 ... Summary ... 278

7. SAP Financial Information Management ... 279


7.1 ... Financial Management Challenges ... 279
7.2 ... SAP Financial Information Management Overview ... 282
7.3 ... SAP Financial Information Management Features ... 284
7.4 ... Administration ... 286
7.5 ... Architecture ... 289
7.6 ... Integration ... 290
7.7 ... Benefits ... 293
7.8 ... Summary ... 296

8. Monitoring and Reporting ... 297


8.1 ... Monitoring and Reporting Process ... 297
8.2 ... Integration of BI Tools and SAP EPM for Reporting ... 300
8.3 ... Key SAP BusinessObjects BI Solution Areas ... 304
8.4 ... Using SAP Predictive Analysis ... 309
8.5 ... Structuring Enterprise Monitoring Using SAP BusinessObjects Design Studio ... 317
8.6 ... Creating Dashboards Using SAP BusinessObjects Explorer ... 319
8.7 ... Reporting Using SAP Crystal Reports and SAP BusinessObjects Web Intelligence ... 321
8.8 ... Performance Management Maturity Model ... 325
8.9 ... Summary ... 327

Part III: Leveraging Capabilities from Alternative Software Solutions ... 329

9. Accelerating Financial Close to Disclose ... 331


9.1 ... Barriers to a Fast, High-Quality Close-to-Disclose Process ... 332
9.2 ... Steps in the Close-to-Disclose Process ... 333
9.3 ... SAP EPM Solutions That Streamline the Close-to-Disclose Process ... 339
9.4 ... SAP Disclosure Management ... 351
9.5 ... Summary ... 359

10. Rapid-Deployment Solutions for SAP EPM ... 361


10.1 ... What Are Rapid-Deployment Solutions? ... 361
10.2 ... SAP G/L Financial Planning Rapid-Deployment Solution ... 363
10.3 ... SAP Strategic Financial Planning Rapid-Deployment Solution ... 366
10.4 ... SAP Financial Close and Disclosure Management Rapid-Deployment Solution ... 367
10.5 ... SAP Value Realization Management Rapid-Deployment Solution ... 370
10.6 ... SAP Public Sector Budgeting and Planning Rapid-Deployment Solution ... 374
10.7 ... Starter Kits ... 377
10.8 ... Summary ... 380

11. EPM and Enterprise Integration ... 381


11.1 ... Integration with SAP Risk Management ... 381
11.2 ... Integration with SAP Human Capital Management and SuccessFactors ... 383
11.3 ... Integration with SAP Customer Relationship Management and Sales Performance Management ... 385
11.4 ... Integration with SAP Financial Accounting and Controlling ... 388
11.5 ... Leveraging SAP Analytics Tools for Enhanced Reporting ... 389
11.6 ... Moving from Planning to Execution and Project Management ... 392
11.7 ... Summary ... 397

Part IV: The Future of Enterprise Performance Management ... 399

12. The Importance of New Technology ... 401


12.1 ... Big Data Opportunities for EPM ... 402
12.2 ... Cloud Opportunities for EPM ... 404
12.3 ... Mobile Opportunities for EPM ... 406
12.4 ... Social Business ... 410
12.5 ... Other Trends and the New Hybrid ... 414
12.6 ... Summary ... 415

13. Road Map to SAP Solutions for Enterprise Performance Management ... 417


13.1 ... Near-Term Challenges for Finance ... 417
13.2 ... Overview of the SAP EPM Road Map for Finance ... 418
13.3 ... Key Recent Releases and Innovations ... 420
13.4 ... Planned Innovations and Future Direction ... 424
13.5 ... Summary ... 426

The Authors ... 427
Index ... 429