Rethinking enterprise performance management in an SAP HANA world

28 September 2017

Michal Galasinski

Michal Galasinski

EPM Consultant

Business Planning and Consolidation (BPC) is changing to harness the power of the SAP HANA platform and help businesses run their enterprise performance management systems faster and easier.

Human beings are relentless; constantly chasing faster results. Nothing demonstrates this more than the recent eighth release in the movie franchise Fast and Furious, while the majestic work of art that was Slow Burn failed to produce a sequel. This ‘need for speed’ extends into the IT world too (sorry if you thought this was about cars, or something other than computers), with expectations rapidly increasing about the performance of systems.
 
One area, the discussion of this particular insight, is how the improvement in system speed can be utilised to provide better performance management.  More specifically SAP Enterprise Performance Management (EPM). The introduction of the SAP HANA database and SAP S/4HANA has brought with it marked improvements in performance and is leading to significant structural changes to IT systems.

However, it has not always been clear what these developments mean in the context of performance management. So, let's look at what HANA is bringing to EPM, and how this can influence your organisational strategy.
 

BPC is changing to utilise HANA technology…

Business Planning and Consolitdation (BPC) has been the go-to SAP performance management tool since 2008. The finance-oriented nature of the tool has seen it become exceptionally popular. The introduction of the HANA database and S/4 HANA ERP system has led SAP to develop a technical roadmap that takes full advantage of HANA technology, and BPC is no exception.

BPC 10.1 saw a redesigned front-end to the tool using SAP's UI5 interface. However, more recent developments have focused on improving the BPC back-end, with the latest versions being:  The links above provide excellent technical overviews for all three products, but the key things to know are:
  • BPC Embedded is designed to work with SAP Business Warehouse (BW) on HANA
  • S/4HANA Planning & Consolidation is fully integrated with S/4 HANA
  • SAP Analytics Cloud (SAC) is a stand-alone cloud-based product that can interface with your existing BPC and BW systems to provide additional scenario planning and dashboards.
 

Key technical improvements 

1. Master data in the system is fully consistent

BPC Embedded integrates fully within the existing BW environment, whereas S/4HANA Planning and Consolidation sits completely in S/4 HANA. This means that the master data governing BPC is fully consistent with that of the source data. SAC allows you to import master data and data directly from BPC.

2. Lightning fast calculations and data aggregation

Perhaps the most disruptive effect of HANA has been its execution of complex calculations and aggregations at a fraction of previous times. The effect of this on BPC solution design is equally significant; it calls for a complete re-evaluation of what is, and is not, possible.

3. Real-time live data availability

Because BPC is fully integrated with the source database, time-consuming, scheduled data loads are a thing of the past. BPC Embedded utilises the latest BW data, while S/4HANA Planning and Consolidation goes a step further – the data reported is the actual, live, transaction data.
  

Real business benefits

Each of these technical improvements can change the way you set your performance management strategy and should be considered accordingly. Let's take a look at each point in turn:

Consistent master data unifies your departmental planning
Consistent master data between BPC and your other IT systems allows for closer alignment of strategy and execution. There are no complex mappings or transformations standing between your daily activities and your organisational strategy. High-level, strategic objectives are expressed in the same 'language' in which your business operates. Rather than working towards isolated, individual targets, all departments can work towards a unified strategic vision.
 
Rapid performance offers new options to your planning processes
The capacity for rapid calculations brings new possibilities to your planning processes. SAP HANA has already been used to meet this challenge by means of Product Cost Forecast and Simulation (PCFS), which uses HANA to forecast a gross margin based on forecast sales volumes, currency exchange rates and bills of materials. This change in strategy to make full use of BPC's capabilities would be particularly valuable for manufacturing companies. Often, the fluctuation of raw material prices can substantially impact profitability, and mitigating this risk is crucial to a healthy operation.

 

Real-time data establishes a forward-looking perspective
The impact of real-time data availability cannot be underestimated either. The ability to consolidate and re-consolidate, forecast and re-forecast, at any given moment, completely changes how these processes should be approached.

Instead of trying to prepare, reconcile and make sense of historical data, your finance team are always dealing with actual, live data. Also, time saved through automation means your finance team can focus on activities that add value, develop the business, and help realise the organisational vision.
 

BPC with HANA brings new opportunities to performance management

The introduction of HANA technology to the EPM world brings it with it a variety of new capabilities. When embarking on a new EPM project, it is worth reviewing your performance management strategy, and considering how your business can benefit from the technical improvements that come with HANA.

In Fast & Furious 7, Vin Diesel declares “This time it ain’t just about being fast!”. And he’s right. The speed of HANA certainly helps – but the real value comes with consideration of how it can be utilised in your performance management processes to help manage your business.
 
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About the author

Michal Galasinski

EPM Consultant
I am fascinated in how technology is changing the way companies operate.  As part of Bluefin's Enterprise Performance Management (EPM) Centre of Excellence,  I help global organisations use the latest SAP technology to develop their strategic processes and gain insight into complex data. I thoroughly enjoy approaching this task creatively and collaboratively, enabling clients to think differently about planning and performance management.

Since joining Bluefin, I have been engaged in multiple EPM projects across a variety of industries. I have worked in the delivery of global, customised BPC solutions to develop corporate analytics and meet management and statutory reporting requirements.

When I am not doing this, I enjoy reading, playing football, and going to concerts.