SAP Business Planning and Consolidation (BPC) has come a long way over the years, but now with so many variations the BPC landscape has become somewhat complicated. Chris Gully, delves into the BPC world to provide clarity and take an in-depth look at the newcomer on the block: SAP S/4HANA Planning & Consolidation (previous SAP BPC Optimized).
With the advent of SAP BPC 10.0, released in April 2012, SAP made a clear distinction that this was the planning and consolidation solution of choice, with its flexibility and heavy finance emphasis. Easy.
And so it has been. BPC is now the most commonly used performance management solution in the SAP landscape, across a broad range of industries. At Bluefin alone, we’ve deployed BPC solutions across the Tobacco, Energy and Media industries (alongside many more).
Despite its success, SAP is continually looking to evolve the product. The release of SAP S/4HANA in 2016 has not only shifted the overall SAP landscape, but has also shifted the realms of what is possible. Suddenly the potential of what can be achieved has increased significantly.
S/4HANA provides a genuine single point of truth through the ledger, it provides rapid results (utilising the power of HANA) and it looks good. No really, its user interface is really good, as it comes dressed in a beautiful Fiori outfit. But you didn’t come here for S/4HANA, although if you did, or are now interested, then I’d suggest having a look at Julien Delvat's whitepaper.
What is SAP S/4HANA Planning & Consolidation…
…and where did it come from? BPC Standard… IP… BPC Embedded… PAK… BPC Optimized. Yes, it confused me too. Fortunately, SAP has a story to explain how S/4HANA Planning & Consolidation came about:
In other words, it’s essentially ‘Embedded’ in look, feel, and similar in config. However, it is entirely integrated within S/4HANA, rather than a separate business warehouse (BW). This means the actuals you are looking at, are your live actuals. It’s real-time, meaning you also have real time access to the master data maintained in your source S/4HANA system. You can, however, utilise the functionality available in embedded: planning functions, analysis for office reporting, business rules etc. To understand the capabilities of BPC embedded, see Federico Blarasin’s insight.
What are the benefits of SAP S/4HANA Planning & Consolidation?
It’s quick. The use of tables rather than cubes is simpler and therefore quicker within the in-memory HANA database.
It’s real time. BPC now views the data in S/4HANA directly, meaning the data you are viewing is 100% up to date. You’ll no longer require time consuming data loads and additional people-hours to reconcile the data between source and destination. Real-time consolidation is also possible, as you can run the consolidation on your latest, up to date general ledger (GL) data. This enables journal adjustments to be made immediately in S/4HANA and reflected in your consolidated figures. The result? You can re-consolidate your figures in minutes rather than waiting on data to load in to BPC.
There is only one version of the truth. Ah, the Holy Grail. Carrying on from the previous point, the fact you don’t have to duplicate data means that you don’t have to worry about multiple versions being out of sync. Your Cost Centre Actuals and GL actuals (for example) will be aligned, all the time. There is also only one version of master data, so you don’t need to worry about missing any new GLs or new cost centres for example. You are, however, able to add additional master data, so don’t panic!
Re-forecasting and performance management are effortless. With your actuals available in real time, you can run checks against plan or re-forecast on a far more frequent basis.
What do I need to be ready for S/4HANA Planning & Consolidation?
Yes. You need to be on S/4HANA as S/4HANA Planning & Consolidation is not available on other systems. However, if S/4HANA is on your roadmap, don’t dismiss BPC Embedded as a stepping stone solution, your Embedded solution can be ‘easily’ migrated if the correct precautions are taken.
Accurate master data and actuals
As the old saying goes, “if rubbish goes in, rubbish comes out”. As S/4HANA Planning & Consolidation is fully embedded within S/4HANA, if your master data and actuals have inaccuracies or are not up to date, this is the data that will be seen in your BPC solution. There’s limited room for data manipulation via a data warehouse here, so make sure your master data and actuals are correct.
A marriage between IT and Finance
BPC (from it’s OutlookSoft ancestors through to BPC 10.0) almost came with a battle cry… "Power to the People!". Here was a solution that could be managed by Finance and had the relative flexibility they craved. BPC Embedded, and by extension S/4HANA Planning & Consolidation, are more heavily IT intensive, primarily utilising the GUI interface to maintain the solution, with a reliance on BEX query designer. That’s not to say that the solution doesn’t offer finance users some flexibility, with report building still encouraged. However, BPC Embedded and Optimized are more prescriptive and IT will be relied upon for certain, significant changes. In addition, with S/4HANA Planning & Consolidation in particular, if your performance management and core finance teams are separate, as they often are, there will have to be communication between the two as and when master data and actuals require changing.
Ultimately, as an IT function, the biggest question you’ll be looking for an answer to in the near future is whether, or more pertinently when, to dive in to S/4HANA. S/4HANA Planning & Consolidation should offer a strong argument in favour of this move. However, if you have already decided on S/4HANA, or if and when you do, you should take a good look at S/4HANA Planning & Consolidation. It is the most advanced of the BPC range, offering significant steps forward via the real-time access to data and the single version of the truth. If you are ready, pull the trigger, this is a significant leap forward and will give your company and their finance function a significant advantage in the market.