Following SAP's S/4HANA announcement, a number of clients have been wondering how SAP BPC on S/4HANA can impact their business. So here it is.
Depending on how closely you’ve been watching the SAP S/4HANA hype, you might be unsure as to what it’s all about, so I’ll start at the beginning.
SAP S/4HANA is the new SAP Enterprise Suite that runs exclusively on SAP’s lightning-fast in-memory HANA database. SAP Simple Finance is an add-on to the Enterprise Suite and includes SAP Accounting, SAP Cash Management and SAP BPC for S/4HANA.
A great read on this topic is The SAP® Business Suite 4 SAP HANA® (SAP S/4HANA) FAQ by John Appleby
To simplify SAP’s message on this topic, SAP’s Business Planning and Consolidation (BPC) product will extend its reach, with ‘Integrated Business Planning for Finance’, now referred to as SAP BPC for S/4HANA.
What is SAP BPC for S4/HANA?
SAP BPC for S/4HANA is part of Simple Finance, and includes pre-delivered content for SAP BPC 10.1 embedded. This is housed in an embedded SAP BW instance in S/4HANA, and therefore doesn’t need a standalone BW instance.
The differentiating factor of SAP BPC for S/4HANA is the pre-delivered content. Without this, you need to create the planning sequences, models, queries and workbooks as part of a project implementation.
What is the pre-delivered content?
The content enables planning of cost centres, profit centres and projects, for both the income statement and statement of financial position. The workbooks and data models require activation, after which it’s a matter of tweaking them to fit your business, reviewing areas of business logic, and away you go.
What are the benefits of SAP BPC for S/4HANA?
The true advantages to your teams depend on the technology your business uses to plan. There are a huge variety of options available; SAP BPC Classic, Microsoft Excel, BW-IP, ECC, PAK to name a few. However, here are a few key headlines:
- Lower IT costs - the solution architecture is kept simple (all of your financial information can be stored in one place). This is due to the S/4HANA instance including a logical SAP BW instance that can be activated upon request, removing the need for a separate SAP BW system.
- Faster reporting - the transactional system has real-time actuals at the highest level of granularity. This accelerates the month-end close process, leaving more time for analysis and less time required waiting for data loads.
- Shorter forecasting cycles without compromising accuracy - by running natively on SAP HANA, complex disaggregation scripts and scenario predictions are performed in real-time, removing the need for manual downloads and time consuming scenario simulations.
- Reduce wait times - during the planning cycle for master data to update from ERP, due to this being shared with ECC. Changes to hierarchies and additional projects are immediately available, resulting in more accurate information, faster
- Consistent and reliable financial data - journals on Actuals are visible in your planning screens immediately, avoiding the wait for data loads to finish. This brings consistency and reliability of financial data, inspiring confidence in the system.
What should we expect next?
With the impending launch of Simple Logistics, there are clear advantages of easy integration between supply chain, logistics, order management, fulfilment, procurement and finance.
Consolidation functionality is being actively worked on for the unified model, and the SAP TechEd event will announce the next BPC Embedded functionality releases.
It will be a relatively big jump for existing SAP BPC Classic customers to move to this planning approach, so an upgrade/migration tool would help to support this.
I would like to see further enhancements in the pre-delivered content, such as algorithm integration with HANA predictive analysis library (PAL), configurable Financial Consolidation support and a driver-based planning solution out of the box.
For many organisations who have mature planning processes, SAP BPC for S/4HANA will currently still require a sizeable amount of project work to align with their processes. If you’re in a position to review the organisation’s approach to planning, with an aspiration to lead as opposed to follow, reviewing SAP BPC for S/4HANA would be a good first step.