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Title: sap bpc online training and corporate training

Training Call91-9052666559 or
9052666558http// Email
Planning Budgeting with SAP BPC
  • Introduction of SAP BPC(EPM 10 NW)
  • Fundamentals of BPC
  • BPC Architecture Administration
  • Reporting in BPC
  • Integration of BW to BPC
  • BPF, Work Status

How BPC evolved?
  • In 2004, SAP decided to create a next
    generation planning solution called Integrated
    Planning (BW-IP), which would be the successor of
    BPS. It looked like it would be a strong
    solution. However impressive , the technical
    advantages of BW IP only solved part of the
    equation the reality was that many businesses
    were growing tired of IT departments having to
    own and maintain planning and consolidation
    solutions with IT support, not ownership. In 2007
    SAP formed a new organization focused on the
    business user. So a Enterprise Performance
    Management team was launched under this area to
    address the needs being expressed by the CFO
    suite. So EPM team evaluated potential
    acquisitions that had the desired ease-of-use and
    simplicity, and discovered them with Outlook
    Soft. The user environment was native Excel,
    which Finance users live and breathe by.

How BPC evolved?
  • Members of Outlook Soft and SAP were summoned
    to SAP headquarters in Waldron. A business
    scenario was created and two teams were formed.
    The first was SAP and included BW experts, ABAP
    developers, web application development members
    and finance personnel. In the other corner was
    the Outlook Soft team made up of a couple finance
    users with no data warehousing or development
    skills. The two teams split up and started
    building their planning applications using the
    two different solutions, BW-IP and Outlook Soft.
    After thirty minutes, the Outlook Soft team came
    back with the completed application it took SAP
    team over six hours to build the same application
    using BW-IP. This sealed the deal within SAP and
    the acquisition of Outlook Soft gave SAP the best
    user experience in the industry, planning and
    Consolidation in one product. The rest is

Concepts of Planning
  • Planning It involves thinking ahead and
    formulating a set of activities you will execute
    in future in other words, it is the process of
    modeling or projecting future business
    activities. It is on high level.
  • Budgeting It is the process of allocating
    resources once the planning process is approved
    and accepted by the companys management. It is
    on detail level.

Concepts of Planning
  • Forecasting It deals with the realization of
    the plan, and is used as a monitoring mechanism
    to facilitate the success of planning. Business
    environments do not remain the same what was
    planned yesterday may not be same today. It is
    done during the course of the current budget
    year with a key objective to provide visibility
    on the current state of the business in a timely
    manner so that corrective action can be taken
    when there is significant difference between the
    current state of the future and what was planned
    for during the planning process.

Concepts of Planning
  • People do not plan to fail, but they fail to
  • The planning, budgeting and forecasting concept
    is critical to the success of the corporation.
    Common error is the fact that they didnt plan
    enough and didnt plan proactively.
  • Its very difficult to plan, budget, or forecast
    in an accurate, timely and consistent way.

Concepts of Planning
  • Planning is not like consolidations, where
    someone else (GAAP or IFRS rules and regulations
    from the government) is telling you how to do it
    and when to do it, the consolidation process.
  • Planning process is done on its own and is
    somewhat unique to the different industries.
  • Planning process is the lifeblood of the
    short-term and long-term revenue stream of a
    corporation and the overall income/expense
    process within a corporation.

Concepts of Planning - Planning Horizon
  • The Planning horizon determines the time frame
    for planning. Planning horizons are divided into
  • Short Term Planning
  • The planning time frame in short term is
    usually a year or less. Business use this when it
    has clear cut goals such as cutting costs,
    increasing labor productivity by freezing new
    hires and effectively training the work force.

Concepts of Planning - Planning Horizon
  • Medium Term Planning
  • It covers a period of one to three years.
    Business uses this when it plans to increase
    market share in a particular segment of the
  • Long Term Planning
  • When the duration of planning exceeds more
    than three years. Business uses this when there
    is a long gestation period between initial
    investment and final realization of sales and
    profits especially in Manufacturing industries or
    Infra Structure industries.

Concepts of Planning - Planning Types
  • Operative Planning
  • It is used for short term and is generally
    conducted at companys operational level. It rely
    on a bottom-up planning approach. Employees at
    the bottom level of the hierarchy may be a part
    of the planning process to make it successful.

Concepts of Planning - Planning Types
  • Tactical Planning
  • It is associated with planning for the medium
    term and is generally conducted at companys
    divisional level. Companys Mid level management
    plays a vital role.
  • Strategic Planning
  • It is associated with the planning for the
    long term and is generally conducted at the
    Organizational level. Companys Management
    usually plays a major role in this type of

Concepts of Planning - Planning Types
Concepts of Planning - Planning Areas
  • Planning is a generic function applicable to all
    area of business.
  • Finance
  • Liquidity Planning focuses on planning for
    maintaining optimal cash flow to be able to run
    the business. For AR and AP estimation.
  • Cost Center Planning is done for operational,
    non operational, and capital expenditure costs
    the company will incur at various cost center
  • Asset Planning is concerned with the planning
    for the purchase of new assets and the disposal
    and maintenance of existing assets, based on the
    companys objective.
  • Profitability Planning determines profitability
    by identifying sales revenue and costs that will
    be incurred in the future.

Concepts of Planning - Planning Areas
  • Production how much to produce and when and
    where to produce it in order to meet the
    market/customer demands. Variables such as
    seasonal behavior, geographic demand are
    considered when planning for production.
  • Human Resources This area of planning is
    especially important in industries that require
    large numbers of employees and where specialized
    skills are required for realizing the objectives
    of the business. Costs associated with it has
    direct impact on the financial planning.

Concepts of Planning Common Scenarios for
Planning in Business
  • Gross Profit Margin Planning
  • Profit Loss and Balance Sheet Planning
  • Investment Planning
  • Labor Planning/HR Planning
  • Sales Planning

Concepts of Planning Common Scenarios for
Planning in Business
  • Considerations in Planning
  • Importance
  • Skills
  • Internal
  • Data
  • Governance
  • Communication
  • Monitoring
  • Planning Method
  • Participation

Planning Execution Time Frame

Integrated Planning
Concepts of Planning
  • What Problem Are We Trying to Solve?The Gap
    between Execution and Strategy

Today, companies struggle to bridge the gap
between strategy and execution to optimize their
business performance.
Strategy disconnected from operations
Decisions made without context
Strategy / Vision
Information locked in storage
Misaligned action across organization
Examples and Typical matters
  • In practice, key issues of the process could be
    summarized as follows

Strategically disconnected a great number of
companies report have no link or weak link
between the strategy and the budgeting process
Slow a large number of organizations have not a
single tool supporting the budgeting process and
as result completing an annual budget usually
takes many days
Expensive the budgeting process requires the
collaboration of all departments and the
aggregation of all single data
Unreliable management is routinely surprised by
the variances between communicated expectations
and results
Concepts of Planning
  • Why is there a Gap?
  • Employees dont understand how the strategy
    affects them, and how their decisions impact
  • Its unclear as to who is accountable for
    ensuring execution of initiatives, projects, and
  • Management systems dont empower employees to
    make their own decisions.
  • Theres no formal mechanism for tactics to
    influence strategy or to share best practices.

Concepts of Planning
  • Theres no link between the budgeting process and
  • Very often strategy is managed using inadequate
    tools that require much manual tracking and
    updating e.g. spreadsheets, PowerPoint, word
    documents, email
  • Plus there needs to be Executive Commitment and
    a culture of performance management

Concepts of Planning - Solution
  • Alignment and Communication is key

Fundamentals of BPC
  • Welcome to the The budgeting process with SAP
    BPC course aimed at
  • Introducing SAP BPC features and benefits for
    planning and budgeting cycle management
  • Pointing out common matters and issues to take
    into account and clear out whenever you analyze,
    assess, and design the planning and budgeting
  • Providing you with consistent guidance as well as
    hits and tips to roll out an effective budgeting
    process efficiently empowered by SAP BPC
  • Sharing experience

Fundamentals of BPC
  • What this course is not about?
  • Not a genie with 3 wishes, black art, crystal
    ball gazing
  • Not a guide to successful project Management
  • Not the perfect project approach

Fundamentals of BPC
  • The budgeting combines historical data and
    economic trends with the Top Management vision,
    as a result budgeting is key to establish, keep,
    and maintain a tight linkage between strategy and
  • Nothing more than
  • spending money
  • knowing what targets need to be met to get a
  • driving action
  • influencing behaviors
  • adjusting direction
  • beating the competition
  • creating value more effectively and efficiently

EPM Methodology Where we are
Fundamentals of BPC
  • Implementing a EPM framework enhances management
    effectiveness and overall performance in a
    variety of ways
  • Improves decision making capabilities
  • Improves progress by allowing line of sight into
    operational performance and compliance
  • Allows management to spot potential problem areas
    and address them proactively
  • Enables management to focus on areas requiring
    their attention and decisions

Fundamentals of BPC
  • Facilitates process improvement and provides a
    common yardstick to measure goal attainment
  • Potential for business intelligence (BI)
    capabilities (predictive, forecasting, root
    cause, etc.)
  • Provides quick analysis of functional areas
  • Aligns employee performance with corporate and
    business unit goals
  • Enables more collaborative processes
  • Increases employee awareness of corporate
  • Reduces costs involved in Management Information1

Advantages of SAP BPC tool
  • How SAP BPC can support the budgeting process?
  • SAP Business Planning and Consolidation is a
    single, unified, Enterprisewide solution. It
    represents a webbased, collaborative solution
    that unifies the business planning and
    performance management process, and integrates
    and manages the financial process

Provide modeling capability to develop plans and
budgets and link to KPIs/Strategic Plans
Created, maintained and run by the business users
Strengths of the tool
Fast end users acceptance means immediate
Unified planning, reporting and consolidation
Microsoft Office provides a familiar user
Agile planning process driven by end users
Budget Process Types
  • Some types of budgeting processes

Rolling Forecasts
Budget process types
  • Approaches to Budgeting TopDown budgeting
  • Works well for organizations with highly
    interrelated divisions, those in crisis
    situations, and for budgeting over longer time
  • Pro
  • Fewer iterations required, often a better fit
    with flexible budgeting

Budget process types
  • Cons
  • Line managers may feel removed from the process
    innovation may be stifled
  • Most annual budget processes encourage and reward
  • Stretch numbers used for target setting are
    usually unsuitable for resource planning
  • Overly tight control from the centre may stifle
    innovation and reduce agility at a local level

Budget process types
  • Approaches to Budgeting BottomUp budgeting
  • A good fit for diverse organizations that
    require creative management at the unit level
  • Pro
  • Increased departmentlevel responsibility and
    sense of ownership
  • Cons
  • Can lack control and consistency, may overlook
    certain corporate objectives and can be
  • Too infrequent to provide actionable information
  • Annual performance contracts hard wired to budget
    targets, make it difficult to respond to
    unforeseen opportunities or threats
  • Most annual budget processes encourage and reward

Budget process types
  • Approaches to Budgeting Blended budgeting
  • In practice, most organizations use some manner
    of blended or countercurrent budgeting
  • All too often, these blended processes combine
    the timeconsuming and costly nature of bottomup
    budgeting with the minimal sense of unitlevel
    ownership and lack of innovation that can result
    from the use of topdown budgeting
  • While often the right answer, organizations need
    to be particularly vigilant to avoid falling into
    a worst of both worlds scenario

Budget process types
  • Approaches to Budgeting Flexible budgeting
  • Flexible budgeting predicts results over a range
    of possible operational outcomes
  • Segregates controllable from noncontrollable
    expenses at a highlevel
  • Uses key drivers and activity bases for
    predicting performance
  • More effort is involved upfront, but rework is
    reduced and budgets stay more relevant throughout
    their useful life

Budget process types
  • Approaches to Budgeting Zerobased budgeting
  • With the traditional budgeting techniques,
    every department must justify only the increases
    over the previous years budget level. With the
    zerobased budget, every function is reviewed and
    all expenditures must be approved rather than
    only the increases.
  • Pros
  • More efficient allocation of resources as it is
    based on the actual companys needs
  • Identifies and eliminates wasteful and obsolete
  • Cons
  • In a large organization, the volume of forms may
    be so large that no one person could read it all
  • Time Consuming

Budget Process Types
  • Approaches to Budgeting Rolling forecast
  • The most forwardthinking organizations are
    replacing the annual budget with a rolling
  • Making this move makes sense for
    organizations that are
  • Empowered at the unit level line managers have
    access to actual performance information in
    nearreal time, and have the tools and knowhow
    to translate recent performance information and
    experience into accurate near to midrange
  • Disciplined at the unit level keeping the
    forecast accurate and up to date is an imperative
  • Managed by a corporate management team
    comfortable with reduced detail (but presumably
    higher accuracy) in near and midrange
    performance estimates

Actual Data
Budget Data
Project approach
  • The main steps of our operative methodology for
    managing a BPC project are

  • Realization, based on the identified business
    requirements, of a prototype which takes into
    consideration all necessary data, reports, and
  • Plan and execute workshop aimed to show defined
  • Testing of the application in order to identify
    potential misalignment
  • Data loading through automatic systems
  • Reconciliation of historical data through control
  • Understanding the organization business model
  • Understanding the AsIs of the planning and
    control process
  • Design of the new scenario (ToBe)

The tools used for managing SAP BPC Planning
Fundamentals of BPC - Project approach
Different component of a budget process
  • Both in the analysis / Design phase and after in
    the implementation phase, we will use Invenio
    reference model to realize the improvement to the
    actual budget process in terms of
  • a more Efficient and Simple process
  • accuracy e accountability (data collection
    through secure processes managed centrally and
    delegated to local user/function)
  • Speed up the process through automatism and
    closed calendar
  • Flexibility realization scenario simulation
    (market, currency, etc.)
  • budget/actual coherence for obtaining a compliant
    variance analysis
  • Provide the users with an independent vision and
    real time/quick information

Reference Framework
Sales Plannig
Purchase cost Budget
Quantity, Pricing, Payment Condition, etc.
Unit cost, quantity, VAT, payment condition, etc
Descriptive example
Headcount, FTE, etc
Personnel Budget
CAPEX Budget
Non- direct cost Budget
Different component of a budget process
  • At the same time, to obtain a financial planning,
    we will realize
  • The Budget completeness with the Balance Sheet
  • Provisional and Actual Cash Flow with the
    relevant analysis dimensions

Reference Framework
Sales Plannig
Debts, Credits and Net Financial Position
VAT, etc.
Purchase cost Budget
Quantity, Pricing, Payment Condition, etc.
Billings and Encashment Analytic Plan
Unit cost, quantity, VAT, payment condition, etc
Descriptive example
Balance Sheet
Cash Flow
Headcount, FTE, etc
Tangible and Intangible Assets
CAPEX Budget
Personnel Budget
Non- direct cost Budget
Budget dei costi indiretti
Billings and Encashment Analytic Plan
TFR, debiti, PFN
Fundamentals of BPC - Link between
economic/financial planning and operative planning
Link between economic/financial planning and
operative planning
Link between economic/financial planning and
operative planning
  • Topdown targets,
  • Topdown forecast
  • Automatic report generation from operational
    planning data

Economic/Financial Budget
Economic/Financial Budget
  • Bottomup plans, subplans,
  • Bottomup forecast
  • Integration between MU and BU plans, though
    keeping each MU and BU peculiarities

Operative Budget
Operative Budget
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