SAP Collaborative Enterprise Planning in a Nutshell

Companies are still facing multiple challenges when it comes to forecasting and analysing their plans

Despite all the advances, organisations are still struggling when it comes to Planning and Analytics. Whether we are talking about strategic planning, budgeting or forecasting, in our experience, the reliance on offline spreadsheets and the use of siloed solutions tend to be the main culprits.

For planning, spreadsheets are extremely flexible and customisable, however their use typically leads to very common issues, for example:

• Inconsistent and disjointed planning processes using offline/siloed data
• Significant time spent on manual data collation and validation
• Lack of transparency and confidence in plans and forecasts
• Lack of flexibility to model integrated business scenarios
• Difficult to quickly gain meaningful insights from existing data

Overall, offline and disjointed planning processes typically lead to inaccurate reporting and require a significant amount of manual efforts in order to plan effectively.

SAP’s Collaborative Enterprise Planning is aimed at addressing these challenges

In this blog I will be focusing on SAP’s Collaborative Enterprise Planning using SAP Analytics Cloud and, before I dive into this topic, I want to first dedicate a couple of lines to talk about Extended Planning & Analysis, or xP&A .

In the context of planning, you probably are familiar with the term FP&A, which stands for Financial Planning and Analysis. Well, in 2020 Gartner introduced Extended Planning and Analytics, or xP&A for short, which is a planning approach that takes the best capabilities from FP&A – like continuous planning, forecasting, advanced analytics and performance monitoring – and extends them across the enterprise. xP&A is about linking plans across the organisation to identify and understand the impacts between areas as well as any impact to the organisation’s financial targets.

SAP’s Collaborative Enterprise Planning aligns with the principles of xP&A and brings together the operational plans from different areas of the company – for example: Sales and Profitability Planning; Workforce Planning; Projects Planning; etc – to create integrated Financial Plans and Forecasts. The goal is to achieve a harmonised and integrated planning process which ensures that strategic, financial and operational plans are synchronized.

Some of the key objectives of Collaborative Enterprise Planning areis to:

• Provide common and standardised planning processes
• Ensure alignment between financial and operational plans
• Improve analysis and gain better insights
• Increase flexibility to model different scenarios

With Collaborative Enterprise Planning, if a change occurs in one plan then all related plans are updated and, at the same time, organisations can analyse and understand the impact that those changes have in their financial plans.

SAP Analytics Cloud (SAC) is at the heart of the Collaborative Enterprise Planning

SAP Analytics Cloud is SAP’s next-generation solution for planning and analytics. Which allows business users to plan, analyse, predict and collaborate within a single solution. SAC contains a full set of planning capabilities that can be used to develop complex planning and forecasting solutions and are complemented by robust Business Intelligence (BI) and reporting capabilities.

Within the Collaborative Enterprise Planning, SAC provides the end-to-end planning capabilities to generate integrated plans – e.g. forecast, budget, strategic – between different areas of Lines of Business – e.g. HR, Sales, Finance.

Furthermore, is not only about integration between different plans, the core of the Collaborative Enterprise Planning is also the integration with the different source systems that are part of the organisation landscape. And SAC provides the necessary integration to other enterprise applications (like S/4HANA, IBP, SuccessFactors, SAP BW or Group Reporting), which allows to create a single source of truth for plan data across the organisation that is tightly integrated with the relevant enterprise systems.

An example of a Collaborative Enterprise Planning scenario

So far, I have talked about the theory of xP&A and Collaborative Enterprise Planning now, in order to bring these concepts to life, I have prepared an example of an integrated planning process supported by SAP Analytics Cloud.

In the above scenario, HR, Finance and Sales generate their corresponding plans using SAP Analytics Cloud. These plans are integrated between them and are also tightly integrated with their relevant source systems. Let’s go through them in a bit more detail.

Financial Planning

From a Finance perspective, we have the company’s Financial Planning Solution; which allows to plan the different Financial Statements and Cost Centre plan. The solution has a bi-directional integration with S/4HANA Finance. Master and Transactional Data is sourced from S/4HANA into SAC and the resulting Financial Plan can be written back from SAC to S/4HANA to support day-to-day reporting through Embedded Analytics.

Workforce Planning

The organisation’s Workforce Planning solution sources employee data from SuccessFactors – such as FTEs, salaries and benefits – and provides HR with a toolset to generate a plan covering the different employee-related costs. Once a plan has been generated, the integration with the organisation’s Financial Planning toolset allows to integrate the resulting Workforce plan to company’s P&L – e.g. to populate the salaries & wages account’s within the P&L.

Profitability Planning

Finally, the Profitability Planning solution provides the toolset to generate a sales and revenue plan which is fully integrated into the organisation’s Financial Plan – i.e. the sales plan can be integrated to populate the relevant revenue accounts of the organisation’s P&L.

Due to the native integration between SAC and SAP IBP, the Supply and Demand quantities forecasted in SAP IBP can be used in SAP Analytics Cloud. In this scenario, IBP provides the sales volumes (quantities) which are then used to generate a financial view (sales and revenue plan) in SAP Analytics Cloud.

But that’s not all, the integration between SAC and IBP is bi-directional, meaning that the key financial plan figures from SAC, like revised sales volumes and sales prices, can be transferred back to IBP. With this financial information, S&OP (Sales and Operations) planners can review and adjust their forecast, in SAP Integrated Business Planning, taking into consideration the potential profitability/costs impact that a volume change could have, as well as understanding if the plans fit the expected financial targets (or constraints).

The Collaborative Enterprise using SAP Analytics Cloud and SAP IBP – Deep dive

If you are interested in knowing more about this topic, in my next blog, I will be drilling down into the Collaborative Enterprise Planning scenario between SAP Analytics Cloud and SAP IBP, so stay tuned!

For more information please contact:
Luis Lopez – luis.lopez-garcia@capgemini.com

Luis Lopez

Managing Consultant,
SAP Corporate Performance Management Lead

I lead the SAP Corporate Performance Management capability for Capgemini UK, managing the delivery of planning solutions using the latest SAP technologies. With over 16 years of experience in SAP Planning and Analytics, I have a passion for helping clients solve complex business scenarios and improve their planning and BI processes through the delivery of innovative solutions.