From SAP Standard Model to SAP BPC Embedded model

In the last couple of years, we have seen a growing interest in the SAP BPC embedded model, resulting in productive deployments all around the globe. This can be explained by providing an alternative to the SAP BPC standard model in which data replication needs have been drastically reduced and integration with other SAP components has been enhanced.

Embedded model planning has evolved from SAP’s BW-IP (Integrated Planning) solution. As such the possibility exists to “migrate” existing BW-IP solutions to embedded planning or take advantage of both in-memory optimizations as well as various BPC specific capabilities such as process flows, etc., whilst retaining and continuing to utilize the applications which you have previously defined.

The SAP standard model is an account based model which is optimal for designing Financial based Planning applications. When someone is looking to design a planning, solution focused on other types of planning (i.e. sales planning) where account is not necessarily the key to differentiating between reported amounts (often with varying units of measure), a more optimal and effective design can often be achieved by having the ability to store “multiple” values as well as their corresponding unit of measure against “each” specific record (combination of dimensions being planned upon. This second approach is often referred to as a key figure as opposed to account based model and is something which the embedded option is fully designed to support.

Even more, with SAP BPC optimized for S/4HANA (which utilizes the embedded model type), the same sort of consistency can be assured across both plan and actual data while at the same time facilitating real time or live reporting of plan to actual results.

In this article, we will focus on the reasons that will convince our live customers to use the SAP BPC embedded model as their planning and consolidation solution, especially since it was announced further Consolidation features for the Embedded model.

Consolidation in SAP BPC Embedded model

Since middle of 2016 we have seen full support for Consolidation on Embedded Model as per below image

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It is remarkable to explain the two-different consolidation use case scenarios that many clients are referring currently:

Real Time Consolidations: To support the complete end to end S/4 HANA Finance story of real time financial processes and analytics, without the need for data replication, SAP has undertaken the development of new Real Time Consolidations capabilities to complement the core financial processes and planning capabilities which have already been introduced. Consistent with BPC planning optimized for S/4HANA Finance the plan is to deliver new consolidation capabilities, based on SAP BPC NW on HANA which will be able to access and utilize the real time transactional data of S/4HANA Finance via direct access to the Universal Journal. In addition, the option will exist to directly access real time master data from within S/4HANA Finance, without the need for data replication. Future also include enhanced performance via moving calculation logic to run directly in-memory, supporting simulation of certain key consolidation functions on demand, in support of the soft close process as well as preparation and validation of data “at source” when initial postings are made.

The real time use case scenario is applicable to those customers who have or are looking to implement S/4HANA Finance / Central Finance and who will ultimately have most the data on which they wish to perform consolidations within the underlying S/4HANA / Central Finance system. Please note that Real time consolidations will continue to support the ability to source data directly to the consolidations system as we must still be able to provide support for example for sourcing of data from acquired entities that may not have been able to be brought into the S/4HANA / Central Finance system immediately or for smaller entities where they may not be maintained within the core ERP / S4HANA Finance System.

For clarification Real Time consolidations does not mean that every time a posting is made to the underlying general ledger system fully consolidated results will immediately be updated, rather what our customers are looking for is to be able to have the ability to control when a consolidation or simulation is run but when executed (on-demand) to be able to immediately and directly access the current real time data and to be able to see the updated consolidated results in the shortest time possible.

Traditional Consolidations: Traditional Consolidations represents the standard historical use case for consolidations and is applicable where a customer is not planning to implement S/4HANA Finance / Central Finance or even after implementation will ultimately continue to have a major portion of their consolidated results being sourced from other systems directly to the consolidations application as opposed to being sourced through S/4HANA / Central Finance.

Once that we believe in BPC embedded model as key solution for Planning and Consolidation projects for existing and new SAP customers, one key criteria when selecting such a solution is to safeguard their past investments. Whether they consider planning software with a green field approach in mind or they are interested into enhancing their current productive planning processes – thanks to the latest available technology – customers are always keen on leveraging their existing infrastructure and skill sets. This is particularly true when customers are looking to evolve from an existing SAP BW-IP solution in use.

In this context, let’s have a look at a past planning customer’s implementation. Investments in the planning processes, rules and skill sets that have been developed during the past years will be secured and can be leveraged in an embedded model deployment. Since SAP BW is used as the main data source, standard InfoObjects and transactional data can be shared and therefore reused within the embedded model of SAP BPC without any need of replication.

Then, even though such a deployment is managed and mostly owned by the customer’s IT, BPC’s administration web client allows end-users to create and maintain local objects (models, dimensions, hierarchies, etc.) to reduce the dependency to IT and provide additional flexibility to the business.

And finally, in addition to the in-memory acceleration provided by SAP HANA and the planning engine of SAP BW-IP, our past planning customer now benefits from the BPC user experience, allowing nice features – such as Business Process Flows – to support its planning cycles.
All these motives contributed in the customer’s decision to use SAP BPC embedded model as an evolution to their BW-IP solution in use, increasing their planning cycles’ efficiency.

First step into the S/4HANA strategy

 

Another criterion currently inviting our customers to embrace SAP BPC embedded model is its close relationship with SAP S/4HANA. Indeed, SAP BPC optimized for S/4HANA is using the embedded model type as foundation, with all the advantages previously described. But there is more to it.

With SAP BPC optimized for S/4HANA, the integration is pushed to another level. Following the concept of Universal Journal of S/4HANA Finance where all the financial information is stored, customers can now plan, forecast and simulate scenarios in real-time without the need of replicating data between SAP ERP and SAP BW. Moreover, BPC optimized for S/4HANA consists in a packaged content (Excel templates, InfoProviders, etc.), supporting most of the current planning scenarios – such as P&L, cost center or profit center planning – that will enhance a customer’s deployment of the embedded model directly in S/4HANA.

Therefore, SAP BPC embedded model could be deployed as an initial step to converge towards the S/4HANA strategy.

Finally just to mention that It is at this moment when each client must analyze which migration path to choose per its own scenario. As there are various scenarios possible in upgrading an existing BPC system to the latest Embedded version, we would like to clarify what options are available for existing SAP/BPC customers:

  • Scenario A–an existing BW-IP / PAK system can be upgraded to BPC 10.1 Embedded in a moderately easy way, as the underlying engine for BPC Embedded is same as BW-IP engine.
  • Scenario B – is also a simple upgrade from 10.0 or earlier NW system to a 10.1 NW Standard system. The upgrade path is similar irrespective of Standard with or without HANA.
  • Scenario – C migrating from 10.0 MS / NW or earlier versions to the BPC Embedded version. In this scenario, the system must be redesigned and rebuilt. There is no easy migration path but you can leverage the learning from your previous BPC implementation to facilitate the upgrade.

Tactic Key Consulting can leverage the benefits of SAP BPC embedded model to more quickly and effectively than would otherwise have been the case

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