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Financial Planning with SAP Analytics Cloud and SAP S/4HANA

Analytics Warehouse Nagarro ES


The future of SAP financial planning is in the cloud

SAP is offering more and more functionalities in the cloud. They also include many areas of planning. Many planning scenarios have their own specific requirements for the system in which the planning is done. Companies implementing S/4HANA today quickly realize that they have a need for extensive planning functions, especially for financial planning. The SAP Analytics Cloud is the strategic product from SAP for financial planning. In the standard SAC, SAP delivers content for different planning areas. The content “Integrated Financial Planning”, for example, includes cost center planning, product cost planning and revenue planning. Interfaces ensure a smooth integration with the S/4HANA core.

Differences from logistical planning with SAP Integrated Business Planning

But as a free-standing cloud tool, SAC can also be used for planning that does not focus on finances. For example, sales planning is also part of integrated financial planning. The planned sales volumes are needed there to determine the activity quantities of the cost centers. These can then be used to perform capacity planning for resources. The interaction between these different planning scenarios shows that the SAC is not only relevant in financial planning.

However, the SAC is not the strategic tool for comprehensive logistical planning. When customer requirements and production capacities need to be planned and compared over a long term basis, SAP Integrated Business Planning is the strategic product for this planning. The Cloud System IBP is the successor of the APO (Advanced Planning Optimizer). The IBP, which is divided into 6 modules, comes with powerful functions such as planning heuristics and operators which can simulate the entire supply chain on the planning horizon. This also includes financial figures, e.g., in order to simulate the financial effects of a logistical decision.

Integrated financial planning with SAP Analytics Cloud

Company-wide financial planning, on the other hand, is the task of SAC. It offers the functions and interfaces that are needed for this task. For integrated financial planning, various subareas of planning are required. These include in particular:

  • Cost center planning
  • Product cost planning
  • Liquidity planning
  • Sales planning (incl. internal jobs and projects)
  • Investment planning

Smooth integration between SAC and S/4HANA is also a central component of integrated financial planning. For example, within cost center planning in the SAC, primary and secondary costs are planned. These are then transferred to the S/4HANA system and an allocation of secondary costs is performed there. The allocated costs are in turn transported to the SAC to calculate plan-cost rates and plan-product costs.

Partial planning in the SAC

The flexibility of the SAC arises from small, self-contained planning scenarios. Each planning scenario has different requirements for the functions used. There are also differences in the required data structures. This is exactly where the strength of the SAC lies. For each partial plan, there are separate models, plan masks and functions, which are created to represent the relevant planning scenario as effectively as possible. SAC also already comes provided with many functions: Currency calculation, versioning, comments, planning calendar and also powerful predictive algorithms. With planning functions (Data Actions), the individual partial plans are integrated into each another.

The structure of such planning using partial planning offers a number of advantages. Existing planning scenarios can be easily extended without influencing other partial plans. It is also easy to implement your own authorizations for each partial plan. Extensions with new partial plans are also possible. When shared master data is used for these plans, these can be integrated centrally and used by all partial plans in a similar manner.

Summary and conclusion

With the technical innovations in S/4HANA development, many planning functions are no longer included, especially in financial planning. The content “Integrated Financial Planning” presented shows how this is now mapped with the SAC. Smooth integration in the S/4HANA core offers the building blocks for this. But in no way is the planning bound to the “standard”. Simple extensions make it possible to get everything out of the plan data. The SAC is not just a planning tool. It combines reporting, planning, predictive methods and customer development (Application Design) in a system and offers smooth integration with S/4HANA.

But all of this is predicated on selecting the right system. Here as is so often the case, the devil is in the details.

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