SAP Business Planning & Consolidation (BPC) Optimized for SAP S/4HANA.

SAP Business Planning & Consolidation (BPC) Optimized for SAP S/4HANA

Recent research among SAP Finance customers stated only 12% of the respondents can respond to data requests within a working day. Today, large enterprises strongly focus on efficiency and agility when it comes to the availability of corporate information.

This article describes how SAP Business Planning & Consolidation Optimized for S/4HANA creates value by supporting current market demands.
To determine whether BPC Optimized for S/4HANA creates value for your company, it is important to understand the different platforms SAP is offering and supporting.

BPC Optimized for S/4HANA, as the name already indicates, runs directly on S/4HANA; SAP’s ERP system as a successor to SAP ECC (Enterprise Resource Planning – ERP Central Component) with an underlying in-memory HANA platform. Besides the in-memory capabilities, this platform uses a more simplified data model compared to traditional database systems. Especially the columnar-based data storage (instead of traditional row-based data storage) extensively decreases the number of tables required in the ERP system, enabling faster data access, better parallel processing and efficient data compression.

S/4HANA, previously known as SAP Simple Finance powered by SAP HANA, can be deployed both, on-premise and via cloud computing.

When to use BPC Optimized for S/4HANA?

Key advantages of using BPC Optimized for S/4HANA, that can also be found in our earlier article about different flavors of BPC, include the elimination of data replication in SAP BPC. Due to the real-time integration with the ERP layer, no Extraction, Transformation and Load (ETL) processes are needed anymore. This means that not only master data is shared directly through 1 single integrated environment, also transactional data can be accessed real-time.

From a financial perspective, BPC Optimized for S/4HANA allows for continuous accounting. The use of, for instance, real-time intercompany eliminations, on-the-fly currency conversions and immediate financial consolidations encourage companies to faster meet their reporting requirements. Companies simply do not have to wait until the general ledgers are closed at the end of the fiscal period. They can obtain for a soft-close during the fiscal period instead.

From a managerial perspective, when assessing whether a company meets its strategic objectives, companies can easily adopt new business activities and measure the effects on their running businesses. Just to give some examples; in case a company acquires a new entity, the single integrated SAP environment allows business controllers to immediately measure the effects on the companies’ cash position and whether it is required to raise funds seizing such a business opportunity. Next, as actual figures are available real-time, business controllers more frequently can adjust their forecasts accordingly. Also, one can run simulations with different scenarios on flexible planning levels.

Key benefits

S/4HANA is a complete ERP system that supports all business activities such as purchasing, production, sales, logistics, inventory management and human resources. SAP modules (of which some have been renamed in S/4HANA) like FI-CO (Finance: Controlling), FI-GL (General Ledger), FSCM-CR (Credit Management), FI-AA (Asset Accounting), ML (Material Ledger), RAR (Revenue Accounting & Reporting), HCM (Human Capital Management), TRM (Treasury & Risk Management), FI-TV (Travel Management) etc. have been integrated in S/4HANA.

In addition, BPC Optimized for S/4HANA supports drill-down features to the General Ledger to check for account details. Processing time to perform complex calculations can be reduced, since BPC Optimized allows you to push down the execution of calculations at database level. This means that, in contrast to a traditional approach, calculations are not performed within the application layer, but directly within the database layer, leveraging parallel processing functionalities within the HANA database. This makes the traditional write-back from the application layer to the database and retrieval vice versa from the database into the application layer redundant.

Although not a prerequisite, S/4HANA integrates with SAP BW/4HANA. With the accelerated data load time and processing time within S/4HANA, companies can focus on Big Data analytics, improving decision making.

Key benefits for using BPC Optimized for S/4HANA obviously include the shared master data and transactional data. The instant data access and shared master and transactional data discards any data replication within BPC, securing data governance.

Generally, the better the quality and control on master data and transactional data, the more efficient reporting processes companies can aim to obtain for.

Moreover, the execution of embedded planning functions on database level leverages parallel processing and data compression features within HANA. Real-time consolidations and intercompany matching processes transform the reporting process and reduce the need for time consuming reconciliations.

SAP Real-time consolidation (source SAP)

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