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Cost center planning is one

of the most crucial planning

applications in an enter-

prise. How cost center plan-

ning is performed and im-

plemented has a major im-

pact on corporate success.

One vital aspect is how a

company manages to com-

bine detailed knowledge

scattered in the enterprise to

flow in a coordinated proc-

ess into cost center plan-

ning.

SAP SEM / Financial AnalyticsCost Center Planning

The solution for cost center planning delivered with SAPStrategic Enterprise Management (SEM) and Financial Ana-

lytics, enables you:

• to create and use individual and personalized user

interfaces.

• to perform decentralized planning based on a common

source of data.

• to plan on any level of detail or aggregation.

• to shorten planning cycles by coordinating planning activi-

ties

DECENTRALIZED PLANNING

Cost center managers require a planning environment tailored

to their specific needs. For example, after logging on to the

system, only those cost centers for which he/she is responsible

together with the cost elements actually available should be

shown.

This is one reason why MS Excel-based planning is used so

extensively in business. A major disadvantage of using MS

Excel with such decentralized planning as cost center planning

is the scattered number of Excel sheets in the company, which

greatly complicates the process of collating and aggregating

the planning data.

SEM Cost center planning enables you to overcome this major

hurdle but still be able to plan in your own planning environ-

ment. You can use your own personalized planning interface

for entering and accessing the planning data (see the following

section), however the data is always kept centrally.

Overview

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The central source for master data and transaction data are the

the InfoCubes within the SAP Business Information Ware-

house (BW). This data can be integrated seamlessly to the

master data and transaction data in R/3 CO-CCA using stan-

dard programs, which also enables you to incorporate

information from R/3 relating to cost centers, cost elements,

currencies etc. within your cost center planning.

PLANNING INTERFACES CREATED EASILY FOR EACHUSER

You can create your own specific planning interfaces very

easily with SEM-BPS (Business Planning and Simulation)

technology, which was used for developing the cost center

planning application.

You first need to choose which type of interface you require.For example, both web-based and Excel-based interfaces are

available.

Planning data (such as primary costs ) is displayed within the

interface in a table format for one object (such as one specific

cost center in a controlling area), structured according to cer-

tain criteria (for example, by cost element and month). In

addition, you can incorporate any reference data in your plan-

ning (such as cost development over the last two years as well

as estimated cost values for the current year).

Planning functions can be combined with the data in the inter-

face. For example, functions for revaluation, currency conver-

sion, copying to other planning periods can be included as

pushbuttons to be performed when required. Planning func-

tions triggered automatically by certain events can also be

included in your planning interface.

SAP delivers pre-packaged user intefaces and planning func-

tions for cost center planning. You can of course create addi-

tional interfaces and functions to meet your own individual

needs.

The interfaces are set up using variables, so that the end user

sees only the data relevant to him in his specific area of re-

sponsibility.

SUPPORT OF THE COMPLETE COST CENTER PLANNINGPROCESS

The cost center planning application delivered by SAP pro-

vides support to the entire cost center planning process.

This process covers primary cost planning including prices,

quantities and cost values for primary cost elements, as well as

secondary cost planning including allocation prices, activity

input quantities and output quantities, and cost values for

secondary cost elements.

Here you can use various master data information from R/3

and export your planned data back into R/3 CO-CCA for

further processing.

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Modeling of

allocation network and

planning of statistical key

figures

Planning of prices for

cost drivers

Quantity planning of

cost drivers

Calculation of

primary costs (or directmanual input)

Distribution

of primary costs

Setting prices of activities

Planning of activitiesPlanning of activities

consumption

Calculation of activities

Calculation of

secondary costs

Calculation

of use of capacity

 

COORDINATING COST CENTER PLANNING

To efficiently achieve reconciled planning results within

strongly decentralized processes, such as cost center planning,

requires a high level of coordination.

To meet this goal, SAP delivers the Status and Tracking Sys-

tem, which enables you to assign planning tasks according to

your company’s planning hierarchy and monitor the entire

planning process. Planning targets, results and comments can

be communicated to and from cost center managers using the

integrated mail system. Information about the status of each

planning task is also provided.

INTEGRATION WITH R/3-BASED COST CENTER PLAN-NING

Instead of running the cost center planning process entirely

within SEM / Financial Analytics, it is of course conceivable

to perform certain tasks within R/3.

Planning of primary costs and activity inputs normally would

take place within SEM / Financial Analytics. The planning

results would then be exported to R/3 CO-CCA using standard

programs. Subsequent internal activity allocation and calcula-

tion of secondary costs would be performed with R/3-based

cost center planning based on the allocation structures in R/3,

so eliminating the need to model these structures again in

SEM / Financial Analytics.

INTEGRATED PERSONNEL COST PLANNING

A key component of most Cost Center plans relates to planned

personnel costs, both in terms of base wages and associated

benefits and other employee related costs. SEM-BPS provides

functionality to support the development of this key compo-

nent of the Cost Center plan, at the appropriate level of detail

(i.e. by employee or position).

Personnel Cost Planning can be implemented on an integrated

basis with other components of SAP’s R/3 Human Resources

module or fully standalone.

Functionality supports not only the calculation of wages and

salaries, based upon planned headcount and applicable wage

rates, but additional “valuation” functionality is delivered so

as to allow for the definition of multi-level schemas, support-

ing not only the calculation of base wages but the automated

calculation of additional wage related costs such as defined

benefit contributions, vacation expense accruals etc.

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