Upload
curtis-rose
View
62
Download
0
Tags:
Embed Size (px)
DESCRIPTION
SAP Business objects Profibility and Cost Management
Citation preview
Short Presentation TitleSpeaker’s Name/Department (delete if not needed)Month 00, 2011
Simuler les flux de coûts pour améliorer la rentabilitéJérémie Brunet – EMEA EPM Business DevelopmentMay 17, 2011
Decreasing margins or market
share?Significant
acquisitions?
New sales management
team?
Expanded Product portfolio or Market
coverage?
Predictive Profitability
© 2011 SAP AG. All rights reserved. 3
Agenda
1.What are we trying to achieve with cost and profitability reporting?
2.How is it currently being done – and what issues exist?
3.How does SAP BusinessObjects Profitability and Cost Management solve these issues?
© 2011 SAP AG. All rights reserved. 4
Agenda
1.What are we trying to achieve with cost and profitability reporting?
2.How is it currently being done – and what issues exist?
3.How does SAP BusinessObjects Profitability and Cost Management solve these issues?
WHAT IS SUCCESS FOR YOU, YOUR TEAM, WHAT IS SUCCESS FOR YOU, YOUR TEAM, AND YOUR ORGANIZATION? AND YOUR ORGANIZATION?
GROWING PROFITSGROWING PROFITSOPTIMIZING RESOURCESOPTIMIZING RESOURCES
IMPROVING IMPROVING SHAREHOLDER SHAREHOLDER VALUEVALUEPREDICTING FUTURE PROFITABILITYPREDICTING FUTURE PROFITABILITY
© 2011 SAP AG. All rights reserved. 6
Profitability analysis can get very complex
Income Statement
Revenue
Less Cost of Goods Sold
Less Cost of SG&A
= Profit
P&L for:-1 product-1 customer segment-1 distribution channel -1 manufacturing site -and handful of suppliers is fairly easy!
P&L for:-10000 products-50 customer segments-20 distribution channel -50 manufacturing site -and 100 suppliers Can get VERY COMPLEX
Especially if you want to run WHAT-IF ANALYSIS in real-time!
© 2011 SAP AG. All rights reserved. 7
Analyst Opinion: Gartner
According to the 2010 Gartner FinancialExecutives (FEI) technology study, themost significant constraint with the officeof finance is the ability to understandprofitability, including at the product andcustomer levels. This was critical duringthe economic downturn, but may be moreimportant as companies return to growth.Recommendation: Leverage ProfitabilityManagement & Optimization businessapplications to replace your legacycosting and profitability analysis solutions
© 2011 SAP AG. All rights reserved. 8
Analyst Opinion: IDC
The benefits of having information thatexpands the organizations’ understandingof where profits lie far outweigh the costs,and an investment in technology is aninvestment in accuracy; a sustainable,repeatable process; and the ability todeliver information to support true day-to-day decision making.
© SAP 2011 / 8
© 2011 SAP AG. All rights reserved. 9
What information and insight are we trying to provide?
What are we doing?
Historic Actuals Budgets Re-forecasts
ACCURACY AND TRANSPARENCY
MORE ACCURATE, SEGMENTED REPORTING
INSIGHT AND COMPETITIVE ADVANTAGE
STRATEGYWhich Products, Customers and Channels to focus on?
IMPROVED MARGIN
OPTIMIZATIONPricing | Discounting Process Improvements
ALIGNMENT, AGILITY, PREDICTABILITY
FORWARD-LOOKING OPERATIONAL PLANS AND BUDGETS
Why are we doing it?
What is the desired outcome?
REDUCED SPEND AS % REVENUE
ACCURATE SERVICES COSTING AND CROSS CHARGING
SERVICES COSTING AND CROSS CHARGINGIT | HR | Finance
PROCESS COSTINGTasks | Activities | Processes
DETAILED PROFITABILITY REPORTINGProduct | Customer | Channel
DRIVER BASED SCEANRIOS AND PLANS
DRIVER-BASED SCENARIOS AND PLANS
PROCESS COSTINGTasks | Activities | Processes
PROCESS COSTINGTasks | Activities | Processes
COST AND PROFITABILITY REPORTING
© 2011 SAP AG. All rights reserved. 10
Agenda
1.What are we trying to achieve with cost and profitability reporting?
2.How is it currently being done – and what issues exist?
3.How does SAP BusinessObjects Profitability and Cost Management solve these issues?
© 2011 SAP AG. All rights reserved. 11
Pressing Issue to Better Understand Costs and Profitability (IDC Research)
Limitations of current profitability reportingWho is doing profitability reporting?
Yes-we do some bit it’snot consistent
22%
Yes-we provide it to the field regularly73%
No-we only respond to
ad-hoc requests2%
What are they using?
ABC application+ BI tool
21%
General Ledger system22%
Standalone ABC6%
None6%
Spreadsheet29%
Business Intelligence tool21%
Inability to respond toManagement request
19%
None22%
Lack of sophisticated
costing process16%
Lack of detail/granularity
10%
High level ofmanual effort21%
Most desired improvement
Produce reports more frequently
24%
Other3%
Reduce the manual workload
39%
Produce more accurate information34%
© 2011 SAP AG. All rights reserved. 12
How does that translate into business issues?
Top executive issues
How do I take decisive actions that improve profits?
How do I optimize the product/ channel / customer mix?
How to I analyze profitability across multiple dimensions?
How do I identify underperforming areas of my business?
How do I understand the root causes of poor performance?
© 2011 SAP AG. All rights reserved. 13
Agenda
1.What are we trying to achieve with cost and profitability reporting?
2.How is it currently being done – and what issues exist?
3.How does SAP BusinessObjects Profitability and Cost Management solve these issues?
© 2011 SAP AG. All rights reserved. 14
Increase your margins with SAP PCM
Understand what drives costs in your organisation Re-engineer non added value activitiesRemove or re-price profit destroying products and channelsAlign capacity with demandExploit revenue and profit opportunities through better operational re-forecasting
Increase your margins with SAP PCM
Understand what drives costs in your organisation Re-engineer non added value activitiesRemove or re-price profit destroying products and channelsAlign capacity with demandExploit revenue and profit opportunities through better operational re-forecasting
How does your operating profit compare with your peers?
Can you measure the true profitability of customers and products?
How do you test out the impact of new go-to-market scenarios?
How does your operating profit compare with your peers?
Can you measure the true profitability of customers and products?
How do you test out the impact of new go-to-market scenarios?
The Key Is in Identifying the Opportunities
© 2011 SAP AG. All rights reserved. 15
Profit-oriented Customer/product Segmentation
Cumulative Products / Customers
Cu
mu
lati
ve M
arg
in
Profit Creating Profit DestroyingNon Profit Creating
Cumulative Net Margin
Lost Profit
Protect & retain
Re-price and
develop
Rationalize(Only if they don’t
contribute to fixed costs)
© 2011 SAP AG. All rights reserved. 16
Banking and Insurance Group Gains Bottom-Line Benefits with SAP® Software
© 2011 SAP AG. All rights reserved. 17
Tunisie Télécom Monitors and Optimizes Costs with SAP® BusinessObjects™ solutions
Challenges and Opportunities
Recover profitability of landline activities via better expense control
Support large regulatory projects
Optimize use of accounting and operational data
Objectives
Determine fully loaded costs and profitability by lines of business (mobile, landline, data, Internet)
Perform analysis of actuals versus budget variances and for chargebacks of internal shared services
Benchmark with competitors
Implementation Highlights
Completed initial implementation in 4 months
QUICK FACTS
Tunisie TélécomHeadquarters: Tunis, TunisiaIndustry: TelecommunicationsProducts and services: TelecommunicationsRevenue: €780 millionEmployees: 8,000Web site: www.tunisietelecom.tnSAP® solutions and services: SAP BusinessObjects™ Profitability and Cost Management applicationImplementation partners: Business and Management Consulting, SAP Consulting
Why SAP
Traceable and auditable software; flexible and adaptablecost-allocation model
Integration of heterogeneous SAP® BusinessObjects™ Business Intelligence platform and Oracle landscape
Benefits
Tailored analytical data communication supporting group’s strategic projects
Daily online reporting to 24 regional managers of profit and loss by product and key financial ratios
Full autonomy of analytical accounting department in cost modeling and report design
Improved regulatory compliance (for interconnection fares, international financial reporting standards)
“SAP BusinessObjects Profitability and Cost Management lets us trace and audit billions of combinations. We reduced analytical reporting time from one week supported by three employees to two hours supported by one employee.”
Mehri KRAIEMHead of Financial Accounting DivisionCentral Finance OfficeTunisie Télécom
(10/
12)
© 2011 SAP AG. All rights reserved. 18
© 2011 SAP AG. All rights reserved. 19
Société Générale Retail Bank Analyzes Costs to Improve Profitability with SAP
© 2011 SAP AG. All rights reserved. 20
La Poste Optimizes IT Costs with SAP® BusinessObjects™ Solution
Challenges and Opportunities
Justify IT budgets to headquarters and report on resource use
Exceed the analytical capabilities of general accounting methodologies and spreadsheet
Objectives
Optimize use of project resources
Identify in advance the resources needed by project, activity, and internal customer
Calculate return on investment
Improve IT system performance by measuring its efficiency among end-users
Implementation Highlights
Initial implementation completed within 3 months
QUICK FACTS
La Poste – Postal mail services departmentHeadquarters: Paris, FranceIndustry: Public sectorProducts and services: Postal servicesRevenue: €11.3 billionEmployees: 191,000Web site: www.laposte.frSAP® solutions and services: SAP BusinessObjects™ Profitability and Cost Management application, SAP ERP applicationImplementation partner: SAP Consulting
Why SAP
Expertise in activity-based costing (ABC) methodology
Supports IT process mapping (as described by CIGREF Foundation)
SAP’s IT services catalog supports all lines of business (LOBs)
Benefits
Identification of links between resources and activities during project lifecycle
Able to partner with LOBs to estimate IT spending and expenses
Able to provide auditors balance sheets that justify capital assets
Trusted dialog between users and budget controllers
Optimized use of IT resources and improved budgetary control
“SAP BusinessObjects allows us to evaluate project costs based on actual resources used during the project lifecycle. As a result, we can help our teams and the LOBs optimize IT costs and project management performance.”
Muriel FallyControlling directorPostal mail services director La Poste
© 2011 SAP AG. All rights reserved. 21
COST ASSIGNMENT
DRIVES
ResourcesProperties People Capital Technology
COST ASSIGNMENT
DRIVES
ActivitiesOpen new accountMail Statements
Cause and Effect Relationships
Products, Customers, ChannelsChecking accounts Upscale single females
Resources& Costs
Cost Objects
Activities
Cost Assignment
Cost Assignment
RevenuesProduct, Customer, Channel, etc.
ProfitabilityProduct, Customer, Channel, etc.
Activity-based Costing
Resource Drivers
Activity Drivers
Activity-based Budgeting
What work is performed for?
What work is performed?
What’s needed to do the work?
© 2011 SAP AG. All rights reserved. 22
User friendly, rapid and efficient model building
Flexible Hierarchies and attributes User-Defined
properties
Out-of-the-box dimensions
© 2011 SAP AG. All rights reserved. 23
Point-and-click modelling
TargetTargetSourceSource Cost DriverCost Driver
© 2011 SAP AG. All rights reserved. 24
Web or Excel Reporting
© 2011 SAP AG. All rights reserved. 25
Customer Value AnalysisGuided Analytics
GUIDED ANALYSIS
DRILL THROUGH
POP UP DETAIL
TRENDED HISTORY
© 2011 SAP AG. All rights reserved. 26
Customer Value AnalysisBest practice report formats
BEST PRACTICE REPORT FORMATS
RANKED REPORTS
© 2011 SAP AG. All rights reserved. 27
Customer Value Analysis‘What-If?’ Analysis
OVERALL IMPACT
WATERFALL DISPLAY OF INDIVIDUAL CHANGES
BEFORE AND AFTER IMPACT ON NET MARGIN
SLIDERS FOR EACH VARIABLE
© 2011 SAP AG. All rights reserved. 28
PCM Usage Scenarios by Industry (1/2)
Industry Usage scenario
Financial Services Transfer pricing, product /customer costing, shared services costing, claims management costing, broker profitability, process improvement, capacityplanning
Transportation & Logistics
Customer, Product and Route profitability, Container costing, Leg contribution, Network optimization, Infrastructure investment analysis, IT costing, Regulatory reporting (postal services)
Consumer products and Life Sciences
Product costing and pricing, SKU profitability, Supply chain optimization, Overhead optimization, Shared Services costing (IT, HR, Finance)
Healthcare Procedure costing, Regulatory bodies reporting
Oil & Gas Fuels and Lubricants costing & pricing, Distribution Point profitability, processcosting
Public sector Pensions, Benefits, and Allowances costing, Benchmarking, Public services pricing (customs, tolls…)
Wholesale distribution Product/Branch pricing, Customer and Distribution Channel Value Analysis, Supply chain optimization, Supplier rebates negociation
Telecom Regulatory requirements (unit costs per service and per minute), Product/customer profitability
© 2011 SAP AG. All rights reserved. 29
PCM Usage Scenarios by Industry (2/2)
Industry Usage scenario
Automotive, Machinery Process/product costing and profitability analysis, Shared Services Costing
High Tech & Electronics Product/Customer segment profitability, Dynamic resource and capacityplanning, Shared Services Costing
Media Service Licence and Product/Broadcast profitability
Utilities & waste Process improvement, Resource optimisation, Customer segment profitability, Services pricing
Professional services Project costing, margin analysis, Shard Services Costing
Chemicals, Process, Mill Products
Process/product costing, Business unit benchamrking, Shared Services Costing, Order Line profitability
Defence and Security Central logistics costing, Missions and Operations Costing, Performance Management
Retail Cost to serve, Customer/Product lifetime value analysis, Suppliers negociationoptimization, margin control, Merchandising/Supply chain costing
© 2011 SAP AG. All rights reserved. 30
PCM Use Case: IT Costing and Chargeback
Costs across various dimensionsService | Project | Business Unit etc
Asset Management Systems
Finance systems (GL)
Time ManagementSystems
Metering and MeasurementE.g. CPU, RAM, HDD, Time etc
Web-based data entry
IT Business ManagementTools E.g. Project Portfolio Management
Standard IT Services Libraries E.g. ITIL, CoBIT etc
Inputs
Transparent and Accurate Cross ChargingInformed consumption – Reduce buffet mentality
Cost AnalysisCost of Service Levels, Non Value Added Costs, Fixed Costs vs. Variable Costs
Performance Measures / BenchmarkingUnit rates, Cost drivers, Internal, External
Investment DecisionsMake or Buy, TCO, Replacement
Cost ReductionRemoval of Non Value Adding Activities, Changing Behaviours
Planning and BudgetingCapacity planning, Resource Planning, Marginal Costing
Process ImprovementProcess costs, Process Re-engineering
Use cases
© 2011 SAP AG. All rights reserved. 31
Activity based modelling with cause and effect assignments
Collection and consolidation of line items
Profitability and Cost Management Planning and Consolidation 1
Budgets and Re-forecasts
Detailed Cost and Profitability Reporting
Process CostingFixed and Variable
Driver base scenarios and plans
Service Costing and Cross Charging
SAP NetWeaver® BW, ERP, GL, DW, CRM, etc.
Actuals
Easier and more accurate allocations and segmented reporting
Profit & Loss Cash Flow Statement Balance Sheet
Priorities and Assumptions
StrategyProduct | Customer | Channel
OptimizationPricing | Discounting | Process improvement
High Level Financials
Forward Looking Resource andCapacity Plan
Alignment and Accountability of Support Services
1 SAP BusinessObjects Planning and Consolidation for MS 7.5
PCM Use Case: Planning and Budgeting
© 2011 SAP AG. All rights reserved. 32
Data layer
Applicationlayer
SAP BusinessObjectsProfitability and Cost Management
Presentation layer
End user data entry, query, analysis and ‘What-If?’ Web or LAN
Work Management Shipped with application
Model buildersModel structure / rules / assignments
SAP BusinessObjects Profitability and Cost Management Solution Architecture
SAP NW BW, ERP, GL, DW, CRM, TRX
Single open databaseOracle or MS SQL
Data BridgeFlat file or ODBO / MDX / BAPI
SAP BusinessObjects Financial Information Management
Bulk Data LoaderTable to table
SAP Business Objects Voyager and other 3rd party OLAP clients
SAP Business Objects Extended AnalyticsShipped with application
MDX ConnectorDynamic
SAP Business Objects BI
SAP Business Objects Universe
Create UniverseStatic
Other SAP BusinessObjects EPM applications
SAP BusinessObjects Financial Information Management
Export calculated results
External Data Warehouseor Data Mart
© 2011 SAP AG. All rights reserved. 33
Data layer
Applicationlayer
SAP BusinessObjectsProfitability and Cost Management
Presentationlayer SAP BusinessObjects
Profitability and Cost ManagementModel buildersModel structure / rules / assignments
SAP BusinessObjects Profitability and Cost Management Solution Architecture options for SAP NetWeaver©
Single open databaseOracle or MS SQL
Other SAP sources
Non SAP sources
SAP ERPSAP FinancialsCOPA etc
SAP NetWeaver Business Warehouse
SAP BW DB Connect
Bulk Data LoaderTable to tableSAP BW Open Hub
Data BridgeFlat file or ODBO / MDX / BAPI
Results
SAP BusinessObjectsProfitability and Cost ManagementBook UserEnd user data entry, query, analysis and ‘What-If?’
SAP NetWeaver BW Business ExplorerBEx Web and BEx AnalyzerQuery / Reconciliation
SAP Business ObjectsBI suiteQuery, Visualization and Analysis
SAP Business Objects Universe
SAP NetWeaverBusiness Warehouse Accelerator Optional
SAP Internal ETL
SAP BusinessObjectsFinancial Information Management
Summary
© 2011 SAP AG. All rights reserved. 37
DECIDE
© 2011 SAP AG. All rights reserved. 42
User-friendly rapid and efficient modelling
Scalable enterprise-class solution
Extend the value of profitability and cost management
Reliable on-demand what-if analysis and scenario modeling
PCM Summary Card
BenefitsVisibility
Alignment
Incisive decision making
Optimize costs and profitability
User-friendly rapid and efficient modelling
Scalable enterprise-class solution
Extend the value of profitability and cost management
Reliable on-demand what-if analysis and scenario modeling