1 Introduction to Enterprise Performance Management

31

1.1 Enterprise Performance Management: What It Means

31

1.1.1 EPM Drives Strategy to Execution

33

1.1.2 EPM Builds on BI by Leveraging Information

34

1.2 Performance Management

35

1.2.1 Performance Management versus BI

36

1.2.2 Performance Management Challenges Facing Businesses Today

37

1.3 Financial Planning and Analysis Lifecycle

39

1.3.1 Strategy: The Starting Point in an Enterprise Performance Management System

39

1.3.2 Enabling the Financial Planning and Analysis Lifecycle

40

1.3.3 Financial Planning and Analysis Lifecycle in Practice

41

1.4 Key Organizational Issues and Concepts

42

1.4.1 Strategy Formulation

42

1.4.2 Planning, Budgeting, and Forecasting

45

1.4.3 Financial Information Management

48

1.4.4 Profitability and Cost Management

49

1.4.5 Monitoring and Reporting

50

1.5 SAP Enterprise Performance Management for the Finance Portfolio

52

1.5.1 Why SAP?

53

1.5.2 SAP EPM Applications

55

1.5.3 EPM Processes Powered by SAP HANA

56

1.6 Introducing an EPM Initiative

57

1.6.1 Resourcing and Funding for EPM Programs

58

1.6.2 Communications Planning for EPM Programs

59

1.6.3 Risk Management of EPM Programs

61

1.6.4 Implementing EPM throughout the Annual Performance Cycle

62

1.7 Summary

63

2 The Evolving Domain of Performance Management

65

2.1 Performance Management-Related Methodologies

67

2.1.1 Strategy Formulation Approaches

68

2.1.2 Balanced Scorecard Approaches

72

2.1.3 Business Planning and Forecasting Approaches

80

2.1.4 Profitability and Costing Approaches

84

2.2 Financial Planning Processes

87

2.2.1 Business Planning

88

2.2.2 Forecasting and Consensus Building

88

2.2.3 Financial Reporting and Analysis

89

2.2.4 Forecasting

90

2.2.5 Analysis to Track Business Performance

90

2.3 Rolling Budget-Based Planning

90

2.3.1 Moving to “Beyond Budgeting”

91

2.3.2 Increase in Data Transparency and Volumes

92

2.3.3 Increase in Opportunity Evaluations

92

2.3.4 Increase in Decision-Making Cycles

93

2.3.5 Merging Planning with Financial Close Activities

93

2.4 Issues and Challenges in Eliminating the Annual Budget

94

2.4.1 Leadership Actions

94

2.4.2 Traditional Budgeting versus Contemporary Beyond Budgeting: Three Core Differences

96

2.5 Financial Consolidation and Disclosure

99

2.5.1 Financial Close

99

2.5.2 Financial Compliance

104

2.6 Risk Management and Mitigation

106

2.7 Profitability Analysis

109

2.8 Financial and Operational Reporting

110

2.8.1 Reporting into Rolling Business Plans and Forecasts

110

2.8.2 Monitoring the Financial Close Process

111

2.8.3 Profitability and Cost Reporting

111

2.8.4 Monitoring Enterprise Performance

113

2.9 Achieving Financial Excellence

113

2.10 Manage Financial Planning and Analysis with Solutions from SAP

115

2.10.1 Develop and Translate Strategy

116

2.10.2 Planning, Budgeting, and Forecasting

117

2.10.3 Improve Profitability and Cost Analysis

117

2.10.4 Monitoring and Reporting

118

2.11 Accelerating Financial Close to Disclose

119

2.11.1 Accounting and Financial Close

119

2.11.2 Faster Accounting and Financial Close

119

2.11.3 SAP Solutions for Accounting and Financial Close

120

2.12 Summary

123

3 SAP Enterprise Management Portfolio

125

3.1 SAP Strategy Management

126

3.1.1 Functionality

127

3.1.2 Mobile Solution

129

3.1.3 Reporting

130

3.2 SAP Business Planning and Consolidation

130

3.2.1 A Process-Centric, Unified Solution for Business Users

131

3.2.2 Powerful Reporting and Analysis Functionality

132

3.2.3 Enhanced Financial Consolidation

132

3.3 SAP Profitability and Cost Management

134

3.4 SAP Financial Information Management

136

3.4.1 User Benefits

137

3.4.2 Integration

139

3.5 SAP Disclosure Management

140

3.6 SAP Intercompany

141

3.7 SAP BusinessObjects Business Intelligence Tools

143

3.7.1 SAP Lumira

144

3.7.2 SAP Predictive Analysis

145

3.7.3 SAP BusinessObjects Analysis, Edition for Microsoft Office

146

3.7.4 SAP BusinessObjects Analysis, Edition for OLAP

147

3.7.5 SAP Crystal Reports

147

3.7.6 SAP BusinessObjects Web Intelligence

148

3.7.7 SAP BusinessObjects Design Studio

150

3.7.8 SAP BusinessObjects Dashboards

151

3.7.9 SAP BusinessObjects Explorer

152

3.7.10 Analytics Edition of an SAP BusinessObjects BI Solution

153

3.7.11 SAP BusinessObjects Live Office

153

3.8 Considerations for SAP ERP Applications

154

3.8.1 Mapping to SAP ERP Financial Accounting and SAP General Ledger

154

3.8.2 Leveraging SAP ERP Human Capital Management for Compensation Management

155

3.8.3 Use of SAP Profitability and Cost Management with SAP ERP Components

155

3.8.4 Integrating SAP Strategy Management with SAP ERP Human Capital Management

156

3.9 Emerging Technologies

157

3.9.1 SAP EPM Unwired for SAP Business Planning and Consolidation

158

3.9.2 SAP EPM Unwired for Enterprise Insight

158

3.9.3 SAP Business Planning and Consolidation, Starter Kit for Mobile Financial Results Insight

158

3.9.4 SAP StoreInsight

158

3.10 Summary

159

4 SAP Strategy Management

163

4.1 Strategy Planning and Execution Process

165

4.1.1 Strategy-to-Execution Lifecycle

165

4.1.2 Issues Impacting Effective Strategy Execution

170

4.1.3 Strategy Management Office

171

4.2 Key Features

176

4.2.1 Initiatives Management Module

176

4.2.2 Scorecard Module

179

4.2.3 Alignment and Collaboration

184

4.3 Architecture

185

4.3.1 Multidimensional Model

186

4.3.2 Relational Database

187

4.3.3 User Interface

187

4.3.4 Entry and Approval Workflow

187

4.3.5 10.1 Enhancements

188

4.4 Integration with SAP BusinessObjects BI

188

4.4.1 Commonly Integrated Tools

189

4.4.2 Building EPM on SAP BusinessObjects BI by Leveraging Information

189

4.5 Mobile Solution

191

4.6 Use Cases

193

4.6.1 Acquisitions

193

4.6.2 Sales Performance Management

194

4.7 Summary

194

5 SAP Business Planning and Consolidation (Planning, Budgeting, and Forecasting)

195

5.1 Business Challenges in Financial Planning and Budgeting

196

5.1.1 CFO Challenges

197

5.1.2 Similarities for Success

198

5.2 Overview of the Planning, Budgeting, and Forecasting Features

199

5.2.1 SAP Business Planning and Consolidation, Defined

199

5.2.2 Features of SAP Business Planning and Consolidation

201

5.2.3 Comparing Microsoft Excel and SAP Business Planning and Consolidation

204

5.3 Versions of SAP Business Planning and Consolidation

205

5.3.1 SAP Business Planning and Consolidation 10.0, Version for Microsoft

205

5.3.2 SAP Business Planning and Consolidation 10, Version for SAP NetWeaver

206

5.3.3 SAP Business Planning and Consolidation 10, Version for SAP NetWeaver, Powered by SAP HANA

207

5.4 Business Planning: Plans and Processes

209

5.4.1 Budgeting

210

5.4.2 Forecasting

213

5.5 Planning Solution Requirements

217

5.5.1 SAP Business Warehouse Integrated Planning (SAP BW-IP)

218

5.5.2 Advent of In-Memory Planning, Leveraging SAP HANA

218

5.5.3 Planning Applications Kit

219

5.5.4 Supported Planning Approaches

219

5.5.5 Integrated SAP BW-IP/PAK and SAP Business Planning and Consolidation, Version for SAP NetWeaver

220

5.5.6 Pushing SAP BPC Functions into SAP HANA

221

5.5.7 Unifying SAP BW-IP/PAK and SAP BPC NetWeaver

222

5.5.8 Integrated Financial Planning Powered by SAP HANA

224

5.6 Key Capabilities

225

5.6.1 SAP EPM Add-In

225

5.6.2 Drill Through

228

5.6.3 Business Logic Script

228

5.6.4 Business Rules

229

5.6.5 Business Process Flows

230

5.7 Data Manager

230

5.7.1 Transformations

231

5.7.2 Packages

231

5.7.3 Process Chains

232

5.8 Summary

233

6 SAP Profitability and Cost Management

235

6.1 Challenges to Profitability Insight

235

6.1.1 Infrequency of Reporting

236

6.1.2 Cost of Ownership

237

6.1.3 Lack of Credibility

237

6.1.4 Lack of Accuracy/Detail

237

6.1.5 Siloed Metrics Can Hurt Overall Performance

238

6.2 Defining SAP Profitability and Cost Management

239

6.2.1 Benefits

239

6.2.2 Enablement

240

6.2.3 Typical Use Cases

241

6.2.4 SAP Profitability and Cost Management versus Financial Controlling in SAP ERP

242

6.2.5 Updates for Version 10

245

6.2.6 Activity-Based Costing

246

6.3 Key Application Components

247

6.3.1 Dimensions

248

6.3.2 Assignments

248

6.3.3 View Builder Grids

249

6.3.4 Data Explorer

249

6.3.5 Books

249

6.3.6 Security

250

6.4 Model Builder, View Builder, and Book Builder

250

6.4.1 Model Builder

250

6.4.2 View Builder

252

6.4.3 Book Builder

254

6.5 Activity-Based Costing

255

6.5.1 Defining Activities

255

6.5.2 Creating a Resource Driver Assignment

256

6.5.3 Reassignments and Overrides

256

6.5.4 Cost Object Costing

257

6.5.5 Complete Flexibility with Costing Methodologies

259

6.6 System Infrastructure and Solution Architecture

259

6.6.1 Data Layer

259

6.6.2 Application Layer

261

6.6.3 Presentation Layer

262

6.6.4 Scalable Enterprise Class Solution

262

6.6.5 Rules

266

6.6.6 Data Imports and Exports

266

6.6.7 SAP Financial Information Management Integration

267

6.6.8 Support for the EPM Add-In

268

6.6.9 Link to SAP Net Margin Analysis on SAP HANA

268

6.6.10 Export of Results to SAP HANA

268

6.7 Usage Scenarios and Benefits

268

6.7.1 Transfer Pricing

269

6.7.2 Identifying the True Cost to Serve

269

6.7.3 Transactional Costing

271

6.7.4 Multilevel Bill of Materials Costing

272

6.7.5 Shared Services Costing and Cross-Charging

275

6.7.6 Planning and Budgeting Resources

275

6.8 Industry Cases

276

6.9 Summary

278

7 SAP Financial Information Management

279

7.1 Financial Management Challenges

279

7.1.1 CFO Challenges with Integrating Data

280

7.1.2 General Challenges with Integrating Data

281

7.2 SAP Financial Information Management Overview

282

7.3 SAP Financial Information Management Features

284

7.4 Administration

286

7.5 Architecture

289

7.6 Integration

290

7.6.1 EPM-to-EPM Integration

291

7.6.2 EPM-to-SAP and Third-Party Solution Integration

292

7.7 Benefits

293

7.7.1 Organizational Benefits

294

7.7.2 Reducing Data Integrity Risks

294

7.8 Summary

296

8 Monitoring and Reporting

297

8.1 Monitoring and Reporting Process

297

8.2 Integration of BI Tools and SAP EPM for Reporting

300

8.3 Key SAP BusinessObjects BI Solution Areas

304

8.3.1 Visualization of Big Data

304

8.3.2 Ad Hoc Visualization and Discovery Using SAP Lumira

306

8.3.3 Crafting Visualization Approaches

307

8.3.4 Interactive Analysis, SAP IQ, and SAP Analytics Database

308

8.4 Using SAP Predictive Analysis

309

8.4.1 SAP Predictive Analysis and KXEN

310

8.4.2 Scenarios for SAP Predictive Analysis

313

8.4.3 Predictive Analytics and Visualization

315

8.4.4 Predictive Scenario Using SAP InfiniteInsight and SAP IQ

316

8.5 Structuring Enterprise Monitoring Using SAP BusinessObjects Design Studio

317

8.5.1 Monitoring Using Mobile Enablement and Data Warehouse Structures

317

8.5.2 Developing Business Views for Mobile and On-Premises

317

8.6 Creating Dashboards Using SAP BusinessObjects Explorer

319

8.6.1 The Effective Use of Dashboards

319

8.6.2 Using SAP Lumira versus SAP BusinessObjects Explorer

320

8.7 Reporting Using SAP Crystal Reports and SAP BusinessObjects Web Intelligence

321

8.7.1 SAP Crystal Reports

322

8.7.2 SAP BusinessObjects Web Intelligence

323

8.8 Performance Management Maturity Model

325

8.9 Summary

327

9 Accelerating Financial Close to Disclose

331

9.1 Barriers to a Fast, High-Quality Close-to-Disclose Process

332

9.1.1 Data Quality and Collection Errors

332

9.1.2 Intercompany Reconciliation

332

9.1.3 Poor Performance from Reporting Applications

333

9.1.4 Lack of Automation

333

9.1.5 Weak Audit Trails

333

9.2 Steps in the Close-to-Disclose Process

333

9.2.1 Financial Accounting

335

9.2.2 Entity Close

335

9.2.3 Corporate Close

336

9.2.4 Reporting and Disclosure

337

9.2.5 Financial Close Governance

338

9.3 SAP EPM Solutions That Streamline the Close-to-Disclose Process

339

9.3.1 SAP Intercompany

339

9.3.2 SAP Consolidation Solutions

343

9.3.3 Differences between SAP Business Suite and SAP EPM Solutions for Consolidation

344

9.3.4 Benefits of SAP EPM Consolidation Solutions

347

9.3.5 SAP EPM Starter Kits

349

9.4 SAP Disclosure Management

351

9.4.1 Benefits

353

9.4.2 SAP Disclosure Management Consolidation Starter Kits

357

9.4.3 SAP Financial Close and Disclosure Management Rapid-Deployment Solution

358

9.5 Summary

359

10 Rapid-Deployment Solutions for SAP EPM

361

10.1 What Are Rapid-Deployment Solutions?

361

10.2 SAP G/L Financial Planning Rapid-Deployment Solution

363

10.2.1 Solution Overview

363

10.2.2 Components in the Solution

365

10.2.3 Related Solutions

366

10.3 SAP Strategic Financial Planning Rapid-Deployment Solution

366

10.4 SAP Financial Close and Disclosure Management Rapid-Deployment Solution

367

10.4.1 Solution Overview

368

10.4.2 Components in the Solution

369

10.4.3 Related Solutions

369

10.5 SAP Value Realization Management Rapid-Deployment Solution

370

10.5.1 Solution Overview

371

10.5.2 Components in the Solution

372

10.5.3 Related Solutions

373

10.6 SAP Public Sector Budgeting and Planning Rapid-Deployment Solution

374

10.6.1 Solution Overview

374

10.6.2 Components in the Solution

375

10.6.3 Related Solutions

376

10.7 Starter Kits

377

10.7.1 Starter Kit for IFRS Transition

377

10.7.2 Starter Kit for Liquidity Planning

378

10.8 Summary

380

11 EPM and Enterprise Integration

381

11.1 Integration with SAP Risk Management

381

11.2 Integration with SAP Human Capital Management and SuccessFactors

383

11.2.1 Mapping Organizational Goals to and from SAP Human Capital Management

384

11.2.2 Mapping Organizational Goals to SuccessFactors Performance & Goals

385

11.3 Integration with SAP Customer Relationship Management and Sales Performance Management

385

11.4 Integration with SAP Financial Accounting and Controlling

388

11.5 Leveraging SAP Analytics Tools for Enhanced Reporting

389

11.5.1 SAP Spend Performance Management

389

11.5.2 SAP Supply Chain Performance Management

391

11.6 Moving from Planning to Execution and Project Management

392

11.6.1 Project Structuring Using SAP Portfolio and Program Management

392

11.6.2 Project Structuring Using Microsoft Solutions

393

11.7 Summary

397

12 The Importance of New Technology

401

12.1 Big Data Opportunities for EPM

402

12.1.1 Choosing the Best Big Data On-Ramp

403

12.1.2 Considerations for SAP Business Suite on SAP HANA

403

12.1.3 Customer Insights Using SAP HANA

404

12.2 Cloud Opportunities for EPM

404

12.2.1 SAP Business ByDesign

405

12.2.2 Two-Tier Subsidiary Models

405

12.3 Mobile Opportunities for EPM

406

12.3.1 Considerations for Big Data and Cloud Computing

406

12.3.2 Mobile Data Governance

406

12.3.3 SAP Mobile Enterprise Performance Management

409

12.4 Social Business

410

12.4.1 SAP Jam for Sales and Service Teams

411

12.4.2 SAP Jam for Mobile

412

12.4.3 SAP Customer Engagement Intelligence

413

12.5 Other Trends and the New Hybrid

414

12.5.1 Emerging Trends

414

12.5.2 An Explosion of New Hybrid Models to Consider

415

12.6 Summary

415

13 Road Map to SAP Solutions for Enterprise Performance Management

417

13.1 Near-Term Challenges for Finance

417

13.2 Overview of the SAP EPM Road Map for Finance

418

13.2.1 Release 10.1 of SAP EPM

418

13.2.2 Key Trends Driving the Future of EPM

419

13.3 Key Recent Releases and Innovations

420

13.3.1 SAP Business Planning and Consolidation 10.1, Version for SAP NetWeaver, Powered by SAP HANA

420

13.3.2 SAP Profitability and Cost Management 10.0 SP8

421

13.3.3 SAP Financial Consolidation 10.0 SP12

423

13.4 Planned Innovations and Future Direction

424

13.5 Summary

426