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SAP Profitability andPerformance Management(PaPM)
22 October 2020
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What if we could create aflexible modelling platformin SAP where most businessscenarios could bemodelled, calculated andsimulated real-time?
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Significant benefits using a flexible modelling platform
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Improvingefficiency
Forex implications of makingthe adjustments in the later
periods₤6mn
Auditexposure₤ 25mn
Reducing cashleakage
Potential TP exposure in terms of unpaid tax(not including penalties or interest)
₤7mn
TP provision€ 140mn
€ 3m saving inFTE across thegroup on inter-
co services
9900Hours
reduction
Customs Impact$6mn
FX Impact€2.9mn
TP Audits€2mn
43,700hours
reduction
Net benefitvalue
€23.8mn
Net benefit value₤37mn
Compliance &risk
Positivebusiness
case fromyear 1
*Numbers quoted are based on EY experience of many projects over the past decade.
Net benefit value€42mn
€ 500K R&Dpenalty risk
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What are the typical use cases for these multipurpose and intelligent platforms…
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Business and financialmodelingHigh-speed processing and analysisof big data volumes providingtraceability and what-if simulationcapabilities
Agile plan and forecastmodelingRun sophisticated driver-based,predictive and stochasticmodels based on BPC and SAC
Funds and liquiditytransfer pricingRate modeling, cashflowdynamics, funds and liquiditytransfer pricing
Transfer pricing& tax reportingTax compliant revenue and costtransfer for intermediates, licenses,services and products betweenlegal entities (OECD Transfer PriceGuidelines, BEPS)
Profitability and costmanagementOptimize profitability and coston product & service, channeland customer level
Allocation simulationsRun simulations based onS/4HANA and ERP allocationrules and data
IT cost managementIT cost transparency,financial management andautomated bill of IT, cross-charging of shared services
Value chain sustainabilitymanagementOptimize economic, environmentand social impact of your company,products and services
Product and priceForecastForecast and optimization ofproduct profitability
PaPM October 2020
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…leveraging much of the same dimensions
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Tax/TPsegmented
reporting
G/L account
Value byCurrency
Cost Center/Profit Center
Period
Volume/units
Project code
Supplier
Channel
Customer
Water use
Geography
Tax mark ups
land (M2)
Legal Entity
Integrated P&L
Headcount
Cost elements
Benchmarks
TP Methods
Brand
tCO2 equivalent
VAT code
Customs/HScode
Inventory val.method
Plant
Budget/Forecast
Producthierarchy
Local GAAP
Stat P&Lmapping
TP Function
ManagementP&L mapping
BOM
Group GAAP
CbCrclassification
Functional area
Transactionaldata
Master dataand hierarchies
Management /performance
reporting
Financial /regulatory
reporting
Integratedprofitability
reporting
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What is PaPM
Best in class calculation and allocation
No data redundancy & fast processing
Integration SAP S/4HANA,ERP, BPC,BW and SAC
Embedded reporting capabilities
Simulation capabilities
Next generation Integratedperformance management solution
Agile financial and business modellingcapabilities
Built on SAP HANA for instant insight
SAP Fiori user experience
Business focused
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SAP PaPMThree main components - A perfect combination
Business data aggregatorIntegrates with your operational
systems and your data warehouseat high speed − without copying
data
Calculation engineProcess high volumes of data
Simulation applicationProvides real-time data insights
with end-to-end traceability.
Scenarios Forecasting Drill-Down Auditability
Allocation
Assessmentand GlobalRecharges
Top-DownDistribution
Activity BasedCosting
Planningsupport
Integrationwith SAP BPC
Cost planning
Sales planning
Enrichment
Derivation
Lookup
Currencyand Unit
Conversion
Calculations
Driver andmodel-basedCalculations
PredictiveAnalytics
library
R Language
SimulationApplication
CalculationEngine
Business DataAggregator
Databases
• SAP HANA• IBM• MSQL Server,
Teradata, Hadoop,etc.…
SAP applications
• SAP S/4HANA• ERP, SAP BW, SAP
BPC, finance risk dataplatform etc.
Functions
• Web Services• Micro Services• R Language• …
Other Apps and Data
• Microsoft Excel• CSV• Other files• …
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Data Review and Input - Creating reports
ITFM – PaPM clarifications 19 October 2020Page 12
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16 August 2019 PS&I MASTER SLIDESPage 20
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16 August 2019 PS&I MASTER SLIDESPage 21
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16 August 2019 PS&I MASTER SLIDESPage 22
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1 November 2020 Presentation title
Thank you.
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