dynamic planning & forecasting w big data
DESCRIPTION
My Presentation at Partner Summit this week in Bangalore on Dyanmic Planning & Forecasting w Big DataTRANSCRIPT
Dynamic Planning & ForecastingPartner Summit
Atul PatelVice PresidentSAP AnalyticsSAP APJ
CFO’s continue to emphasize EPM as their top initiative for BI and Analytics
Source: Gartner. John Van Decker. Survey Analysis: CFOs' Top Imperatives From the 2013 Gartner FEI CFO Technology Study. May 2013
Social networking
Disclosure Mgmt Solutions
Mobile technologies
Cloud computing
On-demand apps/SaaS
GRC apps
Reconciliation mgmt apps
BPM
Integrated financial mgmt apps/ERP
BI, analytics, performance mgmt
3
2
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11
5
3
2
17
23
35
3
3
6
3
5
8
11
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18
29
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3
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Top Initiatives Today: Finance
Ranked 1st Ranked 2nd Ranked 3rd
Statistical analysis
Predicitive modeling
Big data
Customer and product profitability
Data warehouse
Budgeting, planning and forecasting
Financial reporting and consolidation
Performance measurement, scorecard, and dashboard
16%
18%
22%
30%
35%
43%
45%
54%
Investment in Business Analytics
Percentage of respondents
More Companies Choose SAP EPM
Largest EPM installed base (10,000+ customers)
Fastest growth of top 3 vendors (2010 – 2012 30%)
Source: Worldwide Financial Performance and Strategy Management Applications 2013-2017 Forecast and 2012 Vendor Shares, doc #241220, June 2013
© 2011 SAP AG. All rights reserved. 4
What the analysts have to say
SAP rated as a “hot” vendor and awarded highest combined ranking across all categories for 3rd consecutive year – Ventana Value Index for FPM (2013)
“SAP's customer reference scores were very good, near the top of the peer group” – Forrester Wave for FPM (Q3 2013)
“SAP’s mobile capabilities stand out for the breadth of performance management capabilities made available on mobile devices and for the ability to enter data and complete processes via mobile device…… other vendors just had ready-only access to basic dashboards and static reporting” – Nucleus Research Technology Matrix for CPM (H1 2013)
Customer Momentum
Big DealsBig HANA Success
Big Hyperion Wins
BPC/MS, BFC
BPC/NWBFC, TRM
PCM, BPC/NW
TRM
BPC/NW
BPC/NW, PCM
EPM + HANA Success
Customer Success Industries
High Tech
Oil & Gas
Consumer Products
Financial Services
Energy
Use Cases
Sales, production, purchasing planning
SKU level planning
Headcount planning
Capital planning
Sales forecasting
Legal & financial consolidations
OPEX planning
© 2011 SAP AG. All rights reserved. 7
1 toolProviding centralized data, a common user interface, and standardized calculations
20%Reduction in time to create forecasts
CompanyHewlett-Packard Company (HP)
HeadquartersPalo Alto, California
IndustryHigh tech
Products and ServicesComputing equipment, services, software, and solutions
Employees>300,000
RevenueUS$120.4 billion
Web Site www.hp.com
Business challenges Eliminate use of disparate spreadsheets and Essbase cubes for
global expense management (GEM) Automate processes and centralize GEM data as part of a multi-year
project to centralize corporate planning and simulation
Technical implementation Deployed the SAP® Business Planning and Consolidation application
to run on HP AppSystems and the SAP HANA® platform and extended the application enterprise wide
Deployed dimension with over one million members including hierarchies with no performance implications
Ran the system on an HP converged infrastructure, including ProLiant servers
Key benefits Replaced a multitude of spreadsheets and decentralized legacy
databases with one centralized tool Reduction in manual processes, time to consolidate data and ease in
ability to create comparisons Increased flexibility and adoption in reporting ,via the EPM Add-In
with users reporting off one single version of the truth
“SAP understood what we were trying to do and together we made it happen. Before, everyone had a slightly different method to calculate average salary. We agreed on a standard way so everyone is using the same base assumptions. Having everything centralized and standardized speeds plan creation and validation. We wanted to prove that SAP Business Planning and Consolidation could scale to the enterprise, and now we know that on HP infrastructure it can.”
James Mooney, Financial Planning and Simulation Program Manager, Hewlett-Packard Company (HP)
HP: Maximizing Performance with SAP® Business Planning and Consolidation powered by SAP HANA®
© 2011 SAP AG. All rights reserved. 8
Improving Performance at the City of Boston
About City of Boston Location: Boston, Massachusetts Industry: Local Government Products and Services: Multiple City
Departments Revenue: n/a Employees: Approximately 8,000 Web Site: www.cityofboston.gov SAP Solutions and Services: SAP Strategy
Management , Strategy Management iPad, CitizenInsight
Scope: Will be rolled out to all departments
Challenges and Opportunities Improve tracking and internal reporting of
performance Reporting of performance results to the
city’s citizens
Objectives Improve strategic planning and alignment of
performance objectives and actions with goals
Support city managers vision for performance management
Report performance results to citizens
Implementation Highlights Strategy Management branded as BAR –
Strategic Tracking and Reporting System Strategy Management iPad application is
used for mobile monitoring and management of performance
CitizenInsight will be made available (coming June 2012) to citizen’s of Boston area to view performance results
Why SAP? Struggled with implementation and
performance of competitor’s scorecarding solution
Evaluated multiple solutions but felt SAP was easier to use, had better aesthetics and covered all key requirements including initiative management, operational reviews, scorecards and mobile capabilities
Leverage SAP available City Management content to accelerate implementation
Needed solution that offered strong mobile capabilities
Benefits Better understanding of and agreement
on performance from the big picture down to the detailed plans
Lowered overall TCO of their strategy management solution
Improved accuracy, availability, and aesthetics of published performance results
“A successful City is one that delivers for its people. Through
accountability and strategic focus, the BAR program ensures
Boston is delivering on that promise”
- Mayor Thomas M Menino http://www.cityofboston.gov/bar/scorecard/reader.html
Faster SimulationIn Changing Market Conditions
400x faster reporting
4x faster data loads
3x faster ready for reporting
MOBILE TRANSFORMS FINANCE
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Plan Anytime, Anywhere
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Close Anytime, Anywhere
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Citizen Insight
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Citizen Insight
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Store Insight
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Store Insight
CFO.com Research 2013
“The top improvement area for finance executives is improving
capabilities for predictive analytics and simulations.”
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The Flaw of Averages
Plans based on average conditions are wrong on average
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The New Planning
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Integrate EPM and Predictive Analytics
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Embed HANA Predictive Capabilities
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Driver-based Planning IntroductionDrivers behinds Financial Planning
Factors may impact the report
Labor Cost Units Sold Sale Price Oil PriceSteel Price
Financial Planning Report
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Driver-based Planning IntroductionPlanning Process
Build Driver Model
Identify key business drivers Multi-dimensional Modeling Maintain Master Data Define Data Flow
Driver Planning & Analysis
Data Entry Build Report What-if Analysis Forecast Impact
Rule/Calculation Definition
Associate driver with target Define Formula Chain Define Data Scope
Driver1
Time Product
Driver2Revenue
EntityAccount
Revenue = Sales Units × PriceMaintenance Expense = Sales Amount × lookup( maintenance ratio ) Sales Labor Cost = Sales Unit × SalaryTax = ( Revenue – Expense ) × lookup(Tax Rate)
© 2013 SAP AG. All rights reserved. 25
Driver-based Planning in BPC HANAQuery request flow on BPC HANA
EPM Excel Add-in
BPC Backend
HANA MDX Engine
Calculation Model
HANA Calculation Engine
MDX
Query Request
BPC Report
© 2013 SAP AG. All rights reserved. 26
Driver-based Planning in BPC HANASingle Model Approach – Calculation Definition
Member Formula Formula Chain: Nested Formula Driver Reference
– Unqualified Dimension: Tuple with dummy member
Rate Lookup– Member Property
– IIF
Nested Formula
Tuple Reference
Rate Lookup
© 2013 SAP AG. All rights reserved. 27
Driver-based Planning IntroductionBusiness Value
Link plan with drivers Rapid Planning & Forecasting Real-time Risk Analysis
Focus on LoB activity Reduce planning cycle time Reduce guesswork and do
accurate forecasting
Analyze impact from economic condition or event
React faster or make rapid decision based on analysis
Perform what-if Analysis
© 2013 SAP AG. All rights reserved. 28
Driver-based Planning in BPC HANACalculation Accelerated by HANA
Native HANA Calculation Parallelized Calculation Set-Oriented Calculation
No data transferred between HANA and application server
Native HANA MDX engine Native HANA OLAP
aggregation
Compile calculation to HANA calculation scenario
Independent formula can be calculated in parallel
Can be optimized and parallelized by HANA
Less context switch between kernel and application
C = A+B F = D/E
G = F * C H = F * J
G = F * CHANA
Cube MDX/Calc.Engine
Data
BPC NW Server
MDX Command
© 2013 SAP AG. All rights reserved. 29
Driver based Planning Scenarios – How oil rates drive operating profit ?
ABC CompanyStatement of Profit & Loss
Revenues ……………$5,000Cost of Goods sold ……………3,000
Gross Margin …………2,000
Maintenance ………………………400Payroll ……………………………300
SG&A ……………………………250Transportation ……………………50
Operating Profit ……1,000
Interest Expense ……………50Net Income ……………$950
Price
Headcount
Oil Rates
Region
Customers
Product
Planning using SAP Predictive Analysis (using offline BPC data extracts)
© 2013 SAP AG. All rights reserved. 31
Planning using SAP Predictive Analysis (using offline BPC data extracts)
SAP HANA
HANA Tables supporting BPC model
BWBPCBPC
Model
BI Reporting
EPM Reporting
ERP1. In the first set of exercises, you will
create a flat file extract of BPC data
2. Import it into the SAP Predictive Analysis application
3. Execute predictive algorithms to generate a forecast
4. Export the results to a flat file
5. Import the results into BPC using BPC Data Manager
SAP Predictive Analysis
Transaction
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Planning using BPC and SAP HANA native functions executed within HANA
© 2013 SAP AG. All rights reserved. 33
Planning using BPC and SAP HANA native functions executed within HANA
SAP HANAHANA Tables supporting BPC model
BWBPCBPC
Model
BI Reporting
EPM Reporting
ERP1. Data Manager package executes
ABAP function –or- write back BAdI triggers ABAP function automatically during any BPC model data save
2. ABAP function triggers predictive algorithm stored procedure in HANA
3. Forecast data generated by HANA procedure is stored in HANA BW schema table supporting a BW DSO
4. Forecast data in DSO joined with BPC model data using the system generated BPC multi provider
Predictive functions from
HANA AFL
Transaction
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HANA Table supporting DSO model
DSO containing generated forecast
BPC Multi Provider
© 2013 SAP AG. All rights reserved. 34
Strategic Financial Planning RDS- Go live in as little as 7 weeks -
Plan business drivers Full impact on
Profit & Loss Balance Sheet Cashflow
Monitor KPIs Financial Bank covenants Credit ratings
© 2012 SAP AG. All rights reserved. 35
Rapid Deployment and Further Innovation
Prebuilt Dashboards Reports Data extraction Data models
Planned HANA for high
performance acceleration
© 2013 SAP AG. All rights reserved. 36
Optimize Transfer Pricing to Save Potential M$
> 75% of the global trade takes place between related parties
© 2013 SAP AG. All rights reserved. 37
Optimize Transfer Pricing to Save Potential M$
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Transfer Pricing. Just Do It.
© 2013 SAP AG. All rights reserved. 39
Recent releases
• SAP EPM Unwired mobile app
• SAP Business Planning and Consolidation, starter kit for SAP Financial Results Insight mobile app
• SAP Strategic Financial Planning rapid-deployment solution (for use with the SAP Business Planning and Consolidation application)
• SAP Business Planning and Consolidation 10.0, version for SAP NetWeaver SP11
• SAP Profitability and Cost Management application 10.0 SP07
© 2013 SAP AG. All rights reserved. 40
SAP’s differentiation
InnovativeEasyComplete
Get everything you need for performance management – integrated and from one vendor
Improve operability and reduce cost of ownership with direct integration into the SAP NetWeaver technology platform, the SAP ERP application, and analytics solutions from SAP
Choose an industry-recognized, leading portfolio for reduced risk
Deploy on premise or in the cloud to meet the requirements of your organization
Leverage industry and line-of-business content to get up and running faster
Use simplified mobile, Web and Microsoft Office (Excel) interfaces to satisfy all user types instead of only a few
Analyze and act anytime and anywhere with mobile-ready apps for consuming information and inputting data on the fly
Make faster and better decisions by eliminating wait times through the power of the SAP HANA Platform
Improve planning and forecast accuracy on any data size with a platform that is predictive and Big Data-ready
1. Invest in EPM 10 and beyond
2. HANA today, and more tomorrow
3. Leverage predictive analytics
Atul PatelVice President, SAP AnalyticsSAP APJ
THANK YOU