Already since spring 2019 we are gaining project experience regarding SAP Profitability and Performance Management (PaPM) at a large German bank, which goes beyond the development of some prototypes.
Planning & Forecast is leading the implementation and further development of SAP PaPM and is continuously working on moving more and more calculation logics to the new SAP tool. In addition to maintaining the solutions already implemented in SAP PaPM (mainly allocations), we are now working with internal and external colleagues to drive new and more ambitious projects.
The customer has been dealing with the topic for several years now SAP PaPM and can therefore boast an impressive wealth of experience. Nevertheless, I received a very friendly welcome and was quickly integrated into the team. One of my first tasks was, of course, to familiarize myself with the system architecture and existing developments in PaPM. To my great relief, I found that I was in no way inferior to the other colleagues in terms of my experience with PaPM, so that we were able to discuss things directly on an equal footing.
The solutions already implemented include an FX adjustment calculation on the one hand and various cost allocations on the other. Neither of these topics is exceptionally demanding from a technical point of view, but they do pose a challenge in terms of performance due to the large number of data sets that need to be processed. However, due to the relatively small amount of data in the development system, these performance-related problems often only become apparent in one of the later test systems. Unfortunately, this also means that the solutions implemented to improve performance cannot be tested immediately, which leads to delays in the workflow.
A new project is related to the prediction of different outcome variables for different scenarios. The basis for the prediction is the result of a regression analysis, which shows the dependence of the result variable on certain driver variables. Here is a simple example: Let us assume that it can be shown statistically that the turnover of a company increases with the number of employees. This means that when the number of employees increases, the company’s revenue also increases. As a formula, this fact can then be expressed as follows:
Turnover = constant + coefficient*number_of_employees.
With the help of a regression method (e.g. OLS) one can determine the two unknowns, i.e. the constant and the coefficient. For example, if the value determined for the coefficient were 1000, we could say that with each additional employee, the company’s sales increase by 1000 monetary units. This result can thus be used to predict the company’s sales for different scenarios, i.e. for different assumptions regarding the development of the number of employees. The first part, i.e. the determination of the coefficients, does not take place in SAP PaPM at the moment. Instead, we are working on implementing the second part, i.e. the prediction of outcome variables for different development scenarios, in PaPM. Of course, in a much more extensive and complex way than in the example shown above.
We are currently on a very good path here. Data integration, costing, and reporting work almost flawlessly. Only the activation of the calculation process from outside the PaPM (by different users with different parameter specifications) still causes us some difficulties. In the future, we plan to make this approach available to other business areas.
Since some other consultants with SAP PaPM expertise had to leave the team in the meantime, we managed to place two more colleagues from ADWEKO at the customer’s site from October this year. The goal is to quickly train the new colleagues so that we can cover even more SAP PaPM-related topics to further expand our experience.
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Torben Starck is a consultant in the area of SAP Financial Services. The focus is on the specialist topics of risk management, asset/liability management, credit limits and liquidity management. In addition to SAP systems and modules from this environment, there is also initial experience with software systems from other manufacturers.