1.What is BPC?
As you must be aware that BPC stands for Business Planning and Consolidation. As the name suggest, BPC is used for both Planning and Consolidations, unlike IP, which is used for only planning.
2. When BPC 7.5 NW is avaliable?
The 7.5 version is currently in the ramp-up stage and should be availble in few months. I am not sure of the exact month.
3. BPC for NW has an aggregation level or not, Is BPC an application on top SAP-IP?
BPC and IP have completely different architecture. BPC doesnt use aggregation levels or filters. BPC and IP have no relation and thus, cannot be compared. BPC uses various script logics, business rules for doing the planning. Manual planning can be done with input schedules. The input schedules are on excel platform and are quite versatile. You can use BPC functionalities alongwith native excel functionalities for better design of the input schedules.
4. What about BPC in consolidation part?
BPC comes with pre-delivered components for consolidationm, which can be leveraged on. There are few business rules, which makes the consolidation process easier.
5. What is the concept for plan data from BPC?
The concept of planning is the same as you have in any other tool. The functional side of the planning remains the same. However, the tool differs. The way you configure a planning scenario will be much different than any other planning tool. Unfortunately, it will not be feasible to address this in the forum. You can definitely go through the study materials for a better understanding.
6. BPC for NW need to install .NET application server and Web server or not?
Yes. You can have a look at the installation guide available on market place for detailed requirements.
7. What is BPC client tool? and If I planning on BEx report, I have to create an aggregation level for planning data or not?
BPC client sits on the client machines, from where, you will be doing the design. There are mainly 3 interfaces available - BPC Admin, BPC Office, and BPC Web. BPC Office, in turn has 3 interfaces - Excel, Word, Powerpoint. These interfaces can be used for various requirements.
8.SAP BPC:-Business Consolidation:
SAP Business Planning and Consolidation meets all your legal and management consolidation and reporting requirements. Because the software's centralized data repository contains up-to-date actuals from your operational systems, you always have instant access to harmonized charts of accounts, shaving weeks off your consolidation process and simultaneously ensuring compliance with regulatory mandates, such as the Sarbanes-Oxley Act. Specifically, you gain a single, centralized view of performance data and can instantly generate clear, transparent financial statements and reports relating to profit and loss, cash flows, and balance sheets. In addition, the software helps you compare budget-to-actuals data (assets, liabilities, revenues, and expenses); automate the intercompany elimination process; gain transparency into corporate transactions at all levels; and manage any number of currencies by performing conversions, allocations, and eliminations. Automated reports support all reporting standards, including Generally Accepted Accounting Principals (GAAP), Financial Accounting Standards Board (FASB), International Accounting Standards (IAS), and International Financial Reporting Standards (IFRS). Finally, the software improves compliance with regulatory and financial standards and generates a fully documented audit trail to reduce external audit costs.
9. SAP BPC :-Reporting and Analytics:
With SAP Business Planning and Consolidation, you gain a unified, predictive performance management solution for financial and operational reporting and analysis. You can perform production and management reporting (including exception reports), financial and operational analysis, and ad hoc and multidimensional analysis. At the same time, the software provides automated predictive analytics that proactively push findings relevant to employees so they can take appropriate action. It automatically identifies key performance indicators (KPIs) that are at risk, identifies the metrics and drivers of those KPIs, and recommends actions that can change predicted outcomes for the better. In addition, you can quickly find explanations for variances - and root causes - so you know where to focus management attention. Finally, you can make risk-adjusted plans and more calculated decisions using intelligent modeling functions that give you a more precise understanding of risk probabilities.
10. SAP BPC :-Forecasting:
SAP Business Planning and Consolidation provides centralized, collaborative, prepackaged business process flows, tightly linked to the data and processes supporting planning and budgeting, to simplify the enterprise-wide forecasting process. Predictive analysis functionality goes beyond the typical trend and seasonality algorithms, enabling you to produce more accurate plans and budgets, create rolling forecasts, and incorporate real-time actuals with historical data for the most effective forecast seeding possible.
11. Extracts: Vision, Strategy, Business Processes, Organizational Structure, Roles, IT System
Transforming the story into business terms we could say the business owner had a Vision (his imagination), a Strategy (his long term plan), few Business Processes (to produce his imaginary product / service), an Organizational Structure (the model of his business), a few Roles (human resources to run his business). Additionally he implemented an IT System to leverage his initial investment.
Business Equation
Based on the above description of a Business, we can summarize a business model with following equation:
Input > Processing > Output
To get the desired Output, it’s obvious we’ve to have Correct Input and Processing. Referring the equation to successful businesses we could notice “Well defined Processes are key success factors”. And we can’t determine a process is correct unless we know what Output was actually required.
Business Processes’ Study
Understanding the equation requires a thorough study of
vision & Strategy to find out what exactly company is targeting and how
• processes it employs to achieve its goals
• organizational model to know the RACI
• IT system which refines the processes
Business Process Management
Business Process Management – a Holistic Management Approach, talks about Optimization of Business Processes which is achieved by
Analyzing existing processes of an organization and
1. Designing refined & optimized model of business processes.
SAP Business Process Management Methodology what it does?
SAP BPM Methodology addresses the need and provides details on “how-to”
Identify the key success factors of a business
• Understand the existing processes & set the priorities for analysis
• Compare the business processes with Industry’s Best-Practices processes
• Identify weak areas, link them and Assess them together
• Develop high-level and detailed design of to-be model
• Figure-out the required adaptation areas within an organizational model
• Create a transformation plan and utilize existing landscape to support the new model
• Fit & map the changes into an existing solution with analysis of organizational and master data
Phases: A methodological approach
The methodology clearly distinguishes between the Business Approach (Top-Down) and the IT Perspective (Bottom-Up) and is divided into 4 major Phases i.e.
Calibration
1. As-Is Analysis
2. To-Be Design
3. Solution Transformation
It provides the necessary tools 1) to Analyze the existing processes and 2) to Design a To-Be Model.
Tuesday, June 7, 2011
Monday, June 6, 2011
Preparation for Profit Center Consolidation
Preparation for Profit Center Consolidation
Preparation for Profit Center Consolidation
When cross-company deliveries and services occur within a corporate group, internal business volume and intercompany profits arise. These are eliminated in SAP Consolidation in order to allow a cross-company display of results to profit centers.
For these eliminations, you need the partner information at the profit center level. In Customizing for Profit Center Accounting, you have two ways of ensuring that the system finds the right partner profit centers during cross-company-code processes:
• Derivation of the partner profit center
• Reading the partner profit center
If the affected companies are stored in distributed SAP systems, the system can only determine the partner profit centers using derivation.
If the affected companies are stored in a central SAP system, the system can determine the partner profit centers using derivation or by reading them. When reading the profit centers, the system accesses the origin documents and therefore supplies the exact partner information. However, this method can have a negative effect on performance. For information on how this program functions,
We can use both procedures at the same time. To start with, the system will try to determine the partner profit center using the read program. If it cannot find a partner profit center in this way, it will find one using the derivation rules.
Using the partner profit center, the system also finds the partner company and the customer or supplier master record and updates this in Profit center Accounting. This makes this information available for profit center consolidation.
Prerequisites
You are using the SAP components Sales and Distribution (SD) and Materials Management (MM).
If you are not using these modules, you have to transfer the partner profit centers from your systems to Financial Accounting in the SAP system.
If you want to use SAP Consolidation, make the settings for finding partner information in Customizing for Profit Center Accounting, under Preparations for Consolidation.
The settings must have been made when the relevant postings are made. The partner information cannot be found retrospectively.
For more information about the settings that you have to make, see the Implementation Guide (IMG) for Profit Center Accounting, under:
Derive Partner Profit Centers in Purchasing
Derive Partner Profit Centers in Sales
Identify Associated Companies for Reading
Profit Center Accounting (EC-PCA)
Profit Center Accounting (EC PCA) lets you determine profits and losses by profit center using either period accounting or the cost of sales approach. It also lets you analyze fixed capital and so called “statistical key figures” (number of employees, square meters, and so on) by profit center. Consequently, you can calculate all key figures commonly used in cost accounting (return on investment, cash flow, sales per employee, and so on).
A profit center is a management oriented organizational unit used for internal controlling purposes. Dividing your company up into profit centers allows you to analyze areas of responsibility and to delegate responsibility to decentralized units, thus treating them as “companies within the company”.
The essential difference between a profit center and a business area is that profit centers are used for internal control, while business areas are more geared toward an external viewpoint.
The profit center differs from a cost center in that cost centers merely represent the units in which capacity costs arise, whereas the person in charge of the profit center is responsible for its balance of costs and revenues.
EC-PCA is a part of the Enterprise Controlling (EC) module and is integrated with new General Ledger accounting (FI-GL).
Features
The main aim of Profit Center Accounting is to determine profit for internal areas of responsibility. It lets you determine profits and losses using either period accounting or the cost-of-sales approach.
By assigning balance sheet items (asset portfolio, payables and receivables, material stocks, work in process) to profit centers, you can analyze your fixed assets by profit center, thus using them as investment centers. This makes it possible to expand profit centers to investment centers. This also makes it possible for you to analyze a number of key figures by profit center, including return on investment, working capital and cash flow.
EC PCA lets you set up your profit centers according to product (product lines, divisions), geographical factors (regions, offices or production sites) or function (production, sales). You need to make the settings in Basic functions to divide the company into internal areas of responsibility. You divide you business into profit centers by assigning the profit centers to the various master data that is relevant for profits (materials, cost centers, orders, projects, sales orders, assets, cost objects and profitability segments). This lets you set up Profit Center Accounting in a way that meets your company’s requirements regardless of what sector of industry your company is in (machinery, chemicals, services, and so on) or what form of manufacturing you employ (repetitive manufacturing, make to order production, continuous flow production).
Every profit center is assigned to the organizational unit Controlling area. The profit centers in a company code belong to a standard profit center hierarchy that is also assigned to the controlling area.
All profit relevant business transactions are updated in the profit center hierarchy according to G/L account at the same time they are processed in the original module of the SAP system. This ensures that the entire flow of goods and services within a company is transformed in goods and services relationships between profit centers. This is true both with actual postings and in planning.
You can also transfer the balances and balance changes of certain balance sheet accounts to profit centers in real time or periodically.
Goods movements between profit centers can be valuated either at external prices, group internal prices or specially defined transfer prices.
The Information System provides a user-friendly tool for evaluating your plan and actual data. Because results are stored by G/L account, you can reconcile the data with data in Financial Accounting at the cost element level. The reports contained in the standard SAP system represent a simple information system for analyzing areas of responsibility. In addition, different tools are available which let you create your own reports to further meet the needs of your company.
To call up the application menu for Profit Center Accounting, choose Accounting ® Enterprise Controlling ® Profit Center Accounting from the SAP Easy Access screen.
Profit Center Accounting also features tools such as Validation, Substitution, Archiving and ALE.
The profit center master data contains the structural concepts according to which you can post and subsequently analyze the data that is relevant for Profit Center Accounting.
Structure
Profit center master data includes the following objects:
• Profit Centers.
• Standard hierarchy of the profit centers
• Dummy profit center for non-assigned postings
• Alternative profit center hierarchies (if required)
A profit center is an organizational unit in accounting that reflects a management-oriented structure of the organization for the purpose of internal control.
We can analyze operating results for profit centers using either the cost-of-sales or the period accounting approach.
By calculating the fixed capital as well, we can use your profit centers as investment centers.
The master data of a profit center includes the name of the profit center, the controlling area it is assigned to, and the profit center’s period of validity, as well as information about the person responsible for the profit center, the profit center’s assignment to a node of the standard hierarchy, and data required for communication (address, telephone number and so on).
Every profit center is assigned to the controlling area organizational unit. This assignment is necessary because Profit Center Accounting displays values in G/L accounts.
The system transfers all the data to Profit Center Accounting together with the G/L account to which the data was originally posted. You can only aggregate data that shares the following:
● Same chart of accounts
● Same fiscal year variant
● Same currency
Time-Based Master Data
Like cost centers, profit centers are valid for a specific time period. This has the following advantages:
● No complicated activities are necessary when a new fiscal year begins.
● we can enter future changes to the master data in advance.
Profit centers are time dependent in two ways:
● First, we can enter a period during which actual or plan data can be posted to the profit center.
● Second, we can define time-based fields when you customize Profit Center Accounting.
Time-based fields let you change information in the profit center master record, such as the person responsible for the profit center, at a specific point in time without having to create a new profit center and without losing any information about the previous person responsible.
The Standard Hierarchy
To ensure that your data in Profit center Accounting is consistent with that in other areas, you must assign each profit center to the Standard hierarchy .
The standard hierarchy is used in the information system, allocations, and various planning functions. You can also assign your profit centers to alternative hierarchical structures, called Profit Center Group.
Copying Cost Centers
If the profit centers in your organization are closely linked to your cost centers, you can simply copy your cost center master data to create your profit centers. For more information on this function, see the Implementation Guide (IMG) for Profit Center Accounting, under Master Data.
A profit center group is a hierarchical structure of profit centers.
Profit center groups are used for reporting, allocations or in various planning functions, where it is not desirable to enter or display data at the lowest level (with a high level of detail).
The standard hierarchy is a special form of a profit center group. It has to contain all profit centers belonging to the controlling area and reflect the organizational structure of Profit Center Accounting.
For more information on the standard hierarchy, Standard hierarchy for classic Profit Center Accounting or Standard hierarchy for new General Ledger Accounting.
Preparation for Profit Center Consolidation
When cross-company deliveries and services occur within a corporate group, internal business volume and intercompany profits arise. These are eliminated in SAP Consolidation in order to allow a cross-company display of results to profit centers.
For these eliminations, you need the partner information at the profit center level. In Customizing for Profit Center Accounting, you have two ways of ensuring that the system finds the right partner profit centers during cross-company-code processes:
• Derivation of the partner profit center
• Reading the partner profit center
If the affected companies are stored in distributed SAP systems, the system can only determine the partner profit centers using derivation.
If the affected companies are stored in a central SAP system, the system can determine the partner profit centers using derivation or by reading them. When reading the profit centers, the system accesses the origin documents and therefore supplies the exact partner information. However, this method can have a negative effect on performance. For information on how this program functions,
We can use both procedures at the same time. To start with, the system will try to determine the partner profit center using the read program. If it cannot find a partner profit center in this way, it will find one using the derivation rules.
Using the partner profit center, the system also finds the partner company and the customer or supplier master record and updates this in Profit center Accounting. This makes this information available for profit center consolidation.
Prerequisites
You are using the SAP components Sales and Distribution (SD) and Materials Management (MM).
If you are not using these modules, you have to transfer the partner profit centers from your systems to Financial Accounting in the SAP system.
If you want to use SAP Consolidation, make the settings for finding partner information in Customizing for Profit Center Accounting, under Preparations for Consolidation.
The settings must have been made when the relevant postings are made. The partner information cannot be found retrospectively.
For more information about the settings that you have to make, see the Implementation Guide (IMG) for Profit Center Accounting, under:
Derive Partner Profit Centers in Purchasing
Derive Partner Profit Centers in Sales
Identify Associated Companies for Reading
Profit Center Accounting (EC-PCA)
Profit Center Accounting (EC PCA) lets you determine profits and losses by profit center using either period accounting or the cost of sales approach. It also lets you analyze fixed capital and so called “statistical key figures” (number of employees, square meters, and so on) by profit center. Consequently, you can calculate all key figures commonly used in cost accounting (return on investment, cash flow, sales per employee, and so on).
A profit center is a management oriented organizational unit used for internal controlling purposes. Dividing your company up into profit centers allows you to analyze areas of responsibility and to delegate responsibility to decentralized units, thus treating them as “companies within the company”.
The essential difference between a profit center and a business area is that profit centers are used for internal control, while business areas are more geared toward an external viewpoint.
The profit center differs from a cost center in that cost centers merely represent the units in which capacity costs arise, whereas the person in charge of the profit center is responsible for its balance of costs and revenues.
EC-PCA is a part of the Enterprise Controlling (EC) module and is integrated with new General Ledger accounting (FI-GL).
Features
The main aim of Profit Center Accounting is to determine profit for internal areas of responsibility. It lets you determine profits and losses using either period accounting or the cost-of-sales approach.
By assigning balance sheet items (asset portfolio, payables and receivables, material stocks, work in process) to profit centers, you can analyze your fixed assets by profit center, thus using them as investment centers. This makes it possible to expand profit centers to investment centers. This also makes it possible for you to analyze a number of key figures by profit center, including return on investment, working capital and cash flow.
EC PCA lets you set up your profit centers according to product (product lines, divisions), geographical factors (regions, offices or production sites) or function (production, sales). You need to make the settings in Basic functions to divide the company into internal areas of responsibility. You divide you business into profit centers by assigning the profit centers to the various master data that is relevant for profits (materials, cost centers, orders, projects, sales orders, assets, cost objects and profitability segments). This lets you set up Profit Center Accounting in a way that meets your company’s requirements regardless of what sector of industry your company is in (machinery, chemicals, services, and so on) or what form of manufacturing you employ (repetitive manufacturing, make to order production, continuous flow production).
Every profit center is assigned to the organizational unit Controlling area. The profit centers in a company code belong to a standard profit center hierarchy that is also assigned to the controlling area.
All profit relevant business transactions are updated in the profit center hierarchy according to G/L account at the same time they are processed in the original module of the SAP system. This ensures that the entire flow of goods and services within a company is transformed in goods and services relationships between profit centers. This is true both with actual postings and in planning.
You can also transfer the balances and balance changes of certain balance sheet accounts to profit centers in real time or periodically.
Goods movements between profit centers can be valuated either at external prices, group internal prices or specially defined transfer prices.
The Information System provides a user-friendly tool for evaluating your plan and actual data. Because results are stored by G/L account, you can reconcile the data with data in Financial Accounting at the cost element level. The reports contained in the standard SAP system represent a simple information system for analyzing areas of responsibility. In addition, different tools are available which let you create your own reports to further meet the needs of your company.
To call up the application menu for Profit Center Accounting, choose Accounting ® Enterprise Controlling ® Profit Center Accounting from the SAP Easy Access screen.
Profit Center Accounting also features tools such as Validation, Substitution, Archiving and ALE.
The profit center master data contains the structural concepts according to which you can post and subsequently analyze the data that is relevant for Profit Center Accounting.
Structure
Profit center master data includes the following objects:
• Profit Centers.
• Standard hierarchy of the profit centers
• Dummy profit center for non-assigned postings
• Alternative profit center hierarchies (if required)
A profit center is an organizational unit in accounting that reflects a management-oriented structure of the organization for the purpose of internal control.
We can analyze operating results for profit centers using either the cost-of-sales or the period accounting approach.
By calculating the fixed capital as well, we can use your profit centers as investment centers.
The master data of a profit center includes the name of the profit center, the controlling area it is assigned to, and the profit center’s period of validity, as well as information about the person responsible for the profit center, the profit center’s assignment to a node of the standard hierarchy, and data required for communication (address, telephone number and so on).
Every profit center is assigned to the controlling area organizational unit. This assignment is necessary because Profit Center Accounting displays values in G/L accounts.
The system transfers all the data to Profit Center Accounting together with the G/L account to which the data was originally posted. You can only aggregate data that shares the following:
● Same chart of accounts
● Same fiscal year variant
● Same currency
Time-Based Master Data
Like cost centers, profit centers are valid for a specific time period. This has the following advantages:
● No complicated activities are necessary when a new fiscal year begins.
● we can enter future changes to the master data in advance.
Profit centers are time dependent in two ways:
● First, we can enter a period during which actual or plan data can be posted to the profit center.
● Second, we can define time-based fields when you customize Profit Center Accounting.
Time-based fields let you change information in the profit center master record, such as the person responsible for the profit center, at a specific point in time without having to create a new profit center and without losing any information about the previous person responsible.
The Standard Hierarchy
To ensure that your data in Profit center Accounting is consistent with that in other areas, you must assign each profit center to the Standard hierarchy .
The standard hierarchy is used in the information system, allocations, and various planning functions. You can also assign your profit centers to alternative hierarchical structures, called Profit Center Group.
Copying Cost Centers
If the profit centers in your organization are closely linked to your cost centers, you can simply copy your cost center master data to create your profit centers. For more information on this function, see the Implementation Guide (IMG) for Profit Center Accounting, under Master Data.
A profit center group is a hierarchical structure of profit centers.
Profit center groups are used for reporting, allocations or in various planning functions, where it is not desirable to enter or display data at the lowest level (with a high level of detail).
The standard hierarchy is a special form of a profit center group. It has to contain all profit centers belonging to the controlling area and reflect the organizational structure of Profit Center Accounting.
For more information on the standard hierarchy, Standard hierarchy for classic Profit Center Accounting or Standard hierarchy for new General Ledger Accounting.
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