Sledgehammer Software or Sweating the Asset: What’s Your Best Option for SAP Planning
SAP started delivering financial planning functionality through its Controlling Module (CO) in the early 1980s, so you may wonder why planning processes are still so painful in the SAP environment. You may also question why this huge ERP investment has limited your ability for more frequent planning, like rolling forecasts. In the end, an alternative planning tool may seem like the answer, but is it?
In this blog, we’ll look at the challenges of planning in SAP and other planning tools, as well as how to give your SAP investment a better workout.
Complaints and Constraints of SAP Planning
Here are some common complaints and constraints of planning in SAP:
- SAP’s user interface (UI) for planning hasn’t changed much. You have to enter planning data on multiple, not-so-intuitive 1990s-era screens. If you’re an infrequent user, like a cost center manager, you may have to re-learn the system each year as you key in annual budgets. If you’re in finance, the process makes more frequent planning and forecasting a daunting concept, especially if you manually upload batch budget data.
- It’s difficult to track progress with a large number of data planners. While SAP does support some workflow activities, it’s not great around the planning process and tracking people’s activities. Tracking which cost center managers have entered plan data and which ones have not is difficult.
- There’s too much detail in the ERP planning screens. Paging through complex screens is too time consuming for planners.
In the end, the path of least resistance is planning in Excel. Although this practice is common across many businesses, there is an increasing resistance from IT staff, who may veto the practice because of spreadsheet errors and version control issues.
Do You Really Need a Planning “Sledgehammer”?
To address SAP’s limitations without relying on spreadsheets, enterprise planning tools like SAP Business Planning and Consolidation (BPC) are an alternative. These tools work outside SAP and can “bake in” structure to your planning process so data is consistent and auditable.
Alternative tools will have extraction routines to transfer source data into your planning environment. They also let you plan using other characteristics that exist outside of SAP – such as Region or Country. The question is whether these parameters are necessary for your financial plan. And as appealing as that message sounds, there are some drawbacks, as the complexity adds expense and customization to the planning solution.
Other drawbacks include:
- No real-time component. Most alternative planning tools use batch extracts to load their SAP data, so there’s no real-time view from a reporting standpoint.
- No combined planning and reporting. So, you’ve got your SAP data in the planning tool, but can you easily create new reports as your business demands new insights? Sometimes the web based report designer is not so intuitive
- Require additional software licenses and hardware. You’ll need licenses for the new software – and maybe new hardware for the extracted data.
- Costly projects. For enterprise planning tools like SAP BPC, implementation can take from three to six months – or more – and requires consultants. While SAP’s in-memory HANA with BPC can sidestep the data extract/upload issues, it requires a complete overhaul of your SAP system.
- Hefty services component. While software licenses for some tools may seem cheap, the services component can be three times the value of the software. It’s not a one-off expense; if you want to change things going forward, there’s an ongoing cost.
- Poor transactional data load. With BPC used with SAP R/3, you usually load high volumes of transactional data into the data warehouse. This slow, overnight process can impose load issues and then volume constraints. A good implementation helps, but if it’s suboptimal, the tool may be abandoned as an unusable solution.
It’s important to note that BPC is a powerful planning solution with many bells and whistles, but if you only need financial planning and reporting (FP&R), it can be overkill software, a “sledgehammer” in terms of implementation, training, and ongoing costs. While you get a real-time component if BPC is used with HANA, you’re again looking at significant investment.
Making Your Current Software Assets “Sweat”
If you strictly want to do FP&R without the expense of an enterprise planning tool or dangers of standalone spreadsheet, how can you give your assets a workout to get the strong planning functionality you need? With your current SAP and Microsoft platforms, you have options, so here are some questions to ask when assessing an alternative planning tool.
- Does it have an intuitive user interface? A planning tool with an intuitive or familiar interface like Excel can expedite user acceptance and satisfaction.
- Does it require a new data warehouse, database or hardware? To avoid expense and complexity, look for tools that link directly to SAP, allowing you to immediately upload budget updates to the CO module.
- Can you plan and report from it? Make sure you can both directly upload your budget updates to SAP CO and download and report the latest budget version from SAP CO.
- Does it provide prebuilt templates? Prebuilt templates for planning and reporting facilitate a fast transition to a new planning and reporting strategy.
- What is the implementation timeframe? Look for tool that can install with little or no IT help.
- Can you plan at the level of detail you want? Even if a planning solution is tied to account complexities in SAP, make sure the data is still easy to access and manage.
- How fast is your planning process with it? If possible, trial the new software in your environment to see how it can shorten your planning and budgeting cycles.
With the right planning tool, SAP and Excel “sweat it out” in terms of cost, complexity and improved planning functionality so that you don’t have to with a “sledgehammer” system. You’ll be on your way to more advanced planning and better business decisions.
Author: Simon Parkes
Solutions Specialist, Excel4apps