Integrated Financial Planning – An Overview

Introduction

“Integrated Financial Planning for SAP S/4HANA and S/4HANA Cloud” is the content package for SAP Analytics Cloud that covers the complete area of financial planning. This package already exists several years now, it was enhanced step by step in the last years and with the 2022.Q2 release it was migrated to the “New Model” in SAC. With this blog post I want to create a single entry point for all important information around this topic.

The content package consists of five integrated planning areas:

• Operating expense planning manages the expenses for different areas of responsibility within the company, e.g. cost centers or projects. Expenses can be planned and allocated between the respective cost objects. In a quantity driven approach, expenses can be combined with activity quantity planning and an iterative activity price calculation
• Product cost planning has the task to calculate the costs of a product. The two main ingredients of product costs are the raw material costs and the activity costs, for example machine costs. Cost center planning is one important input for product cost planning because it determines the activity prices (e.g. for a machine hour) to calculate the activity costs
• Sales and profitability planning calculates the revenues, deductions and costs based on the planned sales quantities. Product related costs originate from product cost planning whereas product independent costs like administration costs originate from cost center planning directly
• Capital expense planning allows to plan asset additions and depreciations. The depreciations are an important input for the cost center planning and the asset additions can be rolled up into the financial statement planning
• Financial statement planning brings together all the detail plans and creates an equated balance sheet and cash flow statement

The five modules of integrated financial planning can be used altogether to cover the whole financial planning process from an operational to a strategic level. On the other hand they are loosely coupled and can be used easily standalone. E.g. in a non-manufacturing industry like professional services, one would leave out the product cost planning module. Concentrating on a high-level financial plan, one could use the financial statement planning even standalone.

Integrated Financial Planning covers all different business roles that are engaged with financial planning in a company: Corporate controlling or corporate FP&A that set up and manage the planning process in the company and set the targets, the single planners in financial accounting, regional controlling and even sales departments (cost center managers, production controller, sales planner) that manual enter their plan data and the planning administrators that run planning functions across the different modules.

Looking at the legacy planning solutions of SAP, Integrated Financial Planning covers both the “classical” planning in the FI/CO area of SAP ERP and S/4HANA as well as a model driven BW/BPC based planning solution be it BPC Optimized embedded in S/4HANA or a BPC planning solution in a standalone BW system.

Integrated Financial Planning can handle different currencies (global, local, transactional), different time granularity, fixed or rolling time horizons and it can be used tightly or loosely coupled to S/4HANA data and processes. It supports both a bottom-up and a top-down planning approach and a combination of both leveraging a powerful version management.

Integrated Financial Planning also is part of the xP&A suite and very well integrates out-of-the-box both with other SAC based planning applications like HXM Workforce Planning and Consumer Products Sales Planning and non-SAC based planning applications like SAP Integrated Business Planning.

Product Architecture and Strategy

SAP Analytics Cloud is the recommended financial planning solution for SAP S/4HANA Cloud and On Premise. Integrated Financial Planning consists of three pillars:

• The planning tool “SAP Analytics Cloud” that provides
  • generic data input and data import capabilities
  • a planning engine powered by SAP HANA
  • a full blown modeling environment for planning models, input layouts and data actions like allocations and advanced formulas
  • surrounding functionalities like commenting functions and a planning calender
• A dedicated connector for SAP S/4HANA Cloud and On Premise
  • that can read all relevant data from S/4HANA and write the plan results back to S/4HANA via OData services
• Pre-delivered Financial planning content package “Integrated Financial Planning for SAP S/4HANA” that can be
  • used as-is. Feel free to use the content productively
  • adapted. You can copy & enhance the content to meet your requirements in a better way. It is obvious, that not all planning scenarios can be covered by the sample content that SAP provides
  • used for inspiration. You can build your own content from scratch next to our sample content being inspired from it. This is possible by using the complete SAC modeling environment

For details see slide deck https://dam.sap.com/mac/preview/xXnXxZ.htm, slides 4 and 5 for the strategy, slides 6 to 10 for the architecture, slides 11 to 26 for the planning tool per se, slides 27 to 36 for the S/4HANA integration and slides 37 to 93 for the business content.

History

• SAC content innovation release 2022.Q2
  The integrated financial planning content was migrated from the classic account model to the “New Model” in SAC. Some background information is described in this blog post New Model – Configuration Options.
• SAC content innovation release 2022.Q3
  Features like integration with Predictive Accounting, integration of Consumer Products Sales Planning and quantity unit conversion were added

First Impressions

The landing page provides a central entry point for all planning stories of the different planning areas:

A typical planning story has central story filters, triggers for planning functions and a table for data entry:

The planning results can be visualized in analytic stories:

Further Information

General Application Documentation

The documentation for Integrated Financial Planning in SAP Analytics Cloud can be found here:

• For SAP S/4HANA Cloud
  Open the Help Portal and search for product “SAP S/4HANA Cloud”. Go to “Product Assistance” -> Finance -> Management Accounting and Marging Analysis -> Financial Planning -> Financial Planning in SAP Analytics Cloud or directly at Financial Planning in SAP Analytics Cloud
• For SAP S/4HANA On Premise
  Open the Help Portal and search for product “SAP S/4HANA”. Go to “Product Assistance” -> Enterprise Business Applications -> Finance -> Financial Planning and Analysis -> Financial Planning -> Financial Planning in SAP Analytics Cloud or directly at Financial Planning in SAP Analytics Cloud
• In addition, in particular when you want to adapt the pre-delivered content and learn about the modeling capabilities of the SAC tool, have a look at the SAP Analytics Cloud documentation

Overview presentations

You find two overview presentation on S/4HANA Financial Planning with SAP Analytics Cloud (SAC) in https://dam.sap.com/mac/u/a/1f9kqVY.htm and https://dam.sap.com/mac/preview/XXnXx1.htm

Videos

Central note

2977560 – Integrated Financial Planning for SAP S/4HANA with SAP Analytics Cloud

Best Practices

Integrated Financial Planning for SAP S/4HANA is assigned to scope item 4RC and documented in the Best Practice Explorer https://rapid.sap.com/bp/#/browse/scopeitems/4RC

Related Blog Posts and documents

Derivation in SAP Analytics Cloud Planning – Reading Attributes 

Derivation in SAP Analytics Cloud Planning – Advanced Scenario

Quantity Unit Conversion in SAP Analytics Cloud Planning

Advanced Formulas – How they work

New Model – Configuration Options

Adaptation guide for simulation cockpit