In this article I describe alternative options of an SAP application landscape that can provide for the requirement for financial planning and give the list of questions to answer to make the right choice for a customer, taking his situation and preferences into account
Business Capability Requirements
(Wikipedia) Financial planning is the task of determining how a business will afford to achieve its strategic goals and objectives. Usually, a company creates a Financial Plan immediately after the vision and objectives have been set. The Financial Plan describes each of the activities, resources, equipment and materials that are needed to achieve these objectives, as well as the timeframes involved
An overview on different planning use cases is given here:
Possible Solution Options
SAP allows different ways to perform financial planning
- Financial Planning and Analysis in SAP Analytics Cloud
- SAP Profitability and Performance Management
- Classical planning applications within CO and FI modules
- SAP Business Planning and Consolidation
- SAP S/4HANA product cost planning
Compare with this blog Financial Planning Options in S/4HANA (2020/2021 releases) | SAP Blogs
Characterization of the Solution Options
Financial Planning and Analysis in SAP Analytics Cloud
This is the default solution for the requirement in when using SAP S/4HANA. It is a cloud software-as-a-service (SaaS) solution and not part of the S/4HANA code or license, but has by design a very tight integration with S/4HANA finance. Reading data from there and writing back into HANA tables that can be used for operative reporting comparing actuals and plan. SAP delivers the predefined Integrated Financial Planning for SAP S/4HANA business content that is available with demo data.
- FP&A on sap.com: Financial Planning and Analysis | FP&A Software | SAP
Classical Planning Applications in SAP ERP
ERP used to offer different planning applications as part of the FI and CO application areas. They are not longer in scope for SAP S/4HANA and can only be continued to be used in exceptional cases and after explicit activation. Compare the S/4HANA simplification list chapter 12.7
SAP Business Planning and Consolidation for SAP S/4HANA
BPC optimized for S/4HANA is a flavor that runs embedded in S/4HANA.
For additional details see SAP Note 2081400 – SAP BPC Optimized for S/4HANA Finance
SAP Business Planning and Consolidation for BW/4HANA
SAP Business Planning and Consolidation 11.x, version for SAP BW/4HANA is a new product based on SAP BW/4HANA.
SAP Profitability and Performance Management
SAP PaPM is a flexible tool for planning, allocations and simulations in the finance environment. It has a tight integration to S/4HANA being able the retrieve data form there and store results back
SAP PaPM on SAP.com: SAP Profitability and Performance Management | Planning and Analysis
Criteria for the choice of the target solution
1. Do you want to use SAP’s strategic solution that will be improved and enhanced in future versions?
If the answer is yes that points to the SAC Planning solution
2. Do you need a solution on Premise?
That would be the only reason for a new implementation not to go for the SAC option. The fallback would then be SAP BPC 11
3. Do you have one of the predecessor solutions implemented?
Only in exceptional cases and for a limited time we would recommend continuing with the classical planning applications or with legacy implementations of BPC planning. In medium horizon a migration of planning to SAC planning is recommended, Find more info on the timelines for maintenance of BPC versions here: Maintenance timelines for SAP Business Planning and Consolidation (SAP BPC)
If you feel that you rather continue with BPC planning for a while, it might also be interesting that you can still improve by combining BPC with some parts of the SAP Analytics Cloud, as is described here: https://blogs.sap.com/2023/02/17/sap-bpc-move-to-sac-benefits-scenarios-of-moving-sap-bpc-planning-s...
4. Do you have the requirement to flexibly reallocate costs and revenues and perform simulations and what-if analysis as part of the planning cycle?
This requirement can best be fulfilled with PaPM. In most cases it will be an additional environment and not replace SAP Analytics Cloud Planning completely
5. Is product cost planning part of your planning process?
The main application to estimate product costs based on bills of materials and routings in close integration with logistics and productions remain the cost estimates and costing runs in CO-PC
SAC planning has some scenarios for product cost planning, raw material and activity costing. In most cases that will not be able to replace the costing runs in CO-PC
Decision Tree
Conclusion
You have received an overview about applications out of the SAP portfolio that can cover the requirement for financial planning. In most cases SAP S/4HANA SAC financial Planning and Analysis will be the to-go solution. In some circumstances one of the other possibilities can be used side by side or exclusively.
Be aware that there are service offerings by SAP to facilitate the change from predecessor solutions to SAP Analytics Cloud: https://www.sap.com/products/technology-platform/cloud-analytics/move-planning.html
