Post on 25-Apr-2023
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SAP Profitability and Performance Management for RetailProductive decisions made on transparent data
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• What products / channels / shops are the most profitable?
• Which customers bring us the most money? What products do they buy?
• Which discount can we offer to the customer, while remaining within acceptable profitability?
• How does a 7% reduction in indirect costs affect the profitability of business segments?
• Should I open a new store in the city?
• What is the return of investments? (ROI)
Questions that customers are looking answers for
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This presentation and SAP‘s strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to the implied warranties of merchantability, fitness for a particular purpose, or noninfringement.
Modeling of financial KPIs
SAP Profitability and Performance ManagementOne tool for multiple calculations
Indirect cost allocations
Seasonality of margin analysis
Other scenarios
Cost and margin analysis at the most detailed level: client, product, channel, segment
Logistics costs analysis
Profitability analysis in multichannel environment
Processes costs analysis
Strategy and pricing
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This presentation and SAP‘s strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to the implied warranties of merchantability, fitness for a particular purpose, or noninfringement.
Management reporting
How to get to the right basis for decision support?
Transactional systemsProfitability and Performance
ManagementReporting systems
Income
Direct costs
Indirect costs
Extended cost allocations and calculations
What - if simulation
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This presentation and SAP‘s strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to the implied warranties of merchantability, fitness for a particular purpose, or noninfringement.
SAP Profitability and Performance ManagementCombination of three components
Calculation
Models
Forecasts
Transparency
Compliance
DatabasesSAP HANA, Oracle, IBM, MSQL Server,
Teradata, Hadoop, and so on
ApplicationsSAP S/4HANA, ERP, SAP BW, SAP
CRM, SAP BPC, and so on
Other sources
Data integration
Simulation and Reporting
Make right decisions in the moment
Date 0.00.00 – Client X – P r o d u c t ABC – %
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This presentation and SAP‘s strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to the implied warranties of merchantability, fitness for a particular purpose, or noninfringement.
SAP Profitability and Performance ManagementA perfect combination of all 3 components
Allocation
Assessment and global recharges
Top-down distribution
Activity-based costing
Enrichment
Derivation
CalculationValuation
Lookup
Currency and unit
conversion
Present value
Capital growth
Effective capital
Driver- and model-based calculations
Predictive analytics
library
R Language
FTP
Matched maturity
Net present value
Replicating portfolio
Risk management
Market risk
Counter-party default
risk
Shrinkage
Planning support
Sales planning
Cost planning
Integration with SAP
BPC
Calculationengine
Scenarios Forecasting Drill-down Auditability
Databases
SAP HANA, Oracle, IBM, MSQL Server, Teradata, Hadoop, and so on
SAP applications
SAP S/4HANA, ERP, SAP BW, SAP BPC, finance risk data platform,
and so on
Functions
Web services, microservices,R language, and so on
Other apps and data
MS Excel, CSV, andother files
Business data
aggregator
Simulationapplication
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Lego like drag and drop model creation made by analyst
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Business user oriented function. No coding
What do we allocate Based on which data
Driver / Function
Can allocate sums and quantities
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Visualization. Full transparency
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Interface for economist. What – if simulation. Stress testing
Analyze effect on profitability
Change parameters
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Management reporting can be integrated with SAP Analytics Cloud
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Business benefits
Achieve greater business agility through relevant and meaningful profit analysis, down to individual item level (customer, product, store level, transaction etc.)
Simplify estimation using the best allocation models for a specific scenario (standard cost, ABC, marginal cost) with flexible & reusable models
Reduce complexity using a single solution that cover the end-to-end process with a set of capabilities specific for business users roles
Fine tune customer offering, setting or resetting customer strategies based on buying behavior and resource consumption
Predict impact of cost fluctuations, reevaluate value chain and business model, gaining strategic insights for succeeding in an uncertain and volatile business climate
Easy Integration with POS system, Finance and Operation systems will allow cost allocation to more granular level
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Retail Gift Card / Store Credit Profitability
Customer ProfileEstablished SAP customer looking for a performance solution to handle large volume of data• Interested in finding a solution to meet changing statutory revenue calculation requirements• Looking to execute and store multiple what-if calculation simulation scenarios• Desire to have SAP integrated solution platform with Google Cloud• Demand for eight years of outlook on revenue recognition projection• Manage USA and Canada’s Gift Card and Store Credit breakage revenue recognition
SolutionCustomer purchased SAP Performance Management to address the evolving regulatory demands of the firm’s “Gift Card Breakage” program. The focus is on modeling and accounting for the company’s gift card revenue recognition process. SAP Performance Management will be leveraged to:• Parse millions of gift card transactions enabling more accurate revenue recognition patterns of unused gift card revenue• Enable The Home Depot to satisfy regulatory reporting demands• Provide a better overall understanding of their financial position and empower enhanced reporting and decision making
Expected Benefits• Leverage SAP HANA’s native processing power for faster calculation performance• Capable of providing simulation of revenue possibilities based on breakage and redemption rates• Realization of quickly projecting out multi years’ of revenue estimates based on actual experience• Unlimited scalability and high auditable results from valuation based on Gift Card activation amounts and dates• Ability to use same tool to solve other calculation performance issues (i.e. allocation)
Case Study
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How can this SAP solution enable you to change the game?
What does this SAP solution help customers do? Key facts
SAP Profitability and Performance ManagementSolution Summary Analytics
Strategic cost, revenue allocation and profitability solution
Access a centralized environment for cost and profitability management suitable for many types of organizations and industries.
SAP solutions connect processes for a variety of industry value chains by integrating horizontal lines of business with industry-specific solutions on premise, in the cloud, and through mobile devices.
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Companies can manage and analyze enterprise profitability and efficiency with the SAP Profitability and Performance Management application. The application enables companies to execute allocation and funds-transfer pricing and costing models using a high-speed finance and risk calculation engine that comprises business data aggregation and simulation and scenario management capabilities.
Fast high-data-volume processing
A strategic and business-focused profitability platform that is suitable across many industries Complementary financial management deployments using SAP HANA and the SAP S/4HANA
Finance solution Enhanced business scenarios for distributing costs and revenues and for funds-transfer pricing Strong integration with SAP BPC, enabling use of allocation rules of actuals for planning data Fast data processing, allowing business users to see profit results within seconds or minutes rather
than hours
Customers across numerous industries including banking, insurance, retail, consumer products, manufacturing, travel and transportation, and more
Run any size data model, without data replication, for superfast profit insights using the SAP HANA® platform.
Highly flexible and relevant costing models
Empower business users to rapidly create models to match their business needs through a variety of allocation methods.
Simulation and optimization tools
Use flexible analysis tools that allow users to perform ad hoc simulations and “what-if” analyses.
Transparent cost analysis
Support all levels of granularity for transparent profit insights into financial instruments, consumer products, transportation, and more.
Integrated and optimized insights
Gain enhanced profit insights by integrating and optimizing the SAP Business Planning and Consolidation (SAP BPC) application with SAP S/4HANA®.
ImproveProfit insights
ManageTime and cost of implementation
Data redundancy and costly reconciliation issues
Reduce
Customers
Learn more
Why SAP?
What are the benefits?
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