Moore's law is slowing down, organization with focus on cost advantage will have better chance to thrive

Is Moore's law about:

A. Smaller, faster transistors? OR
B. Economics of chip making?

My answer is 'A', until 'B' holds true.

"The culprits (for the slowing of Moore's Law) are the rapidly rising costs associated with technology development and the capital equipment needed to produce next-generation nodes" 

McKinsey identifies this trend in the semiconductor industry in this article, and many Industry experts agree with this trend.

With pressing economic challenges and slower technological breakthroughs, organizations are focusing on cutting costs and consolidating of the value chain (via Partnerships and/or Acquisitions) 

The challenge for decision-makers within an organization is:- 

1. Do I have the right information from all functions within an organization to model and plan for the future?

Traditionally EPM vendors had 'whiteboard' models – i.e. models with some features for financial planning but none for Sales and HR. Implementation of these EPM suites took six months or more, with minimal interaction of the various models.  Host Analytics offers a true, unified Cloud EPM suite, where most of the features are right out of the box. Financial, Workforce, Sales and CAPEX planning are all part of Host Analytics EPM offering.

B. Rising costs - How do we manage or decrease its unfavorable effects
Breaking down costs through Activity-based costing (ABC) (or Segment/channels for Sales/Marketing) can help organizations to identify the activities (expensive production process, or segment with higher costs) which need further analysis. You can view this information in Host Analytics (Actual's loaded from ERP and other systems), identify the issues and plan accordingly
Host Analytics offers integration services to many ERP and other systems, and drill-down to transaction details is also available.

C. Rolling forecasts, reporting and what if scenarios - Volatility, ConsolidationsWith Host Analytics Cloud EPM Suite, organizations can create rolling forecasts and create the most realistic picture possible of the future. There is no complex setup to create a rolling forecast.
You don’t have to purchase a different system for close management or consolidations, its available within the Host Analytics suite. Yes, it can even offer multi-currency consolidations and complex intercompany and equity eliminations.
You can also run 'what if' scenarios for consolidations and view the impact on the Balance Sheet and Income Statements.

D. Modeling of non-Financial information
Host Analytics 'Modeling' module recognizes the need for modeling of non-Financial information and flexibility to model and plan using Microsoft Excel as a front-end. With Host Analytics Modeling, you can model e.g. sales leads/opportunities or inventory SKU planning and then link then to other models .

To find out more, register for a Free demo

The Host Analytics Future of Finance Tour Tours starts in San Francisco on August 12th, 2015 

Cloud CPM suits positioned to be next 'Leaders' in Gartner's 2015 report.

Cloud CPM suite providers -Host Analytics, Adaptive Insights, Tagetik and Anaplan are moving into 'Leader' quadrant. Gartner has published 'Magic Quadrant CPM 2015 Report' and identifies trends in CPM suites.

Current hosted solution providers - SAP , Oracle and IBM are current leaders in CPM solution offering. They are late to understand customers needs, as their focus was on their cash cows 'ERP'. Cloud CPM suite providers realized this opportunity, and now with high customer satisfaction, they will move in 'Leader' quadrant.

Three strengths which cloud CPM has are

1. Pure-play 'Cloud' solutions- which translates to reduced costs per user and easy upgrades
2. Mobile device accessibility- user friendly UI and web analytics
3. Pre-built models for planning and consolidation, and function specific rich features. e.g. HR and Sales models.

Host Analytics, was the first pure-play cloud vendor. Host Analytics started offering its cloud CPM service in 2007. It maintains its 'visionary' vendor position. Host Analytics provides function specific rich features to HR and Sales models.

To make migration to Cloud, vendors offer migration paths and tools to move your models and data from legacy to cloud CPM suite.

If you have a need for cloud CPM solution, please contact us. We will be happy to assist you in moving away from 'Excel chaos' or expensive hosted solution.

Profitability Analysis in SAP BPC with HANA

If you have a background in SAP COPA (Controlling-Profitability Analysis) and wondered if similar planning can be done in SAP BPC, you will find this article interesting.

SAP COPA is a great tool to collect the actual data, but does not have a good user interface for planning. Users of COPA usually plan in Microsoft Excel sheet and plugin the values in COPA planning templates. This defeats the whole purpose of interactive planning. This is due to the fact the templates are not flexible and cannot be generated dynamically.

In earlier blog we discussed about 'Key Figure' limitation in BPC. 

The other limitation is COPA can have 50 Characters, whereas a BPC Model ('Application' in 7.5 am older versions) can have only 20. An Environment ('ApplicationSet' in BPC 7.5 an older versions) can have 50 or more dimensions, if required we can create multiple Models each with different sets of COPA characteristic (or Characteristic groups) and join them using a common denominator (e.g. a segment).

We have helped clients to address COPA planning limitations in BPC. Contact us to discuss your case scenario.

With HANA, many limitations of COPA using traditional database can be overcome. We will cover COPA+HANA in over next blog. 

Real-Time Data in BPC

Real-Time data is required for some organizations for tactical Sales & Operational Planning, a good example is FMCG industry.

I have seen requirements in these scenarios,
- New customers added in source system, need to update daily or weekly sales plan NOW in BPC
- Competitive Analysis, need to update this to my sales force NOW
- Month-end, Quarter-end top-end adjustment entered, I have to finalize forecast NOW

There are two issues
1. How to get the data in BPC, and
2. How to collaborate-Real-Time

How to get the data in BPC

If you use SAP BW, you can achieve it with some effort. It's called 'Real-Time Data Acquisition'. This was available in BW 3.5 with restrictions, in BW 7.0 and later versions it got better. You can get Real-Time data from source system using this technology. This is not out of the box solution, customization's and development effort are required.

I am not aware if this can be achieved with BPC Microsoft version, would like to know if you have experienced with this.

How to collaborate-Real-Time

The limitation of BPC is, one has to refresh the report to see the Real-Time data.  In collaborative planning when a team member is updating plan data, others have to wait for their turn to update. When planning portfolio of products and customers, collaboration is slow.

I see a great potential if everyone can see the same data and collaborate Real-Time, just like this Google Drive Real-Time API

Do you have a requirement for Real-Time Planning in BPC?

SAP BPC NW Consolidations Movements in Flow or Account Dimension?

Whats the advantage of flow dimension over accounts?

In my experience is Flow makes things application complex, Account is relatively easier to report and manage.

Account movements are required for many Balance Sheet accounts- e.g. Cash, Fixed Assets. These movements are reported in financial statements in cash flow and disclosure sections.

I believe capturing movements in accounts is much efficient because

1. Reporting is much simpler, no need to remember which flows are valid for which accounts.e.g. Cash account do not need retirements, additions flows dimensions. 
2. If you have flow dimension, then users have to be careful ion which flow they enter data. Overload on Business User.

What's your take?

Profitability Analysis Using SAP BPC

Can I make my Profitability Analysis (COPA) Planning in SAP as simpler as my Cost center or Revenue Planning in SAP BPC?

Agile Answer: Yes, you can.

SAP BPC's design is based on an Amount (Keyfigure), whereas SAP COPA can have multiple value fields (Keyfigure's). 

How do you load the COPA multi-Keyfigure in BPC? The key word to use in your transformation file is MVAL.

Dimension =*MVAL(keyfiguretype1|dim_mem1||keyfiguretype2|dim_mem2||keyfiguretype3|dim_mem3)

For reporting, you need to expand this Dimension on same axis as your key figure.

Challenges with COPA data in BPC

1. I like COPA, but the only limitation for business users in planning scenarios is 'inflexible' layouts. Unlike BPC reports/input schedules, COPA reports/planning layouts have to be configured. Which means a IT resource is required.
2. Users can plan quantities (or revenue) and COPA  can derive the revenue(or quantity) based on standard price or other measures. To achieve similar results enhancements are required in BPC.
3. If you get past #2, now some users would like to copy BPC data to COPA. How do we do it? It’s a complex development with a BAdI.  

We have helped clients to clear all the above barriers to create COPA like scenario in BPC. Do contact us and we will be glad to help you.