On the road with Analytics Cloud - Planning & Cost Allocation, and a bit of closed loop insights

July 29, 2017

 

In the "on the road with analytics cloud - series", we this time have a closer look at the planning capabilities.  The fact that we do have planning capabilities together with live analytical insights and predictive analytics, in itself is already very special. We call this the closed loop of insights; at any moment in time, a user can step into the loop and start analyzing, predicting or planning insights and see and simulate interdependencies.

 

The closed loop of monitoring (i.e. Business Intelligence), planning and predictive analytics combined in ONE tool is unique and not available anywhere else in the market. SAP Analytics Cloud delivers on this promise. You might think "very nice Iver, but why should I care", well .... consider the following advantages:

 

  • at any point in time, you as a user have actuals, budget and (predictive) forecast numbers available for insights. No more big projects to consolidate actuals and planning numbers in a separate data store and build separate insights on top; it all is available in SAP Analytics Cloud. If you already did set up your planning flows in SAP BPC, SAP Analytics Cloud easily interacts (bi-directional) with that.

  • since SAP Analytics Cloud allows to work with versions of data - these versions are either private or public for all users -, the user can compare versions. ... So ??? ....well, imagine you have a forecast set up and want to see what happens if you'd raise that forecast with xx%, you just make a separate version and apply the raise. SAP Analytics Cloud will distribute or spread the raise among the underlying attributes (according to the rules you can influence). Now it gets interesting: since you can compare your new version of forecast with the original version, it basically means you can do advanced simulation. There are even the Value Driver Tree and the variance reports (both: see screenshot on top) that allows you to visualize your simulation. 

  • and there is the predictive analytics capabilities. They come in to play not only if you want to predict for example your forecast, but also if you require insights of the correlations of dimensions to certain KPI's. "Explain that!" Well, if you want to know what attributes contributes the most/least to a certain KPI, SAP Analytics Cloud embedded algorithms show you so using the Smart Data Discovery functionality. Imagine a use case on Spend analyses: you might want to know what suppliers, products or materials contribute the most to maintenance costs bearing a certain period in time.

  • it's all Cloud based: no infrastructure to set-up, no big teams and big projects to initiate 360° insights projects, no nightmares about new versions and upgrade, and stunning performance because of underlying in-memory computing.

 

Cost Allocation and drivers

 

One of the key use cases for using a planning tool is of course cost allocation. Cost allocation is a process of providing relief to shared service organization's cost centers that provide a product or service. In turn, the associated expense is assigned to internal clients' cost centers that consume the products and services. For example, the CIO may provide all IT services within the company and assign the costs back to the business units that consume each offering.The core components of a cost allocation system consist of a way to track which organizations provides a product and/or service, the organizations that consume the products and/or services, and a list of portfolio offerings (e.g. service catalog). A second important component is the allocation-driver; depending on to whom you charge, you might for example  want to add an uplift  because of tax regulation rules. The driver is basically a definition/rule one applies to a (group of) allocation(s).

 

Below is video I created to show you an overview of the SAP Analytics Cloud for Planning features and capabilities. Of course, I cannot cover all of them so in this video I focused on the process of allocating costs using predefined drivers. The allocations are either '1 on 1', '1 to many' or 'many to many'. 

 

Video - workflow SAP Analytics Cloud

 

 

Distribution workflow

 

Another element of planning, forecast and budget control, is the distribution workflow of it.  If you for example did decide the forecast for next quarter needs to be raised with 4%, you might want to push this raise down to your delegates asking them to raise the volume of the product-sales-forecast so it matches your raise. This push-back or distribution follows a workflow allowing you to see whether the raise is done, to adjust of even over rules it. It also allows you to consolidate the individual raises into a new adjusted forecast. The same workflow can be done for your budgeting or planning. In below video my colleague demonstrates the working of this workflow. It's all part of SAP Analytics Cloud !

 

Video: SAP Analytics Cloud for Planning distribution workflow

 

 

Additional Resources

 

If you want to know more on the planning capabilties of SAP Analytics Cloud, please consider following resources:

 

My Analytics Cloud YouTube playlist

SAP Analytics YouTube channel

SAP community on Analytics Cloud

 

 

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