There are vast approaches to the budgeting process, from Top Down to Bottom Up, blended and hybrid approaches and then there is the whole business of how you determine and arrive at specific calculations. However, few would dispute the value of proper planning, forecasting and budgeting.
In 2013, Winshuttle ran a survey with ACCA and received a substantial number of responses (1806) with an equally significant number of those responses being SAP customers (573).
What the survey failed to reveal was any significant detail regarding which of those SAP customers were using BPC and how they felt it was working for them.
A number of SAP integration partners offer BPC implementation services, and below is a list of important benefits among the many promises of BPC.
- Improved performance
- Faster closes
- Improved governance and transparency
- Shorten DSO (days sales outstanding)
- Optimize cash management
- Improved reporting
- Improved process integration between finance and treasury
- Lower finance costs
Any business that is serious about budgets and forecasting, (even if you aren’t a core SAP ERP customer) should consider implementing BPC, as it can make significant differences to how you plan and manage operations.
SAP customers with BPC often still use old planning transactions
The reality seems to be that the uptake on BPC is relatively poor, given the massive customer base of SAP customers and others (BPC is usable independently of ERP). In fact, possibly of more interest for those companies using SAP ERP and BPC, certain kinds of SAP transactions that fall into the Cost, Profit and Activity Input areas continue to be used even when BPC is utilized.
While some SAP process areas support Excel integration, particularly for download or extraction of statistical key figures, many do not support mass maintenance, and this is certainly an important area for maintenance cycles.
A follow up survey conducted with the respondents of the ACCA/Winshuttle survey received 66 responses from across more than 20 industry segments in primarily Europe and Asia – Pacific. Of the respondents, 35% indicated that they just use SAP with spreadsheets and only 20% use the combination of a tool, spreadsheets and SAP. 20% also indicated that they only use spreadsheets.
52% of the respondents indicated that they can do flexible comparisons of actual performance to planned performance on non-sales budgeting and forecast plans, but the process is more or less inadequate. In all likelihood, this seems to be indicative of a lack of cohesive data sets and users are having difficulties extracting data with ease. 71% of respondents indicated that data is housed in multiple systems.
A wide variety of budget methods are being used
Further scrutiny revealed that of the 66 respondents, a broad selection of budget methods were used for non-sales/revenue budgets with Zero Based, Incremental, ABC and Responsibility Center Management, dominating in values between 30-43%. Performance based budgeting was the least popular at 14%.
While workflow was not singled out by the respondents as a challenge, 17% agreed that collaboration and participation management was challenging. Respectively, almost a quarter (23%) indicated that performance against plan assessment also presented challenges. Another issue identified was simply gathering data.
When examining the specifics of continued use of legacy planning transactions in SAP, although only 13 of the original 66 respondents indicated they use these transactions at the Cost Center/Element Activity Input level, 100% indicated that KP06 is a transaction they use.
This is a positive discovery from a Winshuttle perspective, in that KP06 is a transaction that can be easily automated in a variety of ways with Winshuttle technology. Other areas of interest include KK46 and KK16 for Cost object controlling, as well as some real estate related transactions.
57% of respondents felt that the methods they used to maintain this data in SAP screens was relatively easy to use, and more than three quarters (79%) restricted who had access to these transactions. For an astonishing 72%, data maintenance was done manually, so there is certainly opportunity for improvement in data maintenance efficiency.
Negative consequence of delaying data maintenance
Failure to maintain forecast data in a timely fashion could lead to a number of negative outcomes, and the most commonly cited issues were:
- Reporting delays
- Having to complete manual maintenance and workarounds
- Losing the relevance of the numbers in terms of KPIs
Only nine of the respondents indicated they were using BPC, and one indicated they had recently moved to BPC on HANA and were having an extraordinarily positive experience. The rest of the respondents revealed that BPC seemed to be challenging in terms of its suitability for real strategic views.
Overall, those running BPC leaned toward ‘somewhat satisfied’ with only one indicating a categorical ‘yes’ (this respondent is using HANA). Cited issues include a lack of skilled BPC resources and slowness of the application, and the notion of a single source for information was deemed very beneficial.
Learn more about how Winshuttle can help you with transactions like KP06 by looking at Winshuttle for Budgeting and Planning.
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