The Need for an Unambiguous Workflow Definition
Between June and November of 2003, PostFinance and SAP mapped flows and data models by parameterization of the software. As a result, the previously defined processes could be implemented in the software. Parameterization is different from programming – it’s more like tweaking the settings, just as users set document properties in a word processing program. The settings require relatively little effort and remain in place after a software update.
Specific workflows were defined in SAP Enterprise Portal (SAP EP is now called SAP NetWeaver Portal) for each product group. The workflows would later control and monitor orderly execution of the planning steps. The challenge of this implementation step is the movement from a purely subject-oriented description of the process to a workflow. The workflow must explicitly store numerous criteria, exceptions, possible errors, and escalation rules. Because the software automatically selects and executes the appropriate alternative, the description of the procedure must be unambiguous and complete.
The user interfaces for individual planning steps and roles also had to be designed appropriately. When the software prompts a user to enter planning data, the screen should display the exact formula that corresponds to the user’s position in the workflow and the user’s planning dimension.
Another important step was the integration of SAP SEM with its own connected systems. For example, users need actual data from cost accounting for planning and for operative and strategic controlling. At PostFinance, the data was captured from SAP Financials (now called mySAP ERP Financials), but it did not correspond to the multidimensional data model of SAP SEM. That’s why the data had to detour through SAP Business Information Warehouse to be made compatible with the SAP SEM model.
On-Time Execution of the Project
During the last two months of 2003, SAP installed the solution on the production servers at PostFinance. The system went live at the beginning of January, right on schedule. The new solution was then available to users. The solution is integrated with additional strategic and operative planning processes at PostFinance.
In addition to the primary key figures of economic value added (EVA) and return on equity (RoE), management has defined earnings before interest and taxes (EBIT) as a strategic key figure for the financial dimension. The director of business controlling can derive sales and profitability requirements for market segments from EBIT. Multidimensional, bottom-up planning then begins with SAP SEM. In principle, each planner can tap four sources of information:
- The profit key figure from the top-down requirements
- The actual data of the previous year
- Specific market analyses, individual experience, and so on
- The direct costs, profit center costs (product and market management), and the internal settlement prices of the service center, like those for product services, IT, and distribution – mailing an account statement, for example
Strategic Financial Planning on the Intranet
At PostFinance, users can access SAP SEM over the company’s intranet using a Web browser. Workflow directs the actual planning process.
The process always begins by planning the product dimension. Product managers select their products from a drop-down list and enter their values into a product-specific and parameterized planning screen. Individual market managers then plan the products in light of their customer segments. Depending upon the specific product, additional instances might be involved in the process.
As a super user, the director of business controlling has an unlimited view of all planning dimensions. For this user role, SAP consultants created a traffic-light report that shows the current status of each planning step at a glance. The report allows controlling personnel to note open planning steps and thus accelerate the progress of planning and make it transparent.
The Numbers Agree After One Cycle
Before the implementation of SAP SEM, inconsistent data appeared at the end of a planning cycle. PostFinance had to run through the cycle several times to eliminate the inconsistencies. Now only one cycle is necessary in most cases. First, the users’ screens force them to enter data in a uniform and consistent manner. Second, escalation rules help coordinate correction of planning differences in workflows. All those involved in planning have agreed upon and accepted the numbers that end up in the plan.
Although the overall process has become much more complex because of the addition of the customer dimension, the process actually runs more efficiently today and with better data quality and consistency.
Slice and Dice: Multidimensional Data Surfing
At the end of the planning process, the strategic figures are frozen. This framework of numbers gives PostFinance a companywide, consistent, and integrated source of strategic information that managers can evaluate across multiple dimensions. Some 160 users in controlling, product and customer management, sales, and distribution orient themselves with these figures in daily operations.
All users can generate reports that correspond to their specific perspectives and current questions. For example, distribution personnel see sales for a product in a customer segment and can then drill down into the values to see the sales channel. Product managers can recognize the profit to be earned from their product in a given customer segment. Both can then distribute resources and set operating priorities according to the strategic goals of the entire company.
Most operative and strategic controlling occurs in decentralized departments. That’s why it’s especially important that report creation does not require any special IT knowledge. Users define their questions with logical operators. They can then surf through the resulting ad hoc report with multidimensional analysis and navigation options. For example:
- They can look at a layer in isolation (or slice the data). A customer segment manager isolates the numbers for a submarket and can then analyze individual contribution margin steps for the numbers.
- They can change the dimension (or dice the data). A product manager can look the customer perspective in relation to a Yellow Account – the portion of revenue of the customer segment for a specific product, for example.
- They can examine the detailed information of a cumulated number (or drill down through the data). For example, they can go from the total revenue from Yellow Account to the portion created by individual customer segments.
- They can cumulate detailed information into a total (or roll up the data). For example, they can combine the revenues of all products in a customer segment into total revenues of the customer segment.
Improved Planning Process and Planning Data
The level of user acceptance of the new planning process and the new analysis options was extraordinarily high. The ergonomics of the user interfaces, which are similar to Web sites, contributed a great deal to that level. Users can deal with the interfaces intuitively. No training for SAP SEM was necessary – unlike the situation with a traditional SAP application. Central business controlling enjoys the greatest advantage of the new solution because it can concentrate on an analysis of the data.
So far, the improvements enabled by SAP SEM have primarily affected the planning process and the planning data. To expand and refine the controlling instrument, PostFinance will expand the solution in two directions. First, it will activate the simulation functions available in SAP SEM so that it can calculate alternate plans with actual data and what-if scenarios. Second, PostFinance will integrate additional data and processes step-by-step into the multidimensional model. The goal is objective and transparent derivation of planning figures.
For example, the system has so far made actual data available only for the previous year. Current actual data can be called only from operating upstream systems like SAP Financials, and it does not correspond to the data model of SAP SEM. The next step for PostFinance is to use SAP SEM to integrate quarterly closes, forecasts, and operative financial planning into the planning solution. The goal is consistent and easy-to-analyze plan-actual comparisons and early warning functions. All users should be able to execute deviation reports based upon current data as needed in an integrated data model.
To a great extent, user desire drives these innovations. The positive attitude of users will also be an important success factor in the future as the solution continues to be developed.