How Corporate Controlling Uses Predictive Planning in SAP Analytics Cloud

SAP Corporate Controlling is responsible for governing SAP’s financial activities. Twice every quarter, their team handles a Total Year projection of the Profit and Loss statement of SAP Group to provide an accurate outlook to help the company strategize confidentially into the future and safeguard the fulfillment of objectives and external guidance. This Total Year Projection is called Central Forecast.

To ensure overall financial healthiness, Corporate Controlling regularly needs to understand the way SAP performed and predict how it will perform in the future.

How Corporate Controlling Uses Predictive Planning in SAP Analytics Cloud

The best run finance teams make business decisions with confidence and agility. But developing financial forecasts that are accurate is tricky. That’s why when SAP Corporate Controlling needed a better way to interpret their data, they turned to SAP Analytics Cloud’s new Predictive Planning features and flexible forecasting to help drive efficiencies and enable confident, decision-making.

As any financial analyst knows, creating a financial forecast has a lot of moving parts. Teams need to:

  • Analyze their company’s past performance
  • Have the most up to date data
  • Slice and dice insights any way they want
  • Deliver different scenarios to see how situations could develop
  • Set up efficient planning processes

In forecasting, efficiency and accuracy is the goal. A key component to providing strategic insights to an organization is to leverage reliable data on time.

Corporate Controlling uses SAP Analytics Cloud to create an accurate Total Year projection of the Profit and Loss statement by using the Predictive Planning capabilities that would allow them to get super granular. The team leverages predictive analytics through time-series models that enabled them to look at historical patterns in data and project into the future.

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The Challenge: Defining the Data Problem

When you’re responsible for an entire organization’s financial forecasting, you’re collecting and confirming a lot of mission critical data – everything needs to be accurate, timely, and up to date.

Before using SAP Analytics Cloud, the team calculated projections by using multiple on-premise tools to plan, visualize, and predict in order to generate a forecast.

One of the line items in the Profit and Loss statement was Travel & Entertainment (T&E) expenses.

While travel has been significantly reduced globally, Corporate Controlling still needed to account for this change and plan on company’s performance. The overall goal was to set up a stable, predictive model to deliver a Central Forecast for T&E expenses that would help plan into the future.

But there was a problem: Since SAP’s organizational structure is continuously evolving, Corporate Controlling needed to adjust data structures frequently. This created multiple inefficiencies and frustrations for our analysts, who were spending an excessive amount of time developing and updating forecasts, rather than focusing on delivering high value insights.

The amount of time and effort also affected decision makers who relied on timely information to make significant business decisions.

In order to gain a more stable forecast, the team needed to improve their predictions and reduce inefficiencies by:

  • Flexibly selecting the optimal dimensions
  • Automating labor-intensive components

This is where Predictive Planning’s flexibility and automated machine learning came in.

The Solution: Predictive Planning

Predictive Planning, an integration between Smart Predict and SAP Analytics Cloud for planning, enables users to forecast revenue or costs at scale. By looking at historical data in a planning model and then leveraging the machine learning capabilities of Predictive Planning, teams can efficiently extract real-time data, uncover patterns, and provide a smart, trusted baseline for planning activities.

 

How Corporate Controlling Uses Predictive Planning in SAP Analytics Cloud

 

Here’s how it works: Predictive forecasts are created from dimensions (i.e. product, country). This enables flexible forecasting at different levels of granularity and provides their team with greater control and accuracy of predictions.

Predictive Planning is:

  • Smart. It automates data-driven enterprise planning
  • Self-service. It empowers business users to self-service predictions
  • Trusted. It provides full transparency on the outcomes

In SAP Corporate Controlling’s case, they were able to use the governed connectivity of SAP Analytics Cloud to gain access to their data in real time, analyze their data, and collect predictions using minimal human intervention.

Corporate Controlling team already had a predictive model in use to forecast T&E expenses in a central forecast. However, that predictive model was segmented per profit center, which was a constantly changing structure, bringing time-inefficiencies into the predictive model setup process.

By defining measures (the actuals of SAP’s travel expenses) and toggling dimensions (accounts and cost of sales, instead of profit center), the team was not only able to get more exact and reliable insights into the company, they also automated multiple tedious processes, creating efficient workflows.

Corporate Controlling also found that they could quickly compare all the possibilities of predicting the travel costs based on various measurements in their hierarchy, such as account dimension, cost of sales dimension, and various forecast horizons, and more.

The Results: More Stability, Less Work

Now, SAP Corporate Controlling has dedicated, stable forecast figures by using the flexible forecasting features of SAP Analytics Cloud.

Leveraging the capabilities of Predictive Planning in SAP Analytics Cloud enabled Corporate Controlling to:

  • Produce more accurate forecasts, faster. By automating processes, the labor-intensive work of collecting and reconciling data has been reduced, and the team is able to capture plans quickly and effectively
  • Analyze and predict in one place. Analysts were able to increase organizational agility by effortlessly creating predictive forecasts at scale.
  • Enabling Value-Adding Activities. Corporate Controlling was able to produce a baseline forecast that helped their team move away from mundane tasks and focus on understanding value-adding activities.

For SAP Corporate Controlling, SAP Analytics Cloud’s new predictive planning capabilities were the perfect, scalable solution for setting up a stable central forecast for T&E expenses at any level of granularity. Their team can make business decisions with agility and confidence by leveraging the self-serve capabilities of SAP Analytics Cloud for their day-to-day activities.

 

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