Financial Planning and Consolidation is required in organizations, which are typically large in size, complex in nature, global in terms of operation and profound in terms of product-service matrix. That’s when businesses forecast their production, their sales, their revenue & their cost – so that there are no surprises when these do take place during the year.
But Why? It is because; it can be used for management control i.e. to compare the ACTUAL figures at the end of the year with the forecasted figures at the beginning of the year to judge, when their plans have gone well or gone wrong. If it has gone wrong, they can do something to make it better and if it has gone well, they will try to make it even better, be even more profitable.
Question comes into usual mind – how do they work out those forecasted figures. Simple enough, using various techniques, such as: following a business pattern using historical data, applying seasonality or adding an inflation %age or even using some custom formula to reflect incumbent local/global economic condition. It is different from business to business, depending on the nature, size and industry sector the business falls under.
If that’s all it take imagine working out a forecast version of a global company which has operations across the globe, thousands of products and over 50,000+ employees! In order to calculate a Quarterly rolling Forecast or Annual Budget; forecast and budget of all the Divisions, Factories, Countries, Markets, and Sales Channels need to explored, discussed, validates and then consolidates to work out a single Forecast/Budget for the company.
That is enough for now. Therefore a traditional Budgeting & Forecasting exercise; involve: TIME of Company’s Resources & COST for the Company. Correctness of the planning is ALSO dependent on amount of historical data involved and granularity of the data, using which planning is done.
It sounds a complex exercise! Imagine doing these in every month, every quarter and every year. So; let’s see how our wonderful lady SAP HANA is going to be gracious here.
- Improvement of database speed, with the in-memory processing
- Options to re-Configure InfoCubes which will make them efficient for In-memory processing by making them simpler and with less tables than traditional BI InfoCubes.
- Faster performance in loading data and reporting in SAP BPC & SAP BI.
- Calculations & Aggregations can be performed in SAP HANA database itself, before the result sets are passed on to application server. While it is done in SAP HANA database, it is done through a sophisticated parallel processing mechanism. Only end result is passed on to application server at the end. How cool is that?.
- In a traditional scenario; without SAP HANA, data is moved onto the application server, as soon as a query/report is executed. All the calculations and aggregations are done on application server, with its limited resource.
- From the planning perspective; all those which were bottlenecks before for planning process, such as time, effort and cost, can be saved, when the planning cycle are run in seconds rather than in days and weeks.
- With great power, come great responsibilities! Indeed! Many different amendments, versioning and seamless data integration and reporting capabilities are all possible easily with SAP HANA power; in your Budgeting & Forecasting process; using SAP B…P…C…!