How SAP Profitability and Performance Management amplifies enterprise performance analytics

As business becomes increasingly complex, many senior executives have found that answering questions around the performance and profitability of various products or business lines has become exponentially complicated. Traditional tools like spreadsheets and custom-built applications designed during the pre-cloud era no longer get the job done, unable to handle the distributed data sources, complex calculations, and large volumes of data that are common in today’s business world. When these archaic tools are used today, the result is often an error-riddled analysis that’s out of date the moment it is completed.

Today’s enterprise needs a platform that can ingest data from myriad sources and process it accurately—and in real time—to determine whether products or lines of business are meeting profitability expectations.

SAP Profitability and Performance Management (PaPM) is the solution the enterprise has been waiting for. This end-to-end analytical tool is capable of ingesting data from both SAP and non-SAP source systems, performing complex calculations on large amounts of data, leverages a multi-method reporting system, and provides quick insights into the most complex of performance and profitability questions.

How does SAP Profitability and Performance Management differ from the old ways of profitability analysis? 

Using simulations and predictive intelligence, SAP Profitability and Performance Management works on the SAP S/4HANA platform to seamlessly ingest large volumes of data no matter where they reside, outputting results back to the original source systems or to other platforms. Its intuitive and friendly web-based interface is designed for finance and tax professionals but can be easily understood by relative novices. It’s also preloaded with a wide array of financial management applications and includes content tailored for a variety of specific industries—including Retail, Life Sciences, Energy, Financial Services, Technology and many more—though it can be easily leveraged for use across any type of business. Best of all, SAP Profitability and Performance Management integrates with your existing ERP system, whether it’s on-premises or cloud-based, eliminating the need to replicate existing data or roll out new storage systems.

What makes SAP Profitability and Performance Management the right choice for enterprises?

SAP Profitability and Performance Management is a comprehensive, core solution that optimizes the profitability and cost analysis process across multiple dimensions—and at any level of granularity. It ensures data integrity, transparency, reliability and consistency across every step of the analytical process, improving efficiency thanks to its standardized, streamlined design. SAP Profitability and Performance Management sets up and configures easily, simplifying reporting and providing a natural, intuitive user experience. Because SAP Profitability and Performance Management brings together all types of data, both financial and operational, regardless of its source or destination, it can be leveraged in nearly any type of operation.

The system can be used to analyze all types of business decisions, including the profitability of mergers, acquisitions, divestitures or investments, and helping to determine which customers, products and markets are ideal for the business to target. And SAP Profitability and Performance Management isn’t just accurate, it’s extremely fast. SAP Profitability and Performance Management leverages SAP S/4HANA platform to support calculations that can include thousands or millions of records, incorporating an unlimited number of business rules along the way. Performance is typically measured on a scale of minutes or seconds instead of the days or weeks that traditional profitability analysis tools typically require for mass records.

How does SAP Profitability and Performance Management complement other modules within the SAP landscape?

SAP Profitability and Performance Management is a maturing product with six years of history under its belt. It can be installed as an add-on to an existing SAP S/4HANA system or can operate independently as a standalone product. As a natively integrated add-on to S/4HANA, SAP Profitability and Performance Management is capable of reading data from HANA tables on the fly, allowing it to be positioned between ERP data sources and reporting systems like SAP Analytics Cloud, where additional processing or reporting can be done if required.

For existing SAP users, SAP Profitability and Performance Management extends the capabilities of the platform considerably, providing comprehensive and precise profitability information with full auditability and traceability back to the original source of the data. Results are posted back to the general ledger or can be output to myriad other systems, allowing for data transformation, enrichment and harmonization. Again, SAP Profitability and Performance Management can handle extremely high volumes of calculations and rule complexity, and it works with the specific needs of any industry. Scenario analysis features allow the user to create complex simulations that can be shared between other SAP modules as desired.

PwC’s Performance Management Capabilities Assessment can get you started

The PwC Performance Management Analysis Assessment is designed to allow our consultants to tailor a profitability analysis to the specific needs of the client, working to solve major pain points, reduce manual interventions and create a robust technology platform that will save you time over the long term.

Our ultimate goal is to assist you in selecting a calculation engine that works with your needs, helping you achieve your business goals and outcomes. Contact us to begin an assessment into how SAP Profitability and Performance Management can help unlock new insights into your business’s performance.

^{Richard Dampf, Managing Director of Global Business Development at msg global solutions, partnered with PwC on this article.}