SAP PAPM is an SAP native solution designed to aggregate data from varied sources, execute simple to advanced calculations and processes, and perform reporting and data visualization while providing simulation, audit trail, and quick adaptability to dynamic business requirements.
SAP PaPM provides a performance management application that works on a flexible data model concept. Organisations can fetch data and models from SAP and non-SAP applications either on cloud or on-premise. They can leverage speed, flexibility, accuracy and transparency offered by PaPM to build their business processes and process high volumes of data in real-time.
SAP PaPM caters to the deep dive, root cause analysis and predictive requirements of the organizations. It has tools to perform advanced analytics, forecasting, and modelling etc. and the output of these processes can also be integrated with other SAP solutions like SAP S/4HANA and SAP Analytics Cloud (a cloud-based analytics platform).
SAP PaPM has 3 main building blocks
Business Data Aggregator
Calculation Engine
Simulation Application
- Business Data aggregator
It includes the functionality to aggregate the data from various sources, such as financial systems, operational systems, and external data sources. It can handle large volumes of data and perform aggregation based on user-defined dimensions and hierarchies. It provides a platform for integrating the data from different sources in real-time and also avoids double storage.
- Calculation Engine
The Calculation Engine supports complex calculations involving multiple variables, hierarchies, and dependencies. It can handle nested calculations, iterative calculations, and recursive calculations. The Calculation Engine can handle structured and unstructured data from various sources, such as SAP ERP systems, databases, and external data feeds. It processes the data to transform, cleanse, and prepare it for analysis, calculation, and derivation and also facilitates the onward transfer of data into SAP/Non SAP systems for planning, analysis, and consolidation.
- Simulator Application
The simulator application allows users to create different scenarios by defining variables and input parameters. Users can perform “what-if” analysis by modifying these variables and assessing the potential impact on financial performance. For eg. Users can define pricing models, set targets and goals, calculate revenue based on pricing structures, factor in discounts or promotions, and analyze pricing strategies and their impact on profitability.
Sample use cases of SAP PaPM
Profitability and Cost Management
- SAP PaPM enables profitability and cost analysis on various dimensions viz. customer, product, region, channel, segment, etc.
- This allows organizations better visibility of the drivers and their contribution to overall profitability
Calculations and Enrichment
- It allows users to perform complex calculations and aggregations based on business rules and formulas on huge data volumes at exceedingly high speeds.
- It is enriched with different functions like union, view, derivations, currency, and unit conversion to make the calculation easier and simpler.
Cost and Revenue Allocation
- It helps assign costs to specific activities or cost objects based on their actual usage also known as Activity-Based Costing.
- It can source data from S/4HANA e.g. HANA Views / CDS Views etc. for creating cost/revenue allocations and allows post-back to General Ledger.
Analysis, Interactive Reporting, and Data Visualization
- It curtails data reconciliation efforts and enhances the accuracy and speed of the output as well as error detection.
- Users can generate customized reports, charts, and visual representations which simplifies the messaging of the valuable insights and trends.
- It has provision for “SAP Analysis” for MS Excel as front end.
Agile Plan and Forecast Modelling
It allows organizations to create models to predict and simulate future scenarios for financial planning and forecasting purposes.
- Driver-based and deterministic models
- Predictive and machine learning models which use historical data and statistical techniques to forecast future outcomes.
- Stochastic models which are particularly useful when dealing with scenarios that involve inherent variabilities, such as financial markets, weather patterns, or project risk analysis.
Corporate Budgeting and Planning
- It provides an amalgamation of top-down and bottom-up approaches for creating budgets and plans.
- Budgets and Plans can be made by using necessary parameters, such as time periods, organizational units, cost elements, revenue items, etc.
Tax Calculation and Reporting
- Direct tax calculation and reporting of income and deferred taxes for a group of companies based on S/4HANA and ERP data.
- By optimizing tax calculations, organizations can manage their tax obligations more effectively.
Scenario modeling, Auditability, and Compliance
- It allows users to create simulations / “What If” analyses with complete transparency, control, and flexibility.
- It provides a detailed drill down into the steps involved to view changes at each step and call out the real drivers.
Fund Transfer Pricing
- Matched maturity approach
- Net present value approach
- Replication portfolio approach
- Other volume and account-based methods
Corporate Sustainability Management
- It can source data for varied environmental, social, and allied key performance indicators e.g. carbon footprint, raw material/product waste, human capital, and social data.
- Aggregate, calculate, report, visualize against the desired benchmarks, and perform simulations.
Process Extensions
- Process extensions include SQL, R, Java, and ABAP. it can be used for further custom programs via industry-standard interfaces like Web service.
- R script can be integrated with PaPM on-premise with a remote function adapter (RFA).
Major industries that PaPM caters to
Noshtek has the relevant experience and expertise in in FPA domain working with CFO/CXO levels to address their pain points while ensuring efficient and effective utilization of resources and technology.
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