What is SAP BPC?
SAP Business Planning and Consolidation (BPC) is SAP’s flagship product for planning, budgeting, forecasting, and both legal and management consolidations. SAP BPC provides a highly scalable, robust database combined with business process and logic capabilities to provide a true Enterprise Performance Management (EPM) platform. SAP BPC is a unified solution that does not require individual software components to perform a core set of business functions and tasks.
Let’s begin to understand BPC’s capabilities with an overview of the five core EPM business processes it is most commonly used to address.
Core Capabilities
- Planning
Planning is typically defined as long-range planning spanning multiple years, that can be entered in any combination of periodicity (week, month, quarter year). Some companies use models with strategic or long-range planning that span years or decades into the future. These plans are usually at a higher level than the budget or forecast. The planning cycle also combines a variety of financial and non-financial information to form a complete view. BPC provides a platform to integrate business planning, connecting strategy, operations and financial processes. - Budgeting
A budget cycle is a full outlook for the upcoming year based on your business calendar. Some budgets start out with predefined assumptions or targets (top-down), while others begin with a set of detailed inputs from various participants across the organization (bottom-up). It is quite common for organizations to develop a budget with a combination of both top-down and bottom-up assumptions, with multiple versions being developed during an iterative and collaborative process. - Forecasting
Many companies have abandoned the traditional 12-month budget in favor of a rolling forecast, which looks at the remaining months of the year and a full 12-18 months (or more) into the future. BPC easily combines the actual periods with forecast periods into one category or version. This facilitates more efficient reporting and analysis. For example, the May forecast version (category) would have four periods of actual data (January – April), and at least eight periods of forecast data. This also allows users to easily compare the current forecast to previous forecast periods. - Consolidations
BPC has built-in financial intelligence including robust legal and management consolidation capabilities. These capabilities include the ability to import data from various data sources. SAP BPC customers can enjoy a variety of integration options, including real-time consolidations with SAP’s flagship ERP solution, S/4HANA. BPC also fully supports non-SAP ERP systems. Many BPC users have multiple ERPs – one of our customers had so many acquisitions they consolidate over 90 different GLs with different COAs. Additional consolidation features include currency translation, intercompany eliminations, allocations, partial ownership, equity pick-up, journals, and reporting and analysis. Reporting and analysis features include P&L, Balance Sheet, Cash Flow statements to accommodate internal and external financial reporting requirements. - Legal and Management Reporting & Analysis for both Operations and Finance
BPC enables a wide variety of reporting and analysis formats including what-if scenarios with real-time modeling, by leveraging Excel to dynamically read data and write back to the database. Users can easily develop both ad-hoc and production reports, including financial statements, in their required format. BPC includes a book publication wizard within the Excel interface that dynamically generates any combination of cost centers, profit centers, product lines, etc. and product books into a distributable PDF document. An optional Disclosure Management solution is available from SAP to help automate filing with various regulatory agencies, including SEC.
SAP BPC VersionsRead Less
BPC currently supports several database platforms, but SAP will eventually phase into ongoing support of two main platforms, described below.
Version 1, BPC Microsoft 10.1 is the latest version that is available on the Microsoft technology stack, and leverages the latest versions of Microsoft SQL Server and Analysis Services.
Version 2, BPC 11, version for BW/4HANA, is the most recent version of BPC, and leverages SAP’s HANA in memory database as the engine. BW/4HANA was released in Q4 of 2016 and is the next-generation version of SAP’s Data Warehouse software. Much like SAP’s introduction of S/4HANA as the successor to ECC, BW/4HANA is not just an upgrade from BW, but an entirely new platform fundamentally changing the way SAP approaches EPM. BPC 11 allows cloud deployment across a variety of platforms including Amazon Web Services (AWS), Microsoft Azure, Google Cloud and SAP’s HANA Enterprise Cloud (HEC). Column5 has developed flexible options allowing customers to deploy BPC as a cloud service across those same platforms, with added private and public infrastructure service options.
Both versions of BPC use the same Excel Add-in (Analysis Plug-in and EPM Plug-in), but may exhibit additional functionality and features when enabled in Excel, depending on your backend database.
BPC supports two model types - Standard and Embedded. For a more detailed comparison of BPC Standard vs. Embedded please visit "SAP BPC NW 10.1 Standard and Embedded Compared".
The Standard model is a BPC model structure (or cube) with a single account dimension. The Embedded model structure supports multiple ‘key figures’ and shares more of the SAP ERP structures, reducing replication of both data and master data (dimensions). BPC Microsoft 10.1 supports the Standard configuration. BPC 11, version for BW/4HANA supports both the Standard and Embedded configuration, and can be customized to run the two side-by-side. Customers who are using S/4HANA also have the option to leverage pre-built content, known as “BPC Optimized for S/4HANA”. Column5 can help you determine which model configuration (Standard, Embedded or both) meets your existing and ongoing business requirements.
SAP Analytics Cloud provides cutting-edge visualization capabilities along with advanced analytics, combining business intelligence, planning and predictive analytics. To better understand the benefits of SAP Analytics Cloud with BPC please see our blog entitled “Using SAP Analytics Cloud as a Client to BPC.”
History of SAP BPCRead Less
In 2007, SAP acquired the foundation of today’s BPC solution from OutlookSoft, a software company founded in 1999 by two of Hyperion Software’s key executives. A couple of years earlier, Arbor Software (original developer of the Essbase multidimensional OLAP engine) merged with Hyperion Software and decided to move forward with the Essbase database as the platform for future software development. This helped ignite the vision for the founders of OutlookSoft: They wanted to build a next generation Enterprise Performance Management (EPM) solution on a robust, open and multi-dimensional platform, leveraging Microsoft Excel as the database’s primary interface.
Taking advantage of a unique opportunity to develop the solution on the Microsoft technology stack, OutlookSoft leveraged both Microsoft SQL Server and Microsoft Analysis Services, providing the most complete integration with Microsoft Office. Hyperion was eventually acquired by Oracle and OutlookSoft was acquired by SAP.
BPC was originally designed to leverage Microsoft Excel with planning, budgeting and consolidation capabilities, along with patented technology to interface with the Microsoft technology stack. Not even Microsoft could create a more efficient interface.
SAP BPC TodayRead Less
BPC also includes Business Process Flows (BPFs) that can be used as a formal workflow for both financial and operational processes, or as a menu to organize various assets including input forms, reports, books and dashboards.
BPC attracts users with its innovative user experience, including native Excel integration. BPC’s founders at OutlookSoft understood that Excel was crucial for finance users to accomplish their daily tasks. Copying and pasting information into a proprietary tool or using a web interface cannot match the flexibility, power, variety, and convenience of Excel. They successfully turned Excel into a “window to the database” and they removed many of the traditional pain points previously associated with Excel.
Today, the Excel Add-in for BPC is called Analysis Office. Analysis Office (AO) is comprised of two “Plug-ins”, the Analysis Plug-in and the EPM Plug-in. Additional information along with recommended use cases from SAP can be found in the . In summary, SAP recommends the following:
- For any BPC Standard model, SAP recommends using the EPM Plug-in.
- For the BPC Embedded model, SAP recommends using the Analysis Plug-in due to its superior integration into BW metadata. The EPM Plug-in has some architectural limitations and will not receive any functional enhancements on the Embedded model.
- Both EPM and Analysis Plug-ins will be maintained and developed as part of the Analysis Office release based on these recommendations.
SAP has invested heavily into improving BPC since the OutlookSoft acquisition. Today, BPC’s Excel interface is truly exceptional – we think it’s the best on the market. Please contact us to experience the latest version of BPC through an informative demonstration and personalized conversation.
In addition to the built-in financial intelligence capabilities, BPC is also a robust analytic application development platform. BPC can solve a variety of business needs that fall outside the core five standard business processes. Rather than making sacrifices and changes to your existing processes, BPC can be configured to meet your specific requirements; it is not limited by a software platform. This flexibility is key as businesses evolve and you make processes improve. The BPC platform allows customers to be nimble and dynamic in their design and to expand their use of the solution as business grows or changes.