BPC Consolidation

S S Reddy / SAP EPM Solution Advisor Project Management Office ,June 2013

SAP EPM Consolidation

© 2013 SAP AG or an SAP affiliate company. All rights reserved. 2

Agenda

• SAP Business Planning and Consolidation Vision

• SAP Business Planning and Consolidation Suite

• SAP Business Planning and Consolidation Types

• SAP Business Planning and Consolidation Deployment Services

• Questions & Answers

SAP BPC Consolidation

Business consolidations are usually the process of combining multiple business Segmentation or two organizations (merger) into a single business operation. Consolidations may result in a completely new entity being created, or an increase in the size of current business facilities. Organizations may also go through a merger and acquisition process, which is a different form of business consolidation. Mergers occur when one company buys another in an attempt to consolidate market share and increase ROI.

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SAP BPC Consolidation mission


New challenges with the BPC Consolidation …

Business Cases Challenges Operation Case Challenges• Application portfolio consolidation(Group Entities)• Custom application development• Extend the business value of IT consolidation platform investments• Enable new/enhance incumbent shared business services• Complexity to Improve user experience quality and consistency• Seamlessly integrate mobility, social, cloud-based Business features (Ecommerce)

• Centralize service Business Process• Post-acquisition standardization• Break down silos between teams• Global consistency/ improve localization• Reduce cost & complexity• Increase visibility into business services• Infrastructure consolidation & relationships between CIs• Improve resource management

6© 2013 SAP AG or an SAP affiliate company. All rights reserved.

Lacking of Key Business Challenges- Consolidation Execution not aligned with Strategy (Flexibility)

Strategy not communicated clearly (Decision) Individual objectives not aligned with strategy Poor measurement, and no corrective actions

Ineffective Decision Making Processes(Stake Holder ) Decisions delayed, or made on ‘gut feel’ only Key stakeholders not involved –Challenges in Product Solid information only available to small ‘elite’

Increasingly Complex Operational Environment Lack of insight into customer behavior and trends( Invention) Opportunities frequently missed ( SWOT & PEST )

SOX-Compliance Requirements Ownership for transparency(Internal/External Business owners ) Increasing criticality of trustworthy Business data (Subsidiaries)

Budget Constraints(New Business Merge’s/Acquisition) Need to do more with less, and need to justify expenditures


EPM Report Structures

SAP Financial Consolidation Team Structure

EPM Architect

EPM Solution Architects

BPC Administrator

BusinessKey Users

Business Key Users

BusinessKey Users

IT PROCESS BusinessP

roje

ct M

atu

rit y


Technical Flow of SAP BPC Financial Consolidation Process

DATA VALIDATION , SEGEMENT OF BUSINESS REPORTING

CONSOLIDATION PREPARATION

DATA LOADING

CURRENCY TRANSLATION

RUN LEGAL CONSOLIDATION

CONSOL USERCONSOL MGRCORP ACCCORP ERP-BW

CONSOL USERCORP ERP-BW

CONSOL USER

CONSOL USER


SAP BPC Consolidation Preparation (Legal/Statutory)

1. Master Data Maintenance : Maintain legal entity Maintain GL account mapping Maintain ownership Maintain currency exchange rate

2. Monthly consolidation : Load financial data from non-SAP source Load financial data from SAP ECC 6.0 source Load financial data from SAP R/3 4.6 source Perform BPC consolidation

SAP BusinessObjects Planning Consolidation Suite

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SAP BPC Consolidation Methods - IFRS Rules Consolidation Methods Currency Conversion • Full Consolidation 1.Balance Sheet Closing Position at Closing rate•Proportionate Consolidation (Equity at Historical Value) •Equity Method 2. Balance sheet movements at average rate

Scope Changes 3. Income Statement at Average rate Acquisitions & Loss of Control Equity Transactions Step Acquisitions Internal Merges

Automatic adjustments (With associated audit IDs)• Elimination of Intercompany reciprocal operations & Internal Dividends (ELIM,DIV)• Goodwill booking( on the basis of manual declaration) (GW,FGW)• Elimination of Investments in Subsidiaries( INV)• Calculation of the currency translation adjustments (CTA)• Calculation of non-Controlling interest(NCI)


ELIMINATING ENTRIES First Subsequent Period (Equity Method)

Impact of current equity method entries Ignore any impairment of goodwill

Assignment of income to no controlling interest

Investment account – Stockholders’ equity of subsidiary Including identification of non controlling interest Identification of differentialAllocation of differentialDepreciation/amortization of appropriate differentials Impairment of goodwill


Execute Copy Opening of balances(f00/f99)

Opening BalancesDM Package – EPM Excel

Execute the Package

BPC Consolidation

14

WORKFLOW

SYSTEM

EXT

Import Data from BPC BW Staging Cube to BPC

Error?

Execute Legal Consolidation

Legal ConsolidationDM Package EPM Package

Execute the Package

Subsidiaries/Group Finance Subsidiaries/

Group Finance

Update GL Mapping

Multi Cube

Load Transaction Data from BW InfoProvider

Execute Currency Translation

FX RestatementDM Package EPM Excel

Execute the Package

Group Finance /IT Support

Yes

No

IT-BW team

Posting of Journals

Journals-BPC Web

Input Template/ Journals

End

Subsidiaries/Group Finance

Subsidiaries/Group Finance

BPC Consolidation Flow


15

Temp. Cube

Mapped Cubewith custom queries

SAP BW

Mapped Cube

SAP BPC

Data Flow From Source to BPC

SAP 4.6C

SAP ECC6

Non SAP

Currency conversation

ICMatching

IC Elimination

Legal /Statutory Report

Reports


Magnus Consulting 16

Consolidation Checklist Time Users

1.1 Ownership Percentage - per approved Ownership Maintenance form

Monthly Corp Acct

1.2 GL Accounts Mapping- per approved GCOA Maintenance form

Monthly Corp Acct

1.3 Currency Translation Rate Monthly Corp Acct

1.4 Opening Balance- to be uploaded in SAP BPC for new fiscal year

Yearly Corp Acct

1.5 Maintain Cut-off date for Consol run Yearly Corp AcctCorp ERP-BW

1.6 Prepare TB Template - for non-SAP & SAP (non-LC) entities

Monthly Consol User/Mgr

1.7 Accounting System Migration• Non-SAP to SAP ECC6• SAP 4.6 to SAP ECC6

As required (must cutoff at month-end)

Corp AcctConsol User/MgrCorp ERP-BWMagnus

1.8 SAP BPC & BW user maintenance As required Corp ERPCorp Acct

SAP EPM CONSOLIDATION(Legal/ Management) PREPARATION


Key Tasks after Go Live

Level 1: Corporate Accounts Team

SAP BW Maintenance:-Provide the closing dates for fiscal periods of 2014 to Corporate IT Team to schedule the batch jobs based on the closing dates-Approve and communicate to Corporate IT Team to maintain the GL account mapping in BW-Approve and communicate to Corporate IT Team to maintain the legal entities in BW-Approve and communicate to Corporate IT Team to maintain the user ids and authorization profiles.

SAP BPC Maintenance:-Approve and communicate to BPC users for changes in Group GL accounts-Maintain new or changes (Merge/Delete) in the Group GL accounts-Maintain new or changes in the legal entities-Maintain the consolidation group -Maintain foreign currency exchange rates-Maintain intercompany processes change-Approve and communicate to Corporate IT Team to maintain the user ids and authorization profiles.

Level 2: Corporate IT Team

SAP BW Maintenance:-Maintain new or changes in GCOA/GL account mapping -Maintain new or changes in legal entities-Transport configuration changes from SAP BW DEV to PRD-Create and monitor ad-hoc schedule for specific batch uploads for data transfer from SAP ECC6.0, 4.6C and non-SAP systems (including Financial data)-Create and monitor ad-hoc requests (e.g. during quarterly closing) for specific batch transfer from SAP BW to BPC-Troubleshoot errors in batch uploads -Maintain user ids and profiles for authorization-Install SAP EPM Bex Analyzer in users’ desktops to access the SAP BW queries.SAP BPC Maintenance:-Transport configuration changes from SAP BPC DEV to PRD-Troubleshoot errors in batch uploads -Maintain user ids and authorization profiles-Install SAP BPC client in users’ desktops to access the SAP BPC.


Roles Workflow SAP BW System

Consol Manager/User

Corp Accounts

Corp ERP-BW

Data Loading in SAP ECC ---BW

Monthly 18

BW Upload Text FileData upload &

Verification

Display query in

BeX Analyzer

TB template

Monitor data loading Display query in

BeX Analyzer

SAP 4.6C

SAP ECC

TB Data

source?

BW Data Extraction

(Schedule job)

Non-SAP enities

SAP entities

Error Handling Error notification

User manual• BW Upload Text File


BPC Logon & Navigation


Financial Consolidation----Run Legal ConsolidationRoles Workflow SAP BPC System SAP BW System

Consol Manager/User

Corp Accounts

Corp ERP

Perform Legal Consolidation

Notify Corp Accts the status of consol

run

Verify the consol results

Execute Currency

Translation

Run Legal Consolidation

Journal Posting for adjustment

Execute BPC Reports

Execute BPC ReportsUser manual• Execute currency translation• Run legal consolidation• Journal entry• Execute BPC report


SAP BPC –Financial Consolidation /Forecast Strategy

Working Approach :-Forecast Prototype • Provide a monthly input interface per indicator • Closed periods are loaded by actual values, these periods are not editable • For non closed periods, forecast can be provided • Manage a validation process between hierarchical levels Functions input help : o Loading file o Automatic Initialization from previous forecast or updated budget o Automatic distribution based on updated budget data weight


SAP EPM Consolidation- Task Execution ( Reports )

• The business process to consolidate the financial statements of group company and its subsidiaries.

• The financial operations in group company maintains the foreign currency rates, ownership information, and copy the opening balance from last period to current period.

• The financial operations in subsidiaries upload financial statements, including balance sheet, income statement, and statement of stockholder’s equity. The financial specialists in subsidiaries also input the intercompany transaction data.

• After data is submitted, the financial managers in subsidiaries approve data and set work status to approved.

• Financial specialist in group company runs the foreign currency translation. The intercompany transaction data will be reviewed in IC Matching application. Journal entries need to be entered if any adjustment entries are required.

• In group company run consolidation (Logics) , then check the consolidation working sheet, he also built/use the validation report to review consolidation result.(Review the consolidated balance sheet, income statement).


Financial Consolidation Benefits –SAP BPC

Consolidate data quickly from multiple general ledgers

Consolidate data from various business perspectives and by multiple structure versions (Current year, previous year, proposed)

Carry out automated adjustments including minority, inter-company, recurring, etc.

Review results with and without adjustments( F00/F99/F15) .

Synchronized income statement, balance sheet, and cash flow statements.

Upload financial statements of subsidiaries

Input intercompany transaction data

Run foreign currency translation

Review intercompany transaction data through ICMatching application

Run consolidation program and confirm consolidation working sheet


Contact information:

S S Reddy SAP EPM Solution [email protected]

Thank you…!!!

BPC Consolidation

Documents

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