This article will resume the way SAP EPM define their various products and show some recommendations for projects:
SAP Strategy Management- Management strategies (Vision and Mission)
- Establishment of strategic map
- Monitoring indicators (KPI, KRI, Triggers…) above
- IT Independent
- Reports profitability by different actors in the business
- Reports of different types of costs
- Implementation of financial models based on the financial rules
- Economic Value Added
- Creation and monitoring of budget
- Rolling forecast
- Financial consolidation and / or other
- Modeling for important aspects
- Reports no difference , only reality
EPM
How companies must integrate these solutions?
The order must be in the form of a pyramid, Strategy Management, Profitability and Cost Management and Business Planning and Consolidation.
It is noteworthy to mention that there are cases where the order is in reverse order: better implement and achieve the objectives better suited to the culture of the company.The order must be in the form of a pyramid, Strategy Management, Profitability and Cost Management and Business Planning and Consolidation.
Is There a difference between different software houses offering EPM ?
Reality and experience indicate that beyond the software house, the successful implementation 50 % will be related to the expert that promotes and makes recommendations at the time of the design of the solution. The remaining 50 % will depend on the health of ERP system, alternative systems and core business system.
In many cases these projects seem as a whole and worked in proper order can reach an implementation period of about 1.3 years for three (3) solutions. However, sometimes this time becomes 3 times larger.
Let us know why happen:When starting a project, the client tends to focus on their current need, the expert does not expect to understand the impact into the solution could happen when not considering future options such as EVA estimate, cost of capital by product, etc. This new changes to currently implemented models creates a second phase of unexpected changes. THIS IS WRONG
The expert must make really business consultancy to client and customer should understand that this is the first step to implement a best in class solution model; it is an integrated solution EPM and as such should have all participation of CFO / CIO of the company.
The best way to participate in these projects is through open and conversational sessions with the client. Much more difficult is to find Fixed-price projects whose requirements do not lead to changes in the future.
The measurement of the main indicators of the company must be present in all areas of EPM; the measurement should be possible from a financial point of view. Finally it is the shareholder who reviews them.
Focused with the aim of keep informed to senior management and shareholder then, establishing a priority order in discussions with the requirements requested by the customer in order to anticipate changes. A classic example is EVA (economic value added), which measures the result of the management of the business and therefore what size the cake has increased or decreased.
Another practical example is the WACC (weighted average cost of capital), which is requested by auditors and lenders. Make click for more information about EVA: http://www.investopedia.com/terms/w/wacc.asp
We must do more consulting business!
In this case I propose to start with a consulting business framework as the following:
We need to use different methodologies and business tools to implement solutions related to EPM concepts. Is not only a “AS-IS” vs “TO-BE” design.
After all, it can be concluded that this type of projects are not based only in a technical vision, but on a vision that is more related to business consulting in initial stage. How Data must be moved, migrated, transported or any other aspect is not a problem bigger than model a financial vision when the main goal of the project is automate a Strategic / Financial Process as budget. This is the bigger mistake on failed projects, more time than expected, cost consumer, re-evaluation. Sometimes cheaper à expensive.
My recommendation is to address these projects with a separate aspects below a framework that involve: Financial processes, technological base, agents and consumer.
Daniel Juvinao
