SAP PaPM - Profitability and Performance Management

SAP PaPM performs calculations based on quantitative or qualitative data obtained from any source. It's an advanced, comprehensive solution that allows to shorten the month-end closing process, increase profitability and better plan the future of the company.
SAP PaPM - Profitability and Performance Management

About SAP PaPM

SAP Profitability and Performance Management solution (SAP PaPM) is used to perform very detailed calculations and simulations on the collected numerical data.  

It can be integrated with many different data sources: SAP systems, data warehouses, xls files, or other non-SAP external sources of data. The system works in real time. Based on the user-defined selection criteria or key parameters, it performs calculations according to the adopted assumptions.  At each stage of the process, the calculations can be verified in the form of a report or chart.  

One way of using the tool is support in closing a reporting period. Based on the collected financial and quantitative data from the specified period of time and data sources, the system performs calculations, whose final step is posting the financial documents.  

However, its capabilities do not end there. SAP PaPM allows you to manage costs, increase profitability, and carry out multi-level allocations. It is also possible to perform non-financial calculations. For example, SAP PaPM enables car manufacturer to check the CO2 emissions of a single car from a specific production line in a specific factory. 

SAP Profitability and Performace Management entered the SAP family to remedy some of the shortcomings of the financial systems in SAP  S/4HANA. In combination with standard SAP applications, the tool covers 100% of any company’s needs in such areas as IT cost management, business modeling, or corporate tax settlements. 

 It is a best practice to install SAP PaPM on the SAP S/4HANA system and connect it to the SAP HANA database. 

What is SAP PaPM in SAP? SAP PaPM (Profitability and Performance Management) is a performance management application offered by SAP that does not require a rigid data model. It allows Controlling to simulate integrated business processes quickly and effectively and process high volumes of data coming from various sources: both SAP and non-SAP (like other IT solutions or Microsoft Excel). SAP PaPM enables also what-if scenarios, management of assumptions and drivers. Depending on the granularity of the hierarchized data, thanks to SAP PaPM the users can drill down data from general to very detailed and in this way reach high data transparency level through tracing and audibility. In addition, the application allows SAP BI tools such as SAP Analysis to access the calculations, for example in the form of KPIs. Non-SAP IT solutions can be connected via SAP BAPIs and web services or classic file imports of various formats.
Is SAP PaPM available in Cloud? SAP PaPM is available for Cloud deployment. Moreover, SAP PaPM also allows easy integration with SAP Analytics Cloud by reusing the capabilities of SAP HANA and BW to support connections of both both live data and data imported from various sources/IT solutions. Calculation functions created in SAP PaPM Fiori interfaces will automatically generate views in the native HANA database the tool is run on. SAP Analytics Cloud tools are able to connect directly to these views to obtain live access to the results of calculation. SAP PaPM can also write the calculations back to BW or post the data back to FI-CO tables in ERP or S/4HANA. In this way SAP Analytics Cloud will connect to these results through InfoProviders or CDS views.

Benefits of implementing SAP PaPM

SAP PaPM consists of three components: a business data aggregator, a computing engine, and a simulation application. What can you achieve with them?

Closing billing periods
a plant growing out of a pot with money
  • you collect all the necessary data on one platform 
  • calculations are performed almost in real time, the program indicates any errors during, not at the end of the process 
  • the program will remember individuals steps of the process, which will speed up each subsequent settlement 
Multi-level allocations 

Until now, many companies using SAP solutions would utilize external programs to perform allocations. One of the most important functionalities of SAP PaPM is the ability to perform even very advanced allocations from the level of a tool coupled with SAP S/4HANA and other SAP systems. Witah SAP PaPM you can allocate, among others:

  • allocations of costs and revenues to resources, activities, products, projects, and clients (ABC) 
  • allocations for vehicles, routes, and sections in the tool will show profitability at the lowest level of detail with current and forecast data and specific factors affecting your business 
Company’s profitability in various industries 
chart with analysis
  • profitability studies for production processes  
  • project-based planning and controlling for a variety of building types, including project management and supervision of residential, commercial, industrial, or civil (heavy) construction 
  • streamlining the production process of heavy industrial machinery 
  • what-if analyses 
  • planning and forecasting 
  • discounting future expected cash flows 
  • simulations for business decisions regarding technologically advanced services and production 

Why Hicron

Flexible cooperation models
We know how different client requirements can be. That is why we offer three cariants of our cooperation model: team extension, fixed price, time&material.
Extensive, long-standing experience
Hicron has been operating in the Polish and international markets since 2006. Our consultants will assist you in working with all SAP products, integrating them, and adapting to the needs of your company.
Close business relationships between Trusted Partners
We aim to gain an in-depth understanding of your company’s specific needs in order to propose solutions that address them fully. We strive to become your Trusted Advisors in matters related to the digital transformation of your business.
In-depth knowledge of many industries
We have carried out projects with companies and public sector entities operating in various industries, such as the automotive and medical industries, finance, cosmetics, transport and logistics, or digital telephony. We are familiar with the nature of your business field, the applicable legal requirements, and the non-standard processes you are faced by every day.

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We realize that you are facing numerous challenges in the area of finance. If you want IT experts to show you the possible development paths, contact us!
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