When the time comes to prepare budgets and forecasts for a company, planning professionals often expect an extremely stressful time gathering and publishing information, while continually accommodating changes or corrections until the budget gets approved.
With SAP Analytics Cloud for Planning, you can avoid or eliminate many of the most time-consuming activities thanks to the business intelligence capabilities that the product offers, so financial planning and analysis won’t be such a nightmare!
In this article, we’ll highlight two main benefits of the product compared to traditional planning solutions.
1. Predictive Forecast
“Prepare your data with a single click, using Predictive Analytics”
If you would like to know what your forecasted figures for the next year or years are, you can do this by clicking on the “Predictive Forecast” symbol as seen below.
When you click on this button, SAP Analytics Cloud predictive forecasting will look at historical data in the system to predict future trends based on advanced statistical analysis.
You will be asked to set the required granularity, and the “predict from” and “predict to” intervals, and you’ll also be given the option to filter your previous dataset which will be used as a source to predict future figures.
You can also select the type of algorithm which SAP Analytics Cloud will use to generate the prediction. The options available are:
Linear Regression
Triple Exponential Smoothing
Automatic Forecast
For the purposes of this article, we’re going to use the Automatic Forecast algorithm which performs statistical analysis to generate forecasts by using seasonality cycles, trends, and fluctuations.
Once you’ve made your selections, you can preview the data generated by the system.
Ideally, you’re aiming for a forecast quality of 5/5 (as in our example). This indicates that the prediction has very high accuracy. This value is based on the Mean Absolute Percentage Error (MAPE) and 5/5 corresponds to <=0.2 MAPE - a lower number here corresponds to higher accuracy.
To achieve high accuracy predictions it is important to have sufficient stable historical data. At a minimum, you need at least 3 historical data points to accurately predict the next period, but the more data points you have, the more accurate your forecasting will be.
When you click “OK”, this automatically generated data will be written to the selected private or public version.
You can now analyze your data with the available suite of tools, visually enhanced reports and charts.
2. Value Driver Tree Process
The second powerful feature of SAP Analytics Cloud for Planning is the Value Driver Tree (VDT) process.
VDT processes help planning professionals to run “what if?” scenarios and to accommodate changes or corrections quickly and easily.
You can change the values within Value Driver Tree nodes as % increase/decrease, direct value input or numerical value increase/decrease with the help of the user-friendly panel interface.
In this example, we want to see what happens if our gross sales equal 52 million.
When we click “OK”, all connected nodes are automatically updated down to the lowest level and the system highlights the updated values as shown below. In the table on the left, we can see how our lowest level values are affected.
In our example we used a hierarchical structure in the account dimension to develop the Value Driver Tree, but you can also create nodes which read data from your model and nodes which include calculations that will allow you to explore the relationship between drivers.
In the article, we highlighted just two of the main advantages of implementing SAP Analytics Cloud for planning.
There are a range of other features with the potential to deliver tangible benefits to your organisation’s planning and forecasting capability. If you would like to see a more in depth demonstration and explore the product capabilities with us, please get in touch.