What is SAP PaPM ?
What is PaPM SAP Profitability and Performance Management?
PaPM is a business data aggregator created with the main objective to integrate at high speed different data sources, actually you can integrate entire data warehouses and data from various ERP systems, so that you can clean, enrich, transform and run calculations to create forecasts, simulations and reporting.
Because PaPM is a data aggregator gathering and processing data happens at high speed and because of that replication of the data is avoided.
To accomplish this PaPM uses :
CDS Views for SAP S/4HANA
Open ODS Views for BW
Calc Views for FSDP ( SAP Financial Services Data Platform )
The advantages you get when you are Certified are clear:
You will have better job opportunities
Differentiate yourself in the labour market
Access to the international market demanding skilled SAP consultants
Access to some projects that require certified-only consultants
Who created PaPM Profitability and Performance Management? (History of SAP PaPM)
It is important for you to know that PAPM was created not by SAP but by MSG Global and the first first customer was an insurance company.
The main request made by this customer was that the software was capable of performing high-speed allocations of costs and revenues to more than 31,000,000 contracts which translates to billions of records.
This first customer participates then in the financial services industry and as you know financial services is all about data. With customers in the millions the data records hit billions and because of that it was necessary a solution with the possibility to process billions of records at high-speed so it is possible to calculate profitability but there was much at stake and actually this insurance company asked for the possibility to calculate profitability not only that the customer level but at the contract level so as you can imagine the tool had to be really powerful.
How can I become an SAP PaPM Consultant ?
To become an SAP PaPM Consultant you need to learn how to carry out Modeling tasks such as the creation of Environments, of PaPM Functions to read data, then you should be able to create functions to enrich and join data so that all the "raw data" can be then processed with calculations, derivations and allocations to produce reports, forecasts and queries that can be consumed by end-users such as managers. You can start learning today for free if you enroll using the next button or contact us for more information using email@example.com.
What are the main components of PaPM?
The three main components of PAPM are the business data aggregator, the calculation engine and finally the simulation application.
One of the biggest selling points of the tool is the capability to load data from different sources. So it is not limited to SAP software you can really bring data from any source:
Remote databases (Oracle, Apache HADOOP, Teradata, etc.)
Even flat files such as a CSV file with important data you might want to use for your scenarios
SAP Consultants are in charge of modeling activities. If you are an SAP Consultant or you want to become an SAP PaPM consultant you have to focus on becoming an expert at creating environments and functions.
The function types that you will have to master are:
Funds Transfer Pricing
Remote Function Adapter
Will SAP offer PaPM templates?
Yes, actually for each template (sample content) we have SAP Notes such as:
SAP Note 2615001 - Sample content for Agile Plan and Forecast Modeling
SAP Note 2650880 - Sample content for Airline Profitability and Cost Management
SAP Note 2650984 - Sample content for Chemicals Profitability and Cost Management
SAP Note 2650985 - SAP Note for Sample Content for Consumer Products Profitability and Cost Management
SAP Note 2614017 - SAP Note for Sample Content for Funds and Liquidity Transfer Pricing
SAP Note 2650979 - High Tech Profitability and Cost Management Template
SAP Note 2614974 - Sample content for IT Cost Management
SAP Note 2650986 - Sample content for Life Sciences Profitability and Cost Management
SAP Note 2614930 - Profitability and Cost Management
SAP Note 2650987 - Railways, Travel and Transportation Profitability and Cost Management
SAP Note 2650980 - Telecommunication Profitability and Cost Management
SAP Note 2650694 - Product and Service Costing with Operational Transfer Pricing
SAP Note 2650964 - Value Chain Sustainability Management
Useful acronyms for SAP PaPM
PaPM - Profitability and Performance Management
RDL - Results Data Layer
SAP FSDP - Financial Services Data Platform
SAP FSDM - Financial Services Data Management
SAP FRDP - Finance and Risk Data Platform
BA - Bank Analyzer
IA - Insurance Analyzer
BECF - Best Estimate Cash Flow
FS-PER - Financial Services Performance
SAP PaPM release
PaPM release 3.0 SP11 was released in the second half of 2020.
SAP PaPM is built on SAP HANA.
Is it really that hard to become an SAP consultant?
No, you can start you career right now if you enroll in our training and start learning right away at your own pace. Just click the Enroll now button:
What are the main apps for PaPM?
My Environments Fiori app - With this app you will create your own Environments. Later you can edit them and create all the functions you might need:
The first name of SAP PaPM was FS-PER which stands for Financial Services Performance Management as the customer who ordered the tool participated in the Financial Services sector. Actually, it was an insurance company that needed a tool to perform cost allocations and advanced calculations to at least 30,000,000 individual contracts really fast. MSG initially developed the solution but since SAP got involved now the enhanced software has been expanded to a myriad of new industries becoming a cross-industry solution. Furthermore, now PaPM offers out-of-the-box templates both industry-specific and cross-industry.
Now with SAP Profitability and Performance Management we can cover the following scenarios with out-of-the-box content:
-Profitability and cost management: It is really simple to run Profitability and cost management calculations for both actual data
and planning data and not only that but it is really simple to run what-if simulations.
-Allocation simulation: For example, Assessment or distribution cycles of actual and plan data and actually you can have complex cycles with iterative rules.
-Carbon footprint management: Yes, caring for the planet starts with taking action and for example to reduce a big corporation Carbon Footprint first we need to calculate it and for this PaPM now has a template that we can use to calculate the usage and efficiency of CO2 along different processes with the added benefit of including what-if scenarios.
-Agile plan and forecast modeling.- With this scenario PaPM has now the capability to use deep learning models to determine planning results.
-Global transfer pricing: Nowadays, we have many governments cracking down on bad practices and because of that global transfer pricing is now a big challenge for many corporations. For this SAP PaPM offers and recharges for actuals and planning data using allocations, markup, and tax calculation rules.
-Funds and liquidity transfer pricing: It is now simple to calculate net interest income for actual data and plan data using funds and liquidity transfer pricing methods.
-IT cost management: Have you wondered what is your IT cost? Wonder no more because with the SAP PaPM IT Cost Management template you can calculate exactly that again for both actuals and planning data following ABC Costing rules (Activity-Based Costing rules).
-Risk, capital, and solvency management template: With this template it is easy to calculate minimum and required capital calculations based on selected risk and solvency regulations.
-Discrete industries high tech profitability and cost management: With this template you can calculate profitability for actual data and plan data at different levels for example customer level, product level or channel level to name a few examples.
-SAP PaPM Airline Profitability and Cost Management: This industry-specific template will enable Airlines to easily calculate route profitability.
-Consumer products profitability and cost management: Similar capabilities to the Discrete Industries template but optimized for the Consumer products sector.
-Telecommunications profitability and cost management: Similar to the airline template but optimized for Telecoms.
-Service industries Travel and Transportation profitability: Route and waybill profitability calculations for both actual data and plan data.
-Chemicals profitability and cost management: Similar capabilities to the Discrete Industries template but optimized for the Chemicals sector.
-Business and financial modeling: This template allows for super fast processing and analysis of big data volumes providing traceability to the end user and simulation capabilities.
As mentioned, even the first customer that ordered FS-PER (Financial Services Performance Management) demanded an ultra fast tool and because of that the creators of PaPM decided on the current architecture that enables both vertical and horizontal parallelization to deliver extremely fast performance.
And now that SAP is holding the reins we have seamless integration with the following:
-SAP S/4HANA systems
-SAP ERP ECC
-SAP BW (SAP Business Warehouse)
-SAP BPC (SAP Business Planning and Consolidation)
-SAP SAC (SAP Analytics Cloud)
-SAP Digital Boardroom
The integration is so tight that few people know about this but if you integrate SAP S/4HANA and SAP PaPM it is possible to reuse in PaPM the cycles (such as Assessment cycles or Distribution cycles) that you have previously defined in Controlling.
And again the integration with other SAP tools is great that for SAC you can have both Live data connections or Import data connections. The difference is that with a Live data connection it is possible to connect to on-premise SAP systems and any change made to the data in the source system(s) is shown immediately in PaPM. In contrast, with an Import data connection the data is copied from the source to SAC and any change made to the data in the source has no effect on the imported data in PaPM.
But of course, global corporations sometimes need to bring together data from multiple systems and sources and here the flexibility of PaPM is great. Possible PaPM data sources include databases such as:
-HADOOP distributed databases
Additional PaPM data sources include:
-Data in CSV files
-Data in TXT files
Incredible SAP PA PM performance
SAP has published real customer success stories depicting amazing improvements in performance for example, SAMSUNG with their previous solutions needed around 42 hours to process almost 7 billion records and now with PaPM that time is reduced to less than one hour for the same number of records (around 6.5 billion records).