Solutions & Products
SAP PaPM - Blog Visual Arvato Systems

SAP PaPM: SAP Profitability and Performance Management

A Finance Tool for the VUCA World

SAP PaPM: Ensuring Business Success in Dynamic Markets
Digital Transformation

With SAP Profitability and Performance Management (SAP PaPM), SAP provides a new performance management application that does not require a rigid data model. In-house data and information models from other SAP and non-SAP applications can be used in the cloud or on-premise. This allows Controlling to simulate integrated business processes quickly and computationally process high volumes of data.

What Is SAP PaPM?

Many digital business models are primarily data-based and provide companies with skyrocketing volumes of information that should be constantly analyzed and used as the basis for simulations in view of the constant adjustment of production quantities, customer preferences, and pricing. Successful companies today have accelerated innovation cycles for new products and services under control, are prepared for crisis-ridden geopolitical and financial market developments, and are ready for ever new EU regulations, e.g., on minimum taxation or sustainability.

This rapid adaptability can often only be ensured by thinking ahead based on fast and deep data integration of corporate ERPs with the help of high-performance technology. Otherwise, the survivability of traditional business behaviors in the prevailing VUCA World ("volatility," "uncertainty," "complexity," "ambiguity") must be questioned by controlling. In this context, the SAP PaPM tool presented by the company SAP as a "multifunctional computing champion" offers simulation support and calculation power for processing large volumes of data for profitability-oriented corporate management.

What Functions Does SAP PaPM Offer?

In particular, SAP PaPM also enables what-if scenarios for application users as well as the management of assumptions and drivers. Depending on the granularity of the hierarchized data, SAP PaPM allows drill-down from general to very detailed results and provides transparency through tracing and auditability. In addition, the application allows SAP BI tools such as SAP Analysis for Microsoft Office to access the calculation results, for example in the form of KPIs. Non-SAP tools can be connected via SAP BAPIs and web services or classic file imports of various formats.

Which Application Scenarios Are Conceivable for SAP PaPM?

For a large number of dedicated application options, SAP provides so-called "sample content", i.e. already preconceived case sketches, workflows and reportings. In view of the increasingly agile as well as uncertain economic constitution with simultaneously increasing official regulation, a multitude of application scenarios arise, such as:

  • Profitability calculation in the context of different cost accounting approaches
  • Driver-based and deterministic plan and forecast modeling for business processes
  • Transfer pricing & minimum taxation
  • Cash flow modeling and liquidity forecasting
  • Carbon footprint and sustainability reporting

SAP PaPM: SAP HANA-Integrated Available as an Add-on on SAP S/4HANA or SAP BW/4HANA or Separately in the Cloud at Home

SAP PaPM works without its own data storage, which means that data replication, which is often time-consuming and error-prone, can be largely dispensed with. SAP PaPM also uses SAP standards to supply itself with data from SAP source systems and can also connect to other systems via APIs. In particular, SAP PaPM focuses on costing applications that are based on high data volumes but are located outside the standard ERP processes.

Who Is SAP PaPM Suitable For?

For business groups whose CFO organizations have already met the upcoming finance transformation challenges with the implementation of SAP S/4HANA, the new SAP PaPM can be a value-creating option for added information readiness to future-proof corporate governance.

On an SAP S/4HANA-based integrated finance platform, SAP PaPM finds its place in the finance team alongside SAP Group Reporting (consolidated group reporting) and SAP Analytics Cloud (strategic decision-making level) wherever high volumes of data need to be analyzed with an operational reference or regulatory background. The use cases will tend to increase in the future.

SAP S/4HANA Finance

How do rapidly growing quantities of data, increasing complexity, and real-time operations fit together? It’s very simple: with our SAP S/4HANA Finance services!

SAP Group Reporting: Determine Route Options Optimally

Users of established SAP tools for creating consolidated financial information will have to reorient themselves. Maintenance of the well-known EPM systems SAP EC-CS, SAP BCS, SAP Business Planning & Consolidation, and SAP Financial Consolidation is expected to end at the end of 2027.

Crunch Time for Financial Reporting?

New technologies and data-driven processes are not stopping at the finance function and are increasingly challenging CFOs and their organizations. Experts see a crunch time: The finance function can establish itself as a decision driver or fall back as a number manager.

Written by

Prof. Dr. Martin Wünsch
Expert for SAP S/4HANA Transformation & Finance