Planning Financial Values

In portfolio management, analyzing costs, revenues, and budget is a major task. Based on financial data, you decide which product of your portfolio needs to be updated, which project needs to be terminated, and which product you want to invest in.

In SAP Portfolio and Project Management (PPM), you can enter, aggregate, and analyze financial data at different levels. For example, you can plan costs for items, for initiatives, and for buckets. You can enter financial data either manually, roll up data to superior objects, or use integration of subordinate objects like WBS elements.

Financial data is planned along a timeline. You can use a period breakdown for financial planning. Financial data is planned with respect to a certain currency. However, you can convert currencies in portfolio management.

The financial planning process in PPM is not just about planning costs, but also about forecasted values, budgets, and actual values. Thus, you can compare planned data versus actual data.

Financial planning in PPM is based on categories, groups, and views, which are predefined.

The following are financial categories, groups, and views:

• Category:

  Primary costs, secondary costs

• Group:

  Cost for material, cost for services

• View:

  Planned costs, forecasted costs

In SAP ERP systems, you find very detailed cost-planning based on cost elements. These cost elements are summarized to cost elements groups. Although financial planning in SAP Portfolio Management is not as detailed as it is in SAP ERP, the structure of financial planning is similar. The term view in PPM corresponds to the term value type of SAP ERP.

As an administrator for PPM, you can set up your own categories for your company. You can subdivide your own categories in your own groups. Finally, you set up views as per the needs of your company. As a portfolio manager you can start planning from different points of views.

The preceding video shows financial planning with three different hierarchies. During financial planning, you can switch between these hierarchies.

Once categories, groups, and views are predefined, you can start financial planning. The figure demonstrates manual financial planning for a portfolio item. In this case, the view Forecast is predefined for manual planning. Therefore, you can enter forecasted costs for all periods within the planning interval.

You can use a currency for financial planning. Currency conversations can be calculated with PPM based on conversion rates. However, currency conversion is not as detailed as it is in SAP ERP.

Manual financial planning is available for portfolio items, initiatives, and buckets. You can set up specific views for different objects. For example, you can set up the views Forecasted cost of items, Forecasted for Buckets, and Forecasted for Initiatives.

As additional information, you can define portfolio buckets as sponsors by default for the various financial groups. In this way, you can document that another portfolio bucket bears certain costs of a portfolio item. However, a value flow does not occur between the portfolio bucket and the item.

In Portfolio Management, you define portfolios as hierarchies made up of different levels of buckets. Portfolio items are assigned to the lowest level buckets. Financial data planned at the level of items can be rolled up to the superior bucket. For example, you enter the financial planning view Forecast for an item manually. The Forecast view is rolled up to the respective view of the bucket. You cannot manually change the Forecast view for the bucket.

A view is either rolled up to the bucket or maintained manually. A rollup of planning data is possible from an item to a superior bucket. A rollup is also possible from a bucket to a superior bucket. If you make use of initiatives, a rollup is possible from an initiative item to a superior initiative to a superior bucket. Details of the rollup process are set up in the configuration of views.

In PPM, financial planning data is entered manually, rolled up, or calculated by integration of financial planning of subordinate objects. For example, an internal order of an SAP ERP system is assigned to a portfolio item. The cost element-based cost planning of the internal order can be integrated with a financial planning view of the superior item.

Integration of financial planning is set up in the configuration of views for financial planning in PPM. However, integration can be enabled for items only. You cannot use integration for buckets or for initiatives.

For a number of SAP ERP cost objects, you can integrate cost planning data, budget, actual, and commitments. The preceding video demonstrates typical cost objects assigned to portfolio items. In addition to SAP ERP objects, you can also integrate cost planning or capacity planning of assigned portfolio projects to items. That is, you can use capacity planning for project management to calculate financial planning for an item.