Planning Financial Values


After completing this lesson, you will be able to:

  • Understand strategic financial planning in Portfolio Management

Financial Planning

Planning Financial Values

Sarah is shown.

Sarah wants to do a first rough calculation of the expected costs for the potential projects. Therefore, she carries out financial planning on item and bucket level. In this lesson you can familiarize yourself with the financial planning process Sarah carries out in SAP Portfolio Management.

In Portfolio Management, analyzing costs, revenues, and the 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.

See the following video to learn more about financial planning:
An example of a category is Primary Costs with as subordinate groups for example Material and Services. Examples of views are Planned and Actual.

SAP Portfolio Management uses views, categories, and groups for financial and capacity planning.

Select each element to learn more about it:

Manual Financial Planning

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.

You can use distribution functions to enter financial planning data. A distribution function allows you to distribute values across several periods. For example, you can distribute an additional €10,000 per month over the next twelve months. Without distribution functions, you would have to adjust the twelve months individually.

You can also define portfolio buckets as default sponsors 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.

Planning Financial Values in Buckets and Items Directly

A screenshot is shown of some financial planning data in SAP S/4HANA.

The figure Manual financial planning of a portfolio item shows financial planning with three different views and two categories. During financial planning, you can switch between these objects.

Once categories, groups, and views are defined, 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. You can therefore enter forecasted costs for all periods within the planning interval.

Look at the following demonstration to learn how to plan financial values for a portfolio item:

Roll-up of Financial Planning Values

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. An 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 screenshot is shown of a roll-up of planning data to bucket level.

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

Look at the following demonstration to learn how to aggregate planned financial values from items to buckets and how to plan financial values directly on buckets:

Financial Planning by Integration

Financial Planning by Integration

In SAP Portfolio Management, financial planning data is entered manually, rolled up, or calculated by integration of financial planning of subordinate objects. An example: a work breakdown structure (WBS) of a SAP S/4HANA Project System project is assigned to a portfolio item. The cost element-based cost planning of the structure can be integrated with a financial planning view of the superior item.

Only portfolio items can be integrated for financial planning. Buckets can only be planned directly in SAP Portfolio Management.

An example is shown of some subordinate cost objects (like WBS elements) that can be integrated into the financial planning of portfolio items in your structure.

For a number of SAP S/4HANA cost objects, you can integrate cost planning data, budget information, actuals, and commitments. The figure Financial Planning by Integration demonstrates typical cost objects assigned to portfolio items. In addition to SAP S/4HANA objects, you can also integrate cost planning or capacity planning of assigned portfolio projects to items. This means that you can use capacity planning for project management to calculate financial planning for an item.

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