Dear All,
Some months ago, we shared some impressions about the new SAP Profitability and Performance Management (A.k.a FS-PER).
Since then, some relevant updates deserve we look again at this very interesting product.
The first one is the new name, the old SAP Financial Services Performance Management Solution now is called SAP Profitability and Performance Management.
Also, with the new name, SAP Profitability and Performance Management comes with a bigger Business Content, covering a wider scope of industries, including Telecom, Public Sector, Oil & Gas, Healthcare, Utilities, Transportation and Logistics Providers, Consumer Products, Automotive, Retail, etc.
Additionally, now SAP Profitability and Performance Management is available in both On-Premise and On-Cloud delivery.
In my opinion, there is some overlapping between the functionalities offered by SAP Profitability and Performance Management and SAP Business Planning & Consolidation for S/4HANA, particularly outside of Financial Services and Insurance industries.
On the other hand, since the release of SAP Financial Products Sub-Ledger (SAP-FPSL), the border between SAP Financial Services and Non-Financial Services solutions (other industries) is much narrower and the capacity of integrating Financial Services Business Process and Non-Financial Services Business Processes is much bigger.
Since the release of Smart-AFI and SAP FPSL, we missed an Accounting for Financial Instruments Solution including strong Funds Transfer Pricing and Internal Costs (Standard, Operational and Capital Costs) functionalities. With Classic-AFI we had Profitability Analysis as and Integrated Financial and Management Accounting solution for Financial Instruments, but the solution was not included in Smart-AFI and SAP FPSL.
SAP Profitability and Performance Management covers this gap. The Funds Transfer Pricing Business Content of SAP PaPM gives us the possibility of determining the Funding Costs of Financial Instruments, but it’s open architecture and capacity of connecting agnostically to any SAP and Non-SAP Data Provider and Repository (FI-CO, FPSL-SDL, FPSL-RDL, SAP-BW, HANA-Tables, etc.) also offers the possibility to leverage all its calculation functionalities to practically any Business Process.
Same logic applies to the Calculation of Capital and Operational Costs; SAP PaPM Business Content comes with many scenarios for the management, allocation and distribution of Direct and Indirect Costs.
But this flexibility also brings a challenge, Data Governance is a big opportunity for improvement in most of the banks, and implementing SAP PaPM with a previous redefinition of a centralized data-model can increase the risk of adding complexity to the banks IT landscape.
A very few banks have a robust, reconcilable central repository of Operational and Analytical Data. As we mentioned in a previous blog, SAP Banking data-model offers this capacity, but the reality is that only a few banks have seen already the competitive advantage of the SAP Integrated Financial and Risk Architecture.
In my opinion, it’s becoming mandatory a very hard exercise of redefinition of the Banks IT Architecture focused on improvement of the Data Governance, and the regulator is going to make it clear very soon.
Looking forward to read your opinions.
K. Regards,
Ferran.
Join the SAP Banking Group at: https://www.linkedin.com/
Visit my SAP Banking Blog at: http://sapbank.blogspot.
Let's connect on Twitter: @FerranFrancesGi
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