- SAP Managed Tags:
Hello dear colleagues, thank you for your attention to my first topic here!
Today, I would like to present my perspective on the differences between the SAP PaPM Standard Model and Universal Model based on my previous experience.
Let’s get started!
0. Interface
The Standard Model interface:
The Universal Model interface:
In my opinion, the Universal Model has a more convenient and flexible interface. From the main screen, we can deep - dive into any function, model entity, or other element, regardless of the environment. In the Standard Model, however, we must enter a specific model to view these elements.
1. Data Structure and Management
Standard Model
The Standard Model is based on predefined structures and dimensions, which means data handling here is typically straightforward. It comes with SAP’s native, built in data structures that are already well aligned with ERP data and other standard SAP data models. This makes data mapping and management easier, especially for businesses that are using SAP ERP, S/4HANA, or other SAP solutions.
Advantages: Lower complexity, as data is often seamlessly compatible with existing SAP systems. You can plug in data from SAP modules (like Controlling, Financials, Sales, and Distribution) without complex transformation processes.
Limitations: It’s less flexible when integrating non - SAP data sources or when complex data transformation is needed. The predefined structures limit you to fixed hierarchies and data flow. For example, if you have customer segmentation data in a non - SAP CRM or need to process massive data sets from a cloud source, the Standard Model may not handle this as smoothly.
Universal Model
The Universal Model is far more flexible with data structure and management. It’s built to pull from various sources, whether they’re SAP or non - SAP, relational databases, data lakes, or even Excel files. It supports advanced transformations, letting you modify and enrich the data as it flows into SAP PaPM.
Advantages: Offers full flexibility to model and transform data as needed, regardless of source. You can add data sources or dimensions on - the - fly, such as customer feedback data from a CRM, social media engagement metrics, or environmental data for carbon footprint tracking.
Example Use Case: A utility company using SAP PaPM Universal Model could pull weather data from an external API to adjust profitability analysis based on seasonal demand. This level of integration would be difficult in the Standard Model, but the Universal Model’s flexibility makes it achievable.
2. Calculation Flexibility and Custom Logic
Standard Model
The Standard Model follows SAP’s standard logic and functions for profitability calculations, focusing on core, traditional metrics. Think of it as a structured calculation engine: you input data, and the model handles cost allocation, revenue segmentation, and basic profitability metrics with prebuilt functions.
Advantages: Simplifies the setup process because the core logic is already there, and all you need to do is configure it. For straightforward calculations like splitting revenue across regions or allocating shared service costs based on usage this works well.
Limitations: If you have complex logic that requires multi layered calculations or non - standard rules, the Standard Model can be limiting. For example, it may not be able to handle a scenario where costs need to be allocated based on advanced drivers, such as machine learning predictions on customer profitability.
Universal Model
The Universal Model supports entirely customizable logic and complex calculations. This means you can create custom rules and formulas to allocate costs and revenues exactly as needed. Whether you’re setting up multi - step allocations, recursive calculations, or layering calculations across different dimensions, the Universal Model can handle it.
- Advanced Calculation Examples:
- A manufacturing company could build multi step allocation rules for calculating end - to - end product costs, factoring in every phase of production, logistics, and marketing. Each stage could have its own set of complex drivers, like machine uptime, resource consumption, and location specific logistics costs.
- A bank using the Universal Model could define profitability calculations for various customer risk segments, integrating variables like credit score, transaction volume, and regulatory compliance costs.
3. Performance and Scalability
Standard Model
With its predefined structure, the Standard Model is optimized for performance with typical SAP data volumes. It’s fast and efficient for calculations on small to medium datasets, and since the processing logic is preconfigured, it’s often resource efficient.
- Best Fit: For businesses that don’t need to process massive volumes of data or carry out real - time updates. If you have, say, monthly profitability reports, and your data comes from a predictable set of sources, the Standard Model will be able to handle this with ease.
Universal Model
The Universal Model, being more customizable, is also more resource intensive. It’s built to handle larger datasets, complex data flows, and custom calculations, but this requires more computational power and potentially a more complex technical setup.
Scalability: Suited for businesses that are processing high volumes of transactions or need real - time analytics. The Universal Model is designed to process extensive data, so it’s capable of handling intricate, time - sensitive analyses.
Use Case: A global telecom company might need daily profitability reports across thousands of products, services, and regions, with real - time data on customer churn and network usage. This type of high - frequency, high - volume analysis is well suited to the Universal Model’s capabilities
4. Implementation Time and Effort
Standard Model
The predefined structure of the Standard Model means that it’s typically quicker to deploy and requires fewer resources. Implementing it involves configuring existing templates rather than building custom ones, which can reduce both cost and time to go - live.
- Best Choice: Companies with tight timelines and simpler requirements, like a small - to - mid - sized retail chain looking to track store - level profitability. This setup could be ready in weeks with minimal customization.
Universal Model
The Universal Model’s flexibility requires more design and planning. Each custom dimension, rule, or source integration can extend the project timeline. Additionally, testing complex logic and integrating multiple data sources requires a deeper understanding of both the business logic and the technical setup.
- Implementation Timeline: Companies opting for the Universal Model should expect implementation times ranging from several months to over a year for very complex setups. For instance, a bank with multiple profitability models across various regions, each with unique regulatory and financial structures, might take up to a year to go live with a fully customized Universal Model.
5. Who Benefits Most from Each Model?
Standard Model
This model is ideal for companies with relatively straightforward profitability and performance management needs, and where the business isn’t likely to change dimensions or structures frequently.
Universal Model
This model is designed for businesses that need deep customization and scalability. If your organization requires regular updates to its profitability models, or if it needs to integrate new data sources regularly, the Universal Model is a better choice.
6. Example content
Currently, most content is available for the Standard Model, likely because it was introduced much earlier than the universal model. You can explore all content for both the universal and standard models through the link below.
Example content PaPM Standard/Universal models
Also, please take a look at this link, where you can find future updates and other related topics.
PaPM roadmap
7. Conclusion
The Standard Model is a correct choice if you’re after rapid implementation, reliable performance with basic data, and don’t require custom calculations or complex data integrations. It’s a time and cost efficient option for many businesses with standard profitability, costing and allocations needs.
The Universal Model is perfect for enterprises that need more control and customization. While it requires a heavier initial investment of time and resources, it allows for advanced calculations, multi - source data integration, and deep customization that can drive complex profitability insights.
Ultimately, the choice between these models depends on your organization’s specific needs for data flexibility, complexity, and scalability in profitability management. If in doubt, some companies may start with the Standard Model for a quick win and then transition to the Universal Model as their analytical needs grow.
Feature Standard Model Universal Model
| Data Structure | Predefined dimensions and hierarchies; suited for typical SAP ERP data. | Customizable dimensions and hierarchies; supports SAP and non-SAP sources. |
| Calculation | Standardized, straightforward allocation and profitability formulas. | Fully customizable; supports complex, multi-layered calculations. |
| Data Integration | Primarily integrates with SAP data sources. | Supports integration with SAP, non-SAP sources, data lakes, and external data. |
| Performance | Optimized for smaller to medium data sets; fast for simple calculations. | Scalable for large, complex datasets; suited for high-volume, real - time analytics. |
| Implementation Time | Faster deployment (weeks), as templates and standard logic are prebuilt. | Longer deployment (months to a year) due to customization and complex data integration. |
Thank you for taking the time to read this article. If you notice any mistakes or inaccuracies, please feel free to point them out in the comments. Let’s collaborate to improve this solution. I also invite you to follow me, as I will soon be sharing in details my experience implementing ABC Costing for a mining company. Additionally, I will later explore the Sustainability topic, where I also have project experience.
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