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Michael_Fox
Product and Topic Expert
Product and Topic Expert
Credit: I’m working closely on the topic Extended Planning and Analysis with dominik.fischer02 and Valerie Legris.Together we are leading an effort at SAP to showcase Extended Planning and Analysis best practices in pre-built SAP Analytics Cloud content. To stay current on SAP developments in this area, please browse our other Extended Planning and Analysis blog posts and most importantly, be sure to click “Follow” in the upper left portion of that page.

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The combined value of your sales and marketing spend is massive, in fact commercial spend can total more than 10% of revenue. Are your sales and marketing plans optimized using the right drivers? And are these plans cross-functionally aligned across your organisation? Read on to find out how the new commercial planning content for SAP Analytics Cloud may be able to help you improve your commercial plans!

 

Why is commercial planning important?


Planners need to be agile and work collaboratively across the enterprise to quickly adapt to change in today’s challenging environment. Particularly within Sales and Marketing functions, the need for advanced planning processes is urgent.

According to a recent Gartner survey1, 75% of Chief Marketing Officers are being asked to do more with less. Every year, their marketing spend budget decreases as a percentage of revenue. Another Gartner survey2 shows that the top three priorities of Chief Sales Officers are related to aligning their activities cross-functionally.

Both Sales and Marketing functions share similar pain points within their organizations. Commercial leaders are under pressure from finance to effectively manage their spend budgets. To make sure they maximize their return on investment, they need be able to create “what-if” scenarios and choose the optimal path forward.

On the other hand, commercial managers face time-consuming manual processes and struggle to get the data they need to build their plans. Outdated solutions means they spend more time trying to build basic plans rather than building strategies for their products and customers.

How can SAP Analytics Cloud support commercial planning?


SAP Analytics Cloud (SAC) is the ideal solution to support commercial planning. Designed for self-service use by business planners themselves, the platform allows for endless simulations based on regular manual inputs, driver based inputs or even statistically generated inputs using the embedded predictive functionality. The state-of-the-art cloud planning and analysis solution combines top down and bottom-up inputs in commercial organizations for a complete functional plan, and facilitates access to required data by integrating seamlessly with related solutions within the SAP landscape.

In fact, several of our customers are already successfully using SAC to fulfil their commercial planning needs. For example, a global manufacturer in the automotive industry uses SAC to plan their sales incentives programs. What was once a manual, complex and time-consuming process now takes 65% less effort and leverages data from finance and supply chain. Thanks to TEK Analytics (an SAP Gold Partner) the marketing team can quickly build incentive program scenarios and select the optimal ones given the current market conditions.

In order to support commercial planning processes, SAP Analytics Cloud provides free business content to its customers for sales, marketing and portfolio planning. The content can significantly improve time to value for your commercial planning projects, and is easily customizable to fit your particular requirements. It includes stories, data models, integration flows and sample data for the most common business processes.

 

What is covered by the new commercial planning content?


The new commercial planning business content is divided into 3 sections – marketing planning, sales planning and portfolio planning.


Commercial Planning business content overview


The first applications are the budget planning applications for both marketing and sales. These applications allow planners to assign marketing budgets by company code and product lines, and sales organisations and customers for sales budgets. The sales budgets can also be defined at global and regional levels of the sales organisation – this allows regional sales leadership to manage the allocation of the top-down budget.

Now that budgets are defined, commercial managers can begin building their bottom-up plans. We import the baseline demand quantities from SAP Integrated Business Planning as a foundation for sales and marketing plans. We also import reference data from S/4HANA to facilitate planning – the financial actuals, current list prices and standard COGS rates.

Marketing Campaigns and Sales Activities can then be created, which will provide visibility to planned commercial spend and incremental revenue. On the marketing side, we have a 2 level approach – campaigns can be planned far in advance, then related activities for a particular campaign can be planned closer to the execution date once details are clear. Similarly in sales, simple activities can be planned further in advance and if more detailed activity planning is required these activities can be integrated with a trade promotion management solution for further detailing and execution.

The total planned revenue can then be reviewed, including the detailed breakdown between baseline revenue and incremental revenue. Marketing managers can also adjust external drivers that will have an impact on total planned revenue.

Planned list prices are  used to convert planned amounts into quantities, and vice versa. Price planners can adjust the future list prices in the new content, and also plan the related impact to revenue.

Once the plans are completed, the commercial spend will be sent to SAP IBP as a driver to be leveraged in the gradient boosting demand planning algorithm. Commercial plans can also be integrated with financial plans from other SAC planning business content packages.

In summary, the new commercial planning content provides a complete solution for sales, marketing and list price planning all in one package. It includes driver based planning in both local and global currencies, and provides a common user experience throughout. The content package also leverages integration flows to SAP S/4HANA and SAP Integrated Business Planning available in the SAP Busienss Accelerator Hub (link). More information on other planning content can be found on the Extended Planning & Analysis: Business Content community page (link).

What is the SAP advantage for commercial planning?


The business content is just a starting point, we understand there is so much more to think about when it comes to commercial planning requirements. Particularly, there is a significant amount of collaboration required between the commercial functions and other departments within an enterprise, including exchange of data.


Extended Planning and Analysis Vision


The future vision for the xP&A content is to have a strong business data fabric upon which all planning and analysis content will be built. Functional data foundations will be leveraged to build planning and analytics models within the data fabric itself, which will be consumed by the planning and analytics content built in SAP Analytics Cloud.


Interconnected operational processes across Lines of Business


This data fabric will be pivotal in closing the loop from insight to action. In addition to planning and analysis, the data created by the commercial plans can be leveraged in operational execution processes throughout the SAP landscape, streamlining and simplifying the path from your plans to execution. For example, commercial spend can generate pricing conditions, accruals and purchase orders. Planned commercial activities can also have an impact on demand and supply planning. The commercial plans could also be integrated with operational execution solutions like Revenue Growth Planning and Emarsys, for complete sales and marketing management.

Only SAP has the ability to enable a horizontally integrated planning process with a vertically integrated business application suite on top of an extensible business technology platform.

Summary


Plan to win using the new Commercial Planning content for SAP Analytics Cloud. Bring Commercial teams closer to their Supply Chain and Finance colleagues to truly drive cross-functional enterprise planning. Leverage the power of having a single solution for analytics, planning and predictive functionality to quickly review scenarios and respond to change. And finally, be confident that the data you need for commercial planning will be there when and where you need it.

Bring commercial plans into the integrated business planning process with SAP Analytics Cloud.

 

 

1 Source: 2023 Gartner CMO Spend and Strategy Survey (link)
2 Source: Gartner The Chief Sales Officer | Second Quarter 2023 (link)

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