Technology Blogs by SAP
Learn how to extend and personalize SAP applications. Follow the SAP technology blog for insights into SAP BTP, ABAP, SAP Analytics Cloud, SAP HANA, and more.
cancel
Showing results for 
Search instead for 
Did you mean: 
Elena_Odinets
Advisor
Advisor
This article focuses on the current issue related to the ongoing unprecedented energy crisis in Europe and explains how SAP supports customers’ business strategy and decision making in global cost efficiency and predictability. In addition, a demo will be mentioned that shows how SAP Analytics Cloud can help companies manage challenges associated with an energy crisis.

You can read the content or watch it as a video depending on your preferred way of taking in information.


Embrace new challenges


Energy landscape in Europe is facing frequent changes due to various economic and political reasons. Enterprises have to deal with daily higher energy prices but also with very little visibility of what tomorrow will look like. Rising energy prices may lead to higher operational costs, which can jeopardise profits. Significant impact on production costs is observed in the energy-intensive manufacturing industries such as aluminium, fertilisers, chemicals, steel, machinery, paper, automobile, services, and many others. Rising energy prices can reduce competitiveness in the global market or can even lead to bankruptcy for some companies. If energy prices stay high in Europe some companies may consider relocating production to countries where cheap energy abounds.

As it becomes more expensive for manufacturers to produce their products, companies may have to pass along the costs to consumers, making their finished products less attractive. This can lead to decreased demand and lower profits. Reduced profits and more expensive loans make it harder for companies to invest in modern technologies and processes or renewable energy sources to become more sustainable or expand operations. Companies may be also forced to rethink their investment priorities and cut back on their spending on innovation and new products.

Enhance analysis and accelerate decision making


SAP Analytics Cloud (SAC) is a comprehensive all in one suite of analytics, reporting, budgeting and forecasting, scenario simulations and predictive capabilities to support any extended planning processes.

A detailed cost analysis is the first step on the way to identify opportunities for cost savings and improving profitability, in which SAP Analytics Cloud can support its users.

SAP Analytics Cloud can provide actionable insights into energy usage trends and patterns to allow companies to make more informed decisions about their energy consumption. By providing visibility into energy consumption across multiple sites, SAP Analytics Cloud also enables companies to compare and analyse energy usage and costs across their operations and multiple locations. The application as well provides the ability to benchmark energy usage against industry averages.

Apart from tracking and monitoring energy consumption, SAP Analytics Cloud assists companies to make informed decisions about their energy purchases, for example by helping to identify the most cost-effective energy providers or allowing companies to make data-driven decisions about when and where to purchase electricity but also optimise hedging strategies by providing insights into historical and current energy prices, as well as energy trends.

Create more accurate forecasting


Extended planning and analysis (xP&A) helps companies to bring people and plans together seamlessly by connecting strategic with tactical financial and operational plans. This approach enables organisations to better plan, budget and forecast for their energy needs and costs. Better planning means more predictability, reduced uncertainty, better stability for the company.

SAP Analytics Cloud provides predictive planning capabilities that enable users to anticipate future energy costs based on historical data and other external factors. SAP Analytics Cloud integrates with SAP S/4HANA, making it easier to access data from ERP (Enterprise Resource Planning) system and providing users with data-driven insights into past energy usage and cost trends. Data from other internal SAP and non-SAP sources like HR systems, Supply and Demand Operational systems, CRM sales systems can be incorporated as well, enabling for more accurate forecasting on financial and non-financial KPIs. SAP Analytics Cloud leverages data from external sources such as weather forecasts and economic indicators to further refine the accuracy of the forecasts.

Automated workflows in SAP Analytics Cloud can streamline the process of creating energy forecasts, by automating the data collection and analysis process. This will speed up the process, improve efficiency and ensure that the data is accurate and up-to-date.

Extended planning processes require alignment between multiple lines of business, and SAP Analytics Cloud offers collaboration across teams, enabling users to create and share forecasting models with multiple groups, making it suitable for large-scale forecasting projects, and split the relevant tasks using workflow processes set for the planning and reporting cycles.

SAP Analytics Cloud augmented analytics capabilities provides visibility into how changes in production processes, energy sources, and other factors may affect energy costs and improve profits. SAP Analytics Cloud identifies areas where energy consumption can be reduced through addressing inefficiencies in production processes, or through the implementation of energy-efficient technologies, or through energy storage solutions.

SAP Analytics Cloud not only provides insights into the underlying factors and levers that are driving forecasted energy costs, enabling value driver transparency, but additionally supports the decision-making processes on how to optimise these costs. Thus, SAP Analytics Cloud supports companies to uncover new opportunities for energy optimisation and cost-saving and make informed decisions to prioritise their energy investments in the context of limited financial resources. Through those capabilities SAP Analytics Cloud can assist and steer companies in improving the profitability and efficiency of their operations to release financial resources that can be invested as then in renewable energy to achieve the long-term sustainability KPIs.

With scenario simulation in SAP Analytics Cloud, businesses can test and compare different scenarios in real-time to determine the most cost-effective option. Companies can simulate different scenarios, such as cutting back on production due to a decrease in demand for finished goods or shifting production abroad and get an understanding of how this will affect EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortization) and net income. SAP Analytics Cloud better prioritises the options that are available to the companies to make the most rational business decisions.

Furthermore, SAP Analytics Cloud can also help businesses better manage their cash and liquidity and working capital during the energy crisis. By providing visibility into the current and future cash flow and liquidity position, and then by simulating different scenarios and analysing the impact of different decisions on their finances, SAP Analytics Cloud supports businesses to identify and predict potential liquidity risks, so that they can take steps to mitigate them, achieving higher resiliency during the energy crisis.

Create appealing and smart visualisations and dashboarding


Additionally, SAP Analytics Cloud can create detailed reports and dashboards to monitor and visualize energy usage and trends in real-time, allowing companies to quickly identify areas where energy consumption is higher than expected and take corrective action, rapidly respond to changes in energy prices and keep electricity costs under control. For real-time analysis the data is pushed into SAP Analytics Cloud from various sources, including electricity meters.

SAP Analytics Cloud offers advanced visualization capabilities, allowing users to easily create interactive dashboards and reports that can be shared with stakeholders. Users can drill down into data, filter, sort information, and create visualizations on the fly. By interacting with data, users gain a deeper understanding of key business metrics and uncover trends as well correlations.

Get holistic view on the organisation’s performance


To summarize, with SAP Analytics Cloud companies quickly and easily create accurate and reliable forecasts, such as for energy costs purposes. Extended planning and analysis (xP&A) powered by SAP Analytics Cloud provides a holistic view on the organisation’s performance, identifies opportunities for improvement, and makes better decisions through the alignment of strategic, financial, and operational plans. Companies adapt easier to the changing business environment, including rising energy prices, and remain competitive.

Discover a brand-new content in SAP Analytics Cloud


A demo will illustrate how SAP Analytics Cloud can help companies offset the negative effects of energy crisis. The demo will provide an overview of a multinational company with production facilities in several European countries. Organisation is struggling with rising electricity prices that are negatively impacting its profitability. It is confronted with the challenge of how to counteract the detrimental impact of these increasing prices. Through scenario simulation and driver-based planning, we will show how SAP Analytics Cloud can guide the company to improve performance. To increase profitability, we will simulate the shift of production to a country where electricity prices are lower.

SAP Analytics Cloud brings together analytics and planning in a single solution. Thus, business users can instantly move from insight to action. With scenario simulation, users can quickly and easily create “what if” scenarios to understand the potential impact of different decisions and strategies. By testing scenarios in SAC, the domain experts can find the most efficient and effective way to respond to rising electricity prices. SAP Analytics Cloud helps business users to save time and make better decisions.

This demo is best suited for manufacturing companies that operate in Europe and affected by rising electricity prices, especially in energy intensive industries. However, it may also be useful for any other producer that is dealing with similar issues.

We encourage customers or potential clients to reach out to SAP representatives or their preferred SAP partner to request a live demonstration to get a comprehensive understanding of the demo scenario and SAP Analytics Cloud capabilities.

SAP employees, including sales and pre-sales teams, or SAP partners can test out the demo scenario in SAP Analytics Cloud and experience its features first-hand straight away. To get started please click the following link: SAC Planning - New xP&A Demo - Manufacturing Electricity Cost Optimization - scenario 18703 (int.sap... or find this content in the demo store (scenario 18703). There you can find instructions on how to download the demo and supplementary materials. SAP partners can find information about the demo on PartnerEdge Portal. If you have any further questions about the demo or would like to receive additional materials, such as demo video, please contact Elena Odinets (elena.odinets@sap.com).

An overview of the content of the demo is provided in the image below.

In below screenshot, you can see a demo landing page.

Screenshot notes: developed jointly with Roy Ostergren.

The image below shows the electricity price forecast for various factory locations.



Screenshot notes: developed jointly with Roy Ostergren.

The forecast of production volumes and shift of production are presented in the screenshot below.

Screenshot notes: developed jointly with Roy Ostergren.

A comparison of the profitability of the scenarios is shown in the image below.



Screenshot notes: developed jointly with Roy Ostergren.


Constant currency analysis is presented below.



Screenshot notes: developed jointly with Roy Ostergren.

This article showed how SAP can help businesses make decisions about cost efficiency and profitability, and become more resilient during energy crises.

If you want to learn more about how SAP supports extended planning and analysis (xP&A) process that helps business bring people and plans together to increase agility and performance, or gain additional knowledge about BTP platform, please check the following links:

SAP Analytics Cloud is a single solution for business intelligence and enterprise planning, augmented with the power of artificial intelligence, machine learning technology, and predictive analytics. It helps everyone in your organisation make better decisions and act with confidence.