Budgeting Hierarchy for SAP Business Warehousing

If you want to use the budgeting functionality of BW-BPS in SAP BW for hierarchies with one characteristic (hierarchy with postable nodes).

Handling of hierarchy display for BW hierarchies with postable nodes:

1. In the planning level select the characteristic which is used in the hierarchy
2. Planning level/package: select the hierarchy in the characteristic values
3. On the first screen of the layout builder:
4. Select the hierarchy bearing characteristic for the lead column.
5. Choose "Hierarchical Data Model" and "BW Hierarchy with Postable Nodes".
6. Select the totaling logic you wish to use for the budgeting function.
7. Mark "Check Entry" if you want to ensure, that the not assigned values are not below zero.

Hierarchy with Several Characteristics

Requirements for hierarchical display:

1. Expand and collapse according to a structure
2. Values are sorted according to the hierarchy logic
3. Only valid combinations are displayed
4. You want to post to not assigned values
5. You want to use a structure from a hierarchy with several characteristics
6. User can input data on different levels of the hierarchy
7. Nodes are changeable

Hierarchy with Several Characteristics

If you want to use the budgeting functionality of BW-BPS with hierarchies with several characteristics (e.g. product group, product).

1. In the planning area create characteristic relationships which reflect the relations of all characteristics used in the hierarchy you want to display. Usually you use the respective hierarchy to do so. (You could as well use attributes in order to derive the relations).
2. In the planning level select all characteristics that are used in the hierarchy you want to display.
3. In the planning level/package select all characteristic values you want to be displayed. Make sure you include the "initial value" which in this case means the "not assigned" #-symbol.
4. On the first screen of the layout builder:
5. Select all characteristics that are used in the hierarchy for the lead column (e.g. product group, product).
6. Choose "Hierarchical Data Model" and "BPS Characteristic Hierarchy" (note: BPS characteristic hierarchy will create all possible combinations of the characteristic values that you selected in the planning level/package for the characteristics involved in the hierarchy. The characteristic relationship you created will verify which ones are 
7. Select the totaling logic you wish to use for the budgeting function
   Mark "Check Entry" if you want to ensure, that the not assigned values are not below zero.
   On the second screen of the layout builder:
   define the sequence of the characteristics the same logic as in the hierarchy (e.g. 1. Product Group, 2. Product). 

BPS characteristic hierarchy (virtual hierarchy):

follow the same steps as described in "Handling of hierarchy display for BW hierarchies with several characteristic nodes" it is not mandatory to use characteristic hierarchies for BPS characteristic hierarchy display. If no characteristic relationship rule exists for the characteristics chosen in the level the system will just create all possible combinations of characteristics used in the lead column and display them as a hierarchy.

 Characteristic Hierarchy

Requirements for hierarchical display:

1. Expand and collapse according to a structure
2. Values are sorted according to the hierarchy logic
3. Only valid combinations are displayed
4. User can input data on different levels of the hierarchy
5. Nodes are changeable
6. characteristic values are assigned more than once to a node.
7. E.g. Items must be planned for different countries (specific product sales per country, specific balance sheet item per country)
8. The hierarchy arises from all possible characteristic combinations, which can be formed from the
9. characteristics of the lead column of a layout.

Characteristic Hierarchy

1. If you want to use the budgeting functionality of BW-BPS with no BW hierarchy.this type of  "hierarchy" is just temporary (virtual) and does not necessarily mirror the hierarchical structure of your data model.
   BPS characteristic hierarchy (virtual hierarchy):
2. follow the same steps as described in "Handling of hierarchy display for BW hierarchies with several characteristic nodes"
   it is not mandatory to use characteristic hierarchies for BPS characteristic hierarchy display. If no characteristic relationship rule exists for the characteristics chosen in the level the system will just create all possible combinations of characteristics used in the lead column and display them as a hierarchy.

Limitations:

The validity area of BW-BPS hierarchies always refers to only one specific layout.

Budgeting Logic: Top-Down

1. The budgeting mode is set in the layout builder. Bottom up and top down mode are available in both planning with BPS-Hierarchies and in planning with BW Hierarchies with one characteristic.
2. Top-down is chosen, when the planner is supposed to assign a fixed budget in his area of responsibility manually to hierarchy nodes and leaves he is responsible for.
3. Once the budget is fixed and changes are made in the hierarchical lower nodes then the value on "#" is changed.When changes are done to the budget (budget correction in another layout/level) then the total and the value on "#" are changed.

Budgeting Logic: Bottom-Up

1. In the bottom up mode the budget is not fixed and can be seen as a proposal which the planner may overwrite.
2. If you do changes on a lower level then the value on "#" stays the same but the total is changed.
3. If a budget change is done on a higher level then the difference is written on the value "#".
4. Both modes can be used in a counter current planning scenario. The administrator can switch the mode of the layout according to the phase of the planning.

SAP Business Warehouse Hierarchies and Attributes

SAP Business Warehouse Hierarchies and Attributes in BW-BPS can use attributes and hierarchies created in SAP BW.The maintenance of attributes and hierarchies is located in the Administrators Workbench of SAP BW (RSA1)

BW Hierarchies can be used in BPS in four different ways:

data selection in a planning level or package hierarchical display or sorted display of the data in a layout defining characteristic relationships.

1. Creating variables for hierarchy nodes.
2. For data selection an attribute value can be used in the level or package. Attributes can be used in variables as well.
3. Attributes can be used for defining characteristic relationships.
4. Attributes (attribute columns) can be displayed in all front-ends.

Data Selection via BW Hierarchies

1. BW hierarchies can be used for selection in planning levels as well as planning packages. They can also be used in variables (type hierarchy node).
2. For defining the selection via a hierarchy you specify the hierarchy (name, version, due date,…) and a node or a leaf of the hierarchy. The node can be a characteristic node of the characteristic used to define the hierarchy (base characteristic), a node of an external characteristic or a text node.
3. The system will internally convert the selection via hierarchy into a selection by characteristic values of the base characteristic. If you select the node "Product Group Water" in the above example the system will use the three different types of water for the selection. If you choose the root node the system will select "Water 1", "Water 2", and "Water 3" and all of the four juices.

Benefits of using a hierarchy in a planning layout:

Expand and collapse according to a structure
Values are sorted according to the hierarchy logic
Only valid combinations are displayed
BW-BPS uses two different types of hierarchies – these are the standard BW

hierarchies plus the so-called BPS-Hierarchies that are generated when executing a layout.

Types of BW hierarchies used in BW-BPS:
 

hierarchies that contain only nodes and leaves from one characteristic (so-called hierarchies with postable nodes)

hierarchies with several characteristics and/or text nodes.

Base characteristic: characteristic on which the hierarchy is based upon (e.g. product is the base characteristic in a hierarchy, where product groups group products). The base characteristic is always the characteristic in the last level displayed in a hierarchy.

BW-BPS offers different uses for hierarchical planning

Display as hierarchy shows the data in the planning layout in a hierarchical structure following a bottom-up logic, i.e. data is entered on the lowest level of detail and totaled on the hierarchy nodes.
Display as hierarchy with budgeting logic shows the data in the planning layout in a hierarchical structure following either a bottom-up or a top-down logic.

Top-Down: Data may be entered (posted) on all hierarchy nodes and leaves except the top-node displayed in the planning layout. When data is entered on one of the higher level nodes, initially it is not assigned to lower nodes. After checking the new entry, the system generates an additional entry for the amounts that are still to be distributed (characteristic value "#" or a leaf with the characteristic value of the node for a BW characteristic hierarchy with postable internal nodes), on the same hierarchy level. The system uses these nodes in budgeting, to be able to save difference amounts between a higher-level hierarchy node (for example product group) and the total amounts of the lower-level node (for example product).

When data is entered on a lower-level hierarchy leaf or node, it is adjusted on the not assigned values of the same hierarchy level.

Bottom-up: Data may be entered on all nodes and leaves except the top-node displayed in the planning layout. After checking the new entry, the system will sum up to nodes above the node where data was changed and adjust the not assigned data so that the total on this hierarchy level stays balanced.

Display BW Hierarchy with several characteristics

Requirements for hierarchical display:

1. Expand and collapse according to a structure
2. Values are sorted according to the hierarchy logic
3. Only valid combinations are displayed
4. User can input data only at lowest level in the hierarchy (leaves)
5. Nodes show sums and must not be changeable

To enter data at higher hierarchy levels (e.g. product group in the layout above) you want to use a layout in another planning level.

Display as Hierarchy in One Lead Column

In order to use a BW hierarchy for display:
In the planning level/package: use a hierarchy for selection of the base characteristic (e.g. product)
Note: it is not necessary to select the characteristics used in the hierarchy nodes

On the first screen of the layout builder:
 

1. Select base characteristic as only selection for the lead column
2. On the last screen of the layout builder:
3. Select "hierarchy"

This type of display provides all benefits of hierarchies in planning layouts:
 

1. Expand and collapse according to a structure
2. Values are sorted according to the hierarchy logic
3. Only valid combinations are displayed

Hint: if you do not mark "hierarchy" the data will be displayed as a flat table, but in the sort order of the hierarchy. This works also if you use more than one characteristic in the lead column.

Display BW Hierarchy with several characteristics

Requirements for hierarchical display:

1. Expand and collapse according to a structure
2. Values are sorted according to the hierarchy logic
3. Only valid combinations are displayed
4. User can input data only at lowest level in the hierarchy (leaves)
5. Nodes show sums and must not be changeable
6. To enter data at higher hierarchy levels (e.g. product group in the layout above) you want to use a layout in another planning level.
7. You want to post to not assigned values

Display as Hierarchy with Several Lead Columns

In order to present a hierarchy over several characteristics in a layout with multiple key columns you use the following settings:

1. Use characteristic relationships (combination proposal) and the option "all possible combinations" in the first screen of the layout builder in order to get the proper characteristic combinations in the  layout.
2. Use a hierarchy in the selection to obtain the proper sort order.
3. Mark the flag "Totals as hierarchy" in the layout builder in order to be able to collapse and expand along the hierarchy. 

BPS Budgeting Function: Manual Disaggregation of Data

1. BW-BPS offers different possibilities to disaggregate data manually – in BPS this is called "budgeting"
2. Budgeting is possible with all types of hierarchical planning, no matter what type of hierarchical data model is used in manual planning
3. With every type of hierarchy in BW-BPS a budgeting hierarchy display is possible.
4. BW hierarchy with one characteristic (so called hierarchy with postable nodes)
5. BW hierarchy with several different characteristics
6. BW-BPS characteristic hierarchy (virtual hierarchies)
7. The creation of the hierarchical display differs for the three different types of hierarchical display 

Budgeting Hierarchy – Hierarchy with One Characteristic

Requirements for hierarchical display:

1. Expand and collapse according to a structure
2. Values are sorted according to the hierarchy logic
3. Only valid combinations are displayed
4. You want to use a structure from a hierarchy with one characteristic
5. User can input data on different levels of the hierarchy
6. Nodes are changeable 

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SAP Business Warehouse Simulation Introduction

SAP Business Warehouse Simulation Introduction

Simulation plays very important role in SAP Business Process and helpful in forecasting the business future requirements.Simulation is a procedure to analyze dynamic systems. In Simulation experiments are carried out based on a model of the reality, in order to gain insight regarding the real situation.Business simulations allow you to evaluate your business, identify key issues driving your processes and capture your company's specific business challenges Simulation models may range from simple linear equations with one unknown factor to sophisticated models that incorporate all known influences. Usually the focus of a simulation lies on aspects, which have the most impact on the simulated system, whereas minor important factors are left off or simplified.

There are different methods that support simulations: 

Forecasts: Forecasts examine trends in the presence and past and prolong those into the future. There is no guarantee that those trends will last, however besides day to day turbulence's there are a lot of development processes that are more linear than they look at first sight.

1. Driver-based simulation
2. Model-based simulation
3. System dynamics: Small events can cause unforeseeable processes. Watch the stock markets (or the weather) and you can see the effects any day. System dynamics is the attempt to predict future situations based on all available information and specific theories. 

 Driver-based Planning

Planning is often executed on a very abstract detailed level (e.g. cost elements). When a cost center manager is asked to submit the expected costs for salary, travel, office equipment, overhead costs, etc. that information is usually based upon an information behind those figures (e.g. based on the number of employees working in his department). The challenge is to translate data from across business functions into critical information that tells a company what drives their business plan Driver-based planning takes those dependencies into consideration. It simplifies planning on an aggregated level and enables simulations based on different assumptions about the drivers. Reactions on changing business conditions can faster be decided upon by using changed driver values. 

Methods to support driver-based planning are:

1. Attach documents: people are basically asked to submit a supporting narrative outlining the assumptions that are behind their numbers. 
2. FOX Formulas: model inter dependencies of drivers and related plan figures 
3. Planning sequences: Re-plan based on a predefined sequence of planning functions
4. Versions: Simulate different scenarios without overwriting
5. Reference Data: use relations and inter dependencies from the past  

Model-Based Planning

The planning process spans the whole organization. Decisions in one area of the company influence processes in other areas. These relationships may be executed sequential in the initial plan. For plan revisions the dependencies of the different plans may be modeled according to specific rules. That way it is possible to only change some plan assumptions and recalculate the full model.

Example:

Sales planning and production planning must be aligned so that based on the sales volume and assumed time for the demand the goods must be provided by production at the right time. Sales and production need resources in order to achieve their targets, e.g. sales representatives or production employees which influences headcount planning.

In addition to the integration aspect every department must conduct its internal planning process that in itself also may be model-based (e.g. calculation of capacity restrictions or scheduling in production planning)

Model-based planning reconstructs those inter dependencies and allows to simulate different scenarios based on alternative plan assumptions.

Methods to support model-based planning are: .
 

1. FOX Formulas: map data models (e.g. master data) and transfer data
2. Forecast Functions: predict future trends for value drivers which influence your overall model (e.g. sales growth)
3. Multi-Planning Area: Exchange data between different plan cubes 
4. Planning sequences: Re-plan based on a predefined sequence of planning functions 
5. Versions: Simulate different scenarios without overwriting 
6. Reference Data
7. Aggregation: Every planning process involves a lot of detail which cannot be mapped to another process. However there are similarities (e.g. Sales volume = Demand volume, time period) that may be used as an integration level. The aggregation in a planning level allows to exchange the integration
   values.

Limitations of BW-BPS Regarding Simulation

Circular references (A+B=C, C+D= A)

Excel formulas: no circular references possible
FOX formulas: circular references possible through planning sequences

Iterations

BPS offers no predefined functionality for iterations
FOX formulas: iteration only by re-execution
Planning function type exit: iterations possible 

Graphical display of relationships

Dynamic Simulation

System Dynamics (SD) is an experimental approach to System Analysis. It is a way of understanding complex systems and modifying or changing them in some way. It also an approach for validating and assessing the consequences of implementing analytical (prescriptive) models or recommendations of a case study report.

System Dynamics is both

1. a theory of structure in systems;
2. an approach to policy design.
3. System Dynamics is comprised of two concepts:
4. Feedback Theory that provides general guidelines for organizing system structure.
5. Computer Simulation that provides a means to deduce the behavior arising from a particular system structure.
6. System dynamics is concerned with the construction of graphical and mathematical computer-based models, with detailed descriptions, that tells us how the conditions at one point in time lead to subsequent conditions at later points in time. The constructed model can then be simulated and its behavior observed over time.

To sum it up,

1. System Dynamics is about studying complex and dynamic systems - systems which change over time.
2. System Dynamics is about finding the 'why' (cause[s]) and 'how' (pattern) of system changes.
3. The main benefit of system dynamics is to analyze single complex

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