In Focus

Sales and Profit Planning

General Demands on Sales and Profit Planning

Sales and profit planning typically requires a comprehensive planning process, which consolidates the knowledge of sales management on future sales quantities, the knowledge of marketing on future prices and rebates as well as the knowledge of accounting on the anticipated development of costs to form an overall picture of future profit. Accordingly, most companies go through a sequence of steps to collate planning data across organizations and business units. For example, actual or former planning data is copied, extrapolated or revaluated for the future in order to create a plan proposal. Furthermore decentralized manual data entries are made and integrated into profit planning. Often, sales and profit planning is an integrative and iterative process, in which various roles within Profitability Controlling are involved, such as the Sales Director, Regional Manager and Sales representative. According to the various roles involved in the planning process, you can distinguish different planning approaches, for example centralized top-down planning and decentralized bottom-up planning. The levels and contents of the individual plans vary depending on the depicted approaches. By reflecting a typical sales and profit planning process in the above way, you can derive the following demands on a planning tool which is to perform professionally: I Flexible determination of planning levels and content I Personalization of individual planning tasks

Sales and Profit Planning is part of the SAP R/3 Systems Profitability Analysis application. Sales and Profit Planning enables you to plan your sales and profits effectively, on the basis of an intuitive planning concept and a state-of-the-art, graphical user-interface. Sales and Profit Planning helps you to concentrate your efforts, for example on profitable customer groups, products and sales organizations, by supporting an integrated as well as a decentralized planning process.

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Diversity of relevant planning functions such as valuations and simulations I Excel Integration I Web-enabled Planning I Wide-range integration with other plans such as cost center planning and order planning. The planning tool in Profitability Analysis is based on an intuitive planning concept, which reflects exactly these demands.
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The Concept of Sales and Profit Planning

Central to Sales and Profit Planning is a well-defined and organized planning process. The initial screen of the planning tool in Profitability Analysis supports you in organizing your individual planning process by using only three basic elements:
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Planning levels Planning packages Planning methods

Planning levels and planning packages allow you to: I Structure your planning process I Personalize your work packages I Keep track of the individual steps of your planning process A comprehensive toolbox of planning methods is available to allow you to create and edit planning data. These not only include simple functions, such as manual entry of planning data, but also include more complex ones, such as the automated copy, revaluation and extrapolation of the previous years planning data and actual data, and the automated top-down distribution of high-level planning data to a more detailed planning level. With Sales and Profit Planning, quantity and price planning as well as simulations using a goal-seek function can be carried out easily. To allow sales representatives to create their sales planning data locally, Microsoft Excel is integrated with Sales and Profitability Planning. This allows you to use Excel functions such as those for additional calculations, graphics and printing, while the R/3 System ensures the consistency of the data centrally, providing functions such as derivation and valuation.

Web-Enabled Planning
The easy web planning transaction allows you to offer your sales force flexible access to custom planning screens. A straight-forward interface streamlines their planning tasks, thus enabling them to focus on the sales job. Planning data entered with the easy web planning transaction is posted remotely to the R/3 System and guarantees a consistent database with full validation against R/3 master data and access to valuation functions.

Different decision-makers plan at different planning levels. These planning levels are used to specify the desired dimensions to be applied in planning. Planning levels are represented by combinations of characteristics. For central top-down planning of goals by the Sales Director, for example, the planning level Sales Organization, Distribution Channel and Product group could be of interest. Whereas, decentralized bottom-up planning by sales representatives would be carried out at the Customer group and Product level. In order to determine the detailed planning objects and to assign these to the relevant planners, you define various planning packages for each planning level. For example, central top-down planning is carried out separately for the individual sales organizations. Decentralized bottomup planning, on the other hand, is carried out by the individual sales representatives. In this case, a planning package would be created for each employee whereby each employees package would contain only his/ her customer groups and articles.

Integrated Planning
To improve your sales and profit planning further still, you can enhance your sales and profit plans by transferring planning data between Sales and Profit Planning and the following applications: I Cost Center Planning I Planning of internal orders and projects I SAP Business Information Warehouse (SAP BW) I Advanced Planner and Optimizer (APO) I Profit Center Accounting

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