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Case Study: Insights into Applied Materials’ Project Approach for Implementing SAP Business Planning and Consolidation: From Planning to Consolidations

Sunil Enaganti and Vish Arunachalam Applied Materials

1

In This Session

• Walk through Applied’s SAP Business Planning and

Consolidation implementation project

• Hear firsthand why the company chose to implement the financial

planning aspect of BPC ahead of the financial consolidation piece

2

What We’ll Cover

• Applied Materials Overview

• Why this approach was so critical to the long-term success of the

BPC project

• Potential key planning design elements that could impact future

consolidation functionality in BPC

• Insight into the key integration points between planning and

consolidations in BPC

• Cost Center Planning implementation highlights

• Wrap-up

3

Applied Materials, Inc.

Stock Ticker: Nasdaq: AMAT

Fiscal 2013 Revenue: $9.1 billion

Fiscal 2013 R&D: $1.4 billion

Founded: November 10, 1967

Headquarters: Santa Clara, California

Global Presence: 81 locations in

18 countries

Principal Locations United States, Israel, Singapore, Taiwan

Employees: ~ 14,000 worldwide

Patents: ~ 10,500 issued

Data as of end of fiscal year end, October 26, 2014

*Excluding temporary and interns

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Applied’s Enterprise SAP User Base Worldwide

APAC

Taiwan

China

China

Amsterdam, British

UK, France,

Germany, Ireland,

Israel, Italy

AMNA

India

81 WORLDWIDE LOCATIONS, 18 COUNTRIES, & GROWING!

Data as of end of fiscal year end, October 26, 2014

EMEA

California,

Massachusetts,

Montana, Texas

Japan

Korea

Singapore,

Malaysia

5

Applied’s SAP Implementation

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Key Operational Requirements

• Time zones: 6 (Extends from Pacific to North Asia)

• Regions: 7

• Segments: 4

• Languages: 7

• Global Support: 24/7/365

• Frequency of actuals refresh for planning: Hourly

7

Applied’s Future-Proof BPC Landscape

Cost Center Planning

Internal Management

Reporting

External Financial Reporting

Unified Planning, Budgeting, Forecasting, Financial Consolidations, and Management Reporting

BW-BPC

Foundation

Cost Center Planning in BPC Business

Consolidation in SEM BCS

Reporting MS Excel/Web Front End for BPC & BEx for BCS

Planning &

Consolidation

SAP Business Process Flows/Common Data Model/Common Security

8

Applied’s Planning and Consolidation Landscape

• Applied Materials and its 73 subsidiaries across various regions

use SAP SEM BCS for legal and management consolidation

AMAT has deployed SAP BPC for

Cost Center Planning

Planning

SAP BPC

Hyperion Planning

SAP SEM BCS

SAP BW

SAP ECC

Non-ECC Sources

Data storage,

InfoProviders,

Metadata, and

master data

9

Cost Center Planning and Reporting Data Flow

Source: Applied Materials, Inc.

10

What We’ll Cover

• Applied Materials Overview

• Why this approach was so critical to the long-term success of the

BPC project

• Potential key planning design elements that could impact future

consolidation functionality in BPC

• Insight into the key integration points between planning and

consolidations in BPC

• Cost Center Planning implementation highlights

• Wrap-up

11

Considerations for Implementing Planning Ahead of Consolidation

• Legacy planning applications were on non-SAP platforms

Head Count and Cost Center Planning

Recent new acquisition with varying department business

requirements

Need to introduce uniform, enterprise-wide business

planning process

Requirement for a stable planning application that offered

native integration with existing SAP landscape

• Stable SEM-BCS consolidation application

Applied is in the process of integrating its recent acquisition

12

Approach to Implement Planning Ahead of Consolidation

• Comply with Applied’s key design principle to source ECC master

data and hierarchy when available

GL Accounts/Cost Elements, Cost Centers, Profit Centers,

Business Units

Ensured consistency of master data and hierarchy across

application layers

• Source actuals data from ECC and provide aggregated

reconciliation capability based on Business Units

Aggregation by Business Unit enabled easy reconciliation

Ensured consistency of actual transaction data across ECC,

BW, and BPC

13

Approach to Implement Planning Ahead of Consolidation (cont.)

• Consider potential future Consolidation needs while designing

Cost Center Planning model in BPC

Company Code, GL Accounts, Cost Centers, Profit Centers,

Business Units, Trading Partners, Functional Areas

Ensured compatibility with BPC Consolidation functionality

during data modeling in design phase (master data and

properties)

• Address Cost Center Planning reporting requirements completely

in BPC

Deployed standard MS Excel and Web-based reporting in BPC

Avoided BEx-based reporting and retraction to BW

14

Approach to Implement Planning Ahead of Consolidation (cont.)

• Portal-based single sign-on access for BPC

Provided access to BPC in existing portal page based on

the current security design

Leveraged standard BPC NW features for security

• Catered to Applied’s central master data management principle

GL Accounts/Cost Elements, Cost Centers, Profit Centers

Complied with SOX requirements and minimized change

management challenges

15

What We’ll Cover

• Applied Materials Overview

• Why this approach was so critical to the long-term success of the

BPC project

• Potential key planning design elements that could impact future

consolidation functionality in BPC

• Insight into the key integration points between planning and

consolidations in BPC

• Cost Center Planning implementation highlights

• Wrap-up

16

Key Planning Design Elements with Potential to Impact Future Consolidation Functionality

Design Elements Hierarchy Cost Center

Planning

Consolidation

Company Code

(Entity) Applicable Common master data

Segment (Profit

Center and Business

Unit)

Multiple – Applicable Common master data

Account Applicable

Common master data

Transaction Data –

Actuals – Source &

Refresh Frequency

Not Applicable Common source

Currency Applicable Common master data

Versions &

DataSource Applicable Common master data

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Key Considerations During Implementation

• BPC is a unified planning and consolidation application

Ensured foundation laid for the current planning

implementation was aligned with potential future consolidation

functionality

Ignoring consolidation and going for post-deployment

redesign could have been difficult

• Include Consolidation Representative in design phase

Include consolidation Process Owner as a signatory to

Business Requirements Document

Validate data model and source data elements and reach

consensus

Alignment with Consolidation was a prerequisite for planning

implementation

18

What We’ll Cover

• Applied Materials Overview

• Why this approach was so critical to the long-term success of the

BPC project

• Potential key planning design elements that could impact future

consolidation functionality in BPC

• Insight into the key integration points between planning and

consolidations in BPC

• Cost Center Planning implementation highlights

• Wrap-up

19

Key Design Elements and Integration Points Between Planning and Consolidation

• Checked if any dimensions used in Cost Center Planning model

would be required for future Consolidations model

What views of data do you need supported for reporting?

Consider system performance implications with adding

dimensions vs. properties

• Evaluate BW data warehousing capabilities vs. BPC-based

conversions and transformations

Consider resources, skillset, and bandwidth for support

and maintenance

Consider criticality of performance and frequency for

data loads

Choose optimal application layer for task

20

Key Design Elements and Integration Points Between Planning and Consolidation (cont.)

• Based on business requirements and application design, master data can be maintained in ERP, BW, and BPC

Standard extractors are available for sending master data from ECC to BW

Ensure periodic synchronization of master data between BPC and BW layers where needed

Import master data and hierarchies from SAP BW InfoObject into BPC application

BPC

BW ECC

Sharing characteristics between ECC, BW, and

BPC can significantly enhance integration in

terms of understanding, alignment, and

interoperability in reporting

21

Master Data Staging for BPC

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Key Design Elements and Integration Points Between Planning and Consolidation

• Profit Center Group in ECC

Leveraged Profit Center Group-based hierarchy in ECC as

source for BPC

ABAP enhancement to create alternate hierarchy with select

Profit Centers required in BPC

Periodic refresh of ECC-based alternate hierarchy in BW

InfoObject for Profit Center

Sourced PARENTH2 hierarchy for Profit Center Dimension

from BW

23

What We’ll Cover

• Applied Materials Overview

• Why this approach was so critical to the long-term success of the

BPC project

• Potential key planning design elements that could impact future

consolidation functionality in BPC

• Insight into the key integration points between planning and

consolidations in BPC

• Cost Center Planning implementation highlights

• Wrap-up

24

BPC Cost Center Planning Implementation Highlights

• Head Count-based Cost Center Planning

• Cost Element/GL Account defined as Account Dimension

• Managerial reporting enabled in BPC based on:

Profit Center

Business Unit

Segment

• Business Unit defined as custom field in ECC New GL

Derived Business Unit based on attribute of Profit Center

InfoObject in BW

Enabled derivation of Business Unit based on Profit Center in

input schedule

Enhanced existing reports in BW to report on Business Unit

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BPC Cost Center Planning Implementation Highlights (cont.)

• Segment as hierarchy node in BW

Sourced segment as a node in Profit Center Hierarchy from BW

• Profit Center, Business Unit, and Segment with parallel

hierarchies and time-dependent reporting

Enabled reconciliation of actuals across ECC, BW, BPC

• Master data and actuals loaded from ECC via BW to BPC

Utilized standard extractors and pre-delivered Data Manager

packages

• Enhancement for hierarchy creation with select values in ECC

(extracted via BW for BPC)

Selection parameters provided for creation of Profit Center

hierarchy based on select members in ECC

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Transformation in BPC vs. BW

• Transformation

When source system has data in a form that is different from

what is required in target system, we require transformation

E.g., If master data is unique, BPC users need only to

provide the member ID. By adding specific prefixes to

dimension members, BPC master data can be both unique to

improve system usability and familiar to improve user

comfort.

• Data transformation can be handled in BPC as well as in BW

Evaluate requirement on a case-to-case basis and determine

most optimal application to perform data transformation

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Transformation Handled in BPC

• BPC dimension naming conventions were handled in BPC

BPC dimension members with a prefix is a commonly used

method by BPC experts to assure unique master data across all

dimensions in the Application Set

BPC works optimally with unique master data even across

dimensions, though unique master data is not a system

requirement

Added prefix in BPC for most dimensions

E.g., Prefix “PC_” was added for profit centers using BPC

transformation

28

Transformation Handled in BW

• Selective hierarchy transformation and refresh handled in BW

BW was utilized for creation of time-dependent Profit Center

Hierarchy and periodic synchronization with ECC Profit Center

Group Alternate Hierarchy

Only when delta was noticed, new data was sent to BPC

by BW

You must run the master data load package before running

the hierarchy import package; otherwise, you will get a

missing member error

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Sample Transformation in BPC

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Streamlined Cost Center Planning

• Integrated Cost Center Planning brings together SAP BPC-BW

technical capabilities and Applied’s business processes in a

single, unified platform

CC Planning – Reporting

Planning Levels

Actuals Data Reconciliation

based on Business Unit

ECC BW

ECC

Reporting

ECC BW BPC

ECC BW BPC

Cost Centers &

Cost Element Additional Levels

Possible

Reporting Reporting Reporting

BEx

Reporting

BPC

EPM Excel

Reporting

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Input Schedules for Cost Center Planning

• BPC EPM Add-in supported MS Excel-based input schedules

For Cost Center Planning by Cost Center Group

For Headcount and Labor Rate

• Customized Excel front end to simplify user adoption

• Leveraged Member Recognition functionality

• Derived dimension member values from attributes of other

dimensions (for Profit Center from property of Cost Center

dimension)

• One source of truth for Actuals from ECC via common BW

32

Input Schedule with Sample Data

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Reports for Cost Center Planning

• BPC EPM Add-in supported MS Excel-based reports

For Cost Center Planning by Cost Center Group

• Customized Excel front end to simplify user adoption

• Report structure used member recognition technique

• Drill through from one data set to another

• Standard EPM Add-In field selection functionality and tools (EPM

Context and EPMSelectMember) utilized for selections within

report

• Two levels of security for reports in BPC

Data security (Which data is a user able to access and

change?)

Report access (Which report is a user able to access?)

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EPM Reporting

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Guiding Principles in Design

• Ensured efficient data collection mechanism

• Assigned Cost Center Planning ownership to operational

business units

• Defined consistent methodology and timeline to complete

forecasts

• Automated rolling forecasts through BPC

• User’s perspective weighed during design phase

• Overarching strategic goal was to reduce end-to-end process time

in delivery of timely and useful information for external reporting

and internal decision support and to enable integrated reporting

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Best Practices

• Central Master Data Management

Prefer single source of master data

Ensured consistency with business reporting, compliance

with numbering conventions, and business rules

Leverage data warehouse application’s heavy weight lifting

capability instead of agile BPC layer

Performed data transformations, conversions, periodic data

synchronization, validation in SAP BW

Ensured BPC system performance was not adversely

impacted

37

What We’ll Cover

• Applied Materials Overview

• Why this approach was so critical to the long-term success of the

BPC project

• Potential key planning design elements that could impact future

consolidation functionality in BPC

• Insight into the key integration points between planning and

consolidations in BPC

• Cost Center Planning implementation highlights

• Wrap-up

38

Where to Find More Information

• SAP EPM Community on SDN

http://scn.sap.com/community/epm/planning-and-consolidation-for-netweaver?url_id=text-search-best-best-scn-community-epm-planning-and-consolidation-for-netweaver

SAP Community Network provides rich content on SAP BPC for SAP NetWeaver

Hot news and featured content on current topics from experts and teams involved in implementation can be accessed at this site

Also available is extensive forum discussions on EPM

• SAP Business Planning and Consolidation (BPC) TV

www.youtube.com/user/SAPBPC

Videos of customers talking about how they use the BPC application to help improve business performance

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Where to Find More Information (cont.)

• SAP Help

http://help.sap.com/bopacnw101/

SAP BusinessObjects Planning and Consolidation 10.1, version for SAP NetWeaver

• SAP How-to guides

http://wiki.scn.sap.com/wiki/display/BPX/Enterprise+Performance+Management+%28EPM%29+How-to+Guides

SAP EPM “How-to” guides are intended to simplify implementation

Specific product features and procedures are explained in a practical business context

• SAP EPM official community on LinkedIn

www.linkedin.com/groups?&gid=2327383

View blogs, product features, conference info from SAP America representatives, as well as discussions and promotions in the official SAP EPM group on LinkedIn

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7 Key Points to Take Home

• BPC is a unified application for planning and consolidation

Regardless of which solution is implemented first, ensure

adequate business representation from Planning,

Consolidation, reporting groups

• Ensure consistent master data management by sourcing it from

ERP when possible

Ensure consistent data by leveraging native integration

• Evaluate between adding dimensions and adding dimension

properties

Evaluate and choose optimal functionality to address business

requirements

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7 Key Points to Take Home (cont.)

• Lay BPC foundation for the future

Save significant rework in future implementations

• Leverage Data Warehouse capabilities

Conserve BPC performance for core planning and

consolidation – analysis and reporting

• Utilize BPC’s powerful Excel-based EPM reporting capabilities

Empower business users with ad hoc reporting capabilities

• Go standard; choose custom only when unavoidable!

Planning and consolidation is not rocket science!

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Your Turn!

How to contact us:

Sunil Enaganti

sunil_enaganti@amat.com, @sunilenaganti

Vish Arunachalam

@arunvis

Please remember to complete your session evaluation

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Disclaimer

SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP SE (or

an SAP affiliate company) in Germany and other countries. All other product and service names mentioned are the trademarks of their respective

companies. Wellesley Information Services is neither owned nor controlled by SAP SE.

The statements in this presentation regarding the future of the Applied Materials’ technologies and commercial prospects are forward

looking and actual results could be materially different from those expressed or implied by such forward looking statements as a result of

various risk factors

The forward looking statements included in this presentation involve subjective judgment and analysis and are subject to significant

business, economic and competitive uncertainties, risks and contingencies, many of which are outside the control of, and are unknown to

Applied Materials. Given these uncertainties, you are cautioned to not place undue reliance on such forward looking statements.

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