This is the seventh of a series of LinkedIn posts where Stampa & Partners answers the question: “How efficiently can you track the profitability and cost management of your services and operations?”. Previous posts are available in our Blog and LinkedIn pages.
SAP PAPM is a powerful and flexible solution that can empower users to build up models that support business decisions. You can use this tool for several uses which can increase significantly the ROI of this implementation.
Controlling
PAPM can be used for project-based planning and controlling for different types of activities and businesses. For example, for constructing companies, it can be a relevant tool for project management and supervision of residential, commercial, industrial or civil construction and engineering.
Metrics
PAPM is a tool that can handle specific metrics and reports for any type of industry. Well designed, it can provide a complete multidimensional P&L at granular level.
| • | Calculation of activity data |
| • | Assignment of GL accounts to resources |
| • | Allocation of resources to activities, activities to services and service groups, products and services to customers and subscriptions and of marketing costs to processes, campaigns, customer groups and products and services |
| • | Value flow report (as presented in our case study), which gives the user end to end traceability from resources through all applied drivers to the result. |
PAPM is also a flexible and strong tool to handle any relevant metrics / ratios, such as:
| • | Net profit margin per dimension |
| • | Net working capital |
| • |
Inventory turnover |
| • |
Cost of services, supplies and other areas of operations on a per case basis |
This is relevant for any business user that pretends to use the tool to support business decisions and comply with reporting. The user can use it as a planning tool, but also to measure defined ratios, identify and reassess target ranges for ratios to maximize how resources are been used, to realize overhead optimization, optimize the supply chain and fulfil with broad regulatory reporting requirements for compliance with regulatory bodies.
We at Stampa & Partners have an extensive track record working with CFOs and supporting organisations in Europe successfully digitalise finance functions, leverage analytics and ensure compliance with new accounting standards. Therefore, we can advise your business with the best solutions to fulfil your goals.
By André Almeida