What’s the Price of Sticking With SAP BPC?

Are you wondering where all your team’s time is being spent? Is it all spent on managing software that promises agility for finance teams? In today’s fast-paced and ever-changing business landscape, it is imperative for organizations to be agile. Being able to embrace change and respond quickly has become a key factor in the success of any business.

With modern technologies and disruptive business models emerging faster than ever, if your organization doesn’t embrace change you risk falling behind your competitors. To stay competitive and thrive in today’s dynamic environment, organizations must adopt an agile mindset and be willing to embrace change as a constant.

With SAP BPC, adapting to the quick changes and fostering agility as the modern world demands is difficult. The software, while built for success in the business world of the past, is highly complex and less self-reliant than what the agile organizations of today are looking for. They need a modern solution for modern challenges.

According to PwC’s C-Suite Playbook, nearly half  of finance leaders (49%) selected technology modernization as their top priority for 2024 in a PwC Survey.
As businesses strive for enhanced efficiency and streamlined enterprise performance management (EPM), the call to move away from SAP BPC has grown louder than ever, and here’s why:

The Broken EPM Experience: A Disjointed Landscape

60% of respondents from the BPM Pulse Surveys focus on ‘More Unified Systems’ as part of their finance transformation efforts. What do they mean by more unified systems?

This means that the finance teams want all aspects of performance management to be functional under one system. Planning, budgeting and forecasting, financial close and consolidation, and reporting, all under one system.

With SAP BPC, this is unfortunately not possible. SAP BPC’s requirement to completely migrate (eventually) to other SAP solutions pushes for a fragmented, multi-solution approach:

a.) SAP Analytics Cloud (SAC) for Planning & Analytics

b.) S/4 HANA for Group Reporting for Consolidation

This translates to using two different solutions against one unified EPM solution. Imagine driving a car with misaligned wheels – the journey becomes uncomfortable and unpredictable.

Similarly, a broken EPM experience disrupts an organization’s growth journey.

Finance teams deserve a cohesive and integrated EPM environment, where data flows seamlessly and insights are readily accessible, rather than working with disjointed systems that result in inefficiency and wasted man-hours.

High Business Costs: The Financial Strain

A key factor to consider when evaluating software solutions is the total cost of ownership. With SAP BPC, the total cost of ownership is very high. Let us briefly examine what it entails.

At the outset, there is acquisition or licensing cost, which is the upfront cost of the software, often paid as a subscription amount. Users sticking with SAP BPC will pay this based on the user types they subscribe to, such as BPC standard users or BPC EPM (extended planning and consolidation) users, and the number of users in each type.

Irrespective of whether they move to BPC 11.1 or BPC 2021, they will incur significant added costs for the BW/4HANA licenses they must purchase. Since both are on-premise solutions, there will be costs associated with server infrastructure, hardware, and potentially ongoing maintenance such as updates, patches and support.

Then we have annual maintenance costs, third-party managed services costs for IT support, fixing technical issues etc., and let’s not forget the training costs. The complex interface of SAP BPC requires extensive training for employees. This is not only a financial cost but also a time and resource cost, as you could use the same people who are currently pouring their time into manual tasks could be focused on activities that are of more value to the finance function.

About 64% of businesses use third-party managed services for at least one IT function. However, some organizations are reluctant to use third-party maintenance due to prohibitive costs.

Organizations could still choose to continue with the multi-solution landscape suggested by SAP. In that case, more license, implementation, and maintenance costs will be incurred for operationalizing SAP Analytics Cloud for planning and S/4 HANA for group reporting.

Organizations, often dealing with tight budgets, find themselves burdened by the weight of such steep costs. These expenses can impede investment in other critical areas, hinder growth initiatives, and impact the bottom line.

Unfriendly User Interface: A Roadblock

A user interface should be a gateway to efficiency, not a roadblock. While many business performance management solutions are moving towards finance user-centric solutions with guided workflows and intuitive interfaces, BPC still relies heavily on technical teams to perform.

With the different skills needed to operate, manage, and make changes, a cumbersome interface can stifle productivity and hinder the accuracy of financial decisions. Here are a few factors that customers feel make SAP BPC not a user-intuitive platform:

a.) Need for heavy training
b.) The complexity of navigating the ins and outs of daily tasks
c.) Long data loading procedures
d.) Difficulty in creating custom reports
e.) Lack of intuitive workflows
f.) Coding needed for advanced analytics and simple customizations
g.) Sluggish Excel Add-in

Heavy Dependence on Technical Teams: A Bottleneck

In an era of self-service and empowerment, the last thing finance teams need is heavy reliance on technical experts and system integrators. SAP BPC’s complexity often necessitates extensive involvement from technical teams. This dependency acts as a bottleneck, slowing down processes, inhibiting agility, and zero control. Scenarios such as:

a.) The definition of custom calculations, data transformations, and business rules requires the knowledge of SAP’s proprietary scripting language, Script Logic.
b.) Customizing or modifying data interfaces and connectors requires heavy custom scripting and coding.
c.) Data extraction and modelling from BPC or advanced analysis require specific MDX and SQL skills.

Operating in a VUCA (Volatile, Uncertain, Complex, Ambiguous) world demands flexibility and adapting to changes quickly. SAP BPC requires script logic to accommodate such changes, again increasing the dependence on technical teams.

According to the 2023 CFO Agenda Report by Hackett Group, 75 percent of companies have a major finance initiative addressing digital transformation and technology integration within their finance teams to avoid dependence on technical teams.

Organizations in this modern world yearn for solutions that allow finance professionals to take the reins, empowering them to drive the planning and consolidation without unnecessary delays and absolute control. But SAP BPC takes away control from finance users!

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