Copa 2
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The document discusses how CO-PA (SAP's Profitability Analysis tool) and SAP BW (Business Warehouse) work together as a powerful combination for profitability reporting. CO-PA provides consistent profitability data while SAP BW allows for advanced reporting and analysis of this data across multiple systems. Some key benefits include separating transactional and reporting tasks to optimize performance, consolidating data from various R/3 systems, and integrating data from non-SAP legacy systems.
Copa 2
- 1. CO-PA and SAP BW – A Winning Team The powerful integration of CO-PA and SAP BW adds value to your business by combining: s CO-PA’s proven business model and consistent profitability data basis with s SAP BW’s replication model and state-of- the-art cross application reporting. To guarantee that controlling in your enterprise is geared towards success, it is essential to be able to assess the profit margin of your economic activities at any given time. The best way to achieve this is to ensure that your integrated value flows allocate revenues and costs to the business units and market dimensions which are relevant for decision- making. Typical questions that have to be answered are „Which products and markets generate the highest contribution margin?“, „How do individual customers or customer groups affect my results?“, and „To what extent have my sales employees attained the set goals?“ Just as your Profitability data must be complete, up-to-date and must meet your specific controlling requirements, it is equally important to be able to analyze this data smoothly and efficiently. The joint implementa- tion of SAP R/3’s Profitability Analysis (CO-PA) and the SAP Business Information Warehouse (SAP BW) provides you with two complementary systems, each with its own emphasis: s CO-PA provides a reliable data basis for determining the profit margin for your sales activities (using the definable business model for contribution margin accounting) and for assigning the profit margin to the responsible market segments (such as regions, customer groups and product divisions). In Focus
- 2. s SAP BW affords a cross- application information infrastructure with company- wide uniformity. This infrastructure provides up- to-date profit information from CO-PA and allows you to analyze this information with a modern and sophisticated reporting tool. Due to the technical compatibility of these two products, their core competencies supplement each other perfectly, forming an unbeatable combination. What Profitability Analysis Does Best The core competency of CO-PA resides in consistently combining the revenues earned with the costs incurred and in determining the result at the market segment level. Accordingly, the integrated business model of CO-PA offers different value flows, which allocate revenues and costs to the market segments where they occured. This includes on the one hand the data transfer and valuation of sales documents for relevant market dimensions. On the other hand, a full range of allocation transactions enable you to apply overhead costs to the products, customers and divisions that incurred them. This integrated business model meets the requirements of different industries ranging from retail companies and service companies to make-to-order producers. For this purpose the data of all sales processes, such as sales from stock, third party business and intercompany sales are transferred to CO-PA and demonstrate how CO-PA integrates all relevant profitability aspects into a complete picture. In all these cases, the quantities sold together with corresponding revenues and cost of goods sold are recorded real- time in CO-PA. Thus CO-PA allows you to perform consistent profitability reporting at any given time. As an instrument for internal profitability accounting, CO-PA enhances profitability information further with valuation. Valuation uses accrual methods for calculating accrued costs such as freight costs, commission, or cash discounts, and can retrieve detailed product cost information, if desired. Depending on your reporting requirements, you can use CO-PA to determine either a sales result by using the full costs or a contribution margin by separating fixed and variable costs - the latter supporting a break-even analysis. Furthermore, CO-PA’s interaction with R/3’s Material Ledger allows you to attain a result at the end of the period using actual costs. You can supplement the contribution margin information with the remaining costs of the period: Administrative and sales costs are allocated to the market segments where they occurred. The costs of goods manufactured are updated with the production variances and the variances of production cost centers. Finally, the information can be rendered complete by incorporating actual postings, such as actual cash discounts and actual freight. Thus CO-PA provides a powerful tool for customer and product contribution margin accounting, which you can use to analyze accurate profitability information of individual market segments. Profitability Reporting with SAP BW The SAP BW is a ready-to-use data warehouse solution with which you can collect all data in your enterprise that is relevant to reporting. You do this by means of generic data structures (InfoCubes) and you can then combine this data for analysis using the reporting frontend (Business Explorer). In SAP BW, you will in many cases report period end results that you have taken from CO-PA (by taking the closed income statement, for example). In other cases (such as for short-term profitability analysis purposes or for use as an early warning system), it makes sense to use a more recent replication interval (usually a daily interval), which is also optimally supported by CO-PA and SAP BW. With this replication model you separate transaction- based applications from resource comsuming reporting activities.
- 3. Scenarios Aside from the existing possibilities in Drill-down- Reporting within CO-PA and the existing ALE-scenarios in the R/3 System, you can add value to your profitability reporting with the help of SAP BW in the following scenarios and situations: High-Volume and Cross-Application Reporting In a typical scenario of how SAP BW is used in profitability reporting, you move reporting tasks from the R/3 System into an independent system. For such a scenario, the R/3 System operates as an OLTP (Online Transaction Processing) system, which runs the operational business, while the SAP BW system serves as an OLAP (Online Analytical Processing) system. By diverting the performance- intensive reporting tasks to a separate system, the following strategic advantages can be gained: s Reporting does not affect the response times of operational business transactions in the OLTP system s Each system can be optimized to perform its specific tasks: You can tune the R/3 System to efficiently perform OLTP-typical parallel updates and single- record accesses, whereas the SAP BW system can be adjusted to handle complex search requests that involve summarizing large sets of hits. Competing updates are bundled via cyclic replication, thus eliminating any interference with the queries. s OLTP transactions do not influence the response times of reporting. s Besides the technical advantages, the efficiency of reporting is further increased by uniformly reporting across all functional areas and R/3 applications. Collecting Profitability Data from Several R/3 Systems For environments involving several R/3 Systems that represent, for example, slightly different methods of profitability analysis for various countries or business units, it is essential to gain a cross-system view. In this scenario, the results from different organizational subunits are combined into a single InfoCube in SAP BW that contains the same reporting levels and calculations of contribution margins. CO-PA provides the necessary functions for preparing your data basis for group profitability: s You can classify your business processes according to sales between affiliated companies and customers. This classification of internal and external customers enables you to report your group profit by analyzing profits from external customers as well as profits from affiliated companies. s Furthermore, we recommend valuating quantities sold with the group cost estimate in parallel value fields in CO-PA to eliminate intercompany profits. The data thus prepared in CO-PA can easily be extracted into SAP BW. The powerful integration of CO-PA and BW also allows you to harmonize heterogeneous operating concerns: s If a business unit (affiliate, division, country) stores sales data in CO-PA at a more detailed level than other units, appropriate presummarization can be carried out when the data is transferred.
- 4. 50 034 426 (9910/13) SAP Headquarters: SAP AG • Neurottstraße 16 • 69189 Walldorf • Germany • Tel.: (+49)1805343424 • Fax: (+49)1805343420 © 1999 by SAP AG – including screen shots by SAP AG. All rights reserved. SAP® , the SAP logo, and R/3® are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. All other products mentioned are trademarks or registered trademarks of their respective companies. Design: SAP Communications Media s If there is no need to integrate your data into R/3 Accounting, SAP BW can provide an excellent cross-system view when data is loaded directly into SAP BW. The powerful staging mechanisms within SAP BW provide extensive support for importing external data, data quality management and subse- quent bulk updates of the imported data. Conclusion CO-PA is the R/3 business application, which provides a consistent data basis for analyzing the profitability of your company’s activities. Given one of the scenarios described above, SAP BW complements the business application CO-PA by providing a sophisticated replication model and a modern reporting tool. s If a division system stores a detailed cost component split for the COGS while group-level reporting is carried out in less detail, cost of sales can be aggregated from the split during data transfer. Collecting Profitability Data from Legacy Systems A third typical scenario for the implementation of CO-PA with an SAP BW installation is when affiliated companies or parts of your company operate systems other than R/3 and their data has to be consolidated in your reporting of group profitability. s External data transfer into the R/3 system is recommended when Financial Accounting and Management Accounting are updated simultaneously. In this case the integrated business model of CO-PA will assure the consistency of your profitability data.