Case study - Presenting a cost allocation and monitoring program

This is the second 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?". The previous post is available in our Blog and LinkedIn pages.

Cost allocation and monitoring program


For the full article please click here              Download Article

SAP Profitability and Performance Management (PAPM) is a tool built on SAP HANA which empowers teams and decision-makes on the decision-making process.

By using existing SAP and/or non-SAP data, it allows to understand, control and manage costs drivers and how value is generated and can be optimized.

One of the most common uses of PAPM is the cost allocation. Here it is presented a cost monitoring program scenario.

Scenario
Global company MS is a global entity present in 4 geographical areas, with 43 offices worldwide. Part of its Opex (15% as of Jun2019, circa CHF100m) is cost run by the HQ.

The detailed is presented below:


MS allocates the overheads to its local operations using a waterfall structure:



More recently, MS started a cost monitoring program and now plans to narrow salary gaps after media pressure.

The allocation process supports the pursuit of those goals:

  • Infrastructure country’s headcount as proxy
  • IT Service Desk  charges (number of minutes) per call to IT Service Desk
  • HR Costs  Salary x Salary GAP x Headcount as a proxy
  • Admin expenses  Operating expenses

In order to speed the process and reduce effort and risk of the manual solution in place, MS decided to adopt SAP PAPM. How will this tool use its features to address MS objective efficiently?

Please stay connected to access next week’s second part of our Cost allocation / monitoring program Case Study.

In case you want to access the full article please click on the following link:

Download Article

We also organized a Webinar on this case study, a replay of that session is available here

Download Session Profitability and Performance

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

Topics: Consolidation Planung Financial Consolidation Budget Group Reporting S/4 Finance sap group reporting PAPM cost allocation monitoring program