Please see the SAP Analytics Approach document, section 'Documentation' for more information about the context of this document.
| Status | Approved |
|---|---|
| Functional Specification Owner | CONNELLY-ext, Delia |
| Stakeholders | |
| Jira Request ID | [ERP-125] Business Case form to capture Project Financial Indicators - Jira |
| Jira Development (Build) ID | [ERP-263] Business Case form to capture Project Financial Indicators - Jira |
| Lean IX App Link | |
| Business Process Reference (L4) | 10.01.03.01. Manage Initiatives and Items | Signavio |
High-Level Specification
| Parameter | Value |
|---|---|
| Application System (Delivery Tool) | SAC Story |
Functional Overview
The Project Business Case captures key financial information about a project in a simplified and standardized format to enable:
- Calculation of key financial indicators to enable comparable financial reporting across a Project Portfolio
- Calculation of Project Scoring to support the Prioritization process
The Business Case includes:
- Capturing financial information such as Sales Prices, Sales Volumes
- Calculation of financial measures such as Sales Forecast, Contribution Margin
- Calculation of financial indicators, such as NPV, MIRR and VCI
- Calculation of Project Score.
Scope
The Project Business Case must be completed for all financially driven projects.
Process Flow Diagram
Step | Description | Comment |
|---|---|---|
| 1. | Create Item | A new Item is created in S4HANA. The Item master data is synch'd to SAC. |
| 2. | Maintain Project Cost | A time-phased Project Cost is required for all Portfolio Items. This is entered at Item level for new Items or copied from Detailed Planning for Items with a Project/WBS. Past periods are automatically over-written with actual costs. |
| 3. | Financial Driver? | If the Project has a financial driver, then a Business Case is required. |
| 4. | Complete Business Case* | Mandatory inputs to the Business Case are made. |
| 5. | Calculate Financial Indicators* | Financial Indicators such as NPV, MIRR and VCI are calculated from the business case inputs. |
| 6. | Calculate Project Score** | If the Project has a financial driver, Project Score is calculated based on the financial indicators from the Business Case. Otherwise, Project Score is calculated based on a Risk assessment. |
| 7. | Maintain Item | Portfolio Item master data is maintained throughout its lifecycle. |
| 8. | Next? | Various planning actions are required throughout the life of the Portfolio Item |
| 9. | FY Budget Request | FY Budget Request is maintained for Items requiring budget for the next Financial Year. This is an annual process for the relevant Items. |
| 10. | Stage Gate Funding Request | A Stage Gate is triggered. Depending on the Item Type and Stage Gate, this may involve a funding request. |
| 11. | Variation Funding Request | A Variation Funding Request is made mid-phase when supplementary budget is required. |
| 12. | Detailed Planning | During the life of the Item/Project a time-phased, detailed plan can be maintained at WBS Element level. This can be copied at Item level to Project Cost. Past periods are automatically over-written with actual costs. |
* Covered in this Functional Specification
** Referenced in this Function Specification, but details not included.
Solution Overview
Input from: Reporting & Analytics Consultant
The Project Business Case incorporates data drawn from the following sources:
- Centrally maintained Master Data
- Project Costs - an Item Financial View maintained in a separate Planning page
- Data inputs directly in the Business Case
- Calculations
The results are stored in DSP against the Portfolio Item.
Story Definition
Overview Page
An Overview Page for 'Portfolio Item Planning & Reporting' will include a link to the 'Portfolio Item Planning' Story.
This multi-page Story manages Cluster, Item and WBS level planning. The Business Case is a page within this Story.
The Story pages for 'Portfolio Item Planning' are defined across the following Functional Specifications:
| Story | Page # | Page | Functional Specification |
|---|---|---|---|
| Portfolio Item Planning | 1 | Project Cost (Item) | ERP-669 SAC Planning Portfolio Items |
| 2 | Project Cost (Cluster) | ERP-669 SAC Planning Portfolio Items | |
| 3 | Business Case (Item/Cluster) | ERP-263 SAC Project Business Case | |
| 4 | Detailed Planning (Item) | ERP-670 SAC Planning WBS Elements |
Further related planning Stories are accessed via the same 'Portfolio Item Planning & Reporting' Overview Page:
| Story | Page # | Page | Functional Specification |
|---|---|---|---|
| FY Budget Request | 1 | FY Budget Request (Item/Cluster) | ERP-669 SAC Planning Portfolio Items |
| |||
|
Story Page 3 - Business Case
Page Objective
This page supports input of the Business Case and calculation of Financial Indicators and Project Score.
Page filters
Report Field Name | Mandatory/Optional | Prompt Type (Single Value, Multiple Single Values, Interval, Selection Option, Hierarchy) | Default Value(s) or Restrictions (please provide default value) |
|---|---|---|---|
| Item Id | Mandatory | Single Value Select from Hierarchy with option to filter by Item attributes such as Description, Person Responsible |
Page level input controls
N/a
Calculations
Calculations are incorporated in the Layout tables below.
Layout
Refer here for a mock-up of the Business Case: Business Case Template - Google Sheets
If multiple data sources consumed by story:
Widget | Data Model | Field | Filter |
|---|---|---|---|
Header | PPM_ITEM | Project Name: CGPL_TEXT-TEXT1 | |
| PPM_ITEM | Project ID /RPM/ITEM_D-EXTERNAL_ID | ||
| PPM_ITEM | Project Owner: /RPM/ITEM_D-ZXX14 | Derive Personnel Name from Position | |
| PPM_ITEM | /RPM/ITEM_D-CATEGORY | Retrieve description from RPM_PROJ_CAT | |
0. Preliminary Information | PPM_ITEM | Year of Project Kick-Off | Mandatory, format YYYY Default to year of /RPM/ITEM_D-PLANNED_START |
| PPM_ITEM | First Year of Commercial Sales | Optional, format YYYY If entered, must be >= Year of Project Kick-Off | |
| PPM_ITEM | Time to Full Maturity (Years) | Optional, integer If entered, must be >= 0 | |
| PPM_ITEM | Discount Rate (WACC) | Mandatory, format % Must be >= 0 and <= 100 If blank, take default from /SYQ/T_SCORING_PARAMS-PARAM_VALUE where: /SYQ/T_SCORING_PARAMS-CALCULATION = 'NPV' /SYQ/T_SCORING_PARAMS-PARAM = 'Discount Rate/WACC' | |
| SCORING_PARAMETERS | 'Years for NPV Calculation' value: /SYQ/T_SCORING_PARAMS-PARAM_VALUE | /SYQ/T_SCORING_PARAMS-CALCULATION = 'NPV' /SYQ/T_SCORING_PARAMS-PARAM = 'Years for NPV Calculation' | |
| PPM_ITEM | Currency | Mandatory Default to Group Currency (EUR) and allow to switch to Item currency (/RPM/ITEM_D-CURRENCY) | |
| Currency Multiplier | Mandatory Select from list (1's, 1,000's, 1,000,000's) Default to 1000's | ||
| PPM_ITEM | End Year for NPV Calculation | Calculated: If First Year of Commercial Sales = 0 then Year of Project Kick-Off + Years for NPV Calculation Else First Year of Commercial Sales + Years for NPV Calculation | |
| PPM_ITEM | Probability of Commercial Success | Optional, format % If entered, must be >= 0 and <= 100 | |
| PPM_ITEM | Probability of Technical Success | Optional, format % If entered, must be >= 0 and <= 100 | |
| PPM_ITEM | Risk Adjustment | Mandatory, format % Must be >= 0 and <= 100 | |
| PPM_ITEM | Working Capital/Sales Ratio | Mandatory, format % Must be >= 0 and <= 100 If blank, take default from /SYQ/T_SCORING_PARAMS-PARAM_VALUE where: /SYQ/T_SCORING_PARAMS-CALCULATION = 'NPV' /SYQ/T_SCORING_PARAMS-PARAM = 'Working Capital/Sales Ratio' | |
| PPM_ITEM | EBITDA at Maturity | Optional, format as per Currency | |
1. Project Cost | PPM_ITEM | Project Cost - Opex: /RPM/FIN_PLAN-AMOUNT | Display-only, format as per Currency Filter:
|
| PPM_ITEM | Project Cost - Capex: /RPM/FIN_PLAN-AMOUNT | Display-only, format as per Currency Filter:
| |
| Total Project Costs | Display-only, format as per Currency Calculated: (Project Cost - OPEX) + (Project Cost - CAPEX) | ||
2. Project P&L Impact | PPM_ITEM | Unit | Mandatory Select from list of defined UOM |
| PPM_ITEM | Product Volumes Unit: /RPM/FIN_PLAN-UNIT | Display-only, same as selected Unit Filter:
| |
| PPM_ITEM | Product Volumes: /RPM/FIN_PLAN-QUANTITY | Optional, format as quantity in selected Unit Filter:
| |
| PPM_ITEM | Product Selling Price Unit: /RPM/FIN_PLAN-UNIT | Display-only, derived as Currency / Unit Filter:
| |
| PPM_ITEM | Product Selling Price: /RPM/FIN_PLAN-AMOUNT | Optional, format is Currency per selected Unit Filter:
| |
| PPM_ITEM | Sales Forecast: /RPM/FIN_PLAN-AMOUNT | Display-only Calculated per year: Product Volumes * Product Selling Price Filter:
| |
| PPM_ITEM | Product Variable Cost: /RPM/FIN_PLAN-AMOUNT | Optional, format as per Product Selling Price Filter:
| |
2. Project P&L Impact | PPM_ITEM | Contribution: /RPM/FIN_PLAN-AMOUNT | Display-only, format as per Currency Calculated per year: Product Volumes * (Product Selling Price - Product Variable Cost) Filter:
|
| PPM_ITEM | Contribution in % of Sales: /RPM/FIN_PLAN-QUANTITY | Display-only, format as % Calculated per year: Contribution / Sales Forecast * 100 Filter:
| |
| PPM_ITEM | Total Fixed Costs: /RPM/FIN_PLAN-AMOUNT | Optional, format as per Currency Filter:
| |
| 3. Cash Impacts | PPM_ITEM | Working Capital: /RPM/FIN_PLAN-AMOUNT | Display-only, format as per Currency Calculated per year: Working Capital/Sales Ratio * Sales Forecast Filter:
|
| PPM_ITEM | Change in Working Capital: /RPM/FIN_PLAN-AMOUNT | Display-only, format as per Currency Calculated per year: Sales Forecast this year - Sales Forecast last year Filter:
| |
| PPM_ITEM | Other Cash Impacts: /RPM/FIN_PLAN-AMOUNT | Optional, format as per Currency Filter:
| |
| 4. Subsidies | PPM_ITEM | Subsidy: /RPM/FIN_PLAN-AMOUNT | Optional, format as per Currency Filter:
|
| 5. Interim Calculations | Year XXXX - Year YYYY | Display only Year XXXX = Year of Project Kick-Off Year YYYY = End Year for NPV Calculation | |
| PPM_ITEM | Discount Period from Kick-Off: /RPM/FIN_PLAN-QUANTITY | Display-only, format as per Currency Calculated per year: If Year < Year of Project Kick Off or > End Year for NPV Calculation then zero Else If previous year Discount Period > 0 then Add 1 to previous year Discount Period Else Add 0.5 to previous year Discount Period Filter:
| |
| PPM_ITEM | Cashflow: /RPM/FIN_PLAN-AMOUNT | Display-only, format as per Currency Calculated per year: If Year < Year of Project Kick Off or > End Year for NPV Calculation then zero Else Contribution - Total Project Costs - Change in Working Capital - Other Cash Impact Filter:
| |
| PPM_ITEM | Discounted Cashflow: /RPM/FIN_PLAN-AMOUNT | Display-only, format as per Currency Calculated per year: Cashflow / (1 + Discount Rate) ^ Discount Period from Kick-Off Filter:
| |
| PPM_ITEM | Risk Adjusted Contribution: /RPM/FIN_PLAN-AMOUNT | Display-only, format as per Currency Calculated per year: If Year < Year of Project Kick Off or > End Year for NPV Calculation then zero Else Contribution * Risk Adjustment % Filter:
| |
| PPM_ITEM | Risk Adjusted Cashflow: /RPM/FIN_PLAN-AMOUNT | Display-only, format as per Currency Calculated per year: If Year < Year of Project Kick Off or > End Year for NPV Calculation then zero Else Risk Adjusted Contribution - Total Project Costs - Change in Working Capital Filter:
| |
| PPM_ITEM | Risk Adjusted Discounted Cashflow: /RPM/FIN_PLAN-AMOUNT | Display-only, format as per Currency Calculated per year: Risk Adjusted Cashflow / (1 + Discount Rate) ^ Discount Period from Kick-Off Filter:
| |
| PPM_ITEM | Cumulative Discounted Cash Flow: /RPM/FIN_PLAN-AMOUNT | Display-only, format as per Currency Calculated per year: If Year < Year of Project Kick Off or > End Year for NPV Calculation then zero Else Discounted Cashflow for this year + Cumulative Discounted Cash Flow for Filter:
| |
| PPM_ITEM | Payback Period (Days): /RPM/FIN_PLAN-QUANTITY | Display-only, format as per Currency Calculated per year: If Cumulative Discounted Cash Flow = 0 then zero ElseIf Cumulative Discounted Cash Flow < 0 then 365 ElseIf previous year Cumulative Discounted Cash Flow > 0 then zero Else (previous year Cumulative Discounted Cash Flow * -1) / (Cumulative Discounted Filter:
| |
| 6. Financial Indicators | PPM_ITEM | Year XXXX - Year YYYY | As above |
| PPM_ITEM | NPV (Net Present Value) | Display-only, format as per Currency Calculated: Sum (Discounted Cashflow) for all years | |
| PPM_ITEM | Risk Adjusted NPV | Display-only, format as per Currency Calculated: Sum (Risk Adjusted Discount Cashflow) for all years | |
| PPM_ITEM | MIRR (Modified Internal Rate of Return) | Display-only, format as per Currency Calculated: MIRR (Sum (Discounted Cashflow) for all years, Discount Rate, Investment Rate) | |
| PPM_ITEM | Discounted Payback Period | Display-only, format as per Currency Calculated: Sum (Playback Period for all years) / 365 | |
| PPM_ITEM | VCI (Value Creation Index) | Display-only, format as per Currency Calculated: NPV / Sum (Total Project Costs) for all years | |
| PPM_ITEM | Project Score | Display-only, numeric Refer to ERP-669 SAC Planning Portfolio Items for the calculation | |
| 7. Comments and Justification | PPM_ITEM_Long_Text | CGPL_TEXT-LTXT | Optional, long text commentary to support Business Case Filter:
|
Actions
Calculate & Save
On 'Calculate & Save', the following automations occur:
- All calculations are performed and the results displayed
- Financial View 'Project Cost' is copied to Financial View 'Project Cost - Scoring' to ensure the Project Cost at the time of the calculation is saved.
Story Page N+1 (etc.)
Story Filters
Report Field Name | Mandatory/Optional | Prompt Type (Single Value, Multiple Single Values, Interval, Selection Option, Hierarchy) | Default Value(s) or Restrictions (please provide default value) |
|---|---|---|---|
Data models
| Data Model Technical Name | Data Model Description | Jira Development ID | Link to Data Model Functional Specification |
|---|---|---|---|
| (Filled when available) | Text for data model | ||
Business Roles
Design Rationale
Input from: Reporting & Analytics Consultant
Assumptions
Dependencies
Special Requirements
Frequency of Analysis/Report Run
Testing Considerations / Dependencies
N.B. Unless this is a planning story, the testing should cover layout and user experience NOT data values for metrics created in the data model. Data model values will be tested in conjunction with the data model specification.
How to test
The developer will need to test repeatedly, so where appropriate provide instructions to reverse the actions performed so the test may be run again, or explain how to create new input data to the test. In particular, the developer will need logons for test users representing the various roles within the approval process.
Test Conditions and Expected Results
| ID | Condition | Expected Results |
|---|---|---|
Testing Considerations / Dependencies
Other Requirements