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Hello HCM community,


I am pleased to announce the general availability of SAP Operational Headcount Planning. After releasing SAP Advanced HR Analysis this is already the second rapid-deployment solution in 2013 in the HR Planning and Analytics space. This means that we are on track according to my outlook for 2013.

 

SAP Operational Headcount Planning rapid-deployment solution

 

After having lots of conversations with customers about headcount and cost planning processes we found out that this is still a ‘Microsoft Excel based exercise’ in many organizations. Usually at the beginning of the process either HR or (in most cases) Finance sends out prefilled planning sheets to line management. After the sheets are filled out they are send back. At this point the complex (and questionable) consolidation starts. At the end of the consolidation, at the time that nobody really trusts the numbers anymore, the executive needs to sign off on the final plan.


Salary and headcount planning takes place in every organization and is an integral part of the integrated business plan. As described this is often a cumbersome, manual and disconnected effort. Business managers need a standard process, executives need deep insight, and finance needs the real costs. That is why we developed SAP Operational Headcount Planning rapid-deployment solution.


The SAP Operational Headcount Planning rapid-deployment solution aligns workforce plans with financial budgets. The solution reduces the amount of time spent on budgeting and improves the accuracy of the budget by providing one integrated process for all stakeholders.


Since many organizations run headcount planning processes on data coming from multiple SAP back-end systems,  and possibly even other HR systems of records, we have built Operational Headcount Planning on the flexible SAP Business Planning and Consolidation platform. This platform runs on top of NetWeaver BW and can consolidate data coming from SAP and it can even handle spread sheet uploads to accomplish planning on the whole planning population. 


Salary and Headcount Planning process


The process we support is quite straight forward, as you see in the following process chart:

 

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A brief description per process step:


Before the process starts the data is loaded into the BPC planning application. First the data from either the SAP Payroll or from SAP HR Infotypes is gathered on SAP ECC and is extracted into SAP NetWeaver BW. Data gathering is supported by basic customizing in the SAP Personnel Cost Planning and Simulation module. A best practice for this customizing can be set up as part of the implementation. Once that data is extracted in SAP NetWeaver BW a data management package feeds it into BPC.


Preparation phase


Usually the process starts when executives, controlling, and HR discuss the corporate strategy and the available budgets for workforce cost and headcount. At this point the maximum number of headcount and cost is determined. The headcount is broken down by job role to define what skill sets employees should have. This top-down demand forecasting is supported by the solution.


During this phase also the financial parameters can be entered. Financial parameters could be a bonus, merit increase, social insurance rate, or a pension rate. These rates and even the parameters vary per country and per job. Therefore SAP Operational Headcount planning delivers a flexible concept handles modeling of these parameters according to customer requirements.


After the demand is set up and the parameters are filled in, the planning can be cascaded to the different cost center managers. Distributing the planning is workflow (or Business Process Flow in BPC terminology) supported.


The following mock up shows the BPC web functionality that supports the administrator during the preparation phase.

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Planning phase


In the planning phase the cost center managers receives an e-mail to start the planning. First step for the manager is to get familiar with the budget that is provided. The planning sheet shows the forecasted total headcount number and the total workforce cost. This information is displayed on the central planning sheet in which the manager has an overview of all employees, including all cost items.


We differentiate two types of cost :

  1. Employee and position related cost;
  2. Cost that are directly tied to a cost center. For example education and travel cost.

Both cost types can be planned for.


Once the manager validated the budget and the data in the prefilled planning sheet, he or she can start modeling their headcount by adding new positions, transferring a position to another cost center, terminating a position, changing the FTE of an employee, etc. Basically all actions that can be expected from an employee based planning tool.


After the position modeling activities have taken place the cost impact can be maintained.  The salaries and bonuses can be filled in, and even the expected travel and education cost can be entered. Comments can be added for all the changes that are made by the manager. This provides reasoning behind the numbers.


The following mock up shows the planning template for the manager to maintain the employee cost:

 

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Displayed is the overall budget, the fringe cost, and an overview with all positions and employees. If a position is not available the line is ‘greyed out’.


Once the manager is satisfied with the planning he or she can submit that planning and the workflow guides this to either a higher level manager, or to the HR or finance administration. The process flow is dependent on the approval process that is required.


Approval phase


During the approval phase the approver logs on to the solution and reviews the planning sheets that are submitted. All planning actions undertaken by the manager are visualized by planning statuses and. This makes is easy for the approver to identify and comment on the changes. The approver can check if the planning is in line with the top-down corporate forecast. After validation the approver can either approve or reject the planning. When approved the planning can be rolled up further along the structure of the organization.


The following mock up shows the web functionality that point the approver to the cost centers that need to be reviewed:

 

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Monitoring


Throughout the planning process there are two kinds of monitoring:

  1. Status tracking during the planning process;
  2. 2. Reporting on workforce and cost.


All planning sheets can be tracked. Usually headcount and salary planning processes are time dependent. Therefore, planning statuses are added to the planning sheets. This allows administrators to remind planners that are running behind with finalizing their planning.


With SAP Operational Headcount Planning we also deliver both web-based reports as Excel based reports that provide insight in workforce and workforce cost. These reports show movement within the workforce that can be broken down per job, position or cost center structure. On the financial side reports are delivered that show all planned cost versus the actuals during the year, and reports that show different levels of cost per section of the organization.  
The following mock up shows a cost report that visualizes all employee related cost per cost center:

 

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A lot has been written about Operational Headcount Planning already. Jean-Bernard Rolland first described Operational Headcount Planning in his blog about SAP’s offering for workforce planning and analytics. Kouros Behzad described the positioning of Operational Headcount Planning in our overall portfolio in his blog about workforce planning. In this blog Kouros clearly explained all the planning solutions we have at SAP, including the different value adds.


So why is Operational Headcount Planning different than other applications?


SAP Operational Headcount Planning provides a data model and best practice planning templates that will meet 80% of most customers’ requirements. Truly differentiating is the flexibility of the BPC platform. This allows changes to planning templates in hours and not days or even weeks of development. In most cases development can be done by key users, and do not need consulting effort. 


Since headcount and cost planning processes are different in each organization with regards to workflow, and even what data should be planned for, these capabilities in BPC differentiate. The front end of the solution consists of the web based BPC functionality for the process navigation and the EPM Add-in for the actual planning. This Add-in to Microsoft Excel enables an Excel based planning. This means that BPC offers all the advantages from Microsoft Excel (like flexibility, and calculations) on top of the robust SAP data model.


What is included in the rapid-deployment solution?


In the RDS we packaged all the content that was described. The runtime licenses for the BPC platform are included, and from an enablement perspective all materials like a step-by-step implementation guide, test scripts, and end-user training are provided.


How can this be implemented?


During the eight week implementation the data model part is covered. This means that the NetWeaver BW data model is set up and possible adjustments to the delivered extractor will be made. The BPC application will be configured. This means that the data management package will be implemented, the business process flows, and the data security model will be set up.


In summary, the newly SAP Operational Headcount Planning supports your annual headcount and cost planning cycle. It includes all the features you need like workflow, actuals coming from SAP HR, and planning in a user friendly environment. The solution is based on a best practice process and the underlying BPC platform provides all the flexibility to be up and running within weeks. More info can be found on: service.sap.com


If you have any questions about SAP Operational Headcount Planning rapid-deployment solution, do not hesitate to reach out!


Best regards,


Frans

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