SAP Profitability and Cost Management: Understanding and Controlling IT Costs

Discover how SAP Profitability and Cost Management allows you to quickly and easily model IT expenses, enable credible cross-charging, and perform reliable analysis, with action-oriented insight.

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    • SAP BusinessObjects Profitability and Cost Management: understanding and controlling IT costs. This demonstration shows how SAP BusinessObjects Profitability and Cost Management allows you to quickly and easily model IT expenses, enable credible cross-charging, and perform reliable analysis, with action-oriented insight. Enabling you to take an activity-based approach to assigning IT costs,. understand which IT resources each department is consuming, and drive down the cost of IT to achieve competitive advantage. Quickly and easily model IT expenses. Brenda Wilson is head of IT Finance. She uses SAP BusinessObjects Profitability and Cost Management to view an activity-based costing model for IT services that are cross-charged to other departments. The software includes built-in dimensionality such as departments, line items, and activities. Brenda starts by looking at activities associated with the Management department. These assignments were made with simple mouse clicks or implied from the data. Brenda can also view activities assigned to outputs such as applications, services, and internal customers. When she checks the activity "provisioning PCs," she can see that it was assigned by using the number of PCs as the activity driver. When she checks which IT equipment and services it has been assigned to, she can see it has gone to all workstations,all clients,and all applications. Enable credible cross-charging. Now Brenda wants to view her reports. She can view IT expenses in the Expenses by Version dashboard. She can compare actual, budgeted, and forecasted expenses. She can also analyze fixed versus variable costs. She notices that the Management department is over budget for this year and last year. Brenda checks the Resource by Activity screen to see how IT expenses were assigned to the IT organization. She especially wants to look at expenses for PC deployment, because the head of the Sales department has expressed concern that cross-charges for this activity were high. She can see that resources consumed by PC acquisition, storage, and maintenance are high. She'll discuss with her management whether they should extend the life of their PCs to drive down this cost. She can also see that resources consumed by help desk and training are high, and she'd like to analyze this further. She'll discuss this with the department heads to identify the root cause of this cost. Finally, Brenda looks at the Activities Cost dashboard, where she can view costs by department, the breakdown of fixed and variable costs, and cost assignment for indirect activities. She drills down to view individual departments in the IT organization and to see the support activities. She can see the exact costs assigned for indirect activities such as training IT staff. Perform reliable analysis, with action-oriented insight. Brenda needs to analyze IT costs and model different scenarios. The Output Costing dashboard lets her analyze the cost of every project and application by client, along with trace-back to the IT department. Brenda drills down to view the applications and projects for the sales department to investigate the concerns expressed by the head of Sales. Application support and PC deployment and support are the highest costs. Brenda checks the unit rates to see if Sales could reduce costs by deploying base-level PCs. She sees that base-level PCs are charged at the calculated unit rate rather than a fixed price, and that there's an add-on charge for h
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