​In this second part of a two-part blog, I offer some practical tips on how you can build the business case to justify the investment to implement or migrate your existing SAP BW installation to SAP BW on HANA. If you missed the first part of the blog you can catch up here.
How to build the Business Case for SAP BW on HANA
At this stage I am assuming that you have developed your IM strategy, and you are thinking about the roadmap for deploying it. For this you need the money, and to get the money you need a business case that is realistic and measurable.
For the business case you should think in accounting terms:
1. Balance Sheet Assets
2. Balance Sheet Liabilities
3. Income and Expense (P&L)
There are a number of angles that you need to explore in terms of building the business case and a wide audience that have to be engaged (Accountants, Support Organisation, Delivery Organisation, Management…).
The Accounting Angle
The first I will discuss is the accounting angle.
From a Balance Sheet perspective, you have to think about the current assets that you have in place and the cost of keeping them going – not only the hardware but also the software and licensing (e.g. SAP BW Accelerator licences and hardware and support). For the Balance Sheet you should work through the figures with your accountant and understand what is on the asset register and, if you were to retire it, what would be the taxable benefits that you can derive from this.
Also, when you build the new solution, you should ask the question of your accountants which costs are CapEx and which are OpEx – as they are treated differently from an accounting perspective. A portion of the cost will be moved to your Balance Sheet (which will then get depreciated over a period of time and written off against tax / reduce your tax bill), and the balance to your Profit and Loss account where it will be immediately expensed and used to reduce your company tax bill. You need to remember that you cannot claim the full amount as a “savingâ€
At this stage I am assuming that you have developed your IM strategy, and you are thinking about the roadmap for deploying it. For this you need the money, and to get the money you need a business case that is realistic and measurable.
For the business case you should think in accounting terms:
1. Balance Sheet Assets
- Which assets will be added?
- Which assets will be retired?
2. Balance Sheet Liabilities
- You will incur additional liabilities, but these will only be temporary;
3. Income and Expense (P&L)
- On the income side, I have never seen a report generating income. Even in cases where companies provide Supplier and Customer Portals, it is very difficult to convert this into monetary values.
- On the expense side you have to weigh up the cost of implementing the new solution versus the cost of retaining the existing solution.
There are a number of angles that you need to explore in terms of building the business case and a wide audience that have to be engaged (Accountants, Support Organisation, Delivery Organisation, Management…).
The Accounting Angle
The first I will discuss is the accounting angle.
From a Balance Sheet perspective, you have to think about the current assets that you have in place and the cost of keeping them going – not only the hardware but also the software and licensing (e.g. SAP BW Accelerator licences and hardware and support). For the Balance Sheet you should work through the figures with your accountant and understand what is on the asset register and, if you were to retire it, what would be the taxable benefits that you can derive from this.
Also, when you build the new solution, you should ask the question of your accountants which costs are CapEx and which are OpEx – as they are treated differently from an accounting perspective. A portion of the cost will be moved to your Balance Sheet (which will then get depreciated over a period of time and written off against tax / reduce your tax bill), and the balance to your Profit and Loss account where it will be immediately expensed and used to reduce your company tax bill. You need to remember that you cannot claim the full amount as a “savingâ€
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