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Process documentation Customer Profitability Analysis Locate the document in its SAP Library structure

Purpose

You can use this business process to calculate customer profitability, which is one of the most frequently used methods for customer valuation. Customer profitability is most easily calculated as the difference between revenue and costs. It is more useful, however, to perform detailed customer contribution margin analysis including different revenue types, product costs, marketing costs, and sales costs, to produce a differentiated picture of customer profitability.

The integration of the following SAP systems enables you to achieve this type of comprehensive customer profitability analysis:

·        SAP Customer Relationship Management (SAP CRM)

·        SAP Business Information Warehouse (SAP BW)

·        SAP R/3

The SAP R/3 component Profitability Analysis (CO-PA), which manages cost and revenue data, lends itself optimally for performing more detailed customer contribution margin analysis. The data captured in CO-PA can be transferred into SAP BW for analysis. Similarly, you can also transfer data from SAP BW into CO-PA. In this way, you can use activities entered in SAP CRM to allocate sales and marketing costs to the individual customers that caused them in CO-PA.

Process Flow

This graphic is explained in the accompanying text

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        1.      System posts incoming sales orders in Profitability Analysis (SAP R/3)

This provides an early estimate of the anticipated revenues before the sales order has been completed.

        2.      System posts billing documents and values (SAP R/3)

When a sales order has been completed, SAP R/3 posts billing documents and actual revenues inControllingand in Financial Accounting.

        3.      System performs derivation and valuation in Profitability Analysis (SAP R/3)

When the incoming sales orders and billing documents are posted to Profitability Analysis, the system performs characteristic derivation and valuation, thereby complementing the document data.

        4.      System provides activity data (SAP CRM)

        5.      System updates data in customer knowledge base (SAP BW)

By regularly extracting data into SAP BW, the system updates the data from SAP CRM and SAP R/3 in the customer knowledge base in SAP BW.

        6.      Transfer activities as cost driver (SAP R/3)

You transfer the activities as cost drivers from SAP BW. You do this in Customizing for Profitability Analysis under Tools ® Data Transfers Between CO-PA and Other Systems ® Data Transfer from SAP BW ® Execute Data Transfer.

        7.      Execute assessment (SAP R/3)

In Profitability Analysis, you perform assessment for overhead with the activity as cost driver so that the overhead is assigned to those customers causing it to be incurred.

        8.      System calculates (customer) profitability (SAP R/3)

This is done using a detailed customer contribution margin scheme to compare in Profitability Analysis the revenue made with a customer against the sales deductions and the costs incurred (such as production and sales costs).

        9.      System updates data in customer knowledge base (SAP BW)

By regularly extracting data from SAP R/3 into SAP BW, the system updates the profitability data in SAP BW.

     10.      Analyze customer profitability (SAP BW)

 

 

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