Personnel Expenditure Planning

Personnel Expenditure Planning (PEP) allows forecasting personnel expenditures to be included in a public sector organization’s formulation of the adopted budget or to carry out a mid-year analysis of year-end cost estimates. PEP uses information from the Human Resource (HR) system to establish an organization’s position and employee salary and benefit costs.

The PEP calculation process forecasts personnel expenditures based on information from the HR system and any changes made by budget analysts.

The PEP projection calculation forecasts personnel expenditures as of a point-in-time, allowing fixed amount and percentage-based changes to salary and benefit costs without changing the underlying definitions of those objects. The projection scenario can also include or exclude vacant positions. If the vacant positions are included, you can also define a lag month value. Lag months are the number of periods before costs associated with vacant positions begin to be calculated.

Currency conversion is supported by allowing a global currency, as defined by the currency attribute on the FM area used in the projection, and an alternate currency. The alternate currency is defined in the Employee and Position master data. PEP results will always include one key figure for the global currency and another key figure for the employee and position currencies. Standard currency conversion configuration must be maintained for the currency conversion to work properly.

There is no limit to the number of projection scenarios that can be executed within a budget cycle and each can be used for analysis only or selected to participate in the budget development process. The results of a projection scenario can be posted to the projection cube, the budget form cube, or both.

PEP Projection Types

PBF offers two types of PEP projections:

Fiscal period projections were the original type of projections offered by PBF. Fiscal period projections use the configured fiscal year variant to determine how the results are to be calculated. For fiscal period PEP, the lowest level of results are at the fiscal period level. Additionally what-if projections can be executed on top of fiscal period projections. What-if projections use previously executed fiscal period projections, known as reference projections, and take additional selections and input criteria to produce new results based on some specific scenarios. Examples include adding or removing benefits, changing pay scale or step date criteria, and so on.
Flexible pay period projections were added to address the requirement to produce results by pay period. These projections produce results at the fiscal period and pay period levels. For flexible pay period PEP the lowest level of results are at the pay period level. Flexible pay period PEP utilizes the same configuration and master data as fiscal period PEP (with some exceptions) and also requires some additional configuration. The same employee and position master data can be used for either fiscal period PEP or pay period PEP with one exception: benefit rule maintenance requires additional information for pay period month, year, and accumulators to calculate benefits for pay period PEP.
Pay period PEP offers the following additional functionality:
- Attrition and Backfill Projections
  
  Attrition and backfill projections can be executed on top of pay period projections. Attrition and backfill projections use previously executed pay period projections, known as reference projections, and take previously configured attrition and backfill rules to produce new results based on some specific scenarios. Attrition and backfill rules can be configured as attrition only, backfill only, or attrition and backfill.
- Flexible Source for Employee and Position Master Data
  Pay period PEP supports having employee and position master data for PEP in DSO objects rather than the employee and position InfoObjects. There are several setup steps and configuration required to use this options. Details for all pay period PEP, attrition and backfill and maintaining employee and position master data DSOs can be found in Solution Manager.

The following diagram illustrates what functionality each PEP type supports:

PEP Type	Fiscal Period Results	Pay Period Results	What-if Scenarios	Attrition and Backfill Scenarios	Employee and Position MD from DSO
Fiscal Period PEP	X	-	X	-	-
Flexible Pay Period PEP	X	X	-	X	X

PEP global configuration — such as parallelization parameters, global table settings, and currency conversion types — are utilized by both fiscal period and pay period PEP. There are additional configuration steps specific for fiscal period PEP and pay period PEP.

Assumptions

This document assumes that you have some level of familiarity with the terminology and the functions associated with PBF PEP. This document aims to provide you with all the information you need to navigate through and optimize the performance of PBF PEP. We recommend that you refer to this document whenever necessary during the hands-on operation of PBF PEP.

While there are two types of PEP available — fiscal period PEP and pay period PEP — it is assumed that customers will use one type or the other, but not both.
Fiscal period PEP Allows what-if scenarios and pay period PEP allows attrition and backfill scenarios. Fiscal period PEP will not support Attrition and backfill scenarios and pay period PEP will not support what-if scenarios.

Features

Most of the data needed for the fiscal period and pay period PEP calculation will be imported from the HR system. The information will be imported at the beginning of each budget formulation process. Within SAP Public Budget Formulation, the fiscal period and flexible pay period PEP calculations are based on data defined for positions, employees, jobs, benefit rules and rates, and pay levels. Each of these elements are defined separately but are related. Due to the relationships between each of the PEP elements, the components must be defined in a specific order:

Pay Levels
Benefit Rules
Benefit Rates
Jobs
Positions
Employees

Relationships

Benefits are assigned to jobs, positions, and employees
Jobs are assigned to positions and employees
Positions are assigned to employees

SAP Public Budget Formulation supports and also qualifies all the positions and employees that have different Job Classes maintained for a given position and its corresponding employees.

The PEP calculation will attempt to find the data at the employee level. If an item is not found for the employee, the calculation will look to the related position and then, if necessary, will look to the job class maintained at the employee level.

Similarly the PEP calculation will attempt to find the data at the position level. If an item is not found for the position, the calculation will look to the job class maintained at the position level.

Screen Overview

There are a number of characteristics common to each of the PEP Projection screens. The fiscal period PEP and flexible pay period PEP both have:

An initial selection screen that can retrieve an existing projection, create a new projection, and copy a projection
A Projection Selection tab with characteristics used to filter the projection, such as FM dimensions, pay grade levels, job, and so on
A Projection Parameter tab with the date range of the projection
For fiscal period PEP the dates are converted to fiscal period and year. For flexible pay period PEP a pay type is required (monthly, weekly, and so on) and the dates are converted to pay period and year.
A Projection Configuration tab
The settings for indicating the calculation should include employees only or include vacant positions (Vacant Flag), save the projection master data for use as a reference projection (Save Master Data Flag), and saving the results only to the InfoCube or not (Post Results Only to Cube Flag).
A Benefit Table tab where increases or decreases to benefits can be entered

These are entered by fiscal period or pay period depending on which PEP application is being executed.
A Salary Table tab where increases or decreases to salary grades can be entered

There are entered by fiscal period or pay period depending on which PEP application is being executed.

Prerequisites

The following configuration prerequisites apply to both fiscal period PEP and flexible pay period PEP (access via backend IMG transaction SPRO):

Maintain PBF Global Settings (PEP related settings)
Maintain PBF Projection types
Parallelization of Global Settings

The following configuration prerequisite applies only to fiscal period PEP:

Process Chain Configuration

The following configuration prerequisites apply only to flexible pay period PEP (access via backend IMG transaction SPRO):

Maintain Pay Period Process Chains
Maintain Pay Period Types
Upload Pay Period Table from File
Display Pay Period Table entries
Maintain Pay Period Process Chains
Maintain Master Data DSO for Employee and Position (optional)
Business Add-in (BAdI) for Attrition and Backfill (optional)

The following master data prerequisites apply to both fiscal period PEP and flexible pay period PEP:

Country ID
Pay Scale Type
Pay Scale Area
ES Grouping CAP
Pay Scale Group
Pay Scale Level
Promote Date
Salary Override
Employee Group
Employee Sub Group
Personnel Area
Personnel Sub-Area
FM Area
Fiscal Year Variant
Fund Center
Funded Program
Grant
Functional Area
Fund
Benefit Area
Benefit Plan
Distributions
Positions
Employees
Benefit Rules
Benefit Rates
Pay Levels

For flexible pay period PEP there is additional prerequisites:

Benefit Rules for Pay Periods

For attrition and backfill projections there are additional prerequisites:

Attrition Rules
Attrition and Backfill Group Rules