Performance Based BudgetingLuminita Scarlat / Senior Presales SpecialistSAP Romania28 Martie 2012

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Budget Formulation is an integrated component of a Complete Performance Lifecycle

AnalyticsAnalytics

Cost Management

Do our expenditures align with our strategic vision?

What are the right things to do?

Strategy Management

Costs

Cost Objects

Activities

Processes ExecutionProcesses Execution

SAP Public Budget Formulation SAP BPCBudget Formulation

How should we allocate resources?

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Performance Management

Company- /Area Goals

VisionEnterprise Goals

Board

Higher Management

Department Manager and Team Leader

Strategic Goals• Company goals and • Organizational Goals

Strategic Goals• Company goals and • Organizational Goals

Operational Goals

• On employee basis• Compensation relevant

Operational Goals

• On employee basis• Compensation relevant

SAP Strategy Management

SAP Human Capital Management

Department and

Team Goals

Department and

Team Goals

IndividualGoals

IndividualGoals

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Business StrategyBusiness Strategy

Benchmarking and Key Performance Indicators

Measurable ObjectivesMeasurable Objectives

External BenchmarkingInternal Benchmarking

Definition of

Objectives

Key Performance Indicators (KPI)

Initiatives

Definition of

Objectives

Key Performance Indicators (KPI)

Initiatives

If you can’t measure it, you can’t manage it!!!

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Integrated Talent ManagementOne integrated platform for the best people and talent

Performance, Compensation and

Succession Management

Classroom Training and E-Learning

Recruiting

Planning and Analytics

HCM Service Delivery

Integrated Talent Management

Scheduling and Deployment

Global HRand Payroll Administration

Employee DataOrganizational DataCompetency Data

Eliminates redundant processes and reduces integration costs Wide breadth of functionality across the entire HCM spectrum Unmatched global capabilities

Key Features

Focus

Employee Administration Organizational Management Global Employee Management Benefits Management Payroll and Legal Reporting

Workforce Analytics and Measurement

Workforce Planning

Travel Planning Travel Expense

Manager Portal Employee Portal Employee Interaction Center

Time and Attendance Shift/Roster Planning Scheduling Optimization

Recruiting Onboarding

Classroom Training E-Learning

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SAP Best Practice: Use of PositionPrimary driver of HCM Processes

£$€

Cost Center

Org UnitOrg Structure/Chief

CompensationComp plan, default grade

JobJob familyJob Evaluation

Person

RequirementsSkills needed

Address (Office)

BudgetingSalary, Facility, Travel, EducationPersonnel Cost Planning

$€

QualificationsSkills / Competencies

Learning MapSkills gap/course list

PositionKey Position Occupied/Vacant

SecuritySystem access

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Employee Performance ManagementSAP Solution

SAP Differentiators

SAP Solution

Goal and Objective Management including Cascading Goals

Multi-rater feedback (360 0 ) and offline appraisal capabilities

Full process integration to competency frameworks and learning environment to drive employee development

End-to-end pay for performance process Templates for workflows and analytics

Integration: Seamlessly integrated with compensation management to realize pay-for-performance as well as with other HCM and talent management processes

Highly flexible solution: Allows adoption to organizational processes; cascading goals support with multiple levels of organizational goals

Goal Management

Planning of Individual Objectives

Assessment of Performance & Potential

Calibration

Approval & Follow-up

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Enterprise Compensation ManagementSAP Solution

SAP Differentiators

SAP Solution

Administration of Compensation plans and programs

Budgeting Reviews and Approvals Automatic hand-over of compensation

adjustments into payroll Delivered templates for workflow and

analytics

Integration: Integrated with Employee Performance Management to realize pay-for-performance, with Personnel Cost Planning to create budgets and predict costs, and with payroll master data records for automatic and smooth transfer of compensation changes into payroll

Highly flexible solution: Enables you to meet your compensation strategies and program needs while streamlining and automating the entire process

Establishment of compensation plans

Manager planning and approval

Follow-up

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Budgeting CalculationOverview

Bottom-up approachBudgets are determined and saved at employee levelEmployee-level budget gets added up to obtain the organizational unit budget

Top-down approachBudgets are determined at organizational unit level

You can decide per budget type and budget period which approach to take

Different scenarios for simulation

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The Return On Investment of Integrated Talent Management

Companies with integrated talent management processes and systems experience:

26% higher revenue per employee

28% fewer companies downsized during 2008-2009

40% lower turnover among high performers

87% more likely to “hire the best people“

94% more likely to have “the right people in the right job“

144% more likely to “plan for future talent needs”

Source: Bersin & Associates, 2009

Companies with mature, integrated talent management strategies, have lower turnover, higher productivity and have experienced less downsizing through the economic recession.”

Bersin & Associates, 2009

“

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Questions

Thank You!

Luminita ScarlatSAP RomaniaE-mail: l.scarlat@sap.com0040 740 151 713www.sap.com