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SAPexperts | A Step-by-Step Look at the Analytic Functionality in CO-PA and mySAP CRM

Hom e > CRM > Toolbox > A Ste p-by-Step Look at the Ana lytic Func tiona lity in CO -PA a nd my SAP CRM

A Step-by-Step Look at the Analytic Functionality in CO-PA and

mySAP CRM
by Mitresh Kundalia, Director S AP Practic e, Quality Syst ems & Soft ware
November 18, 2005
SAP Business Information Warehous e (BW ), my SAP CRM, and R/ 3 Profitability Analysis (CO-P A) functionalit ies c an be
used to track your organizat ion's profitability. BWs analytic capabilities can collectively analy ze the CRM cost s ass ociat ed
wit h bus iness activities that serve your customers and the back -end revenues and costs from CO-PA. Here is detailed look
at the analyt ical capabilities of CO-P A and mySA P CRM. (This method works with mySA P ERP as well as R/3.)

Analytic Functionality in CO-PA and mySAP CRM

CO-PA allows you t o perform contribution margin analy sis, which is revenue minus product cost s and other sales costs. A
det ailed cont ribut ion margin analysis includes produc t cos ts, market ing c osts, and other overheads . Figure 1 shows the
components of cont ribut ion margin.
Component

Value

Gross sa les

500

Customer discounts

20

Other di scounts

10

Net sale s

480

Product costs

250

Contribution margi n I

220

Direct sales costs

20

Cam paign costs

10

Other custome r costs

10

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SAPexperts | A Step-by-Step Look at the Analytic Functionality in CO-PA and mySAP CRM

Contribution margi n II

180

Figure 1 Components of cont ribut ion margin

As the name s ugges ts, t he primary objective of CO-PA is to do profit ability analysis. CO-PA lets y ou underst and where
your profits came from. It provides information you need t o mak e strategic bus iness decisions . It lets you answer ques tions
suc h as:
Who are my most profitable c ustomers?
What are my most profit able product lines?
What are the profit margins of my business segments?
CO-PA combines value fields, whic h give numeric values for revenues or costs, with characteristics , which show the causes
of profit values (for example, customer, product line, and sales area). The combination of charact erist ics and values is
referred to as a profit ability segment . For example, a profitability segment answers the ques tion, "What is the t echnical
definition of my s ales channel?" It could be a c ombination of " region north," "cust omer group government cus tomers," and
"product group electronics." Figure 2 shows typical c harac teris tics, value fields, and profit ability segment s.

Fi gure 2

Profitability anal ysis cha racte risti cs, value fields, and segments

The profitability data (characteristic s and value fields) is represented as multi-dimens ional InfoCubes (Figure 3). The dat a
shows the source t ransaction sales order or the invoice posted in the sys tem. Using derivation, additional information such
as SBU, customer region, or sub-region is determined for more analys is. The profit margin informat ion (revenues, discounts,
and cost s) is transferred from the source t ransaction. Using valuation, t he es timat ed sales c ommis sion is determined.
Additionally, with cost assessment, sales overheads are determined. The profit ability information then is available in a multidimensional InfoCube for specific reporting for profitability s egments.

Profitability data flow in CO-PA

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Fi gure 3

SAPexperts | A Step-by-Step Look at the Analytic Functionality in CO-PA and mySAP CRM

Profitability data flow in CO-PA

You can design the CO-P A structure depending on your own requirement s. If your organizat ion puts more emphas is on
cus tomer-related c harac teris tics (for example, s ales offic e, customer group, and sales group), you can include these
characteristics in your CO-P A des ign. Another company might want to add produc t-related characteristics for its analys is.
The same applies t o the number of value fields you can c hoose the amount columns you want t o analyze (for example,
product revenues, service revenues, product disc ounts , cus tomer disc ounts ). This design flexibilit y mak es it poss ible for y ou
to analy ze customer profitability based on your organization's unique needs.
Analytic al CRM allows y ou to analyze information and OLAP funct ionalities . Cus tomer profitability is part of cust omer
analytic s. Ty pical analytical CRM task s inc lude:
Understand how profitable the bus iness is
Monitor, understand, and influenc e cus tomer behavior
Foc us limited resources on t he most valuable cus tomers
Analyze marketing initiatives and influence future marketing campaigns
Plan for future customer dis count and promotion programs
Understand and analyze plan vs. actual results
Gain ins ights into all important perspectives of service activities performed, the drivers behind them, and the financ ial
performance of the service organization
Understand the performance of eac h int eract ion c hannel to optimize resources
Various analy tical applications are available within the s tandard my SAP CRM:
Marketing (marketing analytics)
Sales (s ales analy tics)
Services (service analy tics)
Cus tomers (customer analytic s)
Products (product analy tics)
Int eract ion c hannels (c hannel analytic s)
Marketplaces and Internet (market place and Web analyt ics)

Mitresh Kundalia
Mit resh Kundalia heads the S AP practic e at Quality Sy stems & Software (www.QSandS.c om).
QS& S is a leading business and technology c onsulting firm that specializes in delivering
superior IT s olutions using SAP produc ts. Mitres h is widely ack nowledged as a leading SA P
expert and has worked on various SAP assignments , inc luding strategic planning, fresh
implementations, upgrades, and post-go-live support projec ts. W ith an MBA degree in finance,
Mit resh manages SA P projects with a special focus on customer-focused solutions,
management reporting, profit ability analysis, SA P General Ledger, and bus iness intelligence.
He is a regular contributor at SA P events and publications and technical advis or to leading
journals . His book on s egment reporting is published by SA P PRE SS. Y ou may contact him
via email at Mitresh@QS andS. com.
Mit resh will be a presenter at Financials 2014 in Orlando on March 1821. For information on
his sess ions click here . To regis ter for this conference c lick here .
See more by t his author
If you have c omments about t his article or publication, or would lik e to submit an artic le idea,
please c ontac t the edit or.

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