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Performance Based Budgeting

Performance Based Budgeting. Luminita Scarlat / Senior Presales Specialist SAP Romania 28 Martie 2012. Costs. Activities. Cost Objects. Budget Formulation is an integrated component of a Complete Performance Lifecycle. Analytics. Strategy Management. What are the right things to do?.

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Performance Based Budgeting

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  1. Performance Based Budgeting Luminita Scarlat / Senior Presales Specialist SAP Romania 28 Martie 2012

  2. Costs Activities Cost Objects Budget Formulation is an integrated component of a Complete Performance Lifecycle Analytics • Strategy Management What are the right things to do? Processes Execution • Cost Management • Budget Formulation • SAP Public Budget Formulation SAP BPC Do our expenditures align with our strategic vision? How should we allocate resources?

  3. Performance Management Vision Enterprise Goals Board • Strategic Goals • Company goals and • Organizational Goals SAP Strategy Management Company- / Area Goals Higher Management Department andTeam Goals Department and Team Goals Department Manager and Team Leader • SAP Human Capital Management • Operational Goals • On employee basis • Compensation relevant Individual Goals Individual Goals

  4. Benchmarking and Key Performance Indicators • External Benchmarking • Internal Benchmarking Business Strategy Definition of • Objectives • Key Performance Indicators (KPI) • Initiatives If you can’t measure it, you can’t manage it!!! Measurable Objectives

  5. Integrated Talent ManagementOne integrated platform for the best people and talent Key Features • Eliminates redundant processes and reduces integration costs • Wide breadth of functionality across the entire HCM spectrum • Unmatched global capabilities Integrated Talent Management Recruiting Onboarding • Performance, Compensation and Succession Management Focus Classroom Training E-Learning • Classroom Training and E-Learning Travel Planning Travel Expense • Recruiting Employee Data Organizational Data Competency Data • Global HRand Payroll Administration • Scheduling and Deployment Employee Administration Organizational Management Global Employee Management Benefits Management Payroll and Legal Reporting Time and Attendance Shift/Roster Planning Scheduling Optimization • Planning and Analytics • HCM Service Delivery Workforce Analytics and Measurement Workforce Planning Manager Portal Employee Portal Employee Interaction Center

  6. $ • £ • € • € • $ SAP Best Practice: Use of PositionPrimary driver of HCM Processes • Qualifications • Skills / Competencies Person • Job • Job family • Job Evaluation • Cost Center • Org Unit • Org Structure/Chief • Requirements • Skills needed • Learning Map • Skills gap/course list • Position • Key Position Occupied/Vacant Budgeting Salary, Facility, Travel, Education Personnel Cost Planning • Address (Office) Compensation Comp plan, default grade • Security • System access

  7. Employee Performance ManagementSAP Solution • 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 • Goal Management • Planning of Individual Objectives • Assessment of Performance & Potential • Calibration • Approval & Follow-up • SAP Differentiators 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

  8. Enterprise Compensation ManagementSAP Solution • SAP Solution • Establishment of compensation plans • Administration of Compensation plans and programs • Budgeting • Reviews and Approvals • Automatic hand-over of compensation adjustments into payroll • Delivered templates for workflow and analytics • Manager planning and approval • Follow-up • SAP Differentiators 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

  9. Budgeting CalculationOverview Bottom-up approach Budgets are determined and saved at employee level Employee-level budget gets added up to obtain the organizational unit budget Top-down approach Budgets are determined at organizational unit level You can decide per budget type and budget period which approach to take Different scenarios for simulation

  10. The Return On Investment of Integrated Talent Management • “ • Companies with mature, integrated talent management strategies, have lower turnover, higher productivity and have experienced less downsizing through the economic recession.” • Bersin & Associates, 2009 • Source: Bersin & Associates, 2009

  11. Questions

  12. Thank You! • Luminita Scarlat • SAP Romania • E-mail: l.scarlat@sap.com • 0040 740 151 713 • www.sap.com

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