SAP BPC Periodic Consolidation Model:

The Dow Chemical Company (Dow)

BumSoo Lee, PwC
Ron Kazyak, The Dow Chemical Company
 Agenda

Session Objective
BPC Project at Dow
Project Overview
Dow implemented Solutions
Periodic BPC Consolidation Model
Why Dow Chose Periodic Model
Dow Periodic vs. BPC Standard Data Flow
Periodic Model Specific Solutions
Benefits Realized

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 What is this session for?

Share Dows experiences in implementation of the BPC Periodic

Consolidation Model
Discuss the enhancements that were made for the Periodic
Consolidation Model
Encourage companies to consider the Periodic Consolidation Model
as an alternative during their BPC projects
Make the Periodic Consolidation Model a BPC standard solution

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 The Dow Chemical Company

The largest chemical company in the U.S., #2 in world (Fortune #47)

Leader in the production of specialty chemicals, advanced materials,
agrosciences and plastics
Annual net sales of around $57 billion, with approximately 50,000
employees worldwide
Delivers a broad range of technology-based products and solutions to
customers in approximately 160 countries

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 BPC at Dow

Consolidates 800+ active entities

Generates trial balances from R/2 and ECC 6
Went live with BPC 7.0 NW in 2011 and upgraded to BPC 7.5 in 2012
Dow implemented the same model for a divested group with 50+ entities

Helped Dow change from quarterly to monthly closing

Plans to upgrade to NetWeaver 7.3 & BPC 10 in 2013
Implemented BPC with PwC team
SAP Finance Transformation practice
Finance Effectiveness practice

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 Implemented Solutions

Data Import
Data Import through BW Staging Cube

Data Validation During Data Load to Staging Cube

Security Data Audit

Consolidation
Master Data

Intercompany Eliminations Consolidation of Investment

Currency Conversion Reclassification

Balance Carry Forward Auto Retained Earning Posting

BAdI* Validation for Journal Posting Work Status

Reporting
Trial Balance Balance Sheet Income Stmt Other Reports

*Business Add-In

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 Why Dow Chose the Periodic Model?

Balance Sheet reporting with BPC Standard Periodic Model

Periodic activity reporting is required for Balance Sheet accounts
Periodic and Quarter to Date (QTD) measures only return the same
balance as Year to Date (YTD) measure using standard BPC model

User Preference
Dow users preferred the Periodic Model that they had been using for
over 18 years
Dow and the project team did not want to change the current R/2 data
extraction process/program* that has been being replaced by ECC/BW

* All 800+ entities were in R/2 transactional system (5 clients). ECC project has been going on parallel. The ECC project is still going on.

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 Data Flow: Dow Periodic vs. BPC STD

e.g., B/S account Model

Dow Periodic BPC Standard
Measure Feb Feb
Report
Periodic 300 2,000

BPC Layer YTD 2,000 2,000

Feb Feb
Data Base
Cash 300 2,000

BW Staging Data in Feb Feb

Staging
Change of Cash Balance 300 2,000
cube

Jan Feb
Source
ECC Source Change 700 300
Systems
R/2 Data
Cash Balance 1,700 2,000

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 Periodic Model Specific Solution 1/4

Custom Measures:
Dow custom measures returns correct Periodic and QTD amount for
balance sheet accounts

e.g., B/S account in Feb

Dec Jan Feb

Cash Balance $ 1,000 $ 1,700 $ 2,000

Source data
Cash increase - $ 700 $ 300

Model
Dow Periodic BPC Standard
Measure Feb
Periodic $ 300 $ 2,000
Reporting Comparison QTD $ 1,000 $ 2,000
YTD $ 2,000 $ 2,000

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 Periodic Model Specific Solution 2/4

Journal Reversal:
User needs to reverse a BPC entry in next period when the same entry
is posted in transactional system in the month
Developed new Journal Reversal function** with SAP development
team to enhance BPC Journal Reversal process
Reversal Process Before New Solution Issues

When ARE* is When an original journal entry is saved

generated

User needs to post the When the original User needs to search and post ARE*
How user posts ARE* separately entry is posted manually
ARE*
Manually Automatically High chance to miss some AREs*

If the original entry User needs to change ARE* is changed Wrong entry will be reversed unless user
is changed ARE* manually automatically changes the ARE* manually

Can user change Different entry (account, entity, and

User can change ARE* Not allowed
ARE*? amount) can be reversed

**Related SAP Notes: Note 1592733 - No relation between the source and auto-reversed journal
*ARE: Auto Reversal Entry
Note 1637498 - Cannot unpost/delete source journal unless do it on its AR

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 Periodic Model Specific Solution 3/4

Balance Carry Forward:

Prior year consolidated Balance Sheet items need to be carried
forward to the new year since the Periodic Model only consolidates
the current period activities
Standard Carry Forward function only carries forward data type input
and manual not I/C elimination entries and etc.*
A Script Logic based Balance Carry Forward function to carry forward
all source data and automatic adjustment entries to the new year
Period Zero:
Period Zero is created to store the carried forward balances
TMVL syntax ignores this period. e.g., TMVL (1, 2012.DEC) returns
2013.JAN not Zero period (2013.OPE)

*BPC 10 can carry forward all DataSource dimension members (AuditTrail dimension)

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 Periodic Model Specific Solution 4/4

Flow Dimension:
Dow/PwC project team uses three Flow Dimension members
CLOSING
OPENING: last month closing balance
ACTIVITY: Changes of the account balance in current month

Carry
2012.DEC 2013.OPE 2013.JAN 2013.FEB
Forward
CLOSING $ 1,000 $ 1,000 $ 1,700 $ 2,000
OPENING $ 500 $ 1,000 $ 1,700
ACTIVITY $ 500 $ 1,000 $ 700 $ 300

Transaction Type Dimension is used for the detail movements for Cash Flow
reporting

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 Benefits From Periodic Model

Easier reconciliation process for InterCompany elimination and

Consolidation of Investment since user only has to validate the
current period data
Better reporting performance for the reports using Periodic
Measure compared to SAP standard YTD model
Periodic activity reporting for Balance Sheet accounts without any
calculation
No manual tasks for Journal reversals using new Journal reversal
enhancement
Reduced data extraction time from Source Systems to BW/BPC
since a fewer number of records are extracted

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 KEY LEARNINGS

BPC Periodic Consolidation Model

Imports only periodic activity data from Source systems
Can build periodic activity reports for Balance Sheet accounts without
any calculation
Reconciles only the current period InterCompany transactions
Supports The Dow Chemical Company which has 800+ active entities
in the application

Please consider the Periodic Consolidation Model as an alternative

during your BPC project

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 Q&A

Thanks for attending this session. If you have any further questions on this
session please contact

BumSoo Lee (bumsoo.lee@us.pwc.com or www.linkedin.com/in/sandol)

Manager
PwC SAP Financial Transformation practice

Ron Kazyak (RDKazyak@dow.com or www.linkedin.com/in/ronaldkazyak)

Associate Finance Director
The Dow Chemical Company

2013 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved. PwC refers to the United States member firm, and may
sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This content is
for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

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