Improve Your Customer Profitability Analysis with mySAP CRM, BW, and CO-PA

  • by Mitresh Kundalia, Director — SAP Practice, Quality Systems & Software
  • November 15, 2005
Use mySAP CRM, SAP Business Information Warehouse (BW), and R/3 Profitability Analysis (CO-PA) functionalities to track your organization's profitability. BW's analytic capabilities can collectively analyze the CRM costs associated with business activities that serve your customers and the back-end revenues and costs from CO-PA.
Key Concept
The primary goal of the Profitability Analysis (CO-PA) module is to search for the relationship between profits and the potential causes of those profits. The profits can be from product revenue, service revenue, or other revenue streams. The CO-PA ledger has individual columns for each of these amount fields, known as value fields. Value fields are actual numeric values that quantify revenue or cost, such as gross sales, surcharges, discounts, and cost of sales. The causes of these profit values (i.e., the "who/what/where/when" columns) are called characteristics. Examples of characteristics are customer, product line, and sales area.

To get a 360-degree look at the customer, your applications should not only draw attention to the call center or front-office view, but also should analyze the back-end view to see the overall profitability. I'm going to cover what customer profitability is and show how detailed analysis can help your organization get an edge so that your sales force is proactively working on customer needs rather than struggling to react.

I'll show you how to combine customer data from mySAP CRM with R/3's Profitability Analysis (CO-PA) module. You then can analyze the customer profitability in Business Information Warehouse (BW) and use the results to focus limited resources on the most profitable customers. Although my comments in this article refer to R/3, this method also works with mySAP ERP. (For more detail about the analytical capabilities of CO-PA and mySAP CRM, see the sidebar, "Analytic Functionality in CO-PA and mySAP CRM.")

Mitresh Kundalia

Mitresh Kundalia heads the SAP practice at Quality Systems & Software (www.QSandS.com). QS&S is a leading business and technology consulting firm that specializes in delivering superior IT solutions using SAP products. Mitresh is widely acknowledged as a leading SAP expert and has worked on various SAP assignments, including strategic planning, fresh implementations, upgrades, and post-go-live support projects. With an MBA degree in finance, Mitresh manages SAP projects with a special focus on customer-focused solutions, management reporting, profitability analysis, SAP General Ledger, and business intelligence. He is a regular contributor at SAP events and publications and technical advisor to leading journals.

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