Every company, no matter its size, spends some of its resources on marketing activities. These activities can be as general and as hard to measure as brand marketing in leading TV stations, or as detailed as sales actions performed by representatives and targeted to small groups of customers. They can be minor additions to your main sales processes or important strategic elements that generate most of your company’s earnings. No matter what case is true for your company, if you want to manage marketing activities properly, you must consider the financial control of these activities.

I will explain how financial control works for campaigns created in SAP CRM. I will also present a sample business scenario that can be easily implemented in most companies. It is only one of many ways to control the financial aspects of campaigns. I find this scenario useful for several reasons:

• It can be implemented in a relatively short time without considerable implementation efforts
• It can be used effectively by sales and marketing employees with no SAP ERP knowledge (or even those without access to SAP ERP). All information from SAP ERP is visible in SAP CRM or SAP NetWeaver Business Warehouse (SAP NetWeaver BW).
• It is very flexible and allows the company to change its strategy of campaign planning and cost control by modifying only the project structure plan (PSP)

However, some parts of this example scenario might not work in every situation:

• Your company must use system architecture that consists of at least SAP ERP, SAP CRM, and SAP NetWeaver BW. This scenario is not applicable for a standalone SAP CRM system. There is also an assumption that sales orders are created as a follow-up to other SAP CRM documents.
• End users must be familiar with SAP NetWeaver BW reports

System Architecture

SAP CRM alone does not provide all the necessary functions for full financial control of marketing activities. This is because critical information needed to achieve financial control is entered only in SAP ERP (e.g., purchase orders, incoming invoices for leaflets used in the campaign, or renting a conference room), and can be integrated with SAP CRM data by SAP NetWeaver BW. There are options available in three different systems (SAP CRM, SAP ERP and SAP NetWeaver BW) to provide you with the complete tools and information needed to make campaigns more effective.

SAP CRM

SAP CRM is the central part of this architecture and its most important tool is the Marketing Planner (transaction CRMD_MKTPL, which is replaced in newer versions of SAP CRM in the CRM WebClient UI by the Campaign Work Center, available in standard role MKT-PRO). This is where end users enter the marketing plan (including sub-plans, campaigns, and campaign elements) and where the operational control of campaigns occurs. This is also the place where marketers assign a budget to each campaign or campaign element.

SAP ERP

SAP ERP also contains a lot of important information. First, the Project System (PS) module is used as a basis for cost and revenue control. A marketing plan entered in SAP CRM is replicated as a Work Breakdown Structure in PS, and as a result of this replication, projects and PSP elements are created. Usually, an SAP CRM campaign is considered a project in PS and campaign elements are considered PSP elements. In my example scenario, the most critical object is the PSP element, which collects costs and revenues generated by campaigns. In more complicated scenarios, the Profitability Analysis (CO-PA) application is used for detailed cost analysis.

SAP NetWeaver BW

The SAP NetWeaver BW system is responsible for providing end users with various reports that combine information entered in SAP CRM and SAP ERP. The main goal of these reports is to provide information about the planned and actual cost of campaigns, as well as the revenues generated from related activities. The required system architecture and the connections between the three SAP systems are shown in Figure 1. 

Figure 1

System architecture for financial control of campaigns

Sample Business Scenario

Depending on company-specific requirements and experience in marketing processes management, possible scenarios for financial control of campaigns can vary considerably. However, they all use the three systems described in the previous section. I’ll focus on a basic scenario that assumes the company using the Marketing module in SAP CRM also uses SAP NetWeaver BW and SAP ERP in the area of sales and distribution (SD) and materials management (MM).

Campaign Definition

Say that a company decides to introduce a new product and promote it by running a few conferences where customers can buy a discounted version of the product. The conferences are supported by advertisements placed in professional newspapers. The company’s marketing department has an accepted budget for these activities and would like to control the actual spending it takes to organize this campaign. After all campaign events are finished, it would also like to know exactly how many products were sold during the conferences and whether this method is profitable or not.

The process starts in the SAP CRM system, where the planned campaign is reflected as a campaign document with campaign elements assigned in the Marketing Planner transaction (CRMD_MKTPL). The responsible employee enters all necessary data about the campaign (e.g., objective, tactics, planned dates, products, partners involved). This data is needed later to evaluate and compare the effects of different campaign strategies (e.g., which campaigns are more effective — those executed with external or internal call centers?). Conclusions from such analysis will be the basis for the department’s decision about which types of campaign should be repeated in the future and which should never occur again. In this step, a budget is also allocated to the campaign and distributed among the campaign elements. It is also possible to assign the budget directly to campaign elements; in this case, the budget for the whole campaign is simply the total of all its elements. To make sure that the marketing plan created in SAP CRM is compatible with naming conventions used in PS, you can also set naming masks for the campaign ID. I provide an example of a naming mask later in this article under the SAP CRM section of "Reporting and Configuration."

Campaign Replication

After all the necessary data is entered in SAP CRM, the campaign is transferred to the PS module in SAP ERP. The technical aspects of this transfer are described later in the “Reporting and Configuration” section. From the business’ point of view, this is the most crucial step, because now it is technically possible to make expenses related to the campaign. PSP element is often a mandatory field when you enter incoming invoices (i.e., those received from company vendors) into SAP ERP, and without successful replication, accounting departments cannot accept such invoices (because there is no existing PSP element to enter into the obligatory field on invoice document). To avoid non-accepted campaign costs, replication is triggered only if it has reached proper status, which is controlled by a standard SAP CRM status management function.

Cost Collection

After a campaign is released and transferred to PS, the company can make all the necessary preparations — everything from printing leaflets to making reservations for conference halls to producing and publishing advertisements for the Web, newspaper, or television. As I stated earlier, for every expense made during these preparations the company receives invoices that have to be entered into the SAP ERP system by the accounting department. In this scenario, the company assigns a proper PSP element (which is identical to a campaign element ID) to every expense made during preparations. This means each incoming invoice item has an assigned PSP element. In this way, the company can tell exactly what the total costs of campaign preparation and execution are. You can also extend this scenario so that before any money is spent, employees must create purchase order documents that represent the requirement for a new spending. In that case, a PSP element is assigned to a purchase order item and is then automatically copied to the related invoice. If the size of planned expenses exceeds the budget assigned to this sample campaign, then the purchase order document is automatically blocked for further processing.

Revenue Collection

For the next step, the company executes the campaign — it runs the conferences and generates leads and activities for sales representatives. It expects that the campaign will provide revenue. These revenues are represented in SAP ERP by outgoing invoices in the SD module. Similar to the previous section, each invoice item can be assigned to a PSP element. This indicates that this specific income was achieved thanks to the campaign. Of course, in almost all cases, the PSP element is assigned in earlier steps of the sales process and automatically copied to the invoice document. For example, a lead-to-invoice process (which represents the important data flow between campaign and invoice documents) could look like this:

1. As a result of the campaign execution, a number of leads are generated in the standard lead generation mechanism of SAP CRM that assures each lead is related to a particular campaign element ID. You also have the option to assign leads to a campaign manually (in SAP CRM 5.0, this is done on the Relationships tab; in SAP CRM 2007 and higher, in the General Data section of the lead document).
2. An employee guides generated leads through certain activities (e.g., phone calls, visits). If the customer is interested in buying the company’s products, the opportunity document is created in SAP CRM. Note that all of these documents are also related to the campaign elements.
3. The opportunity is processed and an offer is sent to the customer. The proper document is created in SAP CRM as a follow-up to previous documents, so there is still a link to the campaign.
4. The offer is accepted by the customer. Depending on company specifications, the next steps could be: A sales order is created in the SAP CRM system (still with relation to the campaign); or the offer is replicated to SAP ERP, where a sales order document is created. On this document, the campaign element ID is saved in the PSP Element field (as opposed to the campaign element field, which is used for trade spends).
5. The sales order is processed in SAP ERP until the invoice document is created. The value of the PSP Element field is copied to the invoice.

The result of this is that all incoming invoices (representing actual costs of the campaign) and all outgoing invoices (representing actual revenues of the campaign) have the same PSP element assigned and can be easily reported in SAP NetWeaver BW.

With this approach, you are able not only to control cost and revenues, but also the entire sales process that began with campaign execution. For example, you can find out if all leads were actually processed by sales representatives and how many of them become opportunities and offers. This can be valuable information for anyone responsible for campaign planning and evaluation. You can see a graphical representation of this process in Figure 2.

Figure 2

Scenario for campaign management with financial control

Reporting and Configuration

You can integrate the steps I mentioned related to campaign definition, replication, and execution into SAP NetWeaver BW reports. These reports take information from both SAP CRM (campaign data including budgets) and SAP ERP (incoming invoices related to the campaign and outgoing invoices related to the campaign). These reports can be used to effectively control current marketing activities and enhance future marketing strategies.

When you look at the process in Figure 2 it may seem very complicated to implement. It is not quite as complicated as it seems, especially if you take into account the following aspects:

• The replication mechanism responsible for transferring campaign and campaign elements into PS is ready to use in standard SAP CRM, with some Business Add-Ins (BAdIs) available to influence data flow. Replication is performed with Middleware mechanisms, so there are also tools available for monitoring and error handling.
• Usually, when a company decides to implement a scenario similar to my example, the SAP ERP system has been in place for some time. Therefore, sales and procurement processes are already running. In fact, even basic PS configuration is often ready to use without major changes on your part.
• There are standard reports available in the content delivered by SAP with the SAP NetWeaver BW system.

Here is a list of configuration steps that allow you to use the scenario I described earlier if your SAP ERP system is already running.

SAP CRM

First, you have to integrate SAP CRM, SAP ERP, and SAP NetWeaver BW and make them visible to each other. To achieve this, you only need to make a few settings in SPRO. Follow menu path Customer Relationship Management > Marketing > Marketing Planning and Campaign Management > System Landscape. The following are the settings:

• Define a Remote Function Call (RFC) connection between SAP ERP and SAP NetWeaver BW. You need an ABAP connection type for these systems. If you have already implemented the Sales module of SAP CRM, then the connections are likely already created.
• Define the target systems. Define which RFC connection represents which system (SAP ERP and SAP NetWeaver BW, respectively).
• Activate the SAP NetWeaver BW update. Set the Active option to X to activate replication of marketing elements (campaigns and campaign elements) to SAP NetWeaver BW. From now on, when you save a campaign document, it is automatically transferred to the SAP NetWeaver BW system.
• Define the SAP ERP integration type. In this step, you must choose between two possible variants of replicating the campaign and its elements to PS in SAP ERP:
  • Middleware: replication to SAP ERP occurs automatically in background after the campaign is saved with a proper status. I strongly recommend this option to avoid situations in which a user forgets to start replication manually.
  • Online: replication is triggered manually by a user. In the Marketing Planner menu, the user chooses Marketing project > Transfer to ERP.
• Assign the SAP ERP project scenario to the RFC destination. In this step, you must tell the system which project profile in PS should be used to replicate the campaign. If there are multiple scenarios available in SAP ERP, then you should implement BAdI CRM_MKTPL_R3_INT with method CHANGE_PROJECT_SCENARIO to select the correct project profile.
• Define the formatting mask. In this configuration step, you define the formatting mask for the campaign ID so it contains the business meaning (e.g., if the campaign ID starts with 09/DE, this means that it is going to start in the year 2009 and be performed on the German market) and is compatible with naming conventions used in PS. You must ensure the IDs set for the campaign or campaign element are unique not only in SAP CRM (SAP confirms this automatically), but also in PS within SAP ERP — otherwise, errors occur during replication.

When your systems are integrated and can communicate with each other, you must also control the moment in the campaign life cycle when replication to PS starts. You can do this by following menu path SPRO > Customer Relationship Management > Marketing > Marketing Planning and Campaign Management > General Settings > Change Status Profile for User Status. Find the proper status schema on the list and double-click it to see possible statuses (e.g., Approved or Accepted). Select the one for when your replication should start and double-click it. To make the interface work, the operation Transfer to ERP should be set to Allowed. You may also want to make life easier for end users and integrate financial control reports into the campaign’s main screen. For that purpose, there is an Analysis section available in campaign and campaign elements.

SAP ERP and SAP NetWeaver BW

In this scenario, most of the necessary configuration should already be done — sales and procurement processes are usually ready before an SAP CRM implementation. However, you must take care of the basic configuration in PS in SAP ERP. The most important setting here is the configuration of the project profile, which is used to reflect the marketing plan created in SAP CRM. The configuration path for this is SPRO > Project System > Structures > Operative Structures > Work Breakdown Structure. The most important configuration options for the project profile are: 

• Planning profile for cost planning
• Budget profile
• Company code

In the SAP NetWeaver BW system, make sure that the proper reports are ready to use. You can implement your own reports or use reports from the content delivered by SAP.

Marek Andrzejczak

Marek Andrzejczak is a senior SAP consultant specializing in SAP CRM and SAP SD. As a leading consultant he has taken part in several SAP CRM and SAP ERP implementations, including global template solutions. In this role, Marek helps to define and implement SAP CRM/SAP SD strategies for customers from the retail, FMCG, media, construction and food industries. Marek is an SAP-certified consultant in the areas of SAP CRM, SAP SD and ABAP.

You may contact the author at marek@marekandrzejczak.pl.

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