The Problem with Characteristics and CVCs in SAP DP and SAP BW

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Executive Summary

A characteristic value combination or CVC is a foundational item for both SAP DP and BW.
We cover the concept behind CVCs and how it relates to other vendors.

Introduction to Characteristics

Characteristics are critical to both DP and BW. You will learn how characteristics work and how they are managed within these applications.

Our References for This Article

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Notice of Lack of Financial Bias: We have no financial ties to SAP or any other entity mentioned in this article.

This is published by a research entity, not some lowbrow entity that is part of the SAP ecosystem.
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What Are Characteristics?

A characteristic is the text value to be planned. Characteristics include things like sales, region, and customers.

When thinking in spreadsheet terms, the characteristics are the column and row headings (although most often the row headings, as the columns are almost always the time characteristic – month, week, year, etc..) The intersection between characteristics is called a Characteristic Value Combination or CVC. Characteristics also have a hierarchy, as do CVCs, so…

Sales by Week by Region – is one intersection of the sales, time, and geographic characteristics.
Sales by Month by Year – is a second intersection of the same characteristics.

SAP’s explanations of CVCs, as well as every third party explanation of CVCs I have read, have been quite incompetent. First, there is nothing new about the functionality that is described by the term CVC. CVCs are nothing more than a combination of dimensions; sales, time, and geography are the most common.

Therefore, the following…

Colgate Extra Floride Toothpaste
In the San Diego Warehouse
For the Month of January 2014

…would be one “CVC.”

How Does the Term CVC Work on Actual Projects to Explain SAP Functionality?

Very poorly.

Characteristics and CVCs were a poor choice of terms — and the evidence is that repeated explanations of CVCs are necessary because the concept does not tend to stick with the listener. Secondly, those that are confused by the term have good reason to be. Any term should naturally be consistent with the general understanding of a topic. For instance, if we think of a shirt, it is widely agreed that the shirt’s color and size are the shirt’s characteristics.

However, where the shirt is sold or when the shirt is sold is not generally its characteristics. Now, certainly, a data-oriented person might propose that while generally not thought of as characteristics of the shirt, they are, in fact, characteristics of it — from a purely data point of view — but that proposal would miss the point. Terms should make sense to a broad audience, not simply those that work on a subject’s technical side.

Jargon and Learning

When a term does not do this, it is referred to as jargon, and jargon interferes with learning. Interestingly there are several opinions on jargon — one presented by George Orwell — who studied how jargon is used to conceal and mislead in a political context.

“George Orwell, a socialist, leftist, and Marxist, believes in the modern style of language, deeming that good writing is clear and simple. In his essay, “Politics and the English Language,” he states the following arguments: technical language is nothing but an oratorical trick, simple language is required to clarify difficult concepts, while complex language is needed to explain simple concepts, and lastly, political language is structured to make lies seem like the truth. In short, Orwell is articulating that specialized language is not essential.” – Wikipedia

However, jargon is critical to everything SAP does. Orwell would probably not be a big fan of how SAP develops and applies terminology:

“Never use a foreign phrase, a scientific word or a jargon word if you can think of an everyday English equivalent.”

The term CVC causes a schism between the business side and the IT or technology side, which will always be when one side uses an overly complex nomenclature to describe what could be described much more simply. This can lead to overly complex setups of SAP BW and SAP DP because, in part, it is difficult to explain what work is being done on the technical side. Overly complex setups on SAP BW and SAP DP implementations are a common problem.

How is the Concept Explained by CVCs in SAP BW and SAP DP Explained by Other Software Vendors?

I think this is an interesting question to ask. But it is very rarely asked, in part because SAP resources generally tend only to understand SAP terminology and do not keep up with forecasting terminology outside of SAP and the terminology used by other software vendors. In other forecasting systems, the term CVC does not exist, nor the term in terms of what it describes actually necessary.

I recommend that rather than figure out SAP convoluted logic concerning CVCs, it’s better to follow thought leaders’ explanation concerning the same concept. One of these is the software vendor Demand Works. In Demand Works, the following would apply to the example above:

Colgate Extra Floride Toothpaste: Product/Product Number
In the San Diego Warehouse: Location/Attribute
For the Month of January 2014: Month

If other “characteristics” of the toothpaste are added — such as its product grouping, this is called another attribute. A CVC makes it sound as if it is a characteristic of the “product,” this is what we think of when we think of the term characteristic. Time is not normally considered a characteristic — neither is a location.

All valid CVCs are added to the Planning Object Structure. You can find out more about POSs here.

Database Design

Combining intersections with large data sets and a large number of intersections is very computationally intensive. It normally cannot be accomplished with a normal relational structure designed for transaction processing, not for analysis. The two mechanisms that computer science has arrived at to accomplish this task is the data cube and the star schema overlays onto a relational structure.

We go into detail on these topics in this article.

However, there are tremendous differences between how forecasting and analytic applications expose the complexity of this functionality. I am a big fan of Demand Works Smoothie because very little specialized knowledge must get characteristic/hierarchal/attribute to work.

Characteristics in SAP APO

It is important to recognize that DP and SNP use different characteristics, and thus different planning areas and planning object structures are created for DP and SNP.