Introduction
SAP Analytics Cloud (SAC) Compass is a powerful new feature that brings Monte Carlo simulation capabilities directly into the hands of business users. Released in Q1 2025, Compass eliminates the traditional barriers that have kept advanced statistical modeling techniques like Monte Carlo simulation in the realm of data scientists and mathematicians.
Instead of spending days in meetings debating questions like “What happens to our operating income if inflation, labor costs, and revenue don’t meet our projections?”, business users can now get answers with just a few clicks.
What Problem Does Compass Solve?
In business planning and analysis, uncertainty is everywhere. Revenue forecasts might be off, costs could fluctuate, market conditions change unexpectedly, and external factors like inflation can impact results. Traditional planning often relies on single-point estimates or simple best/worst-case scenarios, which don’t capture the full range of possible outcomes or their likelihood.
Compass bridges this gap by making sophisticated risk analysis accessible to non-technical users, allowing them to:
- Understand the range of possible outcomes for key business metrics
- Assess the probability of achieving specific targets
- Compare different strategic scenarios with their associated risks
- Make more informed decisions based on statistical analysis rather than gut feeling
What is Compass?
At its core, Compass is SAP’s Monte Carlo simulation engine built natively into SAP Analytics Cloud. It enables business users to analyze possible outcomes when faced with uncertainties in performance drivers without requiring advanced mathematics knowledge, coding skills, or complex IT setup.
Think of Compass as a “what-if analysis on steroids.” While traditional what-if analysis might show you three scenarios (best case, worst case, expected case), Compass runs thousands of simulations to show you the entire range of possible outcomes and their probabilities.
Key Capabilities of Compass
1. Scenario Modeling and Comparison
Create multiple “what-if” scenarios to model different assumptions about how your business drivers might fluctuate. For example:
- Scenario A: Conservative market growth with stable costs
- Scenario B: Aggressive expansion with higher risk/reward
- Scenario C: Economic downturn with cost-cutting measures
Compass can display these scenarios side-by-side, showing you the probability distributions and risks for each approach.
2. Multidimensional Simulation
Configure uncertainties across multiple business dimensions simultaneously:
- Products: Different product lines may have different risk profiles
- Regions: Geographic markets may respond differently to changes
- Time Periods: Seasonal variations and market cycles
- Business Units: Various departments may have different cost structures
The system automatically calculates how these multiple uncertainties combine to affect your target outcomes.
3. Risk Analysis with Pessimistic/Realistic/Optimistic Cases
Compass automatically categorizes simulation results into three key cases:
- Pessimistic: What happens in the worst-case scenarios (typically 10th percentile)
- Realistic: The most likely outcomes (around the 50th percentile)
- Optimistic: Best-case scenarios (typically 90th percentile)
Each case includes boundary values and probability percentages, giving you a clear picture of what to expect.
4. Goal-Oriented Risk Assessment
Instead of just showing you all possible outcomes, Compass can focus on specific questions:
- “What are the chances we’ll achieve $50M in revenue this year?”
- “How likely are we to stay within our $2M budget?”
- “What’s the probability of completing the project in 6 months?”
This helps you understand whether your goals are conservative, aggressive, or realistic based on statistical analysis.
5. Collaboration Features
- Private Scenarios: Experiment with assumptions privately before sharing
- Public Scenarios: Share scenarios with team members for collaborative analysis
- Simulation Persistence: Save simulations in SAC’s file repository for future reference and comparison with actual results
How Does Compass Work?
The Simple Process:
- Start with Your Data: Begin with an existing SAC story or planning model
- Identify Drivers: Compass automatically detects possible drivers (variables that could affect your key metrics)
- Set Ranges: For each driver, specify the minimum and maximum values you expect
- Choose Distribution: Select whether fluctuations follow a normal distribution (bell curve) or uniform distribution (equally likely across the range)
- Run Simulation: Compass performs thousands of calculations, trying different combinations of your driver values
- Analyze Results: View probability distributions, percentiles, and goal achievement chances through intuitive charts and graphs
Driver Configuration Made Simple:
- Automatic Detection: Compass identifies all possible drivers in your model
- Flexible Ranges: Simply enter expected minimum and maximum values
- Distribution Types: Choose between normal (most values cluster around the average) or uniform (all values equally likely)
- On-the-Spot Changes: Easily include or exclude drivers without rebuilding your entire scenario
Real-World Use Cases
Compass can be applied to virtually any business scenario involving uncertainty:
Financial Planning:
- Revenue forecasting with market uncertainty
- Budget planning with variable costs
- Investment ROI analysis with market volatility
Operations:
- Project duration estimation with resource constraints
- Workforce planning with turnover rates
- Supply chain optimization with demand fluctuations
Strategic Planning:
- Market entry analysis with competitive responses
- Product launch success probability
- Merger and acquisition impact assessment
Getting Started with Compass
Compass is included with SAP Analytics Cloud’s Planning Standard license, making it accessible to existing SAC users without additional licensing costs. You can create simulations either:
- From an existing story table in SAC
- From the dedicated Compass start page
- Based on specific business questions you want to explore
