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Kai Finck, Senior Vice President, Finance SolutionsMarch, 20th 2014
Achieve Financial Excellencewith innovative SAP Finance Solutions
CFO
Today’s Volatile World Needs Strong CFOs
Steward Operator
Strategist
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Leading CFOs Are Stepping Up …
CFO
Strategist
Steward
Change Agent
Service ProviderGuardian
Operator
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4
RegulatoryCompliance
ReportGeneration
Manual localProcesses
Stakeholder NeedsInternal ControlsRisk Management
Data GovernanceInformation Self ServiceStrategic Advisory
Global ProcessesCollaborationService Quality
… Transforming Their Own Organization
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Real Time – Paradigm for a Volatile World
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Our Private Lives Happen in Real Time
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Legacy platforms and‘silo’ applications
Today’s Barriers
‘Slow pedaling’business applications
Need to understandthe ‘art of the possible’
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70%of effort in analytics ispreparing data foranalysis
40%of IT managers requiredmore than two days toprepare financial data formonthly reporting
25%of LoB end users indicatethat faster access toinformation would have asignificant impact ontheir organization
Do You Understand the Art of the Possible?
Accounting andFinancial Close
Financial Planning andAnalysis
Treasury and FinancialRisk Management
CollaborativeFinance Operations
Enterprise Riskand Compliance
Management
CollaborativeInvoice to Pay
Travel Management
Receivables Management Enterprise Governance,Risk, and Compliance
Access Risk Management
Global Trade Compliance
Accounting
Entity Close
Corporate Close
Develop and TranslateStrategy
Planning, Budgeting andForecasting
Profitability and CostAnalysis
Payments and BankCommunications
Cash and LiquidityManagement
Debt and InvestmentManagement
Monitoring and Reporting Reporting and Disclosure
Financial CloseGovernance
Commodity RiskManagement
Shared ServicesFramework
Financial RiskManagement Sustainability Reporting
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The Reward of Excellence
3xLower finance costas % of revenue
76%Higher operatingmargin
22%Lower audit costs
56%Fewer treasuryFTEs
44%Fewer financeFTEs
26.1%Fewer days toclose the books
Source: SAP Benchmarking Services
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ALIGNED, AGILE, PREDICTIVE• Single source of truth• Real time finance processes• Unmatched insight and foresight
Real Time Finance
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In-Memory Computing Is a Key Enabler of Real Time Finance
SAP HANA PLATFORM
Business and Processing EngineEvents Stream | Planning | Calculation | Predictive Analytics
Application ServicesApplication Server | UI Integration Services | Web Server
Database ServicesTransactions | Analytics | Partitioning
Compression | Availability | Encryption | Virtualization
Integration ServicesMobile | XaaS | High-volume Replication | Real-time Replication | Hadoop
Rules | Text Mining | Search | Application Function Libraries
Developers Data Scientists Business Users ConsumersExecutives
Applications& Tools
Industry | LoB | Consumer | Analytics | Social | Cloud | Mobile
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AlignedSingle Source of Truth
Provide seamless access to allyour financial data
Ensure data consistency acrossall Finance solutions
Support personalized analyticswithin the system of record
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Customer Benefits of Single Source of Truth
SAPERP
SAP HANA PlatformSingle source of truth
SAPBPC
SAPBW, BI
Legacy ERP Legacy ERP Legacy ERP
Corporate alignment• Fully harmonized data
• Reduced reconciliation effort
Personalized analytics• User-defined data views
• Drill-down to line item level
• All relevant dimensions
• Customer-specific dimensions
Aggregation on the fly
Central Journal
SAP’s Next Gen Architecture for a Single Source of Truth
SAPERP
In-Memory Database
PredictiveEngine
BusinessFunctionLibrary
PlanningEngine
UnstructuredText Engine
SAP HANA Platform
SAPBPC
SAPBW
SAP HANA Live (Virtual Data Model)
Legacy ERP Legacy ERP Legacy ERP
Legacy ERP systems feed single source of truth• Real-time replication of all accounting records into a single
SAP HANA platform via SAP SLT• No need to physically consolidate back-end systems
SAP HANA platform provides single source of truth• Real-time reporting through configurable views
(semantically integrated virtual data model)• Library of methods for shared use by all solutions• Single data instance in shared in-memory database
SAP solutions leverage single source of truth• Processing of accounting records in a central journal• Aggregation of shared data on the fly• New unified accounting architecture in SAP ERP
Introducing SAP Smart Accounting
LogisticsDocument
CODocument
FIDocument
Totals & IndicesFinancial Accounting
Totals & Indices
Management Account.
From … Stability
Processing
Analytics
CO Document
FI Document
Flexibility
HANA views on the fly
Pre-Defined Aggregates
Flexibility
Stability
Processing
AnalyticsLogical document
LogisticsDocument
… To
Customer benefits• Harmonized internal
and external reporting
• Account driven datamodel
• Significantly reducedreconciliation effort
• Higher flexibility inreporting and datacustomization
• Significantly reducedmemory consumption
Reporting Flexibility in SAP Smart Accounting
User-defined reporting
Users can explore data on the fly by restrictingfinancial statements to self-defined data sub-segments
SAP will continue to provide standard reports butwith focus on frequently used reports
Available information
• All record dimensions can be used forsegmentation
• Unrestricted selection of multiple dimensionsfor segmentation
• Customer-specific dimensions can be easilyadded and are available for segmentation
Single Sourceof Truth
Central journalReplicate accounting recordsfrom legacy systems in real-timeinto a virtual central journal
Shared data and methodsShare data, data models, andmethods that are stored withinSAP HANA across solutions
New accounting architectureReporting on the fly based onindividual records with one logicaldocument for both FI and CO
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AgileReal time finance processes
Run adaptable end-to-endprocesses with real-timeexecution
Provide instant insight to actionbased on real-time data
Support real-time processoversight and risk management
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Period End Close: Transition to Continuous Processing
Processes designed for real-time operationseliminate close bottlenecks
Real-time analytics forprocess oversight
Close processes involve >100 tasks withmultiple batch bottlenecks
Benefit Drivers• Eliminate end of period batch bottlenecks• Continuous intercompany reconciliation• Continuous financial reporting visibility• CO-PA & line item detail reconciliation• Automation for routine tasks• Full management visibility of close tasks
Challenges• Multiple batch run dependencies• Batch bottlenecks delay downstream activities• High error correction efforts• Complex issues delayed till post close• Time pressured resolutions• Delayed visibility to reporting
Expected Benefits
50%Reduction in GL postingcorrections
60%Reduction in time to reconcilerevenue recognition issues
70%Reduction in time to resolveallocations
CloseBatches
Consolidation Batches
Close &Consolidation
Initial Period
Traditional Close
Close &Consolidation
Initial Period
Reportingon-demand
Close enclosed by HANA
Period End Close: Intercompany Reconciliation on the Fly
FBICR3Reconcile Documents
FBICS3Select Documents
FBICA3Assign Documents Automatically
New user experience Improved data drill down
Reduced time to closebooks• Improved and accelerated
automated matching
• No more batch jobs, realtime analysis supportscontinuous intra-periodprocess execution
• Improved user experienceand enhanced data drilldown reduce manualreconciliation effort
• Better process oversightthrough new managementdashboard
Period End Close: Benefit of Enhanced Data Drill Down
FI Analyst
CEO / CFO
CFO
Sales VP
Head Sales
Freight charges exceed customer charges
Profitability surprise!
Unexplained margin drop
Outstanding accruals in P&L
Unreconciled chargesNegative margin impact
Sales person using old freight calc. tool
Sales orders underestimate freight
Bottom Line
Root Cause
3 months to identify root case• Multi month root cause analysis• Poor information/visibility• Manual analysis across multiple sources
Impact 3 months 30 sec's
Accrual discrepancy $28,000,000 $95,000
Customers impacted 300 2
Customer calls 473 1
Re-invoicing costs $125,000 $37
Customer's lost 34 0
30 sec's to identify root cause• Instant visibility into charges by sales person• Rapid discovery and resolution of issue
vs.
SAP runs SAP: Accelerated Period End Close
Quality by realtimeanalytics withCOPA on HANA
AgiltyBalance Sheet& P&L
> 3.5 x faster
Real time error detectionthrough deviation analysis anddrill down to lowest level
BatchProcessing 3.5 x faster
AutomaticalRevenueAccruals
~ 2.5x faster
CostPostings
New Business Scenarios basedon realtime Sales Data
from > 2 hours to realtime> 7x faster
> 10x faster
Intercompanyreconciliation in real time
From > 2 hours to
realtime
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Smart Business Cockpits
Planned Cockpits• Chief Financial Officer
• Financial Close Manager
• Cash Manager
• Receivables Manager
• Payables Manager
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• Analyze global bank balances andcash positions based on data fromSAP and non-SAP systems
• Integrated liquidity forecastingincluding cash flow analysis usingmulti dimensional real-time analytics
• Central Bank Account Managementincluding overdraft limit analysis,bank risk analysis, signatorymanagement and workflow support
• Smart Business for Cash Managers,a cockpit to monitor critical KPI’s,also on a mobile device
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Treasury and Financial Risk: SAP Smart Cash Management
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Real Time FinanceProcesses
Real time month end closeAccelerated close with intra-monthreconciliation for real time reportingand pre-close simulation
Real time personal analyticsFlexible analytics for instant dataaccess with drill-down along anydimension down to line item level
Next gen user experienceNew role based user interfaces withembedded real time analytics andmobile access for business users
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PredictiveUnmatched insight andforesight
Deeply understand thedrivers of your business
Recognize trends andanticipate future risks
Align around a joint planand adapt dynamically
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One rolling plan for the entire groupPlan autonomy for the businessesDemand signals and smart forecastsUpdate of the group plan on the fly
DynamicPlanning
Rapidly changing customer demandHigh volatility of market pricesDisruptive external shocksNew untested business models
VolatileWorld
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System Requirements for Integrated Business Planning
CorporateFinancial
Plan
de-centralsatellites
De-centraloperational
plans
De-centraloperational
plans
Sub-plans
Sub-plans
LoBForecast
(e.g. Sales)2
1
3
4
• Central plan governanceand process orchestrationfor group controller
• Full planning flexibility andautonomy for owners ofdepartmental plans
• Access to master data andactuals from ERP for rapidmodeling and planning
• Availability of plan data inERP for variance analysis
• Single planning solution forlow TCO and high usability
SAP Business Planning and Consolidation 10.1
• Unification of current BPC and BW capabilities in asingle model for planning and consolidation
• Unified models based on BW meta-data utilizingproven data harmonization services provided by BW
• Seamless integration with SAP ERP
• End-user centric plan configuration and planningcapabilities (incl. UI) provided by BPC NW 10.0
• Support for integrated business planning, dynamicmodeling and simulation
• HTML5 UI support for device-independent planning
SAP HANA Platform
SAP ERP / 3rd party ERP
SAP NetWeaver /SAP Business Warehouse
EPM Excel Add-in/HTML 5 Web UI
SAP Business Planning and Consolidation10.1, version for SAP NetWeaver
BPC NW and BW-IP come together in Unified BW-based model
Introducing SAP Business Planning and Consolidation 10.1
BPC
BW
Architecture for Financial Planning with Classic ERP
SAP HANAPlatform
SAPERP
SAPBPC, BW
Customer benefits• Single SAP planning solution
combining the data harmonizationstrengths of SAP BW-IP with theflexibility and end-user centricity ofSAP Planning and Consolidation
• Unified models for enterprise-wideplanning and reporting scenarios
• Improved integration with SAP ERP
• Rich set of SAP HANA-optimizedplanning and reporting functions
Replication of data• Master data (e.g., cost centers)• Planning model• Actuals, plans, budgets, forecasts
• Entry of transactionaland master data
• Variance analysisactuals vs. plan
• Entry of planningmodels and plan data
• Flexible reporting andanalysis of actuals
Any DB
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Unmatched Insightand Foresight
Integrated business planningFacilitate collaborative planningprocesses, linking departmental plansto a central plan
Dynamic business planningProvide new user experience for driverbased planning, simulations, andpredictive forecasting
Single analytical solutionProvide single solution for planning,real time consolidation, profitabilityanalysis, and reporting
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What Will our Professional Lives Be in Real Time?
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Demo
Financials Add-On to SAP Business Suite powered by SAP HANA
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Business Suite on HANA
SAP HANA Platform
AlignedSingle Source of Truth
AgileReal time finance processes
PredictiveInsight and foresight
Cash ManagementNew product for
Group Cash Management
AccountingAlternative in-memory
functionality for ERP customers
IntegratedBusiness Planning
New capabilities and enhancedintegration for ERP and BPC.
Fraud & AuditManagementNew HANA based apps for
fraud detection and assurance
Adopt Innovation at Your Own Pace
SAP Business Suitepowered bySAP HANA
SAP ERP
SAP HANA
SAP Business SuiteSAP HANA as
side-by-side scenario
Any DB
SAP ERP
SAP HANA
SAP Business SuiteCentral journal on
SAP HANA
SAP ERP
SAP HANA
SAP ERP
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SAP HANAAccelerators
SAP NetWeaverBusiness
Warehouse SAP GovernanceRisk and
Compliance
SAP BusinessPlanning andConsolidation
Starting your Journey towards Real Time
SAPERP
SAP HANAside-by-side
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Your Choice of Deployment Option
On Premise
SAP HANA Enterprise Cloud
Public CloudSAP Cloud for Travel and Expense
Ariba Network
SAP Financial Services Network
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DRIVES BUSINESS REINVENTION,MODERNIZATION AND ACCELERATION
Adopting SAP ERP powered by SAP HANA
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Key Take AwaysTechnology innovations like in memorycomputing will trigger a new processrevolution, enabling Real Time Finance
For this purpose, SAP is providing arenewed Finance solution portfolioon the basis of the SAP HANA platform
SAP supports customers to flexiblychoose their own non-disruptiveevolutionary path towards real time
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Our offer - Creating a Point of View
What is it?
A Point of View (PoV) is a customer-specific, executive document
It ties SAP's solutions to your company’sbusiness strategy and/or pain points
Addresses the most critical concerns ofyour C-level executives
It is based on SAP’s leadingBenchmarking data
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Our offer - Creating a Point of View
Approach
Identifying your key questions and understand your company’sstrategy and business challenges is key
Partnering with our customers should ensure setting the rightexpectations regarding scope, investment and timelines
Preparing an outside in “Move the Needle” analysis and gatherbenchmarks to highlight challenges and opportunities willsupport our customers to find the appropriate solution fit
Validating our key findings together with our customers willdocument our customers’ specific storyline
ENGAGE
with us to leveragetechnology innovations
to transform Finance
PARTICIPATE
Use the businessscenarios
recommendation todiscover the value ofSAP Suite on HANA
EXPERIENCE
The power ofSAP solutions for the
Office of the CFO
Now It IsYour Turn
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Thank You
Contact details:
Kai FinckSenior Vice President, Office of the CFO [email protected]
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