erik hoeksma, manohar 2017 -...

Building a Business Case for S/4HANA

Erik Hoeksma, Manohar2017

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 2Confidential

Questions to the participants

1. Have you or your organization (or division) worked on a S/4HANA business case?A. YesB. No, but planned within the next 6 monthsC. No plans currently


Today’s session

Soft Close

Native Connection to

Ariba Modern UX

Universal Journal

1. Use case selection

Improve Timely Access to Information

Reduce Analysis &

Reporting Cost

Reduce Time to Close Books

3. Impact, benefits assessment

Lower TCO

Lack of granular data

Delayed visibility into key metrics

Connectivity with suppliers

2. Problem, opportunity description

Effort intensive

reconciliations

Technical

Resource availability

Financial (cost over-runs)

4. Risks and mitigation

Change mgmt. (executive support)

Revenue growth

Operational excellence

Cost reduction

5. Link to company objectives

Spend mgmt.

6. Summary and wrap-up


1. Use case selection

What aspect of S/4HANA appealed most to you?

Soft CloseUniversal Journal

Merge of Financials & Controlling

Automated Bank

Reconciliations


Ariba

Real-Time Access to

Financial Data

Each person 1-2 use cases

Summarize in 3-5 words

Modern UX

Lower TCO

Cloud Deployment

Option

Discuss use cases within

group

Instructions

One post-it for each use

case

Group similar use cases together


2. Problem, opportunity description

Pick top three that appeal to most and discuss the problem or opportunity that they address

Effort intensive

reconciliations

Separate close and

consolidation processes

Connectivity with suppliers

Universal Journal


Ariba

Real-Time Access to

Financial Data

Lack of granular data

Delayed visibility into key metrics

Effort-intensive

month-end process

High overhead for reporting


SAP Benchmarking (best practices assessment) helps identify process pain-points and areas for improvement

1 Business and operational analysis is based on a single source (integrated data model) of financial and non-financial information

2 The financial reports are made available in real-time, on all devices including mobile, allowing managers to make decisions anywhere and anytime

3Cost, profitability and margin information is available on product, channel, customer but also micro-segment level (through enhanced data capture on both revenue and cost side for micro-segment profitability)

4 Real time What-if analysis is possible, to model and test the impact of changes to profitability before committing to plans

5 The cost accounting dashboard supports analysis along multiple dimensions including product, location and pre-defined activities

6 Financial systems are used in the business analysis process by providing historical and forward looking views into financial and operational performance

7 Scorecards are implemented and used to connect strategic to operational goals. Scorecards exist at staff level, as well as management and executive levels

8 The organization has capabilities for ad hoc analysis and reporting along key dimensions (customers, regions, divisions etc.) with detailed drill-down visualization

9 Operational reviews and board package content can be automatically generated directly from financial systems in user preferred formats like PDF, Excel, PPT, Word, etc.

Finance – Business and Operations Analysis and Reporting Best Practices

0

1

2

3

4

5

6

1 2 3 4 5 6 7 8 9 10 11

TOP 25% Coverage Average CoverageCustomer Coverage Customer Importance

Best Practice Ranking 1 = No Coverage5 = Full Coverage


3 (a). Impact, benefits assessment

What is the impact or benefit of addressing these problems, opportunities?

Universal Journal


Ariba

Real-Time Access to

Financial Data

Reduce Finance Cost


Improve Days Payable

Outstanding (DPO)


Improve Quality of Decision Making

Effort intensive

reconciliations

Separate close and


Connectivity with suppliers Lack of

granular dataDelayed

visibility into key metrics

Effort-intensive

month-end process


Lower TCO


Business Value in a Digital EconomyValue is More Than Ever Measured Across Four Dimensions

Business Benefits(incl. TCO)

Strategy Enablement

Employee Engagement

Risk Management

Value Creation is Measured Across four dimensions:1. Strategy Enablement

Enabling digital transformation is increasingly becoming a key focus in every boardroom

2. Tangible Business BenefitsDelivering measurable short and midterm benefits (incl. TCO saving) will remain a key decision criteria

3. Employee EngagementIncrease productivity and speed user adoption through tailored user interfaces (Uis)

4. Risk ManagementBeyond compliance and security, companies want agility to change and adapt at will

In a digital economy CEOs are not just looking for immediate results, they want to transform their company, expand their customer reach, and become more relevant. Value is measured the way the stock market

rewards winners.


3 (b). Impact, benefits assessment

Which benefits can be quantified? Which benefits have a financial impact? What metrics are impacted?

Finance Cost (% of Revenue)

Business & Operations Analysis/

Reporting Cost

Universal Journal


Ariba

Real-Time Access to

Financial Data

Reduce Finance Cost


Improve Days Payable

Outstanding (DPO)


Improve Quality of Decision Making

Effort intensive

reconciliations

Separate close and


Connectivity with suppliers Lack of

granular dataDelayed

visibility into key metrics

Effort-intensive

month-end process


Lower TCO


SAP Benchmarking (KPIs assessment) helps identify assess current performance and potential for improvement

Key Performance Indicators (KPIs) Company ValuePeer Group

Average Top 25%

Cycle Time for Financial Forecasts (in days) 5.00 54.00 20.00

Financial Forecast Accuracy (in %) 90.00 83.40 90.00

Time to Create New Reports (in days) 15.00 7.70 2.00

Audit Cost (% of revenue) 0.10 0.07 0.02

Days To Close Quarterly Books 10.00 10.90 5.00

Days To Close Annual Books 10.00 19.30 8.00

Days To Close Monthly Books 15.00 7.10 4.50

Cost of Capital (in %)

Supplier Discounts Lost (in %) 25.00 0.7 0.0

Days Payable Outstanding 60.00

% of Incoming Invoices using Online Processing 50.00 60.90 99.00

Days Sales Outstanding 60.00 47.10 30.00

Overdue Accounts Receivable (in %) 10.00 13.60 3.00

Uncollectible A/R Write-offs (% of A/R) 0.00 0.73 0.00

Error Rate in Invoices Sent Out (in %) 5.00 1.40 0.0

Losses due to Fraud (% of revenue) 0.00 0.02 0.00

Top 25%Between Average and Top 25%Below AverageRanking:


4. Risks and mitigation

What are the risks? How can these be mitigated?

Universal Journal


Ariba

Real-Time Access to

Financial Data

Mitigation Mitigation Mitigation Mitigation Mitigation

Resource availability

Change mgmt. (executive support)

Technical (integration)

Change mgmt. (user

experience)

Financial (cost over-run)

Mitigation

Technical (stability)


5. Link to company objectives

Compliance and Risk

OperationalExcellence

Business Partner

Partner to the business• Enable rapid simulation and

innovation of business models• Lead business strategy and

operations from planning through execution

• Gain new insights from Big Data

Operational excellence• Provide real-time, personal

analytics to business and finance users

• Continually streamline the close • Manage working capital, cash,

liquidity, and receivables

Compliance and risk• Manage financial and commodity

risk in highly volatile marketplaces

• Detect and prevent fraud in real time using mass detection techniques

• Comply with country-specific regulations on a global basis

Real-Time Access to

Financial Data

Universal Journal


Ariba

Typical CFO Objectives

Fraud Management


Typical engagement model for building a business caseO

utco

me

Cust

omer

Part

icip

ants

SAP

Part

icip

ants

Cust

omer

Sp

onso

r

VALUE DISCOVERY WORKSHOP

Timing based on Scope

Executive Sponsor – CxO

Solution Experts, Value Engineering, Consulting Services

Business Unit ExecutivesShared Services Executive

Subject Matter ExpertsGlobal CIO

Business Process à VE

• Discovery workshop

• Benchmarking, Best Practices Assessment

• Mapping to solution enablers and demos

VALIDATION & EXECUTION READINESS

3-5 weeks


Solution Experts, Enterprise Architects, Value Engineering

SAP Services and Support


Global CIO

Value Proposition

• Value proposition & ROI

• Solution roadmap, architecture

• TCO analysis

• Risks and mitigation, Governance

1 day


Executive Sponsor – CxOSolution Experts, Value Engineering, Consulting

Services


Global CIO

Top-to-Top Alignment

• Scope alignment

• Understanding of customer strategy & objectives

• Resources allocations, set timeframe

EXECUTIVE ALIGNMENT

A collaborative approach with customers is at the heart of our new customer engagement model. It requires:� Top-to-Top executive alignment� Clear project timeline, deliverables

and resource allocation � Discovery workshops to re-imagine,

collaborate and build common vision

� Customize architecture and a roadmap that fits every customers unique landscape and business needs

� Joint agreement on execution and governance

� Clear path to value creation and value measurement


6. Summary and wrap-up

1. What did you learn today? What was particularly useful?

2. Where do you need additional support?


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In particular, SAP SE or its affiliated companies have no obligation to pursue any course of business outlined in this document or any related presentation, or to develop or release any functionality mentioned therein. This document, or any related presentation, and SAP SE’s or its affiliated companies’ strategy and possible future developments, products, and/or platform directions and functionality are all subject to change and may be changed by SAP SE or its affiliated companies at any time for any reason without notice. The information in this document is not a commitment, promise, or legal obligation to deliver any material, code, or functionality. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates, and they should not be relied upon in making purchasing decisions.

erik hoeksma, manohar 2017 -...

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