financial excellence for digital enterprise · 1.08.2016 · ben shu fcpa head of gc analytics...

Ben Shu FCPA

Head of GC Analytics (Center of Excellence)

Financial Excellence for Digital Enterprise

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

Increased Globalization Expansion into new markets

Global process standardization

Localization requirements

Economic Volatility Volatility in markets

Decreased stock valuation

Slow economic growth

The Realities of the “New Normal” for Finance

Pressure on Margins Profitability by segments

Decreased budgets and spending

Determination of the cost to serve

Focus on Risk Financial risk and fraud

Commodity risk

Social sentiment affects brand value

New Business Models Shared services organizations

Business partnerships

Leveraging big data for decisions

Regulatory Changes Increasing disclosure requirements

Country-specific regulations

Industry-specific disclosures


Offering Infinite Opportunities to First Movers

+26%Market

valuation

+12%Impact on profitability

+9%Revenuecreation

EARLY ADOPTERS ARE WINNING

In the next 10 years, 40% of the S&P 500 will no longer

exist if they do not keep up with these technology trends


What Does this Mean for Finance?

New business

models and

competitors

Need for instant

insight to action and

radical automation

New types of risks

and more complex

regulations


Foundation for Digital Finance

Single Source of Truth

On the Fly Analysis

ConnectivitySAP HANA

Single source of truth

Operations Business Planning Business Intelligence

FINANCE


Value Scenarios Across the Entire Value Chain

Dynamic, Integrated

PlanningClose Books in a Day

Automated “Lights Out”

Finance

Always on proactive

Compliance

Real time actual to plan

cash management

M&A and divestitures

what-if analysis

Accelerated planning

cycles

Multi-dimensional

reporting on the fly

Real time customer and

product profitability

“Soft close”

Real time P&L

insights

Integrated accounting

and managerial

reporting

No reconciliations

Instant visibility into

working capital

Real-time liquidity

planning

Real time bank counter

risk management

Automated payment

processes

Real-time receivables and

payables reconciliation.

Immediate reaction to

collection

Integration with business

networks

Employee perfect trip

experience

Identify and predict

potential fraud.

Define strategies for

fraud prevention

Ensure compliance and

improve audit

management efficiency

Integrated controls in

processes


Simple Finance – An Integrated Solution for Strategy to Execution

© 2015 SAP SE or an SAP affiliate company. All rights reserved. 8

Business Suite on HANA

SAP HANA Platform

AlignedSingle Source of Truth

AgileReal time finance processes

PredictiveInsight and foresight

SAP Cash Management powered by SAP HANA

New product for

Group Cash Management

SAP Central Financepowered by SAP HANA

Alternative in-memory

functionality for ERP customers

Integrated

Business Planning for

FinanceNew capabilities and enhanced

integration for ERP and BPC.

A Vision of Future Boardroom Experience


Accountability to the Board


Optimize business performance

StrategyAligned strategic decision-

making across teams

Optimize operational

decisions inside and outside

the company

Insight Decisions

Execution

Manage compliance, risk,

and optimize performance

across the business network

,

Generate insight from

structured/unstructured

and internal/external data

across multiple

transaction systems

Business Intelligence Platform

Enterprise Performance Management

Governance, Risk, and Compliance

Unified

Information

Business Network

Optimization

Collaborative

Decisions


Issue: Accuracy apportionment compromises accuracy

Customer P&L

based on apportioned overheads

Customer

A

Customer

B

Revenue $10,000 $11,000

Cost of Sales $7,000 $7,000

Contribution $3,000 $4,000

Overhead(30% Cost of Sales) $2,100 $2,100

Profit / Loss $900 $1,900


Customer P&L

based on Activity Based Costing

Customer

A

Customer

B

Revenue $10,000 $11,000



Sales Calls @ $50 $300 (6) $600 (12)

Order Processing @ $10

$120 (12) $520 (52)

Pick and Pack @ $15

$180 (12) $780 (52)

Shipping @ $40 $480 (12) $2,080 (52)

Credit Control Calls @$25

$0, (0) $300 (12)

Cost to Serve $1,080 $4,280

Profit / Loss $1,920 ($280)

Issue: Accuracy apportionment compromises accuracy

Customer P&L

based on apportioned overheads

Customer

A

Customer

B

Revenue $10,000 $11,000



Overhead(30% Cost of Sales) $2,100 $2,100

Profit / Loss $900 $1,900


High volumes can be costed

ACCURATELY and EFFICIENTLY

Modelling costs in a multidimensional data structure allows for the

more sophisticated modelling of real life situations - giving more

ACCURATE costs

Applying calculated costs to high volumes of transactions

(accounts, SKU’s, sales order lines) is much more EFFICIENT in a

relational data structure

While still maintaining:

Comprehensive trace back

On-demand “What-if?” scenario analysis

of costs

Web-based collection of non-system

driver data

Costing high volumes efficiently – and accurately

Scalable, Enterprise Class Solution

Sophisticated cost

modelling to give Unit

Rates or Cost per

Minute

Detailed costing (Unit rate x Volume)

or

(Cost per Min x Time)

Best-of-breed

multidimensional costing

Relational technology

for the volumes

ACCURACY EFFICIENCY

EFFICIENCY WITH ULTRA HIGH VOLUMES

Low High

COMPLEXITY / ACCURACY OF

COSTING

High

LowRelationa

l Data

Structure

Multi

Dimensional

Data

Structure

Business

Objects

Profitability

and Cost

Managemen

t


User friendly, rapid and efficient modeling

Rapid point and click assignmentsHere the indirect activity “Manage and Supervise”

is being reassigned to direct activities based on

the # of FTEs involved in those activities – and

this is being done for every department where the

activity occurs in the model in just 4 clicks!

Point and click assignments

Any new member detected in a hierarchy automatically

inherits the assignments of its siblings - minimizing time

and effort on model maintenance

Logical data structure for minimal model maintenance

Product 1 Product 2 Product 3

Product Family

New Product


Users can slice and dice the data

themselves with consolidated results

being calculated on-demand and

their Web book automatically

refreshed

Using this functionality they can test

out the impact of changes before

committing to them, resulting in

better - and more incisive - decisions

Unique on-demand query and what-if? analysis

Reliable on-demand “what-if?” analysis and scenario modeling


Users can leverage the insight into the drivers of cost

and profitability in planning and budgeting models. This

provides integrated budgeting and costing solution giving

deep insight into the cost and profitability of products and

customers in future periods

Changing the driver volumes and then “back-calculating” an

existing ABC model delivers an activity-based budget

Driver-based budgeting is based on a more iterative

understanding of what drives cost inside the organization

Both can be rapidly re-forecast by updating driver data

enabling operational capacity to be tightly

aligned with demand

Costing and driver-based / activity-based budgeting in a single solution

Extending the value of profitability and cost management

Resources

& Line Item

Expenses

Cost Objects

Activities

Revenues

Product, Customer,

Channel etc

Profitability

Product, Customer,

Channel etc

Cost Assignment

Cost Assignment

Resource Drivers

Activity Drivers

Adjust capacity

in future periods

Adjust prices

and sales mix

Adjust resource

costs in future

periods

Adjust

consumption in

future periods

Adjust

consumption in

future periods

Adjust demand in

future periods


Analytics customers in Hong Kong & Macau

Thank youContact information:

Ben Shu FCPA Head, Center of ExcellenceGreater China [email protected]

financial excellence for digital enterprise · 1.08.2016 · ben shu fcpa head of gc analytics...

Documents