Post on 28-Mar-2020
Effizienteres Risikomanagement dank IT-
Unterstützung
Nadine Mautner / SAP F&A Deal Support – Global Credit Management
Christian Wagenlechner / Bisnode Practice Leader Integration Solutions
12. November 2014
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 2 Internal 2
D&B US established a strong
relationship with SAP`s global Marketing
organization, including the delivery and
update of more than 5.000.000 D&B
data records per year for lead
generation, market analysis, business
partner management to SAP.
Bisnode D&B runs the global relationship
with SAP for the centralized services of
the Credit Management.
Each Business Partner of SAP uses the
D&B D-U-N-S© number for identification
purposes inside business connections
with SAP
D&B
Webservice
DB 360
D&B Toolkit
SAP and Bisnode D&B A Global Success Story
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 3 Internal
Agenda
Historic development of credit management at SAP
The global credit management process
The FS-CM IT solution and implementation
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 5 Internal
Global Credit Management Development SAP Minimizes Its Risk Exposure with Automated Credit Checks
Development and implementation
of Credit Management and Credit
Insurance Policy
Run Credit Management and Credit
Insurance Process
Harmonize global Data Provider to
D&B/Bisnode
Improve FS-CM application with
D&B expertise
Global Credit Management
Organization
Today Duration Milestone
2010 2014 2011 2012
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2013 2009
Q1 Q2 Q3 Q4
Go live
Termination of
Credit Insurance
Go live
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 6 Internal
Global Credit Management Development Organizational Coverage
EMEA/MEE
5 Credit Manager
APJ
2 Credit Manager
NA/LATAM
8 Credit Manager
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 7 Internal
The Global Credit Management organization is dedicated to the combined goals of
stewardship in mitigating financial loss to SAP resulting from the credit risk of its
customer base, and true business partnership in providing efficient and compliant
processes for evaluating the creditworthiness of our customers as part of Deal
Support. As such, our major responsibilities include:
Timely evaluation of Sales opportunities and
customer creditworthiness to advise on
prospects and expedite credit decisions, but
limit exposure to acceptable risks
Setting clear and consistent guidelines and
global best practices for a SOX-compliant
conduct of Credit Management at SAP
Aligning with key business partners in Sales,
Cash Collections, Revenue Recognition and
Senior Leadership in Finance to meet common
business objectives
Monitoring credit risk across SAP’s customer
and prospect portfolio and reporting to related
business areas.
Sales Enablement
Credit Risk Monitoring Best Practices & Procedures
Partnering w/ Stakeholders
Global Credit Management Mission Statement
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 8 Internal
Credit Mgmt does not … … rather…
decide …
the final word on a
deal’s progress
Escalates
w/in Sales &
Finance
for consensus
& mitigation
decide …
whether or not to
recognize revenue
up-front
Revenue
Recognition
(Finance)
decide …
when and how to
collect revenues
GCCO &
Collections /
Dispute
Management
own/govern … Credit Management objectives and KPI’s
(aligned with corporate strategy) Credit Management policy and guidelines Credit Management processes and tools Credit Management organization provide transparency/early warnings … on the overall risk of SAP’s customer portfolio on global, regional, local and individual scale across all LoBs recommend measures… to evaluate when to defer revenue depending
on the customer’s ability to pay establish and recommend… strict guidelines and actions for reviewing and
escalating credit cases, and mitigation measures such as prepayment, guarantees, and financing for high risk customers
Credit Management does …
Global Credit Management Credit Management Function Responsibilities
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 10 Internal
Trigger for Credit
Worthiness
Assessment
New opportunity in
CRM in phase D and
threshold >100 k€
triggers CWA for
customer
Regular updates/
monitoring for active
customers
Assess Credit
Worthiness
Customer (number)
based
With external credit risk
data
Assign Risk Class
10 risk classes with
assigned probability of
Default
Adjust Risk Class
Risk class can be ad-
justed in exceptional
cases based on addi-
tional information
and/or if no rating is
available from external
data provider
Assign Credit Limit For
Customers
Based on individual re-
venues from last 4qtrs
For new customers:
Based on segment-
specific revenues from
last year
Manual decrease or
increase upon approval
(defined approval
matrix)
Check Against Credit
Exposure
All open A/Rs
90 days invoice pool
Each opportunity
assessed individually
Approve Or Apply
Safeguarding Measures
Safeguarding
measures in case of
high risk or credit limit
overrun:
Accelerated
collection approach
Bank guarantee
Prepayment
SAP Financing
Rejection
Monitor And
Continuously Improve
Process tracking
Reports to support
credit management and
related processes, e.g.,
A/R and revenue
recognition
1 2 3 4
5 6 7 8
Global Credit Management Process Operational SAP Credit Management is an 8-Step Process
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 11 Internal
< 100* k€ No CWA
> 100 k€ External
Information
Opportunity
Opp. vol.
Ph
as
e “
D”
Trigger External Data SAP Risk Class (RC)
PoD (max.)
CRM
DUNS#
???
Collection
NOT
probable
Collection
probable
Impact
???
ERP
Payment
history
(Report)
Direct SW / CS
opportunities in CRM >
100k EUR, Phase A-D (LE)
and A-C (SME)
D&B Ratings replacing Euler
grades, but mapped to SAP
1-10 risk class
Most escalations under current DOA occur in risk classes
7-10 and risk classes 9-10 are considered “Collection not
Probable” for Rev Rec guidance, 6-8 considered on an
individual basis considering payment history.
1
3
2
7
10
6
8
9
5
4
Excellent
Default
Doubtful
Sub - Standard
Unsatisfactory
Marginal
Acceptable
Satisfactory
Good
Strong
Escalation and Credit Considerations for Rev Rec
Global Credit Management Process Credit Worthiness Assessment Based on External Data
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 12 Internal
D&B Risk Indicator
Size Upgrade
S&P Country
Risk
D&B Score
SAP Rating
• D&B Risk
Indicator
• Part of D&B
Rating
• Taken from Data
package or
manually entered
from BIR
• Mapped into
SAP-specific
classes
• D&B Capital
Indicator
• Part of D&B
Rating
• Taken from Data
package or
manually entered
from BIR
• Large companies
get an upgrade of
one SAP risk
class
• Valid for: 5A/5AA,
4A/4AA, 3A/3AA,
2A/AA
• S&P Country
Risk Rating
• Updated
frequently
• No need to enter
data
• Upgrade or
downgrade by
local risk situation
• D&B Score
• Part of D&B credit
assessment
• Taken from data
package or
manually entered
from BIR
• Derived from
D&B and S&P
Risk figures
• international
Comparability
• 10 Rating Classes
• 1-6: Automated
Handling
• 7-9: Manual
Handling
• 10: Business
Failure /
Bankruptcy
Global Credit Management Process Components of an SAP Rating
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 13 Internal
Global Credit Management Process Credit Worthiness Assessment Based on External Data
< 100* k€ No CWA
> 100 k€ External
Information
Opportunity
Opp. vol.
Ph
as
e “
D”
Trigger External Data SAP Risk Class (RC)
PoD (max.)
CRM
DUNS#
???
Collection
NOT
probable
Collection
probable
Impact
???
ERP
Payment
history
(Report)
Direct SW / CS
opportunities in CRM >
100k EUR, Phase A-D (LE)
and A-C (SME)
D&B Ratings replacing Euler
grades, but mapped to SAP
1-10 risk class
Most escalations under current DOA occur in risk classes
7-10 and risk classes 9-10 are considered “Collection not
Probable” for Rev Rec guidance, 6-8 considered on an
individual basis considering payment history.
1
3
2
7
10
6
8
9
5
4
Excellent
Default
Doubtful
Sub - Standard
Unsatisfactory
Marginal
Acceptable
Satisfactory
Good
Strong
Escalation and Credit Considerations for Rev Rec
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 15 Internal
FS-CM IT Solution and Implementation Key Interfaces of SAP Credit Management Process
Credit
Management
Opportunity
Mgmt (Sales
Pipeline)
Collections
Mgmt
Credit
Insurance
BI
Dispute Mgmt
Sales and
Distribution
(SAP SD)
External Risk
Data Provider Finance
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 16 Internal
FS-CM IT Solution and Implementation Real-Time Processing and Integration in SAP CM Application
SAP Credit Management Implemented for CM at SAP
Recalculation of scoring and credit limit event
driven
Online interfaces to external data providers
Change documents, various logs, … Traceability
Credit checks are carried out when entering or
updating opportunities in SAP CRM system
(applicable to phase D or higher)
Automatic credit worthiness assessments
Integration with Accounts Receivables
Exposure
Payment behavior key figures
Exposure updates of open A/Rs
Up-to-date credit exposure and payment
history of particular customers
Ongoing real-time scoring
of customers
Automatic credit worthiness assessments
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 17 Internal
SAP Monitoring Coverage
First-time credit application process via detailed text reports and data packages Two-Step approach for monthly rating update
Phase 1: monthly monitoring with option for daily monitoring in selected countries Phase 2: monthly monitoring (implementation in progress)
Not in scope
Phase 1 – monthly / daily (optional)
Phase 1 – monthly
Phase 2 – monthly
Not covered
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 18 Internal
Real-Time Integration with External Providers (e.g., D&B Business Information Report)
Select “D&B BIR” as rating
procedure in the section
External Credit Information
Request BIR Report.
The BIR report can be
requested from D&B via the
Import Data button.
Prerequisite: Valid DUNS
number is maintained for the
BP and report is available in
the D&B database.
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 19 Internal
Online Request of Text Report (e.g., D&B Business Information Report)
The requested BIR report can be displayed via the Business Information Report tab
Possibility to scroll
between different BIR
Reports
Download in PDF
Format possible
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 20 Internal
FS-CM IT Solution and Implementation System Architecture
One global prod. ERP system (incl. SAP Credit Management)
SAP NetWeaver
BW Reporting
• PoD
• Credit exposure
• KPIs
CRM System
FI A/R
Open Items FI A/R
BI System
SD
Invoice Pool
FI A/R
Payment Behavior
* LE = Large Enterprises; SME = Small and Medium Enterprises
LE, SME ,
Field Services
Opportunities
(direct channel)*
Opportunity phase D or
higher
XI Exchange Infrastructure
Online Interface
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 21 Internal
Credit management should be a lean and efficient process and
should be as automated as possible
The credit management policy should be defined prior to the
start of the implementation/blueprinting
Integration of credit management and credit insurance
processes should be considered (e.g., utilization of external
credit risk data)
Credit worthiness assessment should be transparent for users
SAP CRM system can be used as a starting point for the credit
management process
Master data quality is a prerequisite for successful credit
management
Different external data providers can be combined
Credit Management 7 Key Points to Take Home