Best in Class Finance Transformation - Best Practices for the Finance Function

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Best in Class Finance Transformation - Best Practices for the Finance Function

Birgit Starmanns

Senior Director, Finance Solutions, SAP

[email protected]



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AGENDA

Market Observations

EPM within the Complete Finance Function

Innovations Support Finance Transformation



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Market Observations



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Internal and External Pressures on Finance Require More Value-Added Activities

Increasing globalization

Increased focus on risk

Volatility in economic conditions

Pressure on margins

Innovative business models

On-going changes to regulatory requirements



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Top Business Priorities for the CFOFinance executives prioritize closer collaboration with the business

Over the next 2 years, priorities for finance are:Control costs and improve profitability

Support and fund growth objectives

Improve finance efficiency/reduce cost of finance

76% of Finance executives believe at least half their time should be on high-value planning and analytic activities, though only 55% achieve this

76% want Finance to be more involved working with the business during the next two years

*Source: Source: CFO.com Research 2013



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Technology Supports the Role of the CEO and the CFO

71% of CEOs believe that technology is the top driver of organizational change (the #1 factor), surpassing people skills (69%) and market factors (68%)*

Finance expects their business will demand help with growth (strategic planning), increased value (cost management) and managing uncertainty (planning, budgeting and forecasting) **

The top improvement area for finance executives is improving capabilities for predictive analytics and simulations** *Source: IBM Leading Through Connections – Insights

from the Global Chief Executive Officer Study**Source: CFO.com Research 2013



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Achieve Financial ExcellenceEnable Finance Transformation to Better Support Business Needs

ControlPredict Execute

Seamless end-to-end compliance

Instant insight to action

Agility with simplicity



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EPM within the Complete Finance Function



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Achieve Financial Excellence with End-to-End Solutions

Head of Corporate Reporting

Corporate Treasurer

VP Finance Head of Finance Operations

Chief Compliance

Officer

Financial Planning and

Analysis

Accounting and

Financial Close

Treasury and Financial Risk Management

Collaborative Financial

Operations

Enterprise Risk and

Compliance Management

3x Lower finance cot as percentage of revenue for top quartile organizations versus bottom quartile organizationsSource: SAP Performance Benchmarking



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Financial Planning and Analysis

76%Higher operating margin where financial systems provide historical and forward-looking views into financial and operational performanceSource: SAP Performance Benchmarking

Develop and Translate StrategyProvides enterprise-wide alignment of corporate and operational goals.

Planning, Budgeting and ForecastingHelps organizations monitor and achieve critical key performance indicators (KPIs) in a defined period of time.

Profitability and Cost ManagementManages organizational costs to optimize profitability.

Monitoring and ReportingProvides analysis to support financial and operational decision making.



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Accounting and Financial Close

26.1% Fewer days to close annual books in an integrated G/L system so that no reconciliations are necessarySource: SAP Performance Benchmarking

Financial AccountingAccounting support for multiple financial reporting standards, industries, currencies, and languages.

Entity CloseStrong governance, fast execution, and real-time insight into the entity’s financial close.

Corporate CloseElimination of bottlenecks for faster financial consolidation and reporting cycles.

Reporting and DisclosurePublication of regulatory disclosures as well as creation of XBRL filings, for a holistic regulatory disclosure process.

Financial Close GovernanceTrusted view of subsidiary performance and compliance through consistent financial master data.



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Treasury and Financial Risk Management

56%Lower treasury and cash management FTEs where the treasury system calculates various treasury analyses such as mark to market and value at risk

Source: Source: SAP Performance Benchmarking

Payments and Bank CommunicationsSpeedy decision making with reduced fees and borrowing costs.

Cash and Liquidity ManagementReal-time insight into global cash management.

Debt and Investment StrategiesStrategies that lead to the best borrowing rates and lower investment costs.

Financial Risk ManagementAssets and cash flows protected from financial risks.

Commodity Risk ManagementRisks associated with commodity price volatility can be identified, qualified, and mitigated.



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Collaborative Finance Operations

44%Fewer finance FTEs in transactional processes with streamlined, automated, and integrated core finance processesSource: SAP Performance Benchmarking

Receivables ManagementProvides automated, integrated, and collaborative receivables management processes.

Collaborative Invoice to PayAutomates invoice management and bank communications while improving the archiving process.

Travel ManagementStreamlines the entire trip lifecycle to control costs and enforce corporate and legal compliance.

Shared Services FrameworkSupports financial shared services that improve productivity, help ensure compliance, and cut operational costs.



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Enterprise Risk and Compliance Management

22%Lower audit cost with the use of automated controls rather than manual controlsSource: SAP Performance Benchmarking

Enterprise Governance, Risk and ComplianceReliable insight for preserving and growing business value and compliance management with minimized cost and effort.

Access Risk ManagementMinimized access risk and fraud prevention.

Global Trade ComplianceHeightened control of international trade supply chain.

Sustainability ReportingTracking and communicating your sustainability performance, collecting data, and compiling disclosures quickly and cost-effectively.



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Innovations Support Finance Transformation



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Achieve Financial Excellence with End-to-End Solutions

80%of decision makers think access to the right information at the right time is critical to their business

SourSource: SAP Performance Benchmarking

Applications

In-Memory

Mobile Analytics Cloud



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Application Innovations for Finance

53%Of organizations report a large gap between availability of Big Data and their ability to analyze it Source: SAP Performance Benchmarking

Commodity Risk ManagementIdentify, qualify and mitigate risks associated with commodity price volatility.

Fraud ManagementDetect fraud earlier and more accurately to reduce financial loss.

Disclosure ManagementPublish your financial statements and create XBRL filings for fully compliant regulatory disclosures.

Electronic InvoicingDigitize your purchase orders and invoices to maximize discount capture and comply with contracts and VAT regulations.



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How Can Mobility Transform Finance?

Enable the business to make better decisions in real time, anytime, anywhere

Enable Finance executives to manage their operations more effectively

Accelerate key process cycle times and eliminate approval bottlenecks



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Broad Range of Empowerment with Mobile

Basic Alerts Pre-built AppsMobilize

Existing ContentNext GenerationMobile Analytics

Compliance risks

Performance thresholds

Approvals

Operational alerts

Travel updates

Deliveredout-of-the-box

Available for download on app stores

Extend enterprise data

Leverage user roles

Reports

Explorer data sets

Operational data

Dashboards

Why?

What if?

When?

Take immediate action

Mobilizing “big data”

Flexible, ad-hoc analysis



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Mobile Innovations for Finance

24%Higher operating margins where enterprise mobility is embedded in all business processesSource: SAP Performance Benchmarking

Planning, Budgeting and ForecastingReview planning and budget information, initiate analysis and corrective action, and respond to alert and status updates.

DashboardsMonitor operational finance information with real-time calculations of configurable KPIs and visual heat maps on iPad devices.

Alerts and ApprovalsProvide access to operational alerts and approvals for payments, travel requests and expenses, and access requests.



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How Can Analytics Transform Finance? Immediate insight into

financial performance and profitability of the organization

Quick and complete what-if and predictive analysis to determine the financial impact of decisions

Combine structured and unstructured information for a holistic view



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Immediate Financial Insight for Better Decisions – Finance as the Strategic Advisor

Transactional Data

Planning Information

Market Data

Profitability Calculations

Corporate Strategy



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Analytics Innovations for Finance

15%Fewer days sales outstanding where finance leadership has a financial dashboard that provides a timely view into predefined key metricsSource: SAP Performance Benchmarking

Consolidated Reporting and AnalysisObtain holistic performance insight, supported by KPIs and metrics, to measure financial and operational performance.

Embedded AnalyticsAccess ready-to-consume analytics while running financial transactions, from accounting and financial reporting to treasury and credit risk.

Advanced AnalysesPredict and model potential outcomes of strategic decisions to support business growth initiatives.



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How Can Cloud Transform Finance?

Increased usability and mobility with people-centric design

Quick, cost-effective deployment of software-as-a-service with regular updates to capabilities

Integration into core transactional systems to leverage existing processes



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Flexible Options for Modular Deployment

Traditional on-premise

On-Premise Hybrid & Cloud Extension

Mixed on-premise & cloud.

Cloud with Mobile

Enterprise and Partner Cloud



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Cloud Innovations for Finance

85%Believe the cloud will have a major impact on their organization through efficiencies, innovation, or competitive differentiationSource: SAP Performance Benchmarking

FinancialsAccess easy to consume financial information for all lines of business, with preconfigured KPIs for personalized insight and role-based analytics.

TravelControl travel costs, facilitate corporate and legal compliance, and increase process efficiency with an intuitive user experience and mobility.

Financial Services NetworkLeverage a single connection point and standardize integration between financial institutions and their customers.



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How Can In-Memory Transform Finance?

Enable more agile and more effective Finance processes

Provide instant insight to action based on real-time information

Provide pervasive modeling, planning, and simulation capabilities to better manage uncertainty



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Revolutionary Results with In-Memory

Report Speed ImprovementNew reporting experience with near second response time e.g. Treasury position list and Line Item Browser for General Ledger, Customer, Vendor

Up to

1350x

Profitability Analysis Enables to run Profitability Analysis as online report for different views and cost hierarchies. Gives decision critical insight for business planning and reviews.

124x

Incoming Payment ClearingAdvanced search for open items (e.g. invoices) to be cleared by incoming payments; all FI customers can improve the processing time of one of the most labor intensive processes in FI-AR

71x

Intercompany ReconciliationIntercompany reconciliation runs real-time and enables single source of truth in single instance or central finance system landscape through direct access to finance data tables instead of copied data. Reduction of TCO as data is not replicated anymore.

>200x

Document Journal ReportStable responsiveness of the application by various combinations of attribute selection

978x

Acc. Receivables DashboardNew app that enables the receivables manager to assess and respond quickly and appropriately to changes in customer payment behavior

No latency

KPIs

Up toUp to



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In-Memory Innovations for Finance

68%Of organizations have limited or no predictive modeling capabilities or complex optimization techniques for Big Data analysisSource: SAP Performance Benchmarking

Financial Planning and ForecastingDevelop strategic long-range plans including top down planning with driver-based inputs, rolling period planning, and dynamic event-based forecasting.

Cash ForecastingProject liquidity based on the cash position for all operating units, using real-time activity from purchasing, sales, and other cash-relevant systems.

Working Capital ManagementInteractively explore causes of working capital changes and optimize strategies to improve company liquidity, efficiency, and financial health.

Financial Close ManagementProvide real-time insight into the process, quality, and financial KPIs of the financial close.

Best in Class Finance Transformation - Best Practices for the Finance Function

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