How SAP Solutions for Finance, powered by HANA, Enable a ‘Real’ Real-Time Enterprise

Yesterday the irrepressible Hasso Plattner (co-founder, chairman and driving force behind the latest innovation), announced that the SAP Business Suite has been recast to run entirely on SAP HANA, making SAP the first company to introduce an ERP suite running entirely on in-memory computing. Analysts have said this is the most important news to come out of SAP for a couple of decades and already the SAP board has announced that sales forecasts to 2015 have been increased.

The dawn of the real-time enterprise gives business folk reason to celebrate too. Production controllers who are used to getting into the office at dawn to work through the output of the overnight MRP II (Manufacturing Resource Planning) can stay in bed another hour or so. We know that because during the news briefing, Derek Dyer, Director, Global SAP Services at John Deere told the audience that an MRP II report that previously took 6 hours to run overnight in batch mode is now calculated in a mere 10 seconds. This means production and supply chain staff can optimise business critical processes at any time in the working day. The company will benefit from better capacity utilization, less inventory and immediate feedback on the success of trade promotions; the customer will benefit from having more deliveries completed in full, giving them greater certainty in their own inward supply chain – and as we said, production controllers are sleeping better and longer .

But what does the real-time enterprise mean for Finance? Below I’ve worked through just some of the areas where there are overarching benefits:

Blackboard

Real-Time Performance Management

Working in real-time, with solutions such as SAP Business Planning and Consolidation powered by HANA, is going to reduce the decision cycle time by delivering  up-to-the-minute insight into key metrics for  cost and profitability data.  This will  allow faster and more granular planning and scenario modelling that will result in more accurate forecasts. Even the time taken to do simple queries is transformed.  In  laboratory tests, response times for querying line items in the general ledger were over 1350 times faster with screens repopulated in seconds. 

Real-Time Financial Close

By slashing the time taken to process long-running period-end routines, you can achieve a step change in closing times. Processes like cost and profitability allocations, reconciling invoices with goods received, and intercompany invoices are performed in real-time rather than batch pre-processing,  Having more time available to make use of real-time analytics will also reduce the time consumed  with data inquiries, thus improving quality and reducing risk throughout the process. Again, if you want some statistics, in laboratory tests, intercompany reconciliation runs done in real-time using SAP HANA were over 200 times faster.

 Real-Time Treasury Management

Cash forecasts powered by SAP HANA will report the accurate and up-to-the-minute position for all operating units incorporating the real-time activity from purchasing and sales, giving a far better basis for decision making and forecasting. At the same time, those working in treasury will have instant insight into all financial exposures alongside real-time data about interest rates, currency rates and credit. Immediate access to that critical data will lead to better risk assessments and decisions that all help drive down the cost of capital.

Real-Time Collaborative Financial Operations

Working in real-time rather than batch mode will also facilitate better collaboration between finance functions. For instance, someone in Treasury can explore working capital in real-time, drilling down into operating units to investigate the root cause of local issues. Managing  problematic accounts  promptly will preclude drawing  down external funding. Receivables Management will also benefit by being able to monitor customers’ payment and receivables risks in real-time with exceptions that require prompt attention being automatically alerted to the mobile devices of those managing the accounts. Clearing incoming bank statements in real-time also gives a more accurate view of customer accounts, helping sales by reducing the number of customers’ orders that are blocked while their payments are being reconciled in house. In laboratory tests, incoming payments were cleared 71 times faster using SAP HANA and there was no latency on repopulating the Accounts Receivable Dashboard.

Real-Time Compliance

The ability to monitor high volumes of transactions simultaneously across multiple systems results in the faster identification and correction  of control weakness and risks, as well as the reduction  in the time involved in testing and monitoring controls. Risk management is improved by being able to analyze large volumes of data across multiple systems in real-time to identify any variations in Key Risk Indicators (KRIs) that need alerting to the appropriate risk owners. Likewise, there is considerable benefit in being able to analyze access controls in real-time.

In addition to the benefits listed above, there are many others. No matter where you look within the real-time enterprise, there is typically less time spent on aggregating and copying data. This reduces IT costs and frees up Finance to provide both a better service and greater value to the business. At the same time, improvements in productivity will help drive down the overall cost of finance. SAP’s own benchmarking shows a 3x difference in the cost of finance between the best and worst companies, so it is clearly something many CFOs are still struggling with. Wherever you choose to look, SAP HANA delivers in spades.

5 thoughts on “How SAP Solutions for Finance, powered by HANA, Enable a ‘Real’ Real-Time Enterprise

  1. Pingback: OLTP meets OLAP, BI Conferences, Sybase Who? And Other News | Business Analytics

  2. Pingback: OLTP meets OLAP, BI Conferences, Sybase Who? And Other News

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