The Power of Connection

From Craig Himmelberger, SAP

In my earlier “Power of Connection” blog article on SCN, I wrote about the great opportunities that exist to make valuable connections between the better insights found in our treasury systems, and the policies and procedures of various operational working capital systems.

Following on from my earlier thoughts on this subject, just one month ago SAPPHIRENOW 2014 gave me opportunity to reflect on how far technology has come in a very short time, since “HANA” and “Cloud” were just buzzwords and not yet the center of corporate boardroom conversation. I was joined in a Treasury Solutions demo theater by colleagues from our Ariba and Financial Services Network solution teams. I was pretty excited, as SAP Cash Management powered by SAP HANA was being given its proper SAPPHIRE debut, with full demonstration of the Fiori dashboard user interface (beautiful!) and the practically instant return of in-depth analytical content related to cash positions and anticipated liquidity requirements.

See the future taking place
You know how you read all about something and you think you know it pretty well? I had seen the conceptual walkthroughs of the full Cloud networked solution, complete with the Ariba buyer/supplier portal and the Cloud-based corporate-to-bank connectivity within the SAP Financial Services Network, but I was hardly prepared for the experience of seeing it all together as if for the first time. When you’re used to the beauty of each one of the parts individually, it’s not always easy to take a step back and see the future taking place right in front of your eyes.

Know what’s needed, and when
Seconds after producing a comprehensive cash requirements analysis, and determining a rock-solid liquidity projection for two weeks out, based on purchasing, sales order and everything else available in the Simple Financials system, I finally was able to look at the navigation screen of the Ariba Working Capital Optimizer with opened eyes. The Treasurer knows what is needed, and when. The figures are entered there as simple as you please. And one click yields a paradise of invoice (if you have an excess and want to invest in some instant 1% and 2% discount opportunities among your suppliers) and receivables open items (if you’re short, and want to offer a little sweetener to some of your customers to pay you early, and literally finance your ongoing operations for you) that can be selected with a swipe of a finger. (You have a touch screen, don’t you?)

Maybe I’ve been a finance guy for too long, but Fruit Ninja has nothing on being able to select exactly what you need to make the most of your investible working capital, or reduce (or eliminate) your borrowing costs to the bank. Best of all, after you’ve chosen (collaboratively—it’s in the Cloud!) the items to settle with your buyers and suppliers, the FSN is there to expedite the transactions. Choose from a range of financial institutions—not just a single bank—and get the best terms and the best rates available.

I’ve seen the future, and it’s connected.

Putting Together the Puzzle of Payment Options

Coffee-break with GameChangers

What defines the current climate of payments? Bonnie D Graham, host of a recent SAP Game-Changers radiocast, lists three attributes:

• Risk
• Cost
• Ability to reconcile

Moderating a panel of guest experts, Graham identifies two choices left for those in this sphere: innovate to improve or accept the status quo and risk losing big. Panelists Tom Durkin, head of integrated channel solutions at Bank of America Merrill Lynch; Laurie McCauley, partner with Treasury Strategies; and Leonard Schwartz, director of solution management for the financial services network at SAP discuss the puzzle pieces that comprise next-generation financial services.

Discover a transformed banking industry

Corporations demand more than ever from their banks – especially following the 2008 financial crisis – but for the most part wish to remain bank agnostic. They want banks to take an omnichannel, customer-centric approach and break out of traditional silos.

The question, says Durkin, is how to “support that when you have a variety of clients that range from business banking type clients to the largest multinationals. [It is] certainly a challenge for any bank in any segment.” He goes on to assert that no corporation is truly “agnostic” in banking, but rather attempts to be independent from the technology systems.

Gain trust through enhanced payment visibility

Clients across the globe expect reliable, quick access to information, according to Durkin. They want to become more efficient in the accounts receivable process and the accounts payable process – getting all the information they need on a particular payment for a receivable account or determining if a supplier actually received the appropriate payment.

Rest easy with stronger data and payment security

“The security question is coming up more frequently,” says McCauley. “How do I know my data is secure? How do I go beyond two-factor authentication?”

Schwartz indicates that the other side of this issue is reliability. In case of a major cyberattack or even just some system downtime, it’s important to have a strategy in place. He suggests companies start by asking questions such as, “What are your alternate routes, what’s your disaster recovery plan? To me, it’s about figuring out how to use technology that evolves – both for reliability and to add extra layers of security.”

Navigate a new breed of payment providers

As technology has evolved, so have payment methods. The use of checks has plummeted in recent years. They may never disappear completely, but electronic payment methods are becoming more popular and seem to be the norm for tech-savvy millennials. Why wait for a check (and waste all that paper) when you can just hold your phone up to a scanner?

Synthesizing the comments of the show’s guests, Graham asserts that Amazon, PayPal, and Facebook are redefining what payment providers look like. McCauley includes Walmart in this new contingent as the company has an arrangement with MoneyGram to send Walmart-to-Walmart payments through the store.

Is it possible for so many puzzle pieces to support a quest for continued innovation? Listen to the full radiocast for more information.

Three Ways to Advance Your Finance Operations

Coffee-break with GameChangers

Can a Finance department become more effective – even strategic to the business – through the applied use of innovative technologies? While many field experts say “yes,” Finance lags other corporate functions in technology adoption. Panelists on a recent SAP Game-Changers radiocast agree and suggest three promising technology-inspired alternatives to business-as-usual:

  1. In-memory computing for up-to-the-minute financial and operational data
  2. Cloud technology for quick implementations
  3. Analytics and enterprise mobility innovations for combined company and market information

So why have Finance departments made so little progress? Have they not found the right software or are tight budgets the issue? Panelists Bill Sinnitt, senior director of research for Financial Executives Research Foundation; John Steele, principal in Deloitte Consulting’s technology service area and leader in the SAP finance transformation practice; and SAP’s Birgit Starmanns, senior director in marketing for finance solutions, discuss these alternatives.

Leveraging in-memory computing and the SAP HANA platform

The SAP HANA platform, Steele notes, has democratized information, changing how information is gathered and what types are gathered. “I’ve never been more excited to be a practitioner in the whole finance and technology arena,” he says. “Over the last two years [companies have] moved their transaction processing …over into in memory. This is one of the most fundamental shifts that I have ever seen and it pulls together your analytical and transactional information into one common platform.” He then underscores the significant benefits of this shift:

  • Instant visibility into the organization
  • Greater focus on data quality
  • More time to focus on business processes through integrated planning

Getting comfortable in the cloud

SAP’s Birgit Starmanns explains that Finance has an obvious interest in the cloud, but many organizations are hesitant to put all their data there. For now, larger companies are cautiously migrating to the cloud with hybrid scenarios.

Smaller companies, on the other hand, are open to making a complete move to the cloud because, as Starmanns explains, “Lots of times they are using Microsoft Office applications to manage their business, so they are more ready because they don’t really have that historical larger footprint of an ERP system.”

Capitalizing on enterprise mobility and analytics

“You can never have enough analytics from business intelligence,” Sinnitt rationalizes.

With mobile devices playing an integral role in daily life, enterprise mobility has become a must for financial execs. The panelists examine some of mobile’s largest contributions:

  • Smoother and enriched order-to-cash processes
  • Enhanced forecasting and planning by putting the right information in the right hands
  • Greater insight from social data

All panelists agree that future CFOs will act as the catalysts for innovation. They predict that the next wave of advances will come in the form of visualization technology. Do you agree with this prediction? Listen to the full radiocast for more insights.

Why Finance Operations Shined at SAPPHIRENOW

From Joseph Pacor, SAP, with his thoughts on Finance and the SAPPHIRENOW conference

Recently I wrote a blog about SAP’s Finance Operations which were being showcased at SAPPHIRENOW. These included Collaborative Invoice Management, which we presented as one integrated demonstration for the solutions of the Ariba Network, SAP Vendor Invoice Management by OpenText and SAP Accounts Payable. Bringing these solutions together in a seamless demo really highlights the benefits any company can achieve and it’s something that ExxonMobil has been doing for a couple of years now. The presentation at SAPPHIRENOW by Lionel Jellins, Manager- Global IT Ventures and Operations ExxonMobil Global Procurement, captured the strategic advantages of automating the invoice to pay process, and many of his comments are very compelling for anyone looking to improve their accounts payable management.

To begin with, the magnitude of ExxonMobil’s invoice operations is staggering…$500 Billion in disbursements annually, consisting of 5.2 million invoices from 1400 suppliers. As Lionel mentioned, such volumes necessitated a touch-less, intuitive, connected and cost-effective solution such as SAP Collaborative Invoice Management. The goal was to bring money to the bottom line for shareholders by taking advantage of early-pay discounts and ExxonMobil’s ability to pay faster (commonly referred to as dynamic discounting). They use the Ariba Network to exchange purchase orders and invoices electronically, which helps them lower order costs, reduce cycle times and improve visibility into the procurement to pay process. The SAP Vendor Invoice Management solution supports their invoice approval and exception management processes, all in one easily-accessed workplace. The benefits include faster response to price changes and consolidated payables activities, all within a user-friendly interface with enhanced workflow capabilities.

While the ExxonMobil presentation was excellent and deserving of your viewing here, I also want to highlight the interest we experienced in our other Finance Operations, notably for the Receivables Management and the Shared Services for Financials solutions. Today, finance managers must contribute more strategic value to their corporate objectives, and these applications help to improve employee productivity, cash flow, cost reductions and profitability. Clearly this was why we had a constant flow of interested attendees for three straight days, looking for the latest innovations to support their finance operations processes. If you didn’t stop by our Expert Table, I encourage you to view these solution links and short demo videos to enjoy the experience of the SAPPHIRENOW participants, making Finance Operations shine brightly: Receivables Management, Shared Services for Financials, Collaborative Invoice Management (second demo in search) and Fiori for Collections.

SAPPHIRENOW 2014: Bringing People and Finance Operations Together

From Joseph Pacor, SAP, describing what you can expect to see in Finance Operations this week at the SAPPHIRENOW conference in Orlando

This year’s SAPPHIRENOW, starting tomorrow, 3rd June is expected to attract 20,000 on-site attendees, with another 200,000 on-line participants. The event brings together senior executives, corporate managers and line of business decision makers from small and medium sized organizations, right up to the largest of enterprises. The conference provides great opportunities to network with industry leaders, SAP experts and peers to learn about the latest in technology trends and application innovations. In addition, over 225 exhibiting Partners are available to showcase solutions and provide implementation options for SAP customers. So it should be clear how this premier business conference brings people together, but what about the Finance Operations, which include Collaborative Invoice Management, Receivables Management and Shared Services?

Let’s start with Collaborative Invoice Management. For the first time ever, we have brought together the solutions of the Ariba Network, SAP Vendor Invoice Management (VIM) by OpenText and SAP Accounts Payable into one integrated demonstration which you can view at our Finance Operations Expert Table. This end-to-end scenario showcases how the Ariba Network extends the invoice-to-pay process to suppliers, thus avoiding delays or errors associated with the purchase order and invoice. The VIM solution then processes these invoices efficiently, accurately and quickly so you can enhance worker productivity, cash flow and vendor relations. Finally, these invoices are posted for payment within the SAP Accounts Payable application. Now that is how Finance Operations come together in a streamlined process, leveraging the best solutions for invoice management. But don’t just take it from me; watch the presentation by Tractor Supply Co., the retail farm and ranch store operator, and see how they improved their invoice payment cycles with Collaborative Invoice Management solutions.

We’ve also brought other innovations together, like the Fiori simplified user-friendly apps combined with our Receivables Management solutions. SAP Fiori apps give employees and managers an intuitive way to experience widely used functions for their roles in SAP software across their desktops, tablets, and smart phones. In this scenario, you’ll see how SAP Fiori lets you summarize information from the SAP Collections and Disputes Management application in a role-based dashboard. Employees can prioritize collections in a work list, get quick access to customer contact information, and reduce accounts receivable risk. This enables improved employee productivity, accelerated business processes, and better cash flow management. We’ve also combined analytics into a Financial Operations Manager dashboard, which provides accurate real-time insights into Shared Services KPI’s and helps to identify situations which require immediate action, such as past due receivables. Additional updates on our Finance Innovations can be found in this associated blog posted by my colleague Birgit.

These are just a few examples of the many ways we are ‘Bringing People and Finance Operations Together’. For more information, visit us at the SAPPHIRENOW Finance Operations Expert Table LB222

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PS…you can get started early and see a 3.5 minute video of the Fiori for Collections app here. Enjoy!

The Power of Connection

From Craig Himmelberger, Treasury Solution Marketing, SAP

SAPPHIRE

Eurofinance recently conducted some global research (173 entities in 21 countries) to better understand the impact of treasury influence over three key internal working capital functions based on the value of forecast reports used by key internal “treasury customers”, CFO’s, Financial Controllers, and Operating Entities. The results, in their words, “make a strong case for treasury to work more closely with key working capital functions and to use supply chain and customer / vendor data in forecasts”.

This makes good sense. When liquidity planning can be based on empirical sales and purchase order activity months in advance, and not just the AP and AR balances posted to the General Ledger, the quality of those forecasts can’t help but improve. Likewise, based on those more reliable projections, advantageous policies and actions can be taken in those same working capital systems to better leverage opportunity, and fund operations out of internal working capital. This also reduces reliance on external funding sources which in turn reduces costs, and improves investment returns—a classic win-win.

Today, great opportunities exist to make valuable connections between the better insights found in our treasury systems, and the policies and procedures of various operational working capital systems, from AP to AR to Purchasing to Sales. Of supreme value to understand these opportunities are both the expertise and guidance of a strong technology partner, and, even more importantly, the experience of peers who are already reaping the benefits of their success, and able to share their stories and the value of their experience.

Nowhere better than at SAP’s SAPPHIRENOW conference in Orlando, Florida (June 3rd through 5th) will treasurers and finance professionals have an opportunity to both see the technology that’s winning awards (2013 Adam Smith Awards for Best Working Capital / AP / AR Solution, Best Cash Management Solution, and Best Process Re-Engineering Solution) as well as meet the companies who are setting the standards for excellence. (Over 5,000 corporate attendees are already registered, with more coming every day). Special sessions will cover new technology, from In-Memory Computing to Cloud deployment options, and Meet-the-Experts panels will talk about everything from cash to compliance.

Be there! Don’t miss out!

 

What Defines the CFO of the Future?

Coffee-break with GameChangers

It’s no secret that the financial world is dealing with a period of rapid change. Effectively managing these fluctuations is ultimately the job of the CFO – but what does the role of CFO look like now? A recent SAP Game-Changers radiocast explored this question with three panelists. Here are their opinions.

Diversify your duties

“Remain constructively discontent” might be the most useful advice to current CFOs and other financial leaders. This quote from Coca-Cola CEO Muhtar Kent was invoked by Kyleen Wissell, Corporate Director of Internal Controls within the office of the CFO at the Coca-Cola Company. She believes in a culture of innovation and growth – and that starts with strong entrepreneurial mentality at the top levels. Contentedness can lead to complacence, especially in a time of rapid advancement. A watchful eye on possible improvements inherently enables progress.

Elena Shishkina, CFO of SAP UK and Ireland, agrees. She multitasks in as many areas of the company as possible, because, as she says, “I don’t know how my role will look tomorrow. I strongly believe you can only achieve the best outcome for the team and for the organization if you lead with excellence.” Shishkina views herself not just as a leader in finance but a leader in overall business transformation.

Many CFOs now realize that their position is defined by more than a collection of numbers. Richard Sernyak, principle at PricewaterhouseCoopers responsible for the SAP finance transformation practice, concurs that statistics don’t paint a full picture of an organization’s financial health. Greater focus should be placed on unstructured data such as social media. He explains, “What’s important is that not everything that can be counted counts…you need to look beyond the data and really understand what’s important.”

Take control of a new role

The paradigm is shifting as CFOs need to keep up with their traditional, spreadsheet-intensive responsibilities while creating more value for the business. Some of the unique responsibilities now require CFOs to:

1. Act as the lynchpin across the company for presenting actionable information in a dynamic way.
2. Enable proactive, predictive modelling in real time on mobile devices.
3. Enhance performance by spending less time on tasks that don’t provide added value.
4. Look past the numbers to see their context.
5. Take a more holistic view of the business by adopting innovative technologies (which we discussed in another recent radiocast).

Leading a top-notch finance department requires more soft skills than ever before, according to Wissell. CFOs must draw upon emotional intelligence, considering their internal customers, external customers, and opportunities to introduce a pure model that touts more of a specialist view.

As the transformation marches on, all panelists agree that championing technology will become paramount for the CFO. Sernyak sees the role becoming more intertwined with that of CIO as more millennials flood the marketplace and eventually move into leadership positions. Beyond an affinity for fast-paced innovation, Shishkina asserts that CFOs of the future must be culturally aware and sensitive to different aspects of diversity.

That’s quite a list of attributes! So are you a CFO of the future? Listen to the full radiocast.