Is It Time for Two CFOs?

Coffee-break with GameChangers

Laurel and Hardy. Lucy and Ethel. Fred and Ginger. Dynamic duos can have quite the impact – far more than one person alone. Is it time for the office of the CFO to adopt this mentality? Finance insiders would say so, especially as they try to force the tipping point for moving operations to the cloud.

During a recent SAP Game-Changers radiocast, panelists Joshua Greenbaum, principal and founder at Enterprise Applications Consulting; David Dixon, partner and principal at TruQua Enterprises; and Neil Krefsky, senior director of product marketing for SAP Cloud at SAP, weighed the advantages of splitting the CFO job into two parts – one for compliance and one for innovation.

Why? “So we can ignore the former and stop driving financial innovation based on what a regulator thinks is innovative,” quips Greenbaum. He asserts that the office of the CFO is one of the most conservative places in the business. Until the CFO can get on board with and drive innovation, finance will continue to lag behind in cloud adoption.

Monitoring cloud turnover

Krefsky sees cloud adoption in finance happening in a sort of domino effect. He explains, “I think it’s going to be an evolution…as they [finance organizations] see adoption uptake, that will encourage them to uptake, but [who] is going to dip their feet into the water?” The water might be more enticing once finance organizations realize there is no tradeoff between staying compliant and moving to the cloud.

Companies of all sizes are now moving to the cloud, for reasons that include:

  • Greater accessibility
  • Lower cost
  • Innovative technology

The general success of SMEs bodes well for global corporations that might be reluctant to move to the cloud. Adds Dixon, “It’s just a tipping point…and, as more people adopt it, [there] will be more [of a] trust level. But really, I think it’s IT that needs convincing, because I think finance will just turn to [the] IT organization and ask, ‘Is it trustworthy? Is it safe? Is it secure?’”

Simplicity vs. complexity

Part of cloud adoption is walking a tightrope between simplicity and complexity – balancing the need for user-friendly solutions that facilitate self-service with the complexity of integrating your existing systems across a variety of different applications.

Managing this dichotomy would, theoretically, be easier with two CFOs in place. Greenbaum agrees, remarking that, “For innovation, I would want someone from the technology side – someone with a minimum of grey hair and a lot of crazy ideas. I think they need to be counterbalanced by the adult supervision from the compliance side, but I think we need a little bit of fresh blood in there.”

Do you think there is room for co-CFOs in the finance world? Listen to the full radiocast to learn more.

Three Steps to Transform into a “New” Finance Organization

Coffee-break with GameChangers

If you’re not innovating, you’re falling behind. This is true for any industry, but especially finance. The question is how to successfully manage change. It’s easy to get lost in many moving parts and lose sight of the original goal. What steps can you take to adopt innovative practices and remain as efficient as possible? Panelists Rob Kugel, research director at Ventana; Renee Ford, a managing director in Accenture’s SAP practice; and Birgit Starmanns, a senior director in marketing for finance solutions at SAP discuss the prospects of financial innovation – and how to get there – in a recent SAP Game Changers radiocast.

Step 1: Ditch spreadsheets where appropriate

Kugel dives into travel and expense reporting as a prime example of an area made unbearably tedious by Excel spreadsheets. The task is time-consuming for the traveler and just as laborious for the business. He says now is the time to find solutions.

“Software has the ability to be our personal assistant to speed and improve the effectiveness of enterprise processes.” Kugel’s research shows that companies relying heavily on spreadsheets take two days longer on average to close books than companies that use them infrequently. Why?

  • Lack of flexibility means spreadsheets don’t lend themselves to data visualization
  • Time-consuming and error-prone processes lead to mistakes that can affect decades of data
  • On-demand reporting now exists to quickly and accurately pull necessary information

Starmanns agrees, pointing out that by spending so much time consolidating Excel sheets, you’re missing the solid technology foundation that enables advanced analysis.

Step 2: Automate – for better or worse

Ford presents the automation conundrum with a quote from Bill Gates: “The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second rule is that automation applied to an inefficient operation will magnify the inefficiency.”

She advocates adopting automation with an open mind as “organizations can use technology to highlight bottlenecks and in some cases where they are really conscious of it, it can propel them forward.” In her opinion, automation should advance finance to a point where the finance function is contributing to the overall organization.

Step 3: Consider your people above all else

Starmanns asserts that “A huge part of implementing any new technology is really that change management piece, and it’s all about communicate, communicate, communicate. Some folks will be more comfortable and can hit the ground running and others… they are almost afraid.”

Ford echoes this sentiment, cautioning that technology is just one piece of the puzzle – it means nothing without capable minds to operate it. It’s important to make sure your workers are ready for the change that’s happening – and prepared to take on the change. You should decide where they need to be with technology proficiency and then get them up to speed.

As tech-savvy millennials start taking on more prominent roles in finance, the panelists think software adoption should become more rapid and intuitive, paving the way for prolific innovation.

Is your finance organization equipped to take these steps? Listen to the full radiocast to learn more.

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!