Using in-memory computing to power real-time financial planning

In-memory computing has heralded a way for organizations to view Big Data in ways that they simply were not able to do before, giving them a platform for improved insight, analytics and decisions.

But I often hear the question, what can I do practically with Big Data and how does in-memory computing really help me to run my business better? I guess the thing that solution vendors need to do is provide more guidance on the possible applications and build better business cases for many people to really understand the potential that analysis of Big Data has to offer.

I was interested therefore to come across a Hewlett Packard case study recently, which clearly demonstrates how they have applied in-memory computing within their business, and worked closely with SAP to deliver an augmented planning solution using SAP Business Planning and Consolidation, running on HP AppSystems for SAP HANA.

Businessman Looking at Computer Monitor

Through close collaboration and focusing initially on one of HPs planning needs, financial expense planning and simulation, the resulting Expense Planning tool allows expense management teams to automate and streamline their budgeting, forecasting and consolidation activities in a centralized tool, giving increased value to productivity of their analysts while supporting real-time financial planning business decisions.

This HP and SAP story is interesting because it highlights the evolving role that SAP Business Planning and Consolidation, powered by SAP HANA has to play in the HP organization. Their story was first told at SAPPHIRENOW in 2013, and according to this new HP case study there is yet more to come as this in-memory powered solution seems set to be expanded to other processes within the business. I’m very much looking forward to seeing how this HP & SAP story continues to evolve and no doubt there’ll also be lots to hear from more SAP customers and partners at the forthcoming SAPPHIRENOW 2014 event in June.

Improving Business Planning and the Financial Close

In my blog post a few weeks ago I shared details of two SAP solutions for EPM customer stories with you. One of these customers, oil producer Concho Resources was described by my colleague @JohnGWard3 in his linked blog post to be using SAP Business Planning and Consolidation to improve the efficiency of its financial planning and reporting processes.

It’s great to be able to share stories like this, as they serve to focus attention on the opportunities for creating business benefits from the use of software solutions. But sometimes it’s also nice to hear a more detailed description about the “why” and the “how” behind a decision to implement a software solution or to be provided with a fuller description of the customer’s experience in implementing and using their new solution, and the impact that this has on their business.

So as a follow-up to my earlier blog post I would now like to share the more detailed view for Concho, in the customer’s words.

Concho Leverages BPC

Here’s a link to a YouTube video of a presentation from Concho Resources and SAP business partner Akili, at the 2013 Best Practices for Oil & Gas conference. It’s quite a long video of the full conference presentation, but interesting to see if you have the time. Watch the video to hear how Concho were able to:

  • Achieve a consistent planning process
  • Increase visibility into the financial close numbers and performance metrics
  • Improve speed of production and accessibility to monthly financial close reports

Implementing a robust planning solution at IDEXX Laboratories

I had a nice surprise the other day when I came across a customer video that I’d not seen before. It was a surprise because I do spend quite a bit of time researching and reviewing customer stories concerning the use of performance management solutions, and this one from 2013 must have slipped through my net!

This story was recorded at SAPInsider Financials 2013 and provides a short overview of the reasons why IDEXX Laboratories implemented SAP Business Planning and Consolidation, to replace their legacy planning system with a new and robust planning tool. In addition to providing improved connectivity with their back-office SAP ERP system, it seems that SAP Business Planning and Consolidation also impressed IDEXX with its user-friendly interface as well as providing them with a single source for planning data, helping them to remove multiple planning spreadsheets from the process.

IDEXX Labs Interview at SAPInsider

Access the video recording here to listen to their story.

Place your bids for an improved Financial Close

I came across an interesting SAP customer story the other day, which was in part referred to in an earlier CFOKnowledge article published in November 2013. As you’ll know from reading that blog article, SAP had augmented its comprehensive Accounting and Financial Close offerings by endorsing the BlackLine Financial Close Suite a Software-as-a-Service (SaaS) offering from partner BlackLine Systems. Citing benefits such as reduced risk and easier compliance in their account reconciliation and financial close processes, efficiency gains and increased employee productivity, along with the freeing-up of resources (personnel time) to do other things, on the face of it this cloud-based solution has much to offer. I can certainly see why this would appeal to organizations eager to improve and further streamline their Financial processes.Businessman Looking at Stock Prices

An article in SAP Insider this month now reports how eBay have transformed their Journal Entry, Task Management, and Account Reconciliations processes using BlackLine’s solution, working in tandem with their existing SAP ERP software landscape. According to the article the results of the implementation have been a reduction by several days in the financial close, greater visibility into close processes and reconciliations, and improved auditing controls. And by the sound of it, the system also seems to be easy to implement and use.

Take a look at the SAP Insider article for more information (you may need to register for access), I think you’ll find it an interesting read, and it may perhaps leave you wondering whether you should also bid for an improved Close process.

SAP Business Planning and Consolidation 10.1, version for SAP NetWeaver, powered by SAP HANA extends planning model options for SAP customers

Original blog post by Pras Chatterjee, EPM Product Marketing, SAP. Issued with permission.

SAP recently announced the release into ramp-up of SAP Business Planning and Consolidation 10.1, version for SAP NetWeaver, powered by SAP HANA. In this new version, SAP accomplishes its vision of uniting its SAP NetWeaver Business Warehouse-based planning solutions all within one solution. It also provides next generation reporting through a new HTML5 Web Client.

SAP Business Planning and Consolidation 10.1 is a milestone for SAP and in particular SAP business planning customers who run in an SAP NetWeaver environment, as this latest software release now offers more options regarding how they want to proceed with their modelling for budgeting and forecasting. Models now available include:

• Classic Model – based on the application’s 10.0 version for SAP NetWeaver – End user owned
• Unified Model – based on the SAP NetWeaver BW-IP / Planning Applications Kit model – IT owned

The concept of the Unified Model will be new to most current SAP Business Planning and Consolidation customers – however inclusion of this takes SAP integration to a whole new level. As this video demonstrates (see image link below), when creating a model in the Unified Model, users base it on an existing SAP NetWeaver BW InfoProvider, thereby enabling them to leverage existing hierarchies and master data in real time. This also provides tighter integration with SAP NetWeaver Business Warehouse.

Creating a Unified Planning Environment in BPC 10_1

In the Unified Model, existing SAP NetWeaver BW-IP/PAK customers will notice a brand new HTML5-based administration client and new administration functions such as audit trail, business process flows, and work status.

By assigning users to teams and configuring work status, as shown here, security-related functions are in the hands of the end users. This provides them with a greater sense of usability.

HTML5 web-based reporting also will be available with both the Classic and Unified Model and so no doubt be welcomed by current SAP Business Planning and Consolidation customers as well as appealing to a wider SAP business planning community. As this third video shows, users can easily create web-based reports in the Unified Model based on SAP NetWeaver BW queries.  This brings about a better user experience, including:

• Right to Left Language support for languages such as Arabic and Hebrew
• Personalized branding, with the ability to customize the visualization aspect
• Intuitive page switching when multi-tasking
• Optimized for mobile, with HTML providing easier mobile access

In addition to all the new features and functionality available within SAP Business Planning and Consolidation 10.1, version for SAP NetWeaver, there is enhanced scalability and performance for better decision making due to the power of SAP HANA. More planning functions have been moved to the SAP HANA layer, which allows for the extreme optimization of planning functions for unparalleled performance and real-time simulation.

As the numbering on the videos implies, watch out for more videos and information regarding the new version of SAP Business Planning and Consolidation 10.1, version for SAP NetWeaver in the coming weeks. All in all though it seems like this new release will give traditional SAP customers extended options for maximizing the investments that they have made in SAP planning solutions, and greater choice and flexibility in terms of the planning model options that they have available. Coupled with this the delivery of enhanced visualization and planning functionality, along with the ability to leverage the power of SAP HANA for exceptional performance, means that this release seems set to deliver much to current and new users of the solution alike.

Writing ‘Accelerating Financial Closing with SAP’; an interview with the authors

FCbookJust before the holiday I hooked up with Elizabeth Milne, Birgit Starmanns and James Fisher from SAP to talk about their new book, ‘Accelerated Financial Closing with SAP’, which was published in the last quarter of 2013. Every time I’ve looked recently it shows as ‘out of stock’ on Amazon, which is always a good sign of demand exceeding supply. But as anyone who has written a technical accounting book knows, the reward is the reception you receive from your, often small, target audience, rather than the life-changing wealth that would be needed to adequately reflect the amount of time and effort involved in such a mammoth task. So, big respect everyone; now let’s get down to our discussion:

authors

CFOK; Why did SAP bring out a book on the Financial Close now?

Birgit: SAP has published books on various aspects of the Financial Close before but these tended to be written for a single audience – the expert user – and to focus on a single SAP solution. But with the acquisition of the solutions from cundus AG in early 2011, that subsequently became SAP Disclosure Management and SAP Notes Management, SAP effectively covers all aspects of the Finance Close from core accounting in the SAP ERP Financials solutions right through to the ‘last mile of finance’ with report production and publication.

James:  There’s more to come too. We touch on some of the newer technologies in the book such as the use of SAP HANA – the in-memory calculation engine – and how some corporate finance teams have already benefited from step changes in calculation speeds and productivity; about how mobile can be used to expedite some of the key stages in disclosure management and mention how the cloud is an increasingly attractive deployment option.  But companies are only now starting to adopt these newer technologies in significant numbers and over the next few years I can see us publishing revisions of the book that include new solutions at various stages in the close process and lots of new customer stories where adopting in-memory, mobile and the like have delivered major benefits. For me, it’s a work in progress that will need new editions over the coming years.

Elizabeth: Don’t forget regulation is always changing too. Although many have already done a lot of preparation, corporate finance teams based in North America are still waiting for the Securities and Exchange Commission to decide on the adoption and timing of IFRS – and there is increasing momentum behind Integrated Reporting, which will bring another dimension to the close as few companies to date have addressed sustainability as part of their routine financial reporting. We discuss these trends in the book but once they hit, we will certainly need to rewrite some key sections.

CFOK: What makes this book different from others?     

Birgit: We structured the book around three factors – Process, People and Technology – starting with an overview of all the different stages involved in the Financial Close, before stepping through each one in detail; covering the roles and responsibilities of the various people typically involved at each stage of the process and the software solutions needed to automate and expedite each step and how it all fits together into an integrated process.

Choosing that structure did mean we had some challenges to address, particularly where SAP offers a choice of solutions for various stages of the close such as with SAP Financial Consolidation or SAP Business Planning and Consolidation for consolidation and reporting. But reading through the finished book now, I think readers will get enormous benefit from the way we’ve structured the book and the detailed discussion of how various factors influence the choices that need to be made between overlapping solutions.

Elizabeth:  The people issue is an important consideration though. Besides the accounting and finance people involved at individual stages of the process, we also wanted the book to be of value to people from the IT side of the house, who might not need to immersed in the detail of each stage, but need to know how to diagnose issues across the entire end-to-end process, contribute to the discussion on selecting the most appropriate software solution to address the particular pain point, and know how to go about building a compelling business case to secure any necessary investment. So some chapters take a helicopter view of the process, while others, such as the chapter on disclosure management, which was a completely new SAP offering at the time we wrote the manuscript, is definitely a deep dive as we think that’s what most readers will want. But even then, we’ve shied away from slavishly replicating the type of content you find in a user manual. There’s little value in that.

James: The customer cameos are also an important element of the book in that they allow readers to see that the issues they might be experiencing themselves are far from unique; to understand something of the thinking process customers went through when selecting a particular solution and how it fits into their overall IT landscape – and to have some quantified proof of the type of improvements that their peers are achieving. This is all extremely useful material for building a business case and for developing a timetable for continuous improvement. Knowing where to look for quick wins and how to prioritize implementation initiatives can save a lot of frustration and wasted effort.

CFOK: Finally, what were the high points and low points of writing the book?  

Elizabeth: Well it’s not something that you can do during the normal working day; you have to be prepared to sacrifice weekends for a while and take advantage of any spare evenings.

Birigit: Keeping ourselves aligned with each other to ensure we didn’t repeat content unnecessarily initially took some coordination, but the most time-consuming thing for me was having to go back and revise what I’d already written to incorporate changes such as more recent research findings; additional functionality in newer versions of software and constantly changing regulation – to say nothing of how rapidly the newer technologies were coming along during the months we were actually writing.

James:  As we’ve already said, it’s a work in progress. I’m sure we all learnt a lot during the months we were writing the book – I know I did – and I’m confident that we will find tackling the next edition less daunting. But perhaps not just yet though.

CFOK: Thanks everyone.                

                        

Windows of Opportunity in EPM

There will never be another SAP. The company grew up on the shirt tails of half a century of manufacturing revolution that saw the majority of families in the West acquire an automobile, a refrigerator, freezer, television and the like.Until the last quarter of the 20th century, these were mainly built in western manufacturing plants that both employed millions of workers  and paid them a wage sufficient to acquire those same consumer goods they produced. 

SAP was founded towards the end of that era when organic growth started to tail off and automation, productivity, and efficiency became the mantra of modern manufacturing. Being able to deliver exactly what companies needed, SAP positively thrived to become a giant international company. Now, with countries in the Asia Pacific region and the Brazil, Russia, India, and China (BRIC) group growing rapidly while the West languishes, the focus of manufacturing has shifted.

But unless SAP executes poorly in these developing countries and gets overtaken by one of the local ERP vendors that you and I may never have heard of, or falters in offering software and services that continue to satisfy business needs, it seems to me unlikely that there will be a gap for another vendor to elbow their way in.

SAP Changes with the Times

Sure, the technologies and ways in which businesses’ needs are satisfied may mean SAP is no longer recognizable as the on-premise, software vendor it once was – that transformation is already in motion. It may also end up smaller as the number of companies in the world shrinks through merger and acquisition, which may leave just a handful of truly global players in each market.

But it’s a classic text book case of spotting the opportunity and keeping a clear focus on the needs that are being satisfied rather than becoming beholden to the product, the technology or the channel – the type of thing that brings down big companies that we first heard about in Marketing 101.

ipadAs newsworthy as it is, social media will never fill the gap left by the downturn in Western manufacturing . Facebook and Linked-In together employ less than 11,000 people in total – about a quarter of the number employed  by car maker Packard in their main factory in Detroit in the 1970s. What social media does do though is allow us to keep tabs on work colleagues that we would otherwise have quickly lost contact with.

Many of mine were with independent software vendors that were acquired by BusinessObjects or SAP during the last decade.And every time I check into Linked-In these days, it seems another of them has joined a new EPM vendor that has sprung up in the last couple of years, often regrouping with ex-colleagues in an attempt to do it all again.

Is There Room for New Start-Up EPM Vendors?

I wish them well, but suspect that, just like has happened in the wider business software market, the window of opportunity that was there a decade ago to build a business differentiated by technology, process expertise, vertical knowledge, or cloud is rapidly evaporating – as is the obvious exit route of a trade sale to a larger ERP vendor. Other than small acquisitions in recent years to round out EPM processes, such as disclosure management, the large enterprise vendors seem content with their lot. 

They’re firmly focused on transforming performance management process through in-memory computing and mobile technologies while reducing the cost of ownership and time to value by moving their offerings into the cloud. Outside of these vendor-led initiatives, most  innovation in performance management looks set to come from moving to different reporting requirements (such as integrated reporting), adopting different approaches to budgeting (such as integrated business planning) and  grasping the nettle on cost and profitability reporting and strategy management, all of which are already addressed in existing vendor offerings.

So, wither the start-up EPM vendors? I don’t know. The window of opportunity isn’t open and flapping in the breeze like it was a decade ago, but many of these folk have the fortitude to break down the door and the staying power to make a go of it.

All I do know is that checking into Linked-In will continue to throw up surprises over the next few years.