How to Build High-Performing Finance Functions

By Drew Hofler, Senior Director, Solutions Marketing at Ariba, an SAP Company

To compete in a global economy, organizations must work efficiently, maintain financial visibility and control, and use information wisely to seize opportunities and create value. These are all areas where finance operations can have a positive impact and as a result, the role of finance operations is evolving from purely tactical to one that contributes more strategic value.

In fact, a recent CFO Research report indicates that companies have placed a high priority on improving finance operations (68%), but many finance executives believe it should be even higher (79%). What will it take for these companies to build high-performing finance functions? That’s what I’ll touch on in this blog.

Step back and evaluate needs 

Many companies have invested a lot of money in disparate point solutions for a particular piece of the finance operations process. For example, they may have separate solutions for managing cash, processing payments and receivables, and procuring goods.

When your team is in the trenches working with these solutions, the processes seem distinct and discreet. But if you step back and view them holistically, you’ll see they’re not. It causes a lot of manual work for your finance team to connect the pieces together.

Not that your team isn’t up for the challenge. In the same study I referenced above, 87% of senior finance executives agreed that their finance staff have the knowledge and expertise they need to succeed. One senior vice president praises his team for its “can-do attitude and excellent work ethic.” Another commends the “strong technical know-how and hardworking, capable employees” in finance operations.

Provide strong teams with effective tools

Despite the strength of your finance operations team, you can’t take full advantage of their them if they’re overwhelmed by a rising tide of tactical responsibilities. The report indicates that more than half of the respondents (57%) say the finance operations staff is often overwhelmed by the demands placed upon them. As one manager put it, finance is “unable to meet deadlines due to overload.”

If companies would take the investment they’ve made in their people, and various point solutions, and enable them to work together on a single platform, then finance operations would have the automation tools they need to meet tactical responsibilities while adding more strategic value.

Enable a game-changing technology model 

Solutions from SAP and Ariba, an SAP company, establish a game-changing technology model that integrates functionality while offering essential deployment flexibility. The Ariba Network and SAP solutions enable finance operations to connect linked processes more easily, collaborate with business partners and vendors more efficiently, and leverage business insights more effectively to contribute strategic value to the business.


We have two resources to help you explore how the Ariba Network and solutions from SAP can help you accomplish these objectives – an overview video and an e-book. Each explains the solutions that can help you address the following key areas of focus for finance operations teams:

  • Business network: Connects trading partners on a cloud-based platform for business-to-business commerce
  • Invoice management: Automates the most time-intensive manual processes with on-premise software, cloud-based solutions, or hybrid deployment options
  • Receivables management: Enables automated, integrated, and collaborative processes for receivables management using SAP software and mobile apps
  • Dynamic discounting and working capital management: Improves days payable outstanding and enables significant cash returns through increased high-yield, low-risk, early-payment discounts
  • Payment automation: Enables an end-to-end payment solution that helps to increase the certainty, simplicity, and security of B2B payments
  • Shared services: Support efficient and scalable finance operations through automation, smooth execution across departments and functional processes, and a shared-service delivery environment

Transform the role of finance operations

By enabling automated, repeatable, and consistent processing of core financial transactions across various locations, the Ariba Network and SAP solutions help you to:

  • Reduce the cost of finance operations
  • Increase compliance and capture savings
  • Improve efficiency and productivity
  • Simplify collaboration
  • Optimize cash flow and return on short-term cash
  • Speed time to value through rapid deployment

Learn more about the solutions that can help

The bottom line is this. The role of finance operations is evolving beyond tactical responsibilities to include a more strategic focus. To enable this transformation, financial executives must be able to easily connect and optimize financial processes in an integrated and efficient manner. To explore how the Ariba Network and solutions from SAP can help you improve finance operations, read our e-book and overview video today.


This story originally appeared on the SAP Business Trends community.




The Next Step in Transforming Finance Operations

By Drew Hofler, Senior Director, Solutions Marketing at Ariba, an SAP Company

An effective and efficient finance operations function is central to the smooth functioning of a company. Accounts payable and receivable, working capital, supplier management, expense management, and compliance all need to be harmonized and seamless to ensure optimal business execution.

But a recent global survey of 323 finance executives, carried out by CFO Research in collaboration with SAP, found that most finance executives believe that finance operations staffs will need better information tools and simpler processes in order to unleash their full potential. They say their staffs have to overcome serious obstacles put up by poor processes that create inefficiencies and information systems that are difficult to use.

For example, in the survey a director of finance from a technology company in India writes, “Upgrading the information system has worked the best [for improving finance operations]. It has resulted in faster financial processing power.” At the same time, half of the survey respondents report the need for still more upgrades to systems and processes in order to reap the full value from their skilled finance operations staff.


In fact, despite the investments their companies have already made in technology, three-quarters of the respondents report that their finance operations systems still require a great deal of manual intervention. “Finance performance is negatively impacted by the current out-of-date ERP in place (still from the mid ‘90s),” the controller at a U.S. manufacturing company wrote. “Lack of technology results in rework, duplication of efforts, and a lot of manual processes that are not efficient or effective.”

And a large number of companies appear to be falling short in their consideration of a comprehensive solution set. Only about one in five are looking to expand use of either outsourcing or shared services centers as the means to improving finance operations.

At one Brazilian technology company that has already taken this path, a vice president of finance extols the benefits the company enjoys as a result. Writing about the shared services capabilities his company had developed, he said, “Everything became more efficient, rapid, and integrated across all BUs.” A vice president in the U.S. wholesale/retail trade also pointed out the enterprise-wide value of a shared services model that he believed “would contribute greatly to success in all areas of the business.”

The right solution, taking advantage of the right technology, can deliver radical results for a company. For example, a vice president at a U.S. financial services firm wrote that “a flexible billing system [would] enable the business to change revenue models to address competitive pressures.” Companies simply can’t afford to overlook finance operations as an new enabler of transformation and driver of success.

Read the full report “Build High Performaning Finance Functions”.


This story originally appeared on the SAP Business Trends community.








Support Finance Operations: Re-invest in Business

By Drew Hofler, Senior Director, Solutions Marketing at Ariba, an SAP Company

For quite some time, CFO Publishing has been documenting an expanding role for finance at companies around the world. Finance functions have been building a reputation as full business and strategic partners, providing insight along with information.

It is a demanding role for finance staff, but they are up to the task. At least, that’s what finance leaders think, according to a global survey conducted by CFO Research and sponsored by SAP. The survey of more than 300 finance executives found nearly nine in ten respondents expressing full confidence that their staffs embody the knowledge and expertise they need to succeed.

A number of respondents went out of their way to give their people glowing reviews. One senior vice president in the chemicals/energy sector in Australia wrote, “Finance has a can-do attitude. Their work ethic is excellent.” Another executive from the chemicals and energy industry in Singapore praised the “strong technical know-how and hardworking, capable employees” in finance operations.

However, the survey also raises the question of whether deep skills and hard work are enough. Despite their confidence in their people, four in ten respondents also believe that they are understaffed. And more than half of the respondents—58%— say that finance operations staff often are overwhelmed by the demands placed upon them. A finance manager from a technology company in Singapore says simply that finance is “unable to meet deadlines due to overload.”


Many companies apparently are falling short in the support they provide finance operations, which execute the core financial transactions and processes for a company. Processes are too complex and cumbersome, and the disparate and disconnected technology tools they currently use cannot always keep up with the demands.

The consequences can be disastrous. For example, the controller of a construction company in Asia notes that one of the most serious weaknesses at his company are “payments that lack [sufficient] detail and do not go through, which chokes up the entire system.”

In contrast, the payoffs for better supporting finance operations activities drive directly to the success of a company. A finance transformation leader in the survey points to the ability to “re-invest savings in higher-value business support and analysis activities.” And a CFO from the media/leisure sector writes, simply, “Less time chasing payables would enable more focus on the business operations.”

Read the full report “Build High Performaning Finance Functions”.


This story originally appeared on the SAP Business Trends community.





Unleashing the Potential of Finance Operations

By Drew Hofler, Senior Director, Solutions Marketing at Ariba, an SAP Company

Improvement for improvement’s sake may be a noble ideal, but that’s not what’s driving the desire to make the most out of finance operations—the slew of activities coming under finance’s umbrella that make the company run. These include traditional activities such as accounts payable and accounts receivable, compliance, and cash management. But increasingly, finance leaders are also breaking through process or functional walls and looking at the total picture, taking a keener interest in how a well-run finance operations organization can influence things like procurement, supplier relations, and even net income.

CFO Research, in collaboration with SAP, surveyed finance executives from mid-sized and large companies around the world on their views of their own finance operations functions. And writing in the survey,* the CFO of a U.K. construction company said that “[management] need to understand that, without a world-class finance function, they will struggle with cash flow.” That’s an outcome that gets at the heart of how the business is run. It behooves the finance leader to ensure transactional performance fuels effective business operations, rather than hold it back.

The executives taking our survey certainly believe it’s important—eight out of ten respondents said that improving finance operations should be one of their companies’ top priorities. They traced the impact of an efficient and effective finance operations function directly to business-critical such as business process execution and cash management, in addition to controlling process costs.


These impacts can help grow net income and improve profit margins, whether it’s directly through cost reductions or indirectly through smoother business operations and, ultimately, stronger satisfaction ratings from both suppliers and customers.

As a CFO from the financial services industry insists in our survey, the time has come for the finance operations to take the next step in its transformation, moving beyond the “purely administrative and tactical” and into the realm of the strategic.

Read the full report “Build High Performaning Finance Functions”.


This story originally appeared on the SAP Business Trends community.




Simplifying Finance in an increasingly complex world – outlook on Financials / GRC 2015

SAPInsider Financials Logo

By Henner Schliebs, SAP. Originally posted on SAP Business Trends, 17 February 2015. Reposted with permission.

We all have read the new mantra multiple times: if we simplify everything – we can do anything. This holds true for the finance department more than ever, considering that the use of technology is key to enabling a real-time business process environment. There were some threatening results revealed in a recent study that the CFO magazine has published, like “80% of respondents would need easier to use technology if they’d wanted to meet their growth targets”. So, this latest shift in technology enabling true real-time processes will be the focus topic of this year’s Financials 2015 / GRC 2015 event hosted in Las Vegas in March (Wynn Hotel, 3/17-3/20, follow the discussion #Financials2015).

As there will be hundreds of sessions that show customer success stories, the latest and greatest in financial management, EPM, Analytics, GRC and Ariba solutions I would like to highlight the Simple Finance sessions so that you can build your agenda around those, especially given that any S4/HANA journey will start with Simple Finance:

  1. start with the keynote where Thack Brown will elaborate on the need for speed (aka real-time finance processes) and introduces some external thought leaders to the panel discussions around a modern finance organization. I won’t tell too much when mentioning that Thack will launch another important mile stone of Simple Finance to the public…
  2. one of the most compelling use cases of Simple Finance is the central journal, so this session lead by Carsten Hilker shows you how to non-disruptively start your Simple Finance implementation arriving at one source of the truth
  3. for those in need of a high-level introduction to Simple Finance I’d highly recommend Martin Naraschewski’s session about the roadmap to Simple Finance, where he will elaborate on the needs of a typical finance transformation initiative
  4. one thing that was highly anticipated by you all is more insight into Integrated Business Planning – your unique opportunity to natively connect EPM with your Simple Finance ERP system to allow planning, simulations and scenario modeling directly on your transactional data. Pras Chatterjee off course will show integration to the new Cloud for Planning solution as well
  5. new to the game is the Simple Finance Cash Management solution that is introduced by Christian Mnich, where he will give insights into how to better plan and forecast liquidity based on an integrated process leveraging your ERP / S4HANA system
  6. a dedicated session on the new Accounting solution will provide better understanding of the concepts of the greatest innovation since R/3 building the base for S4HANA. Stefan Karl will guide you through this
  7. want to learn how to get to Simple Finance? Join charming expert Birgit Starmanns and understand what to consider if you want to adopt Simple Finance including advanced predictive finance analytics
  8. join our partner John Steele at Deloitte when he talks about real-time finance processes and the role that HANA plays in this highlighting finance use cases like fast close, financial risk management or finance operations
  9. the experts from TruQua will deliver a thrilling session around the analytics that Simple Finance can provide in form of HANA Live content or via integration of SAP Analytics and EPM solutions. Dave Dixon’s presentation is a good example
  10. finally you’d want to learn about the fast close capabilities of Simple Finance where Stefan Karl walks you through how to become a world’s fastest closing company like SAP

Note there are many “hands-on”-like sessions on the Monday (3/6) as part of the Pre-Conference Workshops that deliver tremendous value for practitioners.

Please be sure this is just the Simple Finance top 10 – please be sure you also learn from customers how SAP Financial Management solutions helped them achieve targets.

Follow the discussion on twitter or facebook or SCN and please share your thoughts.

The New Revenue Recognition Standard is here, now what?

By Pete Graham, Director, Finance Solutions and Mobility, SAP

In May 2014, the International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) issued the new International Financial Reporting Standard (IFRS 15 / ASU 2014-09, ASC 606) which specifies the accounting guidance for revenue recognition. This standard is truly a joint standard of the IASB and of the FASB.   The new standard becomes effective January 1, 2017 in countries adhering to US GAAP and to IFRS.  So, this new standard will impact many companies in every industry and many countries around the world (announcement).

SAP has been actively preparing for this change for several years.  In order to support our customers to be compliant with this new standard, we have now completed a multi-year development effort providing a new standard SAP solution: SAP Revenue Accounting and Reporting 1.0. It specifically addresses requirements derived from this new accounting standard but also generic requirements related to revenue recognition across various accounting principles.  This new solution is now in Ramp-Up.  SAP is rolling out the new solution internally and some scenarios are already being handled in a production environment.  SAP ERP Financials customers with current maintenance agreements will have access to the solution at no charge.

SAP Revenue Accounting and Reporting 1.0 was built from the ground up to handle the new revenue recognition regulation. A cross-functional team comprised of product development and corporate accounting met frequently while the standard was being written to analyze the standard and assess how best to design a new solution to cover the new requirements.  SAP also ran a co-innovation project with over 30 customers to gather input and requirements on the new regulation from our customers’ perspective.  The end result is a solution that automates the revenue recognition and accounting process and simplifies the tasks of revenue accountants in following the new accounting guidelines which are structured in the five following steps:

  1. Identify the revenue contract(s) (combine contracts)
  2. Identify the performance obligations in the contract
  3. Determine the transaction price
  4. Allocate the transaction price to the performance obligations of the contract
  5. Recognize the revenue when / as the performance obligations are satisfied.

SAP Revenue Accounting and Reporting manages revenue recognition from a Finance point of view. It decouples operational transactions from accounting. Thus, various operational transactions can be accounted together no matter where the operational data is processed. It literally translates operational transactions into accounting. The main requirement tackled by the new solution is the management and processing of so-called Multiple Element Arrangements. It is now possible to automatically determine these Multiple Element Arrangements from an accounting perspective based on a flexible rules framework. Additionally, accountants have the ability to change the way of how revenues are allocated and recognized manually based on given customer arrangements. SAP Revenue Accounting and Reporting is able to deal with multiple accounting principles and their specifics in revenue recognition and presentation. It also provides analytics for revenue accounting to address legal disclosures and management reporting.

SAP Revenue Accounting and Reporting can also handle multiple accounting standards offering additional flexibility to customers.  And because SAP’s corporate accounting group provided direct feedback to the product development team, the solution was built holistically considering the requirements of revenue accountants even going into the details of transitioning to the new standard.

So what is your call to action?   Brush up on the new standard.  Schedule a meeting with your auditor to discuss the new regulation. Develop a plan to assess your revenue contracts with customers.  Put a project team together. Start evaluating transition options. Listen to the Game Changers Radio show call on September 23, 2014 at 12 PM Noon EST to learn more about the revenue recognition topic. And if you want more information in the future then please check out this link.

Pete Graham Bio


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.