Simplified Financial Planning, Part I: 5 Advantages of Thinking Ahead

by Babak Ghoreyshi, Global Marketing Program manager at SAP

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Planning is everything, but for many financial executives, planning involves an extremely complex process of predicting metrics and budget impacts of sprawling projects with many moving parts. For the practical-minded finance executive, this leads to an ongoing search for better planning tools delivering faster, more informative reporting solutions that can help them be more efficient in setting and monitoring KPIs and as a result making more effective business decisions.
CFOs in many industries are looking for the right technological solutions to breathe life into their budgets and plans. Current planning, budgeting, and forecasting processes are just too difficult to complete within a reasonable amount of time without disrupting business operations. In addition, enterprises are finding it difficult to get accurate results due to market volatility using their current technology. The following are real-world examples and survey results covering how financial planning solutions are helping enterprises do more in five significant areas.

1. Adapt to Market Conditions

VELUX is a Danish window-maker that needed to adapt to the changing designs, technologies and lifestyles of modern homes and businesses. They found that their yearly budget planning process was not fast enough to accurately provide the insights that they needed to react to the market in a timely manner. They moved from yearly to a repeated monthly business planning by using SAP Business Planning and Consolidation on SAP HANA. They now have a clearer vision of what kinds of windows the market wants, the lifespan of what they produce and economic impacts across the organization.

2. Identify Growth Opportunities

Forecasting should do more than just helping enterprises avoid surprises. Good forecasting can also identify a window of opportunity before it slams shut. Intuitive modeling makes it possible to analyze a variety of complex what-if scenarios at once. Companies that embrace the new planning technology to gain the ability to identify opportunities and react in the most profitable way. That is what happened at Hunt Consolidated Inc. (HCI) when they recognized a growing need for centralized, top-down planning to manage the business as a whole. Using SAP HANA as a platform for Business Planning and Consolidation, HCI was able to run wide-open queries involving hundreds of millions of record objects, rendering what-if scenarios in seconds. This opened up a world of original solutions and opportunities for them.

3. Allocate Resources

Aberdeen’s 2014 Excellence in Financial Management Survey revealed that the top three priorities for finance leaders were:
Conducting assessments of financial processes
Automation of core functions
Promoting collaboration across all finance roles
All three play a part in discovering the optimum pathway for allocating finance resources. Allocation and replenishment assessments allow financiers to identify cost centers that need to be reduced. In addition, these assessments make sure the supply chain is optimized, so the products and services customers need, are available when they want them.

4. Execute Organizational Strategies

CFO’s are searching for self-service technology that allows them to visualize data in ways that are most convenient for them instead of relying on IT. According to Aberdeen’s report on “The Next Generation of Cloud FP&A,” 87 percent of business users in the cloud either have self-service options or would like to get them in the very near future. They need the ability to execute organizational strategies with detailed forecasts using embedded analytics and scenario projections without waiting for help from IT.

5. Increase Profitability

Many finance executives say they need better solutions to face what’s coming next. In Aberdeen’s “The Next Generation of Cloud FP&A,” 37 percent of finance leaders say that their current forecasting and budgeting processes are too long and are resource intensive. Their companies are now searching for a cloud solution that helps them to reduce the operational costs and boost profitability. Cloud-based financial planning and analysis tools are better able to run queries on thousands of variables simultaneously and respond dynamically to real-time data.

The Finance Solution

Finance leaders are searching for the right solutions to deliver better speed and computing power so they can produce results in these five areas. In our next blog, we’ll take a step further by looking at specific technological innovations that deliver results. Another great resource for CFO’s is available now at the Finance Solution content hub, where there is a rich library of researches and insights into the most relevant topics in the world of finance.

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

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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.

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

Cash to Cash – Making Lemonade in Today’s Economy

By Birgit Starmanns

It used to be easier. When my best friend opened her very first lemonade stand, she did not have to use her allowance to purchase the lemons. Or the sugar. Or the paper cups. Or the table. Or the paper and magic markers for the “25 cents” sign. Or….well, you get the picture.

Fast-forward (more than) a few years. Imagine that we are running a lemonade company. Continue reading