6 Stories to Give You the Finance Buzz at SAPinsider

SAPInsider Financials Logo

It’s going to be a busy time this week for many of my colleagues and the visitors to SAPinsider Financials 2015 in Las Vegas, so I decided to give you my thoughts on some interesting sessions to see, if you’re attending, given that you’re spoilt for choice with such a comprehensive agenda. And I’m bucking the trend with this blog post – because instead of talking about products, I ‘m talking about customers and thought leaders, and in particular the stories that you’ll be able to see and hear at the event this week.

Excited yet? I am! And with good reason, because many valued SAP customers have decided to make the trip to Las Vegas to give an account of their experiences with SAP solutions for Finance…stories of implementation approaches, best practices, and where they have found business benefits.

So for anyone embarking on a software implementation project, or even just considering approaches to solving some of their finance department and process issues, these are key SAPinsider Financials 2015 sessions to attend.

Six in Focus – But Don’t Forget the Rest!

My six focus sessions are chosen not because I know the customer stories particularly well, but rather because they’ll give attendees a good flavor across a range of finance topics. And my apologies to the many other customers not listed here – whose sessions are equally as valuable – but I just couldn’t fit you all into one short blog post.

I would, however, encourage readers attending Financials 2015 to take a look at the many other customer-led sessions at the event this week, as well as those detailed here, just so that you select sessions that will be most relevant to you.

Ready to learn about some of the exciting sessions ahead? Then let’s go:

  1. Keynote address, TODAY, Tue 17 March at 8:30 am – Okay, it’s strictly an SAP-led session, but there’ll be a panel discussion in which thought leaders will be asked to give their view about challenges and opportunities facing CFOs. It’s sure to be an interesting discussion – and let’s face it, no-one wants to miss the keynote!
  2. Sun Products, Wed 18 March at 8:30 am – A session where you should learn some best practice advice on implementing credit, dispute, and collections management.
  3. Velux, Wed 18 March at 10:30 am – I really like the sound of this session, in which you’ll hear how Velux moved from a traditional to “beyond budgeting” approach.
  4. McKesson, Thu 19 March at 8:30 am – For anyone seeking advice on implementing SAP ERP Financials then this is a session for you!
  5. Bentley Systems, Thu 19 March at 1:00 pm – Hear how Bentley Systems automated and shortened the payment processing lifecycle with SAP Bank Communication Management.
  6. Telephone and Data Systems, Thu 19 March at 4:30 pm – This is one for those of you interested in financial consolidations, with particular focus on project planning.

Don’t Be Shy – Get Networking!

All of these customers are attending the event to share their knowledge and experience with you, and I know that if you have questions for them after hearing their sessions that they’ll be delighted to speak with you…so do take advantage of this in the event networking sessions.

And remember to also take a look at the full agenda, so that you can plan your sessions and make the best use of your time. I hope you have an interesting and informative week, and that you return to work buzzing with the excitement of the potential to put in practice what you have learned at the event.

Have a great week!

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.

10 Things to See and Do at SAPinsider Financials 2015

SAPInsider Financials Logo

By David Williams, Head of EPM and GRC Product Marketing, SAP

We’re already well into 2015 and the first key event for the SAP EPM (Enterprise Performance Management) team, partners, and most importantly, our customers, is just about upon us. SAPinsider Financials 2015, hosted by Wellesley Information Services, and co-located with SAPinsider GRC 2015, runs from March 17 – 20 in Las Vegas. It’s one of the key annual events that features EPM-related content. Given there’s so much to see and do at the event, and I often get asked for an agenda of EPM content, I thought why not put together a list of 10 things to see while attending the event. Think of it as a checklist of don’t miss items/sessions. Here we go:

  1. Cloud for Planning, Cloud for Planning, Cloud for Planning. The latest and greatest cloud-based planning and analysis application has been available since February. Make sure to check out one of the many SAP Cloud for Planning sessions and demos to see why it sets a new standard for planning in the cloud
  2. SAP Business Planning and Consolidation 10.1, version for SAP NetWeaver. “BPC” continues to be one of the most widely deployed planning and consolidation applications on the planet. Discover what’s new in the latest release and see how BPC fulfills integrated business planning for Finance capabilities as part of Simple Finance
  3. Close to Disclose. Closing the books and disclosing results continues to be a highly-manual task for many. Discover how you can accelerate/automate the financial close to disclose in one of the presentation or demo sessions including a Jumpstart deep dive on March 16th
  4. Speaking of Jumpstarts, there are 6 Finance ones and these are a good way to get up to speed on subjects such as SAP Simple Finance, simplifying plan and report deign in SAP Business Planning and Consolidation, and the impact of big data on Finance and GRC security among others
  5. EPM solution center. Go deep into product demos with our solution experts across a range of topics including planning, consolidation and profitability analytics, while not forgetting of course the new SAP Cloud for Planning application
  6. Show floor demos. Have a seat and take a well-earned rest from all that walking around the show floor, while watching one of the EPM solution experts show you the latest and greatest product features
  7. Customer delivered sessions. For many the key attraction of SAPinsider is hearing our customers’ financial transformation stories, in their own words. In 2015 you can hear from Lexmark, Velux, Delicato, IDEXX, Telephone and Data Systems and Applied Materials among others
  8. Simple Finance. It’s bound to be a big draw, and so there’s a number of SAP Simple Finance focused sessions. But of course don’t miss the keynote address to hear about the SAP vision to help simplify finance
  9. Visit our partners. Why not take the opportunity to speak with some of our business partners at the event? This year you’ll find the event global sponsor PwC, premier sponsors EY, KPMG and Z Option, as well as Deloitte, itelligence and BlackLine among others
  10. Say hi to the SAP team. Really please do – we’d be delighted to meet you. There will be a number of our subject matter experts at the event that can discuss topics such as planning and financial consolidations

The complete agenda is available here. Safe travels to Las Vegas and if you’d like to meet send me a tweet @daveswilliams!

EPM Reflections #4: A forensic approach to profitability analysis

EPMReflections 2014_4

Although we had started our new series of Financial Excellence with Game-Changers radio shows in March, the show I bring you here, Predicting Profitable Performance in Challenging Times, is from April 2014. I particularly liked this show because it deals with the often overlooked subject of profitability.

04_SAP Radio Show

A thoroughly engaging and entertaining show – in fact all of these radio shows are anything but dull – my favourite quote in the show is something said by SAP’s Rob Jenkins, who expresses that it is possible to “achieve a near-forensic view of product and customer profitability”. Having started my SAP career in the team that created SAP Profitability and Cost Management, I couldn’t agree more with Rob – and I love the image that a “forensic view” conjures up, implying to me that one can really get to the detail of the source of customer profitability if one has a mind to do so.

EPM Reflections #3: A Leader in EPM

EPMReflections 2014_3

For SAP solutions for EPM, the big news in March was the release of the 2014 Gartner Magic Quadrant for CPM (aka EPM) Suites. This Gartner report, as with other Analyst reports, offers unbiased opinion concerning the relative merits of software vendors and their solutions in the EPM space. Gartner’s report is based not only on an assessment of software capability and innovation, but also upon customer feedback, and as such the SAP team always eagerly awaits the results of this annual survey.

Reported in this CFOKnowledge blog post by my colleague David Williams, SAP was once again indicated as a “Leader” in this Analyst report.

03_Gartner

Read David’s blog post here, or if you prefer click the image above to go straight to the short-report, available at the SAP website.

The First Barrier to Enterprise Performance Management: How to Get Started?

By Gary Cokins, Founder of Analytics-Based Performance Management LLC

In my work career I have the fortune to travel extensively around the globe. As a result, I observe the issues and concerns facing executives, mid-level managers, and those in the project team trenches. During my travels one question has repeatedly emerged: how do we get started?

At my gray-haired age, I’m not sure why I have overlooked this fundamental and basic issue, but it is now becoming clearer to me that a key barrier preventing organizations from pursuing their vision of enterprise performance management (EPM) – regardless of their vision of it – is that they do not know how to get started. There are other barriers too, such as the false perception of some senior executives that the benefits from enterprise performance management do not exceed the administrative effort and expense, but the behavior of senior executives is a topic for another day. This article discusses why the barrier that prevents organizations from getting started has slowed the adoption rate of performance management.

Enterprise Performance Management: An Enigma or Simply Ambiguous?

There will be confusion for a long time to precisely define enterprise performance management (EPM). In my mind, the good news is this: enterprise performance management is not a new managerial method that everyone now has to learn, but rather it is the assemblage and integration of existing improvement methods that most managers are already familiar with. Collectively, these methods are interdependent, working together to manage the execution of an organization’s strategy. And most organizations have already begun to implement some of the EPM portfolio of methods, such as the balanced scorecard, but not enough of them have reached that flash point where substantial synergy kicks in.

Some executives and many mid-level managers have misconceptions about the components of the EPM suite. For example, many believe that the high accuracy in calculating product and service-line costs requires employee timesheets recorded at fifteen minute intervals, when in truth the major and dominant determinant of cost accuracy is much more influenced by better mapping of how work activities are uniquely consumed by outputs (e.g., products, services, channels, and customers). Regardless of the misconceptions, and there are many since most managers have yet to see or experience an organization that is nearing the complete vision of EPM, the problem is that these misconceptions prevent an organization from making progress – from moving ahead!

One proven way to break through this barrier and to get the ball rolling for good is to use the approach of rapid prototyping coupled with iterative re-design and re-modeling. Rapid prototyping works because within two or three days an organization has successfully accomplished constructing its initial system – albeit it at a high level. The “getting started” is over before you hardly knew it had begun!

Rapid Prototyping of Activity-Based Costing (ABC) and the Balanced Scorecard (BSC)

Those who remember the miscues of the early 1990s in implementing activity-based costing systems can now with hindsight realize those ABC implementations that fell short of expectations were way over-designed and over-built. The diminishing returns in additional accuracy were not worth the exponentially burdensome extra level of administrative effort required to collect and calculate the cost data. Worse yet, it took forever to create that gargantuan cost model. These implementations collapsed under their own weight long before the employee teams and managers could ultimately use the cost data originally promised for decision support.

While ABC information answers eternal organizational questions such as “where do we make or lose money?”, “what does something cost now?” and “what will something cost if something else changes?”, what has rescued this initiative is the application of rapid prototyping. Since calculating costs is not bookkeeping but rather a modeling exercise to transform spending expenses on resources (e.g., salaries, travel, power, supplies) into the calculated costs of the consuming outputs and outcomes (ultimately the costs of products, service-lines, channels, and customers), then the first model can be scaled into deeper levels that are more revealing. So the prudent approach is to build the first complete scope ABC model in two days using estimates from only four or five cross-functional employees who are familiar with their areas. On the third day, these employees brief a peer group – and maybe, but cautiously, an executive or two – so more work colleagues can get a vision of what an ABC system could eventually look like in their organization and be used.

Of course the cost data in this initial model is not accurate, but the next iteration becomes more accurate and granular by taking a few more days, going deeper, and replacing estimates with fact-based data in a few crucial areas. An organization benefits from making its design and assumption mistakes early on, not later when it will be much more difficult. Better yet, during the co-worker briefing that follows each iteration, their colleagues internalize what they are seeing and can immediately relate it to their problems. Project teams need two parallel plans: (1) an implementation plan, and (2) a communication plan. The second plan is much more important than the first! Resistance to change is what stops progress, and this can be overcome when the buy-in process starts out with an effective way of education.

Can a strategy map and its associated balanced scorecard also be completed as quickly? You bet, but only if the executives are willing. Some balanced scorecard consultant facilitators are mastering rapid brainstorming methods. Some are as simple as having the executive team take four brief hours to have each executive individually fill out thirty to forty SWOTs (an organizational strength, weakness, opportunity, and threat assessment) on Post-It™ notes and paste all of them on wall panels divided into focus areas using frameworks like the Malcolm Baldrige Award, the European Foundation for Quality Management (EFQM), or Norton-Kaplan. Next, they manually cluster the sticky SWOT notes into common groups with similar characteristics. Then they finally describe each cluster on a larger Post-It in words reflecting a strategic objective. That’s it! These larger Post-Its can be pasted on a wall-size poster board, and the executives can return to their offices.

Next, the core process managers from the next managerial level take over. In the next day or two they identify the few and manageable projects or initiatives that can be accomplished (or the area of their process they must excel at) for each strategic objective. They then define those vital few key performance indicators (KPIs) – three at most – for each project or process specified. Voila. The initial strategy map, key projects or initiatives, and the vital few (rather than trivial many) relevant KPI measures are then defined. And as a bonus, many of those middle managers will for the first time have learned the senior executives’ strategy in a way that they can understand it, since many do not know their organization’s strategy.

Is a Ready, Fire, Aim Approach All that Bad?

Rapid prototyping achieves the benefits advocated by W. Edwards Deming, the popular quality management guru, with his plan-do-check-act (PDCA) iterative cycle. By accelerating organizational learning rates, EPM methods are more quickly implemented.

Typically, people do not like taking responsibilities for decisions, so they don’t make any. What is needed is the courage to make decisions. This is what differentiates leaders from mere managers. Managers are adverse to risk, prone to over-planning and under-executing, while leaders take calculated risks knowing they can always adjust. Let’s not wait for the stars to align to get started. Nike has the right idea: “Just do it.”

 

About the Author: Gary Cokins, CPIM

Gary_Cokins

Gary Cokins (Cornell University BS IE/OR, 1971; Northwestern University Kellogg MBA 1974) is an internationally recognized expert, speaker, and author in enterprise and corporate performance management (EPM/CPM) systems. He is the founder of Analytics-Based Performance Management LLC www.garycokins.com . He began his career in industry with a Fortune 100 company in CFO and operations roles. Then 15 years in consulting with Deloitte, KPMG, and EDS (now part of HP). From 1997 until 2013 Gary was a Principal Consultant with SAS, a business analytics software vendor. His most recent books are Performance Management: Integrating Strategy Execution, Methodologies, Risk, and Analytics and Predictive Business Analytics.

gcokins@garycokins.com; phone +919 720 2718

http://www.garycokins.com

Linkedin.com contact: http://www.linkedin.com/pub/gary-cokins/0/15a/949.

Performance Management from C-Suite Future Diaries

By Gary Cokins, Founder of Analytics-Based Performance Management LLC

What might C-level executives write in their diaries in the future? My crystal ball is crystal clear. Seven years from now in 2021 here are the personal diary entries of the executives of a fictitious corporation reflecting on their experience implementing a performance management framework. As you’ll see, the last diary entry written by the CEO is the most surprising.

Vice-President, Sales

Dear Diary of Sales Commissions,

Recalling 2014, I did not believe our CFO’s claim that some of our long-term customers were very unprofitable for us. That is until I saw the facts in her customer profitability reports. Also, I could not believe that our customer with the highest sales volume was much less profitable than many of our midsize customers. But then she proved that all the extra work we work did for that No. 1 customer substantially dragged down our profit. When the CEO and CFO ganged up on me to change our sales force’s commissions and bonuses to also include targets for customer profits, I thought they had flipped out. Everyone knew the name of the game was increase market share and sales growth. Now I realize the goal is growing sales profitably – what we call smart growth. You live and learn.

Vice-President, Operations

Dear Diary of Chaos,

I remember back in 2014 when my solution to reducing the cost of our dysfunctional operations was to attempt to standardize processes. But as the years progressed, I realized that our research and development organization was increasingly tailoring differentiated products and services to each customer segment – and accordingly they kept micro-segmenting our customer base and future sales prospects! These customized services grew into a huge tsunami wave that standardization of processes could not overcome. Now I am thankful we shifted our efforts towards attaining much higher forecasting accuracy. The better our forecasts became, the less uncertainty we experienced – and the better our scheduling and capacity planning. What was I thinking back then in 2014?

Vice-President, Marketing

Dear Diary of Spray-and-Pray Advertising,

My MBA marketing courses taught me the current fads of the time: Put your money into branding, spend heavily entertaining your largest customers, and use gimmicks to retain existing customers and acquire new ones. But then fortunately I discovered the secret to maximizing the yield the money we spent was by better understanding the unique preferences of our individual customers then targeting new customers with similar traits to our most economically valuable customers. My big “ah-ha” was when I saw how powerful analytics, such as statistics, correlation, regression, segmentation, forecasts – could provide us better answers. At first I feared that the administrative cost and effort to collect, understand, and apply all the necessary data would be galactic and that I would have to replace my street-smart marketing staff with PhD geeks. But then I saw my team gain competency in precision targeting of their marketing campaigns and optimizing deals, offers, discounts, and service levels based on the new intelligence we gained about our customers and their unique traits and preferences.

Vice-President, Human Resources

Dear Diary of Employee Turnover,

My staff and I reminisced today about how proficient we were back in 2014 processing paperwork for exiting employees and stacking inbound resumes in piles. I am so glad those days are over. The big breakthrough in our mindset was when we seriously applied workforce analytics to retain employees by predicting which employees were most likely to next quit so we could optionally intervene to prevent them from resigning – also to hire new employees that would truly fit our current and future needs as well as our culture. Now my challenge is growing our employees’ brains to accelerate their pace to innovate.

Chief Financial Officer (CFO)

Dear Diary of Jail Prevention and Bean-Counting,

When we built our second cafeteria in 2014 just for the on-site external auditors, I thought then that any aspiration for me to actually help improve our business would be consumed with a life of compliance and governance duties to satisfy the external investment community. Thank you, thank you, thank you for the software systems that have made those responsibilities just a minor part-time job. I now recall my excitement these past years to use my freed-up time in a much more value-adding way to help our work force and executives make better decisions and improve our profit performance. This new twist has been a rewarding surprise. Also, I love my expanded role contributing to the Green and Sustainability movement to enable my organization to achieve a negative carbon footprint with money to spare to reduce global poverty. We are now only a year away from hitting our target. Yesterday my kids told me they want to grow up just like me. I’m a hero in their eyes.

Chief Information Officer (CIO)

Dear Diary of Spreadsheet-itis,

I still laugh about the prior CIO I replaced in 2014, who was fired when our business nearly collapsed from the week that all of our spreadsheets converged into an infinite closed loop system. All our laptops kept endlessly calculating and calculating. No new data could be input or information reported. Our company logo could have been replaced with the hourglass symbol. Exclusive dependence on spreadsheets is an addiction. They are OK in moderation but not in excess. I resolved our obsession with business intelligence systems. I wish I could laugh today about the dwindling size of my IT department – all the line and staff departments now do what we used to do for them. I guess buggy-whip makers somehow found new careers. I’ll survive.

Chief Executive Officer (CEO)

Dear Diary of Relentless Pressure,

My fellow CEOs in 2014 dreamed that boards of directors would return to those ceremonial jobs for which you just showed up at quarterly board meetings to pick up your director’s check. In contrast, my board was certainly an activist one in 2014. I vividly recall trying to turn around my sagging business by training everyone with Six Sigma quality and lean management techniques. With hindsight, I am glad I shifted our attention to strategy execution and our culture to embrace measurements with accountability. Those strategy maps, scorecards, dashboards, and other enterprise performance management systems saved my tail. I realize now that Six Sigma and lean programs, though relevant, are limited in that they only teach employees how to think, but our strategy management methods and enabling software technologies taught us where to think. Better yet, they gave us the focus, traction, torque and yield regarding what actions to take to continually optimize to dynamic change. My next challenge? Grow the analytic skills and capabilities of my employees. I hope my VP of human resources is thinking about that, too.

With perfect hindsight, these 2021 diary entries could be true ones. With imperfect foresight, these C-suite executives would probably have far less successful accomplishments to write in their diary. To sustain long-term success, an embrace of the full vision of the enterprise performance management framework is not optional – it is essential.

 

About the Author: Gary Cokins, CPIM

Gary_Cokins

Gary Cokins (Cornell University BS IE/OR, 1971; Northwestern University Kellogg MBA 1974) is an internationally recognized expert, speaker, and author in enterprise and corporate performance management (EPM/CPM) systems. He is the founder of Analytics-Based Performance Management LLC www.garycokins.com . He began his career in industry with a Fortune 100 company in CFO and operations roles. Then 15 years in consulting with Deloitte, KPMG, and EDS (now part of HP). From 1997 until 2013 Gary was a Principal Consultant with SAS, a business analytics software vendor. His most recent books are Performance Management: Integrating Strategy Execution, Methodologies, Risk, and Analytics and Predictive Business Analytics.

gcokins@garycokins.com; phone +919 720 2718

http://www.garycokins.com

Linkedin.com contact: http://www.linkedin.com/pub/gary-cokins/0/15a/949.