Post on 24-Aug-2020
Ben Shu FCPA
Head of GC Analytics (Center of Excellence)
Financial Excellence for Digital Enterprise
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 2Internal
Increased Globalization Expansion into new markets
Global process standardization
Localization requirements
Economic Volatility Volatility in markets
Decreased stock valuation
Slow economic growth
The Realities of the “New Normal” for Finance
Pressure on Margins Profitability by segments
Decreased budgets and spending
Determination of the cost to serve
Focus on Risk Financial risk and fraud
Commodity risk
Social sentiment affects brand value
New Business Models Shared services organizations
Business partnerships
Leveraging big data for decisions
Regulatory Changes Increasing disclosure requirements
Country-specific regulations
Industry-specific disclosures
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 3Internal
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 4Internal
Offering Infinite Opportunities to First Movers
+26%Market
valuation
+12%Impact on profitability
+9%Revenuecreation
EARLY ADOPTERS ARE WINNING
In the next 10 years, 40% of the S&P 500 will no longer
exist if they do not keep up with these technology trends
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 5Internal
What Does this Mean for Finance?
New business
models and
competitors
Need for instant
insight to action and
radical automation
New types of risks
and more complex
regulations
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 6Internal
Foundation for Digital Finance
Single Source of Truth
On the Fly Analysis
ConnectivitySAP HANA
Single source of truth
Operations Business Planning Business Intelligence
FINANCE
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 7Internal
Value Scenarios Across the Entire Value Chain
Dynamic, Integrated
PlanningClose Books in a Day
Automated “Lights Out”
Finance
Always on proactive
Compliance
Real time actual to plan
cash management
M&A and divestitures
what-if analysis
Accelerated planning
cycles
Multi-dimensional
reporting on the fly
Real time customer and
product profitability
“Soft close”
Real time P&L
insights
Integrated accounting
and managerial
reporting
No reconciliations
Instant visibility into
working capital
Real-time liquidity
planning
Real time bank counter
risk management
Automated payment
processes
Real-time receivables and
payables reconciliation.
Immediate reaction to
collection
Integration with business
networks
Employee perfect trip
experience
Identify and predict
potential fraud.
Define strategies for
fraud prevention
Ensure compliance and
improve audit
management efficiency
Integrated controls in
processes
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 8Internal
Simple Finance – An Integrated Solution for Strategy to Execution
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 8
Business Suite on HANA
SAP HANA Platform
AlignedSingle Source of Truth
AgileReal time finance processes
PredictiveInsight and foresight
SAP Cash Management powered by SAP HANA
New product for
Group Cash Management
SAP Central Financepowered by SAP HANA
Alternative in-memory
functionality for ERP customers
Integrated
Business Planning for
FinanceNew capabilities and enhanced
integration for ERP and BPC.
A Vision of Future Boardroom Experience
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 10Internal
Accountability to the Board
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 11Internal
Optimize business performance
StrategyAligned strategic decision-
making across teams
Optimize operational
decisions inside and outside
the company
Insight Decisions
Execution
Manage compliance, risk,
and optimize performance
across the business network
,
Generate insight from
structured/unstructured
and internal/external data
across multiple
transaction systems
Business Intelligence Platform
Enterprise Performance Management
Governance, Risk, and Compliance
Unified
Information
Business Network
Optimization
Collaborative
Decisions
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 12Internal
Issue: Accuracy apportionment compromises accuracy
Customer P&L
based on apportioned overheads
Customer
A
Customer
B
Revenue $10,000 $11,000
Cost of Sales $7,000 $7,000
Contribution $3,000 $4,000
Overhead(30% Cost of Sales) $2,100 $2,100
Profit / Loss $900 $1,900
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 13Internal
Customer P&L
based on Activity Based Costing
Customer
A
Customer
B
Revenue $10,000 $11,000
Cost of Sales $7,000 $7,000
Contribution $3,000 $4,000
Sales Calls @ $50 $300 (6) $600 (12)
Order Processing @ $10
$120 (12) $520 (52)
Pick and Pack @ $15
$180 (12) $780 (52)
Shipping @ $40 $480 (12) $2,080 (52)
Credit Control Calls @$25
$0, (0) $300 (12)
Cost to Serve $1,080 $4,280
Profit / Loss $1,920 ($280)
Issue: Accuracy apportionment compromises accuracy
Customer P&L
based on apportioned overheads
Customer
A
Customer
B
Revenue $10,000 $11,000
Cost of Sales $7,000 $7,000
Contribution $3,000 $4,000
Overhead(30% Cost of Sales) $2,100 $2,100
Profit / Loss $900 $1,900
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 14Internal
High volumes can be costed
ACCURATELY and EFFICIENTLY
Modelling costs in a multidimensional data structure allows for the
more sophisticated modelling of real life situations - giving more
ACCURATE costs
Applying calculated costs to high volumes of transactions
(accounts, SKU’s, sales order lines) is much more EFFICIENT in a
relational data structure
While still maintaining:
Comprehensive trace back
On-demand “What-if?” scenario analysis
of costs
Web-based collection of non-system
driver data
Costing high volumes efficiently – and accurately
Scalable, Enterprise Class Solution
Sophisticated cost
modelling to give Unit
Rates or Cost per
Minute
Detailed costing (Unit rate x Volume)
or
(Cost per Min x Time)
Best-of-breed
multidimensional costing
Relational technology
for the volumes
ACCURACY EFFICIENCY
EFFICIENCY WITH ULTRA HIGH VOLUMES
Low High
COMPLEXITY / ACCURACY OF
COSTING
High
LowRelationa
l Data
Structure
Multi
Dimensional
Data
Structure
Business
Objects
Profitability
and Cost
Managemen
t
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 15Internal
User friendly, rapid and efficient modeling
Rapid point and click assignmentsHere the indirect activity “Manage and Supervise”
is being reassigned to direct activities based on
the # of FTEs involved in those activities – and
this is being done for every department where the
activity occurs in the model in just 4 clicks!
Point and click assignments
Any new member detected in a hierarchy automatically
inherits the assignments of its siblings - minimizing time
and effort on model maintenance
Logical data structure for minimal model maintenance
Product 1 Product 2 Product 3
Product Family
New Product
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 16Internal
Users can slice and dice the data
themselves with consolidated results
being calculated on-demand and
their Web book automatically
refreshed
Using this functionality they can test
out the impact of changes before
committing to them, resulting in
better - and more incisive - decisions
Unique on-demand query and what-if? analysis
Reliable on-demand “what-if?” analysis and scenario modeling
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 17Internal
Users can leverage the insight into the drivers of cost
and profitability in planning and budgeting models. This
provides integrated budgeting and costing solution giving
deep insight into the cost and profitability of products and
customers in future periods
Changing the driver volumes and then “back-calculating” an
existing ABC model delivers an activity-based budget
Driver-based budgeting is based on a more iterative
understanding of what drives cost inside the organization
Both can be rapidly re-forecast by updating driver data
enabling operational capacity to be tightly
aligned with demand
Costing and driver-based / activity-based budgeting in a single solution
Extending the value of profitability and cost management
Resources
& Line Item
Expenses
Cost Objects
Activities
Revenues
Product, Customer,
Channel etc
Profitability
Product, Customer,
Channel etc
Cost Assignment
Cost Assignment
Resource Drivers
Activity Drivers
Adjust capacity
in future periods
Adjust prices
and sales mix
Adjust resource
costs in future
periods
Adjust
consumption in
future periods
Adjust
consumption in
future periods
Adjust demand in
future periods
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 18Internal
Analytics customers in Hong Kong & Macau
Thank youContact information:
Ben Shu FCPA Head, Center of ExcellenceGreater China Analyticsb.shu@sap.com