I have always been fascinated with Formula 1 and the way the teams extract the maximum performance they can from their cars and people. So I was delighted to be invited to join senior finance executives from the UK, France, and Turkey on Wednesday 16 September at an exclusive CFO round table dinner co-sponsored by SAP and PwC. This was followed on Thursday 17 September by a unique behind-the-scenes tour of McLaren Technology Centre and insights into McLaren Technology Group, a Partner of SAP.
Seeing how McLaren Technology Group is using SAP software and other technologies to drive the F1 team and its other businesses forward was absolutely mesmerizing. One area in particular caught my eye: Mission Control.
On race day, the McLaren Honda F1 team collects vast amounts of real-time telemetry data from the cars, beginning the moment the race starts. It’s too much to analyze at the racetrack, so it’s sent back to a team of engineers at Mission Control at the Technology Centre. Using sophisticated predictive analytics tools, the engineers advise the team on the ground what should be done in the event of a number of possible situations.
This ability to use data to shape the course of events in real time struck me as something that every business is striving to achieve, particularly in the dynamic environment we find ourselves in today.
At SAP, we use our newly developed “SAP Digital Boardroom.” Through an easy-to-access interface, our board now has access to live finance and operational information from around the world and can drill down into it to get more granular views and answer questions.
But the biggest benefit is the ability to run on-the-fly simulations on the data to predict the outcomes of various strategic options, much like the McLaren Honda F1 team is doing. This approach has not only significantly accelerated our ability to make decisions; it’s also improving their quality.
Providing decision support
In fact, this whole question of data and support for decision making was a major topic of conversation at the CFO round table held during the event, which included Brian Furness, Partner, from PwC UK. Around the table there was unanimous agreement that finance needs to take a more strategic role in helping the business set and achieve its goals.
This requires finance to be able to deliver and analyze the information the board and lines of business need to make decisions as and when needed. However, while everyone can see the need, there are challenges to be overcome.
The first is coping with the multiple instances of ERP systems that many companies have in place today. Bringing together the information residing in these systems to get a consolidated view of all company activities is required for truly all-inclusive insight.
The second is data quality, which has been a problem due to traditional user interfaces being complex and difficult to learn and use. However, today’s new user interfaces are less complex, more intuitive, have many more checks, and can be adapted to individual users. As a result, errors are reduced and data quality is increased.
At SAP, we are no different from other organizations in facing those same challenges. But we are using our own technology to overcome them – in particular, SAP S/4HANA Finance, a global financial solution powered by the SAP HANA platform, and our operational and analytics products.
From a business perspective, SAP S/4 HANA Finance has simplified finance substantially. For example, we are no longer limited to having to pre-aggregate data in order to measure performance. The flexibility of SAP S/4 HANA Finance enables us to report on live data, allowing us to perform full reconciliations of internal and external accounting (FI and CO) on all reporting granularities in real time.
Last but not least this technology has enabled us to create the “SAP Digital Boardroom” as well as other innovations such as our Enterprise Analytics Store, a single one-stop-shop that enables users around the world to locate and create customized reports for themselves.
Evolving from CPA to MBA
Another intriguing topic of conversation at the round table was the impact of the change in role on the skillsets finance professionals now require. Without exception, attendees thought that finance professionals today need a more commercially and strategic oriented skillset, rather than the controlling mind set of old. And they also need to be more tech-savvy, because delivering greater insights into operations and predicting business outcomes will require them to use increasingly sophisticated tools, in the same way the McLaren Honda F1 team is.
It was a real pleasure to meet with the other finance executives who attended the event, and I would like to thank them for taking the time and effort to share their ideas and experiences.
-Peter David, Regional CFO, Europe Middle East and Africa (EMEA), SAP SE
For more information about SAP S/4HANA Finance, please visit our website and request your complimentary copy of our business case.