Boosting Efficiency For CFOs And The Finance Function

Henner Schliebs

new finance toolsOne of the challenges that CFOs face is measuring and monitoring business performance in a timely manner. CFOs who were considered to be value integrators were often ahead of their competitors due to the fact that they were bringing together information from the entire organization and could then plan, budget, forecast, and hone any minor issues in each routine financial process. The faster they can do this, the better it is for them and the CFO function.

New finance tools using cloud computing and in-memory database technology can help finance leaders simplify their operating environment, and access and deliver data in real time. Migration to the new finance systems powered by in-memory technology is one way to speed up finance operations and enhance finance’s ability to deliver insights across large organizations. For CFOs and finance organizations, the ability to slash report-generation time and to integrate end-to-end processes to a far greater extent is a huge boost to productivity and efficiency.

Being disruptive in a good way

The great power of in-memory technology is that it rationalizes and analyzes huge amounts of data assets and records in a matter of seconds, while at the same time facilitating Big Data management. The finance applications that SAP has developed around in-memory technology have been disruptive for the finance organization in the best sense. The systems are allowing teams to simplify finance processes, making them operate faster and smarter, and enhancing the team’s ability to be partners to the business.

Reconciliation used to be an extremely cumbersome process that ran for more than 26 hours. Now, that process can take less than four hours, leaving the finance organization much more time for analytical validation.

For example, the faster close means that the finance organization can start the next forecast earlier. The net result is getting better insights to senior management, faster. The new capability to do simplified, self-service real-time reporting enables finance to transfer many reporting duties to the lines of business. Typically, teams spent significant amounts of time gathering this data for the business users and providing it to them in offline reports. By reducing the time FP&A employees spend on producing reports, they have a higher capacity to analyze the data and advise the businesses on ways to improve their performance.

Providing insights

In-memory technology makes data available in real time for analysis, which opens the door to many new collaborative processes between finance and the business. For example, in managing working capital, real-time insight can be generated into cash collection patterns that may pose a risk, and account executives can use the insight to make different payment arrangements with customers.

What this means is that risks can be mitigated early, especially when working in volatile business environments. As the performance of the receivables profile are tracked proactively, risks can be detected early and mitigated through the tightening of payment terms or revenue cycles and even through delivery blocks of certain customers if they go above certain overdue levels. This makes it possible for the groups overseeing this process to work in a more collaborative process.

With in-memory technology, finance organizations can also play a larger role in supporting the operational side of the business and identifying opportunities to improve margin. For instance, the supply chain for manufacturing companies usually has large number of data sets that typically outweighs the information that is residing in the core financial systems. Using in-memory technology, planning the daily production can be done in real-time fashion, and daily production can be adjusted quickly for a change order.

Advocating for overall business transformation

While CFOs are often challenged to assess how IT creates business value for finance, it certainly goes beyond just that, as CFOs should also advocate for overall business transformation. To that end, pushing for in-memory-based system to improve business can be built around a few arguments.

First, it lowers the total cost of data ownership through the dramatic simplification of the IT architecture (higher data compression rates, lower data redundancy, data residing in a smaller footprint, etc.) which together can lower storage costs considerably.

Second, there are the value and benefits to be reaped from the real-time capabilities, which has allowed for the redesign of many business processes to allow for greater self-service reporting. That streamlining has reduced capacity in reporting areas, allowing for a shift in capacity to generating more value for the business.

Finally, an in-memory-based system offers the opportunity to radically rethink the way business processes are run. Finance teams can now generate real-time insights not only for collection clerks, but also for the account managers about the development of overdues in their accounts. This gives them the ability to present this information to customers on their tablets and to document their payment agreements. The account managers can then funnel their actions directly back to finance, enabling the organization to improve operations.

To learn how to keep valued talent engaged and on track with your goals, watch Are Your Metrics and Incentives Rewarding Complexity or Simplification?

About Henner Schliebs

Henner Schliebs is global vice president Audience Marketing for SAP S/4HANA and Finance at SAP. He is a progressive sales/marketing executive with 15+ years of experience in business software solutions focused on corporate functions. He has strong marketing and go-to-market skills and a proven track record in enterprise software solutions, along with significant experience in solution management and customer engagement.