Control Costs By Integrating T&E And Procurement Into A Single Financial Platform

Henner Schliebs

Sometimes I’m struck by the sheer volatility of our world. Economic trends, political change, and technology innovation all seem more dynamic than ever. As a result, CFOs can’t take their eye off the ball for even a minute.

Financial leaders must be able to change direction instantly when conditions shift or new threats arise. Yet discrete finance applications cannot provide the breadth of information and rapid insight that today’s executives need.

Instead, CFOs need a single, integrated financial platform that provides instant visibility across the enterprise. To better understand the implications of embracing a platform approach to financial systems, I talked with three leaders who are on the front lines, working with today’s leading financial executives: Thack Brown, general manager and global head of finance at SAP; Phil Beck, SVP & GM of payments and finance at SAP Ariba; and Todd Pelletier, SVP & GM, Global Accounts at Concur.

Schliebs: How are financial systems changing to meet volatile business environments?

Brown: To help our customers keep pace with the digital business environment, we have brought together the latest technologies with our 40+ year legacy in corporate finance to provide groundbreaking new capabilities for finance. A key aspect of that transformation has been tightly coupling our transactional systems with our planning and analytical tools to ensure that finance can have a single source of truth, built on a real-time data platform. With this, our customers can speed up decision-making and better guide the business. We have also opened up the system via open APIs so that the transactional systems become more of a financial information platform, effectively extending the reach of that data.

Schliebs: Why extend the reach of that data?

Brown: As we have opened the system, we are now inviting our ecosystem to take advantage of the data in the platform to build applications that leverage that data, using their unique intellectual property. With this, our customers now gain access to the IP of the world’s leading consulting, tax, and audit firms via applications that they are creating to leverage that data. As we move forward, this will provide enormous opportunity for our customers to leverage best practices and industry-specific IP to better run their businesses and reduce costs.

Schliebs: Are you saying that financial platforms can help CFOs stay ahead of the competition?

Brown: Yes. With real-time data visibility, we can transform static processes like month-end close and annual budget cycle into highly dynamic processes that really support business decision-making. By further opening the system, we ensure that our customers gain access to the best innovation coming from our broad ecosystem.

Schliebs: Which business systems should be included in a financial platform?

Brown: Every one that touches financial performance, even those that operate outside the traditional control of finance.

Pelletier: Thack is right. Think about travel and expense (T&E) management. In every line of business, from manufacturing to high tech to financial services, people adhere to tight budgets and cost controls. And, for most companies, T&E is their second-largest controllable expense after payroll, but it lives outside of the financial systems and the controls built into those systems. By bringing T&E data into the finance platform, CFOs can automate the majority of the expense report, gain control, give actionable insight to decision-makers, and make T&E data a strategic financial line item.

Schliebs: What’s the response when executives receive this insight?

Beck: Most executives we work with are excited to finally have access to the data and information they need to better control expenses and make better planning and forecast decisions. For many, this may be the first time they’ve seen certain data points, which can be very eye-opening.

Pelletier: One example is of a CFO who reviewed employee meal spend, and by making a small change in the meal-spending policy enabled the company to save over $30 million a year. And there are so many similar examples like that.

Schliebs: Are there other lines of business that need to be included in a financial platform?

Beck: Absolutely. One area where we see a huge opportunity to collaborate across business stakeholders is payables. In most companies, the accounts payable function has an arms-length relationship with the business and a siloed view of transactional information. They also lack the platform and analytics to make timely decisions on approved invoices, and they do not have the tools or supplier relationships necessary to execute against opportunities to optimize the financial supply chain. By moving into a real-time financial environment where stakeholders from accounts payable, treasury, and procurement can all access real-time transaction-level data, organizations can transform a theoretical opportunity – such as an early-payment discount – into an actionable opportunity with immediate bottom-line impact to the business.

Schliebs: Do most CFOs recognize the financial value of supply chain collaboration?

Beck: Most CFOs recognize the value of supply chain collaboration, but have lacked the platform and organizational alignment to execute a cohesive long-term strategy in this area. We are seeing best-in-class organizations now approach the financial supply chain strategically rather than tactically – a major shift. These companies are using analytics to establish payment-terms optimization programs complemented with early-payment programs (self-funded discounts and supply chain financing) to improve working capital management ratios and reduce supply chain financial risk.

Pelletier: That’s a real win that CFOs can’t overlook. Direct connections to travel suppliers provide actionable data that allow them to make strategic decisions on their spend.

Schliebs: To summarize: we need a drastic change in how CFOs set up their teams and positioning.

Beck: That’s true. And it’s also important to recognize that an integrated financial platform is the backbone to enable the change.

Schliebs: A financial platform can serve as a foundation for using advanced technologies like machine learning and predictive analytics to deliver new insights to the business. With all of the financial and operational data integrated at the core, access to information is instant and seamless. And that’s exactly what CFOs need to keep their companies ahead of constant change. Thank you, gentlemen, for this insightful interview reflecting your many CFO discussions.

Learn more about how solutions from SAP, SAP Ariba, and Concur can help CFOs create an integrated financial platform.

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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.