Financial Analytics At Work: Speed, Visibility, And Performance

Todd McElhatton

Years ago at SAP, we moved finance to a shared services model that centralized key functions and standardized processes globally. Building on this move, we’ve more recently standardized financial reporting and implemented analytics tools. As CFO for the Cloud Business Group at SAP, I am responsible for making sure we use these capabilities to improve financial and business performance.

Consolidated reporting – without the spreadsheets

Toward this end, perhaps the most important thing we’ve done is to dramatically decrease our use of spreadsheets. They’re still used in a tactical capacity, but no longer represent different interpretations of reality that stand in the way of consensus, especially when it comes to forecasting.

Instead, we have global numbers consolidated in one reporting system that serves as a single source of agreed-upon truth for all financial data. Today, on our regular forecast calls with our CEO, everybody is working with the same numbers. This means we can get to work faster and make informed decisions.

Better foresight and performance

A single source of trusted financial data also supports predictive capabilities. One thing my group tracks is the sales pipeline at SAP. Toward the end of every quarter, we start holding “latest estimates” calls to get a picture of where we are with deals and determine whether or not we’ll hit our numbers.

Today, with a single comprehensive view of pipeline data, we can supplement these calls with increasingly accurate predictions based on a mix of historical and real-time data. On demand, we can see our linearity – a measure of the percentage of business closed to date.

We also have a real-time picture of accounts receivable, which enables us to release highly accurate days sales outstanding (DSO) numbers. Financial markets reward companies that predict their numbers with confidence and hit them consistently, which is something financial analytics at SAP enables us to do.

Empowered salespeople

While working with a customer during the purchasing process, it’s not unusual for a salesperson to generate ten or more such quotes during the sales cycle to accommodate customer changes and analyze the impact of different configurations. Generating the quote is work enough – but then there’s the approval process. Depending on how many stakeholders are involved, this can take days.

Improved data visibility and access has enabled us to automate the process of generating quotes and obtaining approvals within SAP. Based on specific risk criteria, we’ve identified scenarios in which deals would be considered standard and would get approved almost all the time. We modeled these scenarios in our system and implemented a “deal health index” that monitors whether or not a proposed deal qualifies for automated approvals.

Today, salespeople can create proposal quotes in real time with their customers using our pricing app. Salespeople are empowered, and SAP is more agile – prepared to accommodate whatever changes the customer requests. With no wait times, the customer gets a far better experience.

Inspired customers

At SAP, we believe in running our own software wherever possible – both to improve our own performance and to serve as a showcase for what the smart application of technology can do for our customers.

When I visit my finance peers in companies that run SAP software, I try to find subtle ways to put this showcase on display. After all, there’s nothing more convincing than a simple, targeted demo of the power of data visibility and real-time reporting in action.

Not long ago, I visited with a fellow CFO whose team reported its numbers by fax – clearly an impediment to visibility. I was able to access the company’s open receivables on my phone and noticed that additional payments had been sent in the past 24 hours. Our customer was impressed by the level of detail I had at my fingertips. This level of instant visibility helps us serve her better, I explained. We know where payments stand in real time, and sales calls regarding how to move forward with her own digital transformation are much more efficient.

Other customers have also been inspired by our digital boardroom capabilities that serve up KPIs in an intuitive dashboard that enables executives and board members to monitor business performance on demand.

For example, leadership can now track headcount in real time. You’d be surprised how easy it can be for a large global organization to get ahead of itself with hiring and then find that it has accrued unanticipated costs. But with improved data visibility and analytics presented in a digital dashboard, business leadership can see exactly where global expenses stand at any given point. Based on this visibility, companies can identify issues as they emerge and take prompt and appropriate action.

As a CFO at SAP, I strive not only to put such capabilities to work for us at SAP, but to inspire our customers to do the same. The benefits of financial analytics are real. Companies that use these capabilities can speed decision-making, enhance the customer experience, and drive business performance. ­­­

For more information, download the March 2019 Forrester Consulting opportunity snapshot, “Optimize Business Intelligence Efforts With Embedded, Application-Driven Analytics,” to examine the challenges, best practices, and recommended actions that can help your finance team turn your business into an intelligent, competitive force.

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Todd McElhatton

About Todd McElhatton

As the CFO for SAP Cloud Business Group, Todd McElhatton establishes the financial vision and executes SAP’s cloud business strategy across multiple lines of business globally. Some of his key responsibilities include effective capital allocation, successful integration of acquired companies, forecasting and planning, risk management, optimal asset purchases, and driving efficiencies while developing commercial and pricing strategies to ensure the overall financial health of the Cloud Business Group. Todd is a member of SAP’s Global Finance Leadership Team. Prior to this role, he was the CFO for SAP North America, under the Global Customer Operations Board area, overseeing all financial activities for the United States and Canada while driving business simplifications across the region. Before joining SAP, Todd has held senior finance leadership roles as CFO of VMware’s Hybrid Cloud Business, vice president of Oracle’s Cloud Services, and vice president and CFO for Hewlett Packard Managed Services Business. Todd has over 25 years of experience in finance management, leadership, and business growth and he holds a bachelor’s degree in business administration from Southern Methodist University in Dallas, Texas, and an MBA from the University of Tennessee in Knoxville, Tennessee.