Part 1 of the “Finance Transformation” series, which explores how finance can take the lead in driving their companies towards an intelligent enterprise
It’s a staple of Hollywood blockbusters: a big monitor on the wall, people furiously hammering away at keyboards monitoring all aspects of operations in real time. With just a clickety-clack of a few keys, almost any information imaginable can be called up in an instant. In the movies, at least, there is no lag time between wanting to know something and actually knowing it.
Moviemakers know exactly what they’re doing, of course. Who wants to watch technical staff querying databases, generating reports, and submitting them to the higher-ups? Boring! Better to skip the technical challenges and push the plot along.
Yet, while the state of the art portrayed in movies is far from reality, you may be pleasantly surprised at how far the real-world state of the art has come along.
Finance with forward visibility
Before coming to SAP, I had spent much of my career in finance. I sometimes think of myself as the worst financial analyst of all time – because whenever an executive wanted to know something, my standard response was “I’ll get back to you.”
Executives don’t like this answer. They want it like it is in the movies: instant knowledge and understanding right now. This requires a new way of doing things for finance.
In the old way, books are closed at the end of the month; then final reports are generated after five days of adjustments, when lines of business can compare what’s happened to actual budgets – and so on and so forth.
What’s needed today is real-time visibility – seeing what’s happening now and also what lies ahead. For this kind of visibility, finance now has the tools to execute. It’s not as effortless as in the movies, but it’s getting there. Here are some ideas on how to make it a reality for your company.
Integrate business systems
To make decisions based on reality, finance needs a comprehensive and consolidated view of enterprise data across lines of business. Such a view is the outcome of integrated business systems that operate based on a common data layer used by all business units throughout the enterprise.
When critical systems for finance, HR, marketing, sales, R&D, operations, supply chain, customer service, and more all run on systems that talk to one another, true enterprise-wide visibility is possible. The clickety-clack of the keyboard required to jump over from a CRM application to the supply chain system and see events unfold in real time is something companies are capable of today – not just in the movies.
Sidestep the problem of spreadsheets
Integrated business systems and a common data foundation can help your company move away from silos. Instead of keeping data on individual spreadsheets stored on servers dedicated to specific lines of business (a textbook definition of a business silo), you can enable access to live data in real time.
Not that spreadsheets really go away. Nobody wants to ban a tool that has enabled modern finance. But now, the data represented in whatever spreadsheet being used can be checked against the live data in the live system. No more disagreements on the numbers. This is the beginning of company-wide alignment.
Use analytics and dashboards
Effective analytics is predicated on data quality, consistency, and volume. With integrated business systems – and an open data platform that can connect to and digest structured and unstructured data from all sources – you can bring in high volumes of high-quality data on a consistent basis.
From this foundation, you can start to use augmented analytics such as machine learning. Machine learning can help finance detect patterns in data that reveal insights. Examples include fraud detection, better risk management, portfolio optimization, and much more.
Integration and a single source of data truth also make powerful dashboards possible. From executives in the boardroom to technicians on the front lines of production, users throughout the business can now monitor critical KPIs in real time – watching the numbers change on the screen as events unfold. Then, as these numbers suggest the need for intervention, users can drill down into relevant systems to investigate matters and take action quickly – almost like in the movies.
Toward collaborative enterprise planning
Siloed, disjointed business systems require IT and data experts to run batch processes overnight and manually manipulate data so that finance people can make sense of it. This takes time, energy, and resources.
Vastly more valuable for finance is real-time access to comprehensive enterprise data on-demand, across business units. In such a world, collaborative enterprise planning can become a reality. Collaborative enterprise planning enables all business units to work together to drive planning agendas forward – all based on a common understanding of business strategy and a common data foundation. The result is that finance can help align teams, make informed decisions, and steer the business in the right direction.
Now that’s a movie worth seeing.
Join the second SAP Intelligent Finance virtual event on Tuesday, Feb. 11, 2020, and explore the new reality driving finance transformation. Register now.