As we go through the positioning and messaging process for SAP Financials OnDemand (our latest addition to the SAP Cloud portfolio), I am reminded of the big innovation wave of the 90’s when Michael Hammer’s Business Process Engineering book took the industry by storm, and created a huge wave of demand around transformation projects as well as Enterprise Resource Planning (ERP) software, which made SAP the market leader we are today.

I think we are just at the beginning of a new, huge, very similar innovation wave for financial software (the perfect storm of innovation if you will), because of the convergence of a lot of concurrent technology trends, including In-Memory, Analytics, Big Data, Cloud, Mobile and Social.

“Yeah, Yeah”, you’re thinking, “here we go again with a marketeer yakking away about innovation .. we’ve heard it all before …”

Really? Let me lay out my thought process here …

  • The ERP systems of the 90’s were built around transactions, not decision-making or analytics , leading to lot of pain of transformation and integration
  • They were built for transparency and governance/compliance, not for collaboration and instant action, leading to frustration and delays
  • They were built for finance experts, not for everyone in your company, leading to duplication and losses in translation

The world has moved on. Business processes have moved on. People’s work style has moved on. Enterprises still need all of the foundational capabilities listed above in their trusted financial backbone (Transactions, Transparency, Governance/Compliance, Financial Excellence) but, more than ever, need to add support for the 21st century style of work as well. Finance has to move out of the boring but essential back-office paradigm of operations and reporting and move into a key position for driving growth and change in enterprises. But how? In comes SAP Financials OnDemand, which is already shipping in its first iteration, and will hit its first refresh in November of 2012. Here is a short overview of the system characteristics which I personally think offer a very interesting case for taking a closer look.

  • Single Source of Truth
    • Reconciled data (true data) along multiple dimensions reflecting the real world in real time
  • Real Real time
    • Based on In-Memory technology, designed for analytics, and doing away with the separation between transactional and analytical data stores
  • Intuitive
    • Designed to be easy to use for anyone in your business, not just the financial experts
  • Mobile
    • Native support for mobile devices including iPad and Windows8, getting the informaton to the people whereever they may be
  • Collaborative
    • Built-in workflows and community support so people can take immediate action
  • Open
    • Embedded process library with open integration links to processes beyond the the scope of the built-in order-to-cash and procure-to-pay scenarios
    • Extensible architecture based on Web-Standards
    • Software Development Kit
  • Extensible
    • Other SAP Cloud Applications easy to “clip on” (SAP Travel OnDemand, SAP Sales OnDemand, etc.)
    • Available Application Connectors for non SAP applications, Payroll, Sourcing, etc.
    • Easy business-driven configuration (Click-to-Adapt technology)
  • Global Compliance
    • Global Accounting Standards (IFRS, US-GAAP, ..)
    • Internal controls built into the processes
    • Localization for multiple languages, currencies, …
  • Trusted Cloud
    • Cloud Certifications in Germany, US ..
    • Trusted Data Centers around the world
  • SAP Ecosystem
    • 40 years of business process excellence
    • 1000’s of partners in global ecosystem

I think if I were a CIO or CFO, I’d take a serious look at this right now. A system built by SAP, that can DRASTICALLY simplify my general ledger landscape and EXPONENTIALLY  increase my speed and flexibility in terms of reporting for everyone in my business?

Does that mean people will throw away their existing financial systems and upgrade to SAP Financials OnDemand over night? Heck no! Of course not. Trillions of € are invested in these systems and they form the backbone of the global economy. That would be like trying to do a heart transplant on a marathon runner  WHILE HE IS IN THE RACE. Impossible. But. What IS possible, is to kick-start a new wave of process engineering, or financials re-engineering, if you will. In a an approach of open co-innovation, where we’d look at your specific business situation, identify the opportunities together, focus on the fast moving areas that need accelerated innovation more than others … and get it done. I am personally excited to be part of this new wave. I missed the fun and excitement when this happened in the 90’s (I was playing with databases and middleware then). But I am not going to miss this one .. actually, I am the Launch Captain for the November refresh.

The Launch is coming. At SAPPHIRE NOW in Madrid. Get on board, you don’t want to miss this one …

CHHO, Walldorf, Oct 9, 2012

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  1. Judson Wickham

    If I were a CIO or CFO, I’d wonder what this offers me beyond what are standard financial processes and have been for years. I’d wonder why I should replace my current on-premise, integrated solution with a cloud solution built from the DNA of a SMB solution.

    All the marketing shows flashy iPad stuff, but if I were a CIO or CFO, I’d already have that available to me from a large variety of vendors.

    If I were a CIO or CFO, I’d worry about ‘clipping on’ other processes.

    If I were a CIO or CFO, why wouldn’t I buy the platform that already has the Financials OnDemand and LoB apps built-in: Business ByDesign?

    I realize this is all market positioning, and it’s interesting. But the trend for cloud products is to bring them into the enterprise via departments, not executives. If you can demonstrate real value to Finance departments, I’d expect a lot more success than targeting CFO’s that generally just care about the end result.

    If I am correct in my assumptions, there will also be a lot of ‘standard’ features for a financial platform not included in this one, like consolidation. As soon as I get a spare week, I intend to develop consolidation for ByD. Maybe you can use it in FoD.

    1. Christian Horak Post author

      Hi Judson, let me try to answer in a bit more detail

      – the first point, I don’t think all CFO’s will replace their existing systems, but then again, that depends on the type of business they are in, and in the case of larger companies that have lots of business units, doing mergers, acquistions, divestitures, yes, there will be a lot of instances where this makes sense

      – on the second point, re DNA of an SMB solution, the SMB DNA relates very much to making things easier to configure and run than classical soltions, and I think CFO’s will see the value of that too.

      – The flashy iPad stuff, agreed, everyone is doing this, the question is, are they doing is based on a single, flexible general ledger that allows dynamic reporting? That’s where the integration of HANA into Financials OnDemand comes in. There won’t be a need to create a separate data warehouse instance or complex aggregations for your basic financial analytics, and since we are thinking in terms of personal, adjustable KPI’s, this will be very appealing to business users, aka. the average Jane and Joe

      – Well, the term “clip on” might be deserving of some criticism, however, not every integration has to be heavy lifting, and sometimes a loosely coupled web service or a mash up will do the job just fine, in other cases you have dedicated integrations. The devil is always in the details, but the direction is to make this drastically simpler

      – There will be a type of customer that will prefer ByDesign over FinOD. The main difference is, do you want one app to run the entire business (unit) or you you want just the financial core that then reaches out into best of breed apps for HR, Sales, Procurement etc.

      I agree that cloud adoption has been largely departmental and outside in. That’s why Financials has not been taken off massively in the cloud yet. Things are changing. A lot of customers are telling us they are going to the cloud strategically, and the CIO will play a huge role in “reigning in” the flea circus of 100’s of Cloud App’s into a governable holistic system that is compliant and secure. The fun here is just about to start!

      You are spot on that we will need a lot of add-on app’s to round out the functionality, that’s why we decided to go to market via partners right from the start. You are totally aware of the rocky road we had with ByDesign on getting the public solution model and the SDK under way and we will continue to push and invest here to make it easier to create these add ons. Looking forward to your consolidation Add-On!!

      1. Judson Wickham

        Good points. I don’t really agree about the iPad stuff, since your average CFO doesn’t care if his flashy dashboards come directly from the source or a data warehouse.

        I do see your point about going to the cloud with a financial core, and integrating the best of breeds.

        You should see Sina Moatamed blogs on this topic.

        1. Christian Horak Post author

          There are mixed views on this. The more you go towards real-time, and even beyond real time into predictive analytics and planning (admittedly in the future as we bring in more HANA) the more you DO care about getting rid of any kind of redundant consolidations, aggregations and ware houses data marts. Is this a panacea, nope, but the new kind of data management you get with colum store, easy full table scans (no indexing needed) compression, flexible attributes, it will make a difference for certain businesses. And yup, yes, I know Sina’s blogs (maybe not all of them, I’ll recheck)

    1. Christian Horak Post author

      Hi Imtihaz

      The financials core of SAP Financials OnDemand, General Ledger, Accounts Payable, Accounts Receivable, etc. is identical to the financials core of SAP Business ByDesign. The main difference is that the financials engine of FinOD does not assume that it’s subledgers are “fed” by other ByD components, but instead can accept input from anywhere in a proscribed format. These well defined feeds are the foundation for integration, to you can have a complete end to end view (Income statement, profitability, etc.) though the inputs could come from attached best-of-breed components, such as HR, CRM and Procurement. In that way FinOD can function as a financial hub.

      1. Imtihaz Hussein


        Thank you for the response and clarification. So if you currently have just the Finance modules of Business ByDesign today is this essentially exactly the same as SAP Financials OnDemand? Also, on the integration of HANA on the OnDemand solution, does this also apply to Business ByDesign?



        1. Christian Horak Post author

          Hi Imtihaz, for the moment this is correct. What we have with FinOD in addition, is the availability of the Native iPad app “Business in Focus” that allows users to build a personal financial news and KPI dashboard. HANA is being deployed first into FinOD, but we are also planning to put HANA inside ByD in the future. We expect higher data volumes and transaction rates in the Large Enterprise, that’s why HANA goes into FinOD first. Also, the integrations to Employee Central and Ariba will be accellerated on the FinOD base, since ByD has its own, embedded HR and Sourcing capabilities.

      2. Judson Wickham


        Realistically, this is no difference from ByDesign. Any customer can implement core ByD Financials, then ‘feed’ the subledgers from external applications using publicly available ByD web services.

        I would like to do a parallel case study on Financials OnDemand + tons of integration vs. ByD core financials + tons of integration vs fully-scoped ByD.

        Also, when you get your first FoD customer, I’ll be happy to join the implementation team. 🙂

        1. Christian Horak Post author

          Judson, sounds good, re case study!  There is a real difference, however. FinOD is targetted at the large enterprise where we assume a fully functioning CRM/HRM/SRM system to be already there .. So for those companies that have these best of breed solution components in place, it would not make much sense for them to deploy the whole suite, just to get the Financials. The difference now is relatively small, but as both products will evolve, the number of plug-in adapters to connect to FinOD will grow and mature rapidly. But, you are right of course, with both products sharing the same financial core, one could say they are very similar if you only deploy the finance bit.

          1. Judson Wickham

            I understand it’s a marketing play, but you can easily deliver a ByD pre-scoped Financials package. No one ever deploys the WHOLE suite at first.

            The real difference to me is that it can be enhanced by the Cloud Studio, it has the LoB UI structure, and that’s about it.

            I am just extremely skeptical about this product. If you assume fully functional CRM/HRM/SRM systems in place, you must also realize that every large enterprise already has a financial system in place, that is probably extremely customized. I doubt many companies would want to rip out their financial system just to go to the cloud. In fact, I think large enterprises with a CFO that has ‘cloud fever’ would be the only ones to even consider this move.

            I hope I’m wrong, but I don’t see the market being receptive to this product until the current wave of enterprise financial systems become obsolete. That could be 10+ years from now.

            1. Christian Horak Post author

              Hey Judson, I am completely open to any kind of skepticism here, you are not alone with that point of view and I talked to dozens of people at SAPPHIRE NOW, each with a slightly different point of view. I am not trying to convince you, but just using this thread to have an open dialog. I don’t agree that it will take 10 years, though. There are thousands, if not millions of financial systems out there that are not up to modern standards. Again, we don’t expect the large enterprises to toss out their core systems, but to selectively deploy Financials OnDemand in sattelite systems, or for mergers, acquistions etc. This will also be the case for upper mid market. And having the choice between a full suite like ByD, or a smaller more focussed offering like FinOD is just a good idea in my book. Also, as we keep ramping up the integration with our own offerings from SFSF (Employee Central, Ariba, Jam), the value of the FinOD as hub will continue to increase. I also expect that our partners will write a whole range of adapters to other 3rd party apps, including deep integration with SalesForce for example.

              1. Judson Wickham

                As a partner, I honestly can’t wait to develop integrations to a whole host of modern cloud products. Is there a timeline for releasing re-selling and development for the channel?

                I still hold firm that this is ByD in a Prom dress, but I’m definitely ready to go to Prom.


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