Becoming a Financial Athlete: How SAP is Helping Finance Become more Agile
What does it mean when we talk about finance organizations becoming more agile? Well, in simple terms, it means being able to respond to changes in the business and its financial reporting, analytics and processes quickly and effectively. Organizations change in a variety of ways such as new acquisitions, spin-offs and joint ventures to name a few. Often it’s difficult for their financial management systems to adapt to these new changes without costly re-engineering. But responding to change means more than just modifying the chart of accounts to accommodate a new organization structure. It also means adapting business processes such as procure-to-pay, order-to-cash and the way in which the company closes its books to the new realities. In SAP Financials OnDemand, our new cloud-based financial management application, we’ve addressed these requirements to not only allow the system to be easily configured to the organization’s changes, we’ve also “future-proofed” it to enable it to adapt by enabling business people to make these changes relatively easily without having to depend on skilled IT people to support them.
SAP Financials OnDemand uses the SAP Business ByDesign platform and borrows many of the features that makes that application unique; one of the more important is its native configurability. Prior to implementation, business people can configure the system to their organization structure using the business configuration work center. This module uses very intuitive “drag and drop” visual design capabilities to set up organization structures. From the same module, you can assign attributes to each organization unit such as cost center, profit center, and the like. Further, to accommodate the requirements of multi-national companies, you can assign to each organization unit financial attributes such as the financial reporting standards it uses (IFRS, US-GAAP and local accounting standards) its transaction currency and tax jurisdiction by simply selecting these options from the configuration list. This sets up the organization’s financial reporting structure and makes it easy to post financial transactions and allocate costs and revenues to it for reporting purposes. The same capability applies after you’ve implemented Financials OnDemand to accommodate change such as when a new organization unit needs to be added or deleted due to a business event such as a spinoff or acquisition. Of course, the benefit for finance professionals is you can immediately make use of these business changes to accommodate your financial transaction and reporting requirements.
Another option to help your finance department be more agile is the way the system allows you to simplify reporting through the use of tagging. Tagging provides Google-like search capabilities on Financials OnDemand’s transactional data that can be organized in analytic views. I covered this in greater detail in my previous blog.http://http://scn.sap.com/people/jim.daddario/blog/2012/10/10/simplifying-the-general-ledger-to-achieve-greater-business-insight
For both finance people and non-financial knowledge workers across the business, Financials OnDemand’s intuitive user interface is completely configurable to provide user defined views analytic information that’s delivered pervasively across the business. Finance people can take advantage of similar analytics embedded in their transaction screens. For example, accounts receivable people can take advantage of analytic views that show receivables aging and drill down into each customer’s account detail in the same screen where they would generate a customer invoice, check on a past due invoice or post a customer payment.
All of what I’ve described points to Financials OnDemand’s capabilities at the user level. However, what happens when more complex change requirements arise? Assimilating a new company into your existing organization can become very complicated, particularly when the acquired company has their own IT systems that are still providing utility and not yet fully depreciated. The “rip and replace” method is often too disruptive because of existing business processes, reporting requirements and user familiarity, let alone the need to preserve the investment in valuable IT assets. SAP Financials OnDemand is built to accommodate this. Whether the acquired company’s systems are on premise or in the cloud, Financials OnDemand uses modern technology to allow you to connect these systems and ensure business process integrity. We do this through open-IT standards and a software development kit that allows your IT people to build the system-to-system connections that enable data to flow unhindered. For example, an acquired company with an on premise procurement system can send purchase orders to SAP Financials OnDemand to ensure a seamless procure-to-pay process while ensuring that rigorous audit trails are available to track the PO all the way through to the vendor payment. These are just some of the ways Finance departments can become more agile through the adoption of modern, cloud based financial management systems. I encourage you to stay tuned to this blog and those of my colleagues for more information on how you can become a more agile finance organization. I also encourage you to watch for our product launch at SAPPHIRENOW in Madrid.
This is a great Article/blog focussing on Finance on Demand, hope to see more inslight of Finance on Demand.