Check out a transcript from one of the question and answer sessions done with our #Financials2013 speaker Carsten Hilker of SAP.
Critical reporting strategies in SAP ERP Financials
An exclusive podcast with Financials Expert, Carsten Hilker
Carsten will be one of the featured speakers at SAPinsider’s SAP Financials 2013 conference in Amsterdam, June 11-13. FOr more info on the event visit our website at SAP Financials 2013 and follow me on Twitter @AllisonMartin14
Allison Martin, Financials 2013: Hi, my name is Allison Martin with SAPinsider and I am the conference producer of the SAPinsider Financials event.
I am joined today by Carsten Hilker who is a Solution Manager on the Line-of-Business Finance team at SAP, and is also a very well-known speaker at our Financials events.
To start off, would you mind giving us a bit of background on yourself and how long you’ve been working in the area of SAP financials?
Carsten Hilker, SAP: Sure. I’ve worked with SAP ERP CO and FI predominately since the ‘90s, initially as a consultant implementing finance and more and more all the modules of CO. And subsequently I joined SAP directly and worked in various solution management roles — right now within line-of-business finance, focusing on Performance Management on our CO modules and our EPM modules.
Allison: Thanks so much again for joining us. The purpose of today’s podcast is to really help listeners get a better understanding of the financial reporting capabilities in SAP, a topic that you’re presenting on at our Financials 2013 in a few weeks.
What would you say are some of the key factors that an organization really needs to consider when developing its financial reporting strategy?
Carsten: Well, it’s not the same anymore, right? Ten years ago was easy. There was a module and every module included some master data, some configuration, some transaction process and capability, and reporting. Reporting was part of the module.
And since then we all kind of got to appreciate a BW system where we’re able to basically pull data out and bring it together from different modules, from different applications. We had the initial reporting, front-end on tops, maybe something like BEx or something.
A couple of years ago we merged with BusinessObjects and we’ve got now their entire BusinessObjects BI toolset that ranges from dashboards to line-item explorers to formatted reporting.
That also serves different kinds of people. At the beginning it was one report and it didn’t matter if you are a regular person, analyst, a manager, or an executive. You looked at the same kind of data.
And today you have a choice. So there are more choices for our customers to say, “Well, what do I need to deliver? Who do I need to deliver the information for? And how do I have to deliver it?”
So now we’re talking about access mechanisms like mobile — mobile devices, little phones, iPads. They all have different real estate on there, and so different ways of bringing information to a customer are available today. Many of these now have to be delivered on the desktop or on the mobile as well. And some of this information sits in the cloud. So, many, many more choices and decisions to take.
I think people need to be aware of what the capabilities of the solutions are. People need to come up with what’s important to them: Who are they going to develop these reports for? What kinds of roles are they delivering information for? What kind of personas fit behind that? And then I also have to take a pragmatic approach. There’s so much there and it will not stop developing – in visualizations especially — and predefined analytics will just be more and more in demand.
So go with something, make it work, and then if there’s additional need, see what else you can do. But there are many, many more choices than 10 ten years ago.
Allison: As you mentioned, we know that there are more than a few options for performing financial reporting in SAP.
Can you provide a brief overview of those options and which ones you’ve seen to be the most adopted by SAP customers?
Carsten: Sure. I think mass adoption really came with, BW first, right? People always had those standard reports that I mentioned and the end users are using them or continue to use them. But BW, I guess, put a different spin on it and often became the corporate report, let’s say, distribution mechanism. So we’ve seen that widely adopted.
What we see less now, but growing, is, I think, all the BI tools. People put more emphasis, companies put more emphasis, on the information that needs to be delivered — not just data in a spreadsheet or a list format — and focusing on the users. So it’s a very, very fast-growing segment. There’s still a lot of room to grow for our customers to adopt these kinds of technologies.
And I think the latest is really analytics. If you look at it up to now, we gave the customers a good number of choices in regards to tools to put this information together, right? We had the underlying transaction systems, we had the way to store the data, like COPA or BW, and we put those front-ends on top that allow you to generate a report.
Now there’s a lot of emphasis on predefining reports and purposeful reports so our customers don’t have to do it. We can share the best practices across our customers and also make this available quicker and faster. And these technologies are often based on our own solutions, so some of them are dashboards or predefined reporting.
You will see more and more analytics, especially based on HANA, because now we can do more things with them. I think this is where the adoption is the lowest just because it is the latest and greatest and newest area, and we will see a lot of adoption there – and I think also the highest business value. There are studies out from analysts like Ovum that say a dollar invested in analytics, predefined analytics, gives you a return of ten dollars. So there are not many more areas where we can achieve a similar high ROI.
So a lot from the old world, lots to transform, lots more to do on visualization and really bringing really information to people, instead of just reports.
Allison: I know you had mentioned analytics, and there does currently seem to be a lot of buzz around mobility and analytics in the market.
Can you briefly discuss what you see to be the driving factors behind this?
Carsten: Sure. I think the number one thing is that we as private people, as consumers, we are used to getting information now in different ways. We’re used to getting them in a very effective way. Logging into Yahoo Stocks is a perfect example. We have this on our phones, we might have it on our iPad. I click on it, I see my top five stocks, I see the trends, the current price, and maybe some information to it. I don’t need to log on to any system anymore. I don’t have to VPN in, put a secure access code and wait until the systems boots and starts — it’s just there.
I think what would drives a lot about this mobile thing is the way that we are able in our private lives to access information and use it.
And it’s both: It’s being on the road, being away, being mobile anywhere, anytime; but the second thing is really the user experience of these mobile applications. So that’s, I think, a lot of what’s driving the bus behind mobile.
With it, I think, also comes a renewal of the functionality. In the past we often looked at ERP or other systems as transaction processing systems. The focus was on entering one transaction with all the data that was required. And today we do much more. These mobile applications support processes, or maybe process steps. They bring together information maybe from different kinds of modules or maybe even use different capabilities.
You can capture travel expenses because your phone has a camera, and you can capture this. There’s no scanning anymore. So the technology and what we experience in our private lives now drives the demand and the renewal of the applications that we have in our business suite.
And with it comes analytics, right? We don’t want to pull up a report anymore that’s list-based. We don’t want to sort it manually and put a filter on it and create a graphic, and then start all over and create the next aspect. We want this to come out of the box.
I want to be able to, for example, look at the fishbone chart that tells me that these are the five customers I lose money with. I want to see waterfall chart to see out of the revenue that I make, what are the largest cost components, so if I want to change one I know I go after the largest. I want to have modeling and simulation capabilities within these graphics to say, “What if I change this? What’s the impact so I can find out what the impact would be before I enact it?”
So a lot of I think development on the mobile side, on the analytics side, lots more to come.
But what’s key already is that those companies that decide to go for solutions with a mobile analytics, they typically have a high ROI and that can extend to user satisfaction as well. And that sometimes may be more of a soft factor, but a really important factor.
Allison: And finally, another hot topic with regards to financial reporting is SAP HANA.
What opportunities does this provide for reporting and how can customers leverage it?
Carsten: That’s actually a good one because I think not many people know that you can use SAP HANA with ERP levels as low as 4.6C, which is basically everyone within SAP. And I think that’s really important.
What differentiates the different release levels is what you can do. If you run 4.6C, you can replicate the data onto an SAP HANA database and you can basically leverage it for faster reporting. You can put BusinessObjects BI on top of it, Explorer for example, perfect for COPA analysis. All line items, all dimensions are there, instant response time — and with 4.6C.
Now the second scenario would be where you have an accelerator. So for example, you have reporting in ERP, CO reporting, FI reporting, COPA reporting — you want that to be faster, or maybe even transactions or processes would be faster, like month-end allocations, top-down allocations, these kinds of things. Similar things, so you can basically replicate the data from your ERP system onto SAP HANA. And if you’re on ECC 6.0 to 6.5 and higher, you can basically then read that data that sits on HANA and you accelerate your ERP reporting and your ERP processes.
If you’re not on ERP EHP 5 yet, you can apply a downward compatible kernel, and you can achieve the same functionality. The kernel is just there so that basically the ERP system can communicate with HANA. So it can read the data from there.
So this is how you can accelerate reporting. What it does is basically, today companies have a lot of workarounds in place because no one can read the entire amount of data that sits there. So they replicate data into smaller buckets that they can process.
But there’s often a compromise in regards to depth of data. You don’t have all the line items eventually. You don’t have all the dimensions. You might not have all the time lines available, so maybe you have just current period, this business unit, and maybe just a subsegment of the data. And that’s a limitation because it means people need to jump between different reports, just so the performance works, and it means also that you never have the complete picture. So any of these kinds of restrictions go away.
So now reporting is based on HANA, you have access to all the data, line items ever reposted, all the dimensions and the fields within. There’s no aggregation necessary. There’s no duplication of reporting. Objects, let’s just say, you can sometimes just use one report. So very, very different world, and with something like Explorer, for example, you can put a self-service user interface on top of it, so a user can basically explore all of the data. So very, very different world compared to the past.
And I think the last aspect is that with SAP HANA now we have a solution available called SAP HANA Live, and that basically is HANA data on top of a virtual data model that is more, let’s say, end-user applicable. So if you want to generate your reports based on ERP data, because that’s what sits on HANA, you can do this yourself. You don’t have to be a BW expert anymore to do these kinds of things. And you have access directly to ERP data — you don’t have to replicate it onto BW first. You can run it directly from there.
There are some predefined reports available. There will be more and more available in that area called SAP HANA Live. So substantial changes in regards to what we have to offer and how reporting can take place.
Allison: Thanks so much for all of this wonderful information. And thank you so much for your time today. I look forward to hearing you present at the upcoming http://www.financials2013.comSAP Financials 2013 eventin Amsterdam.
Carsten: You’re very welcome. Have a great day.