SAP Insider Finance 2014 Keynote Notes – We’ve Always Done it That Way
Today I watched Finance 2014 and GRC keynote online, headlined by SAP’s Christian Rodatus. He also had a panel of Finance experts.
Figure 1: Source: SAP
Today Finance still has to do period close
Finance can’t shift from key resources to work strategic projects; Finance has to manage the balance
CFO Publishing reports that only 19% of Finance teams spend time on value adding analytics versus day to day transactions
42% spend majority with lower value add activities
80% need to do more in Big Data space
Finance needs the ability to simulate high impact business decisions
Finance needs to be empowered to spend less time on low-value activities and more on contributing to growth says
Figure 2: Source: SAP
Figure 2 shows the challenges today. One is Execute which is new notion of self service to lines of business (LoB) directly
Control is managing and reducing risks; bring to other LoB’s
Predict: eBay example is all about predictions; advanced technology. Finance is a perfect place for predictions
Figure 3: Source: SAP
Figure 3 shows the panel from today’s keynote.
Bill Sinnett said they performed an FEI CFO Survey. CFO’s are more positive about national economy and business; one third plan substantial improvements including technology. Their chief concern is government regulation, including Healthcare act
Rob said state tax authorities are automating their tax departments; will be smarter
Celina said they survey every quarter. Their CFO Duke survey results show optimism about economy; interest in spending in technology; top concern is consumer demand; following up on that is regulation scrutiny and tax anxiety
Q: How see role of finance changing?
A: Celina sees it changing from information steward to more strategic partner; IT is similar.
She sees it as a set of moving targets including change in organization. Growth means evolution and change. She said it is a moving target on regulatory side – move towards regulatory scrutiny and transparency and automating tax departments.
Bill said analytics. Typically Finance records transactions looking back and now more forward looking and includes collaboration. They have a need for predictive and a need to collaborate
Rob said it is a mindset, that those trained in Accounting doing things over and over. “We’ve always done it that way” are the six most expensive words in Finance.
Figure 4: Source: SAP
Figure 4 shows an audience poll question and the response.
Q: What type of research doing?
Rob said they are looking new leadership from latest generation
Newer leaders are more familiar with technology; getting your organization to a more advanced role in organization
Celina said she is looking at more high valued analytic activities. She said it is important to think of these things as a different from IT spending and look at a more project oriented approach of investing. She said to avoid lumping in with IT spending
Q: Rob talked about a new generation, Celina adopting new technology – how do you see resources being deployed
A: Celina said a new generation of executives with new expectations of what IT can and can’t do
She said they find in business lines that decision makers expect an ease of use like what they have in their consumer lives
Rob said they need someone who can think of T accounts and multidimensional database terms
Bill suggested putting Finance in business units
They also said they need knowledge of unstructured data and how to use it.
Q: Any examples of how see technology drive changes
A: They have seen an evolution towards performance management paradigm (for IT as well)
They have a set of methodology and metrics in place that allows you to understand key drivers of business and performance – sense and respond in landscape
What is changing now is the approach is being disruptive technology like Big Data Analytics
Internal data maintaining about company is better – focus on cleaning data “single version of truth”
Analytical prowess will tell you a logical story of how to better make decisions
At the edge – what happens when decision making is based on probability and correlations using Big Data capabilities?
What if external data on performance is as useful as a predictor? External investors can know?
Q: Big data is a buzzword – 80% think Big Data is important for finance; how kick off big data projects in Finance?
Rob said he is not see this translating into concrete projects for organizations
Rob sees today’s focus is on sales/marketing – not finance
Finance should see how use use Big Data to improve Accounts Receivable.
If a customer doesn’t pay on the 45th day today it goes into collection
As an example, say on the 23rd day they send a note if something is wrong – they pay and makes AR front line of customer service
Figure 5: Source: SAP
Figure 5 shows another audience polling question. One of the panelists said they have seen this response in past 5 years to facilitate analysis and decision making. Why saying this past 5 years? This is under BI
Celina said distractions, drives for efficiency, carve away from that
Bill said Finance has the “drive for BI” but under budget for it. They also have to “do more with less” but now face more and more regulations.
Technology is moving so fast, are CFO’s not buying to see what happens?
Rob said he did a survey on the close process
- Companies taking longer to close – 2012 vs 2007
- Regulation was an issue for finance; not impact on close
- In recession, Finance staffs were cut back and not hired back
- Better performing finance organizations limited use of spreadsheets in close process
- Companies on manual process and spreadsheets – had fewer people to do work
- Find opportunities to fix little things one by one; continuous improvement
Celina suggested that Finance should discuss with other organizations
Q: Mobile technology, cloud computing, shorten decision cycles, lower cost, faster time to application within finance function
A: Celina has done a study of cloud and mobile. She said the real sense of promise of mobile is to create a 2 way conversation between finance and operations
With Cloud they are exploring and understanding and the real excitement is that cloud may start to scrub away technical difficulties of single version of truth to gain access to most powerful analytics possible
The panelist predicts that CFO’s will be in a hybrid environment – on premise and cloud
If start today would start in cloud but not practical
Bill said they are concerned about security – our data integrity and leakage
- It is up to providers and vendors explain the security controls
Rob agrees; think companies’ disaster plan is a disaster (for on premise)
- If in cloud and have a disaster on premise your cloud is still working
- Backup to cloud – Dynamics – one button click to back up finance data to Azure data center
- Thinks we’ll be in hybrid situation forever
- Cloud outsourcing is good for “regular stuff”
This was the end of the panel.