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Over the past two months, I have been(re)introducing SAP HANA via a series of blog posts that talk about why HANA is more than just a database how it can massively reduce redundancy and complexity in enterprise data management environments, and how it brings real-time enterprise computing into the realm of the possible. With this entry, I am happy toreport that real-time computing is no longer just a possibility. It’s here.

At last month’s Sapphire conference in Orlando,we introduced SAP Simple Finance, which delivers a real-time financial solution set to enterprises everywhere via the HANA Enterprise Cloud. With SAP Simple Finance, users enjoy the simplicity of secure cloud delivery and a beautifully redesigned user interface, while leveraging new capabilities which promise to do nothing less than transform finance processes and finance departments.

How great can the impact of transitioning to real-time be? Consider the experience of Zurich Insurance: when they set out to improve their global processes for managing finance, they had a few top priorities in mind.  They wanted to deliver a common consolidated accounting system for all countries. They wanted to provide globally consistent accounting and operational procedures. And they wanted to accelerate their core finance processes, especially reporting and close.

Zurich is an early adopter of SAP Accounting powered by SAP HANA. The team at Zurich were able to rapidly implement the new financial suite and found that it met their requirements for a common system and consistent processes worldwide. But it did much more than that.

The new HANA-native environment is transforming Zurich Insurance’s financial operations. General ledger data, which was once variously duplicated and distributed to support reporting and other processes, is becoming a live repository and single source of truth for all finance processes. Zurich discovered that they now have the flexibility to redesign (and simplify) finance processes on the fly. They were able to develop accelerated reporting and monthly close processes in short order and without the kind of massive, labor-intensive effort normally associated with such an undertaking.

And yet, based on a recent validation project, the results they are seeing far surpass what you might expect from a standard optimization or retooling exercise. After implementation, Zurich will enjoy a 65% faster monthly close process and reporting that is 1000 times faster than the previous implementation. Zurich Insurance is experiencing first hand the true power that is real-time computing.

In the new financials suite, all the different finance applications are seamlessly united on the same live SAP HANA platform, which provides a single source of truth. The tremendous boost in reporting speed that Zurich Insurance enjoyed owes to the fact that all the finance data is now in memory. So, for example, there is no need to copy the data, no need to perform a separate extraction to get it into the embedded Business Warehouse environment.

Additionally, the HANA virtual data model provides more seamless access to data than could ever be achieved using a traditional, static model. Reporting can now be implemented in a much more flexible way. Users can run BI tools directly on the data in the production system; there is no need for a separate reporting system. And where previous Finance architectures included a large collection of built-in calculations aimed at saving time by anticipating what questions the user might need to ask, the new suite supports any possible calculation into the dataset. There is no need to try to fine-tune the results.The answers are returned immediately. 

But the shift to real-time finance processes goes beyond just cutting out the middle man (or middleware.) Typically, financial processes are implemented sequentially. So if your organization performs a monthly close, you have a full profitability picture only once a month. Any dependent or downstream processes are also constrained to that monthly timeline. But with financials running on HANA, users can accelerate and even eliminate sequential processes.

Some users are working towards a completely new model: near real-time close. In such a scenario, the closing process adds little or no additional information. The actual close becomes largely a formality. Empowered by real-time access to information, users are also moving from monthly close to a weekly one. Using traditional tools, some large financial institutions spend as many as 18 days each month on closing. Imagine the organizational transformation when enterprises such as these cut their close time to a few hours, and move to a weekly model.

And it doesn’t stop there. Many enterprises are already building a strategy around the implicit and explicit benefits they will be able to derive from closing their books everyday.

Such capabilities may sound impressive, even amazing, but these organizations aren’t adopting radically new processes just to look cool. In an era in which disruption, high volatility, and accelerating change have all become the new normal, these capabilities are becoming basic requirements. Businesses need better and faster updates, and they need processes that don’t entangle or delay each other.

Forecasting and simulation are more critical than they have ever been before. Organizations often need to model every aspect of their business, including full accounting runs. In a standard environment, such a modeling exercise would require a subset of the data, or would take a very long time to process, or both. So either you get a picture based on incomplete data or you get a more complete picture that is out of date by the time you get it. Neither choice is particularly appealing. The HANA platform does away with that choice, providing the ability to develop accurate real-timemodels for integrated planning and advanced predictive analysis.

While this story begins with talking about finance processes, it does not end there. When you move the breadth and depth of functionality that is the entire SAP enterprise portfolio into a live HANA environment, amazing things begin to happen. Suddenly you have seamless access to data coming from all the different solutions. ERP, accounting, planning — all the applications can see each other’s data. So, for example, the planning system can essentially “open” the ERP system and build models directly from live data. At any time you can compare the plan with reality. There is no latency. The comparison is updated in real time.

Real time is here, and the story has only begun. SAP Simple Finance represents not just the next generation of SAP finance applications; it is a foothold in the future of how finance processes will be expected (and assumed) to work going forward. Moreover, these innovations are giving us a glimpse into the kind of business transformation that pervasive real-time computing will enable overall.

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