Are you thinking about the next big accomplishment IT can provide for our colleagues in the finance department? You should be, because now with SAP Simple Finance, we have a great opportunity to transform how finance operates.
CFO.com reported recently that 76% of finance executives think strategic planning will be the biggest area of new demand. You can’t act strategically, however, when so much time is spent on the tactical. Consider:
- 70% of analytics effort is preparing data (IDC, Feb 2013)
- 76% of global companies do not have financial performance data at the ready (Harvard Business Review, 2014)
- 73% of executives think complexity is their biggest IT challenge (Forrester, 2013)
At SAP, we want to attack complexity in finance systems. That is why we took our industry-leading finance solution and re-built it to take full advantage of HANA. The result is Simple Finance. From an IT deployment point-of-view, you can think of Simple Finance as the next version of our finance solution.
I hear all the time from our customers: “What exactly makes Simple Finance simple? What have you simplified? Will it be worth the effort to upgrade?”
This is the first in a series of articles where I will answer these questions. Each article will describe how Simple Finance transforms a key tactical process like reconciliation, analysis, and closing. Simple Finance makes these processes simpler, freeing up finance to focus on the strategic. If you know about these processes, you can explain the benefits of Simple Finance to your finance colleagues in examples that are meaningful to them.
Before we look at specific finance problems, we must first understand the foundation of Simple Finance: HANA. You probably know that HANA at its core is an in-memory database engine. In-memory means that queries run exceedingly fast. But speed alone isn’t good enough. In some cases, it may be worth the upgrade to get queries to run faster. But we want to go further and use the speed to simplify the underlying architecture. How do we do this?
The simplest way to explain it is this: we put everything into one database engine in memory. Queries, transactions—all of it. Because HANA is so fast, and the column store lends itself to excellent compression, we can finally do this. Previously, database architects needed to separate transactions carefully from queries and design redundant data (indices, subtotals) to handle the query workload. Not anymore.
This has a profound impact on finance systems. First, the database footprint is reduced dramatically since we no longer need redundant data. But more importantly for finance, it means we can combine data for two different tasks—transactions and queries—into one data store. This is the beginning of the simplification of finance systems. I hope you’ll read on in the series to see the specific examples. Part 2.