Do you ever pause to think about the miracle that is Google real-time traffic updates? I mean, this has revolutionised my journey to the office – instantaneous updates on journey time, automatic suggestions about the best route to take to avoid delays, the only downside is that now I can’t blame the traffic when I oversleep!
But how does it know? Well simply put, Google uses position and movement data derived from the mobile phones we carry – effectively ‘crowd sourcing’ traffic information. So now I can plan my journey – and then Google will help me to re-plan and re-forecast my arrival time accurately – all in real-time, based on detailed information drawn from a vast army of fellow travellers.
Which is a million miles away from the world of financial business planning. Here I compare a plan that was drawn up last year with a static set of actual results from last month – and try to figure out what to do next. A process that is handled by a small group of finance analysts – often working several steps removed from the operational realities of the business.
But why can’t the two approaches converge? Why can’t I have real-time data in my business planning process? Why can’t I gather information from operations that automatically updates my financial plans?
The answer is that up until now the business planning process has been limited by technology. Old disk-based storage systems simply cannot cope with analysing large volumes of transaction data. So meaningful information has to be extracted, then summarised, then transferred to spreadsheets or dedicated planning systems, getting out of date in the process, and then needing to be reconciled, and adjusted to maintain any relevance to the real world.
But recent developments from SAP hold out the promise of something better – something much more like the Google world of real-time traffic planning. Based on the new SAP HANA in-memory platform, SAP S/4 HANA Finance allows analytic processes such as modelling and forecasting to take place directly on transactional (operational) data. So as insights are gathered from the business in real-time (think of the army of travellers with their mobile phones), these can be turned into financial outcomes directly feeding into the business planning process.
Just think of the benefits of being able to plan in real-time across your entire organisation, drawing on the insights of front-line staff – no longer restricted to a small team of over-worked finance analysts. You’ll be able to adapt your plans rapidly as market conditions change – just like Google maps can warn you of a sudden incident and suggest an alternative route to get you to your destination on time.
Just think how valuable it will be to have everyone in your organisation working from the same set of information – and in real time. You’ll be able to avoid the risk of missing the quarter, losing sight of high-profile customers, or dropping market share.
But just think what it might mean for your company if your competitors got hold of these capabilities before you do… oh! Better find out more quickly – for more on S/4 HANA Finance go to http://go.sap.com/solution/lob/finance.html or to learn more about next generation business planning go to http://go.sap.com/solution/lob/finance/financial-planning-analysis.html