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How Finance Supports the Enterprise

Introduction – Finance is at the heart of an enterprise and, as such, is uniquely positioned to support the business with critical information for agile business decision-making. 

We all know that Finance sits at the heart of the enterprise, monitoring the corporate pulse, keeping an eye on plans, budgets and costs; reporting results to the wider world.

We have also learned that the role of Finance has been changing gradually over the years but, now, it is due to change further and faster thanks to developments in innovation and technology. Such quantum leaps in the world of Finance have only been witnessed on rare occasions in history:

  • The advent of the abacus (circa third millennium BCE, Mesopotamia).
  • Brahmagupta’s seminal text Brahma Sphuta Siddhanta containing the first mathematical treatment of zero (7 century BCE, India).
  • Double entry book-keeping (codified by the Italian monk Luca Pacioli in the late 15th century).
  • SAP, the world’s first integrated business software suite (late 20th century).

The strategic CFO

The needs of the CFO have changed. CFOs are now business strategists. Of course, “keeping the lights on” is still very important but the way to do so has changed dramatically. Intelligent innovations have automated, simplified, streamlined and, in some cases, removed redundant processes from much of the day to day, manually intensive, transactional work. Technology has transformed Finance across the board by changing:

  • reconciliations into analysis,
  • reports into real-time insight,
  • historical performance into predictive future outcomes, and
  • firefighting fraud into embedded controls and compliance.

All of this means that CFOs can turn their energies to helping the C-suite shape and execute business strategy. CFOs can now provide in-depth, granular as you like, real time views of holistic global performance, effectively super-charging the executive decision-making process.

The Hackett Group summarizes how Finance helps meet today’s global challenges as follows:

The Hackett Group: World-Class Finance: Redefining Performance in a Digital Era, 2019 (https://www.thehackettgroup.com/world-class-fin-1905/)

 

Global seismic shocks, such as the coronavirus pandemic of 2020, highlight the need for agility and cost optimization across all lines of business (LoB) in the enterprise. The Finance department is uniquely positioned to support all LoBs with the critical analysis and data they will need to make better, quicker and more agile business decisions.

Finance leads the way

Finance departments play a key role, not only as business partners but also as business mentors. Key to successfully making any significant change is recognizing the need to do so from a perspective of value, rather than just cost. Lets look at some compelling benchmark data.

Comparative cost of Finance by industry from PwC’s Finance effectiveness benchmarking report:

Depending on the size and scale of the enterprise, even a small fraction of a percentage-point improvement can yield significant value – all operational cost savings flow directly to the bottom line, improving net margins, delighting CFOs, CEOs and shareholders alike.

The value of S/4HANA Finance

Companies moving from traditional ERP to SAP S/4HANA have realized significant benefits. As each enterprise is at a different level of maturity, SAP can work with you to determine your value proposition. Figures from SAP benchmarking exercises show just how significant the potential for improvement is:


Utilize these great resources:

SAP’s Global Finance and Risk Value Advisory Team

We are here to help you in supporting you with art-of-the-possible workshops and value case development.

Any questions or comments, please follow this link: https://answers.sap.com/tags/67837800100800006927

 

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