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Rethinking Analytics in The Midst of Volatility – How to Do It Well

Foresight isn’t about predicting the future. It’s about minimizing the surprise. When the status quo changed everyone’s lives earlier this year, organizations quickly adapted one way or another. In my last blog I talked about ways to successfully adjust and survive disruption in the short term (Navigating your way to savings in the short term). What comes next is perhaps harder still.

We are neither at the beginning nor end of this crisis, but rather in the middle of it. And as these extraordinary times continue, businesses are turning to analytics, Machine Learning and AI to create operational transparency, to better understand and manage risks, as well as to support future looking strategic decision making.

In this blog, I’d like to give you some guidance on how advanced analytics can navigate you through mid-term problem solving in determining the best path forward, and give you a practical example how we at SAP are using analytics to create transparency and manage risk in Global Treasury.

For many organizations, recent events have become a catalyst to re-think their approach to BI and accelerate delivery of business insights. A good place to start is looking at your analytics and data strategy. To effectively accelerate your analytics delivery, you should focus on these three critical areas:

  1. Aligned, Cross-Functional Teams – A recent McKinsey study showed that the two key influencing factors that differentiate successful companies from laggards are an analytics strategy aligned with business goals and the ability to collaborate across business functions. This requires business sponsorship, as well as strong alignment between business and analytics teams.
  2. Agile Delivery – Analytics is no longer delivered in a classical top down waterfall style but rather through constant innovations. This not only requires a culture shift to continually create POCs that fail often and fail early, and to pick and choose successful initiatives to transition from POC to enterprise-wide production use. This also requires you to have the proper data architecture and the right platforms in place.
  3. Data Architecture and Standardized Platforms – In times of data sprawl and data entropy, high quality and well-governed “data products” need to become the single source of truth for both, self-service as well as enterprise-wide, governed analytics. Combined with a platform that supports both business innovation as well as enterprise standard reporting, you can cross the chasm between self-service and proof of concepts to enterprise-wide, governed analytics and reporting.

With these renewed analytics capabilities in place, your organization is much better placed to understand demand, secure the supply chain, support employees and make informed financial and strategic decisions.

 

Real World Example – Analytics In Action

If you’re thinking this all sounds a bit too theoretical, let me share a real-world example of how we put this to use ourselves within SAP. SAP Global Treasury working with the Enterprise Analytics team jointly developed a real-time interactive Global Treasury Dashboard. This dashboard creates operational transparency and helps in managing risk around SAP Group’s cash and liquidity and is instrumental in steering our company through the current crisis.

With the three principles outlined above, the Global Treasury Dashboard has taken treasury reporting to a whole new level. It’s eliminated customized reports, reduced high manual effort down to a minimum, and more importantly delivered a macro view with the ability to drill right down to the micro view, such as share of group-wide USD investments incl. information on yields and maturities.

Besides having agility and the cross-functional collaboration between our treasury and analytics teams, the key ingredient in this project is the data architecture and platform. Thanks to the speed of the middle layer, a unified SAP HANA database with real-time access, we can now drill down to a granular view of our treasury information and run ‘what if’ scenarios that are fully integrated into the Digital Boardroom in SAP Analytics Cloud. It’s a bit like Lego where you can easily take what you want, join it and visualize it.

By following this approach, SAP not only has its own intelligent visualizations, but it also gives users real-time insight on major treasury and finance KPIs, such as Liquidity and Investment Overview, Financial Risk, Indebtedness, and Market Overview. SAP customers can benefit as well, as our learnings have been transformed into business content and connectors that we ship as part of our platform.

Real-time insights and analytical capabilities have become crucial for SAP to navigate through the current situation. Capabilities, like real-time monitoring the group’s liquidity, as well as counterparty credit risk (the likelihood of a financial institution going bankrupt with your money) based on internal and external data are main pillars in successfully surviving this crisis and are two prime examples where advanced analytics can help.

Business leaders must have insight and intelligence at the click of a button to protect employees and customers while managing the economic repercussions of continual uncertainty. That’s because the decisions you make today can and will alter the trajectory of your organization for years to come. To learn more about how to turn data into outcomes, join our SAP Data and Analytics Virtual Forum in September.

I’d like to close by thanking Marvin Schmitt and Steffen Diel from SAP Group Treasury for their support in creating this blog.

Gerd Danner, Vice President Data Management, EMEA-N Center of Excellence

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