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The insideEdge (SAPinsider Vol. 4, Iss. 2)

by Hans-Dieter Scheuermann | SAPinsider

April 1, 2003

by Hans-Dieter Scheuermann, Senior Vice President, GBU Financials, SAP AG SAPinsider - 2003 (Volume 4), April (Issue 2)
 

When CFOs like Larry Carter of Cisco Systems assert that “it’s no longer about the big beating the small, it’s about the fast beating the slow,” and fund managers demonstrate that they are prepared to pay up to 20% more for companies that can publish trusted, transparent financial statements, companies have got to take notice.

You need to assess whether your financial processes inhibit or promote these market imperatives. And if there are any lingering doubts as to the pressing need for a finance organization to be able to effect a “fast close” and more accurate, transparent reporting, just look at recent headlines. The demise of Enron, WorldCom, Tyco, and others were not momentary news blips. The repercussions are being acutely felt worldwide, and will be for years to come. The CFO and CEO of any corporation listed on any U.S. stock exchange, for example, have to personally certify that the corporate financial statements do not contain material false facts. At the same time, companies will be required to disclose more extensive information in a shorter time (see the latest SEC initiatives). This is not an easy task, and represents one of today’s major challenges for CFOs.

The problem is that traditional financial reporting techniques and processes are too cumbersome to enable organizations to deliver financial information with more trusted figures and with far greater speed and accuracy. What’s more, if they cannot deliver internal management reports and forecasts faster, they will be unable to manage internally what they must report externally.

What stands in the way? Well, setting up the accounts and generating timely forecasts that account for all subsidiaries is complicated, particularly for multinationals. Also a “period” isn’t necessarily a fixed number of days anymore; it may be tied to a project’s lifecycle. Transparency of operations across disparate systems is yet another hurdle, and so is reorienting your processes and organization to adhere to new or multinational accounting standards. What is needed is a new approach to accounting, reporting, and forecasting, with new processes, organizational models, and systems.

How else can you attempt to develop, execute, or refine an effective strategy and manage performance when you’re grappling with inaccurate figures, periodic closes that take you by surprise, unclear reporting processes, auditors who require lengthy review cycle times, and differences in accounting principles? The quality and transparency of your financial data and the speed with which it’s delivered are inextricably linked to sound management and forecasting processes.

SAP solutions can help.

In this day and age, I understand the reluctance to embrace anything that is perceived as introducing costs. Let me assure you — every SAP customer can afford faster, more accurate, more trusted financial processes. You’ve got the groundwork in place with your current SAP implementation. What you will find is that SAP solutions can reduce your cost of finance by as much as 44% (Source: The Hackett Group). Our solutions will also enable you to achieve tighter linkage between finance and other key business processes, increased accountability and control, and ultimately better insights and decision making — benefits you now can’t afford to be without.

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