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Taming Complexity in Finance: Keep it Simple

by Chris Horak | SAPinsider, Volume 16, Issue 1

January 1, 2015

New demands for instantly available financial information and visibility into every aspect of an organization’s financial landscape mean that finance organizations can no longer operate as bland back-office activities. Read about how SAP Simple Finance is redefining the role of financial organizations and enabling them to become strategic, innovation-driving partners to the business.


Balancing the books on time and without error rarely evokes the same level of enthusiasm throughout a company as, say, landing that big win in sales or releasing a shiny new product. Let’s face it: While complying with rules and regulations is vastly preferable to federal agents barging through the front door, it’s not exciting. It’s expected. It’s business as usual. This might be unfair, but it is how many organizations view the finance function — at least until recently.

Companies are recognizing that the traditional way of running finance is no longer sufficient in today’s fast-moving, tumultuous economy. Where closing the books once a month was previously the recognized standard of a job well done, today’s finance organization requires an unprecedented level of responsiveness and agility: The pace of change has accelerated to an almost frenetic rate. Information consumers demand instant visibility into their key data on their mobile devices. Global competition forces companies to constantly review their business models and strategies to enhance their competitive edge. Finance experts have to transform the finance function from a bland, non-value-added backoffice activity into a strategic partner of the business and a driver of innovation.

An Opportunity to Innovate

Significant advances in cloud, mobility, and in-memory computing present a ripe opportunity — if not a mandate — to harvest this innovation for business advantage. Traditionally, technological limitations — such as the need for separate transactional and analytical systems — led to the familiar, staid practice of regular, time-consuming financial reconciliation cycles. With so much time spent in reconciliation and consolidation, strategic planning was, if not an afterthought, certainly not considered integral to the finance mission.

Now, with the advent of in-memory computing, the line separating OLTP and OLAP is blurring. With real-time analysis possible on live ERP data, and with modern analytics solutions and instant delivery to mobile devices simplifying enterprise-wide consumption of relevant information, finance can finally tackle the task of transforming into a strategic asset for the company. However, becoming a strategic asset means more than just performing the same functions faster. Closing the books faster in and of itself is a worthwhile objective, but significant value lies in what you can do because of it. Purchasing, financing, and pricing decisions can be made with more confidence by knowing the organization’s cash standing at any given moment based on up-to-the-second transactions. Or consider the benefits of shortening the long-term planning window. For even the largest multinationals, this is akin to bringing the same visibility and transparency into financial operations that a mom-and-pop business counting up cash receipts enjoys on a daily basis.

Simple Means Simple

This, in a nutshell, is the promise behind SAP Simple Finance, the new SAP finance portfolio powered by SAP HANA that makes even the most difficult financial tasks simpler to perform. Simplicity of course does not mean running the financial operations of a 50,000-employee multinational organization out of a cash register. It means stripping away long-standing obstacles that have prevented finance from becoming a strategic corporate function.

With SAP Simple Finance, organizations no longer need vast resources for reconciliation. Wait cycles can be minimized or eliminated and real-time financial insight based on a single source of truth can become a business staple. In addition, by optionally deploying SAP Simple Finance in SAP HANA Enterprise Cloud, organizations can free themselves from the burden and risk of having to purchase and manage the solution landscape, thereby reducing the resources and complexity that might otherwise serve as barriers to fulfilling the mission of finance as a strategic business partner.

Empowering the Finance Consumer

That is all very well for an organization’s bottom line, but it’s also important to consider the needs of the business consumers, who have become more demanding and more mobile at the same time. What does transforming finance into a strategic asset for the business mean from a user’s perspective? How are users interacting with this platform to help drive that business value?

Consider the various responsibilities that the finance organization assumes every day, be it planning, budget allocations, cash flow analysis, account consolidations, or dozens of other tasks. Users are thinking about the tasks at hand, not the screens where these tasks take place. This is why SAP Simple Finance was developed with the SAP Fiori framework — to provide users with a consistent, intuitive, modern, and personalized look and feel. Finance-based apps built on SAP Fiori focus not so much on the overarching system, but on what the user wants to accomplish, with a fresh, responsive design for a seamless experience across various platforms and devices.

By empowering the finance consumer in this way, innovation is no longer the sole domain of, say, customer relationship management or human resource management, where transformative change has been afoot for years. SAP Simple Finance brings this same dynamism and drive into the finance organization.

Reimagining the Possibilities

Since SAP Simple Finance was released in June 2014, we have heard customers ask, “Why did you call it ‘simple?’ Finance is not simple!” For customers that have long understood finance to mean a complex system of transactional and analytical solutions, disparate data sources, and manual reconciliations all coming together perfectly just to meet periodic close targets, finance is indeed not simple.

But when that complexity is taken away, finance can indeed become simple: Simple in the context of an instant, accessible, and intuitive process, where running a massive finance organization can, in many ways, be just as clear-cut, visible, and transparent as a ringing cash register in a mom-and-pop corner store.

Achieving this transformation requires a journey as unique as each customer. However, like any other journey, the transformation starts with the first step. As always, SAP and its ecosystem of partners can lend an important hand to help customers understand the potential of a reimagined financial operation. And because SAP Fiori and SAP HANA Enterprise Cloud are key components of SAP Simple Finance, we can also help enrich and extend the solution from an application development standpoint.

A Mandate for Transformation

Business is increasingly prioritizing speed and agility, while still placing the same extreme demands on governance, compliance, accuracy, and stability. To not only keep up with these conditions, but to flourish under them, finance must look beyond operational steadiness and focus on collecting real-time financial information from a single, accessible, and intuitive source of truth to serve as a rock-solid foundation for business innovation. SAP Simple Finance can help organizations complete this transformation.

Additional resource: SAP Simple Finance -- New Options in Profitability Analysis. This in-depth article can be found in the Financials Expert online content library (subscription required). Readers will get a detailed look at how the use of SAP HANA as a database opens up new options for profitability reporting.

Looking for more on SAP Simple Finance?
Check out Financials 2015, June 16-18 in Nice, France. Financials 2015 is the most important event of the year for financial and IT professionals who work with SAP® solutions for financial accounting, control, planning, consolidation, closings, and reporting. Don’t miss this unique opportunity to network with your peers and experience in-depth education presented by some of the best names in the industry, leading customers, and SAP® solution experts.

For more information and to register

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Chris Horak
Chris Horak

Global Vice President
Finance Line-of-Business, Solution Marketing

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