Q: The release of SAP Simple Finance last year represents a big investment in SAP’s finance portfolio. What is the impact of this release for customers?
A: This is a very big topic for SAP. It’s a complete rejuvenation of our finance portfolio under the SAP Simple Finance umbrella, and three major components are converging to give this platform transformative value for our customers. First, the entire platform is supported by SAP HANA, so real-time analytics is part and parcel of everything the system touches. Along with this comes the need to bring this information to everyone in the organization with a seamless, cross-platform user experience, which makes SAP Fiori the second important component. The third is the SAP HANA Enterprise Cloud deployment option, which makes this a unique offering — there isn’t another finance portfolio of this breadth available in the cloud.
That’s the heart of SAP Simple Finance —three innovation pillars that lead to financial transformation.
With SAP Simple Finance, technology limitations that hampered performance are now lifted, and that opens up a newfound flexibility that can transform the way finance operates.
Q: How does a customer capitalize on this innovation on the path toward that transformation?
A: The value can be thought of as transformative in two ways. It’s transformative for the business — it helps the business derive more value from its financial systems — but it’s also transformative for the IT organization that supports the business. It’s the merging of real-time analytic capabilities, real-time processing, and the ability to consume information much more flexibly. Then there is the change that comes from new user interfaces and consumption technology that bring information directly to end users.
Right now, in a typical finance organization, you have multiple analysts accessing multiple Microsoft Excel spreadsheets, moving from one to another and having to bring all the data together for analysis. And the cycle starts all over again when the data fails to answer the question at hand. With SAP Simple Finance, decision makers will be able to pull information out of their systems in real time without having to wade through pre-built reports. This is more economical for organizations in addition to being more effective and efficient for users.
In short, technology limitations that hampered performance are now lifted, and that opens up a newfound flexibility that can transform the way finance operates. This is true from a transactional standpoint as well, because it allows companies to move away from the traditional sequential close period and look at different ways to completely rebuild their finance processes. Processes can now be more continuous in the sense of being event-driven, so everyone is working ad hoc at any time in the system because they always have access to the latest information. And IT is freed up in terms of both money and time, as cloud deployments allow for more economical, non-disruptive implementations and also require less manual upkeep.
Q: Why did SAP decide to rebrand its finance portfolio as “simple?” This word does not usually spring to mind when thinking about finance processes.
A: Customers should not think of “simple” as a synonym for “dumbing down” finance. On the contrary, “simple” refers to taking complexity out of what have become, for many, unwieldy financial systems.
And this is again the transformative power of in-memory computing — beyond improving performance, it helps SAP reduce system constraints that made things more complicated. While over the years companies experienced significantly improved performance, it came at the cost of added complexity and rigidity. Optimization was not pre-built by SAP, so some companies found that performance wasn’t up to par and they weren’t able to get the information that they needed. So when considering the name SAP Simple Finance in this context, the reason for the term “simple” is that it permits simplicity in the architecture. It’s no longer complicated to calculate anything you want.
Q: In addition to the architecture, does simplicity refer to how users are consuming information?
A: Yes, it does. First, with SAP Fiori, transactional screens are easier to use — a must when considering simplicity.
Second, while a timely look and feel is important, what’s transformative is that within SAP Fiori there are cockpits and dashboards that tie directly to SAP ERP data and integrate with SAP HANA, and that can put information into the hands of decision makers in real time on any device. SAP Fiori cockpits and dashboards are as easy and intuitive to use as any touchscreen application. This enables root cause analysis without any layers that interfere with managers accessing this information. There’s no IT involvement, no replication of data, no data clerks. This is a very big step forward: instant and interactive analysis with a consumer-grade user experience.
Third, in terms of ease of use, are innovations around the SAP BusinessObjects Business Intelligence (BI) portfolio — in particular SAP BusinessObjects Analysis, edition for Microsoft Office, which connects Microsoft Excel directly to data coming from SAP HANA. This means you can work in Microsoft Excel while accessing real-time information. Yes, there are times when more complex modeling or deep profitability analysis requires something more sophisticated than a dashboard, but to have access to terabytes of data with the flexibility and rich capabilities of Microsoft Excel is quite an advancement.
Q: As part of SAP Simple Finance, does SAP HANA Enterprise Cloud extend this concept of reduced complexity?
A: One of the biggest benefits of the cloud movement is the ability to get rid of internal complexity. For the finance user, SAP Simple Finance running on SAP HANA Enterprise Cloud speeds the adoption that accelerates innovation. Outsourcing the complexity to SAP eliminates many of the roadblocks that stifle innovation. You don’t have to buy hardware, invest in new technology skills, or use IT resources to manage complex landscapes or apply updates.
CIOs not only get to reduce costs, they can also focus their attention and the attention of their management and staff on doing more valuable work for their internal customers.
Consolidating SAP finance solutions in the cloud provides great benefits to our customers. Nearly everything in our finance portfolio can run on SAP HANA, and because these solutions can run on SAP HANA, we can also offer them in SAP HANA Enterprise Cloud. This is different from building a cloud portfolio from best-of-breed cloud providers, which brings its own complexity of various interfaces connecting different applications and transmitting data between different servers and providers.
This isn’t the case when customers have their own SAP HANA instances in the cloud, where they can run everything that they’re running on SAP HANA and where all of the data is in the same place. From an integration perspective, this is a big benefit and a differentiator for SAP Simple Finance.
SAP Simple Finance represents a significant number of incremental enhancements since SAP R/3, combined with the power of in-memory computing, an improved and seamless user experience, and cloud deployment capabilities.
Q: What do you see as both the short- and long-term effects of SAP Simple Finance?
A: Overall, SAP Simple Finance is the biggest advancement that SAP has made in the finance area since SAP R/3. The SAP finance portfolio has broadened massively since the early 1990s with significant incremental enhancements. SAP Simple Finance represents a lot of that incremental growth combined with the power of in-memory computing, an improved and seamless user experience, and cloud deployment capabilities.
This step will trigger the next phase of finance transformation for our customers. There has been a gradual transformation that involved improving transactional processes over time. Shared services brought together disparate, poorly documented manual processes, and there was a shift toward globalized, standard processes and increased automation. But, in many ways, old habits die hard.
Despite those incremental advancements, analysts are still pulling numbers out of systems in a non-centralized fashion. So I really think that from an information consumption and analytic standpoint, in-memory and usability are representing the next step in this finance transformation. We’re now bringing centralization, harmonization, and automation to analytics, and presenting information to decision makers throughout the organization in a consumable way, in real time.
Additional opportunities await when you consider that finance is not only an internal organization. When it comes to collecting revenues or paying invoices, for example, interacting with business partners plays an important role, and this is where the business networking concept comes into play. It’s all part of the same mindset shift — while in the past questions centered on how to improve the efficiency or quality of the collections or invoicing process, now the focus is on how to create a positive reputation and brand for the organization. This naturally lends itself to a cloud deployment, because a business network isn’t sitting on premise.
The cloud can bring business partners closer and make it easier for them to work together. Here is where the finance organization can have a positive impact, with streamlined invoice management, for instance, that engenders goodwill. As evidenced by recent SAP acquisitions, such as Ariba and Concur, this is another important area of investment for SAP in the journey toward finance transformation. And it will continue to be a natural part of a broader evolution going forward, as with s-innovations1 we look to expand to solutions based on SAP HANA that are available in a public cloud.
1 “SAP Expands Cloud Solution Offerings” (November 2014; www.news-sap.com/sap-expands-cloud-solution-offerings-s-innovations).