Thursday, 30 May 2019 15:37

Navigate your next to decision centric digital finance with SAP S/4HANA and disruptive technologies- Part 1 of 2

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rising economic uncertainties, regulatory compliance and competitionhas created tremendous business challenges across industries. These challengeshave put increasing demands on the Finance function to evolve from atransaction processing, historical reporting focus to a strategic advisor andvalued business partner responsible for driving growth and profitability.The role of CFO is continuously evolving tomove from 'policeman' to 'entrepreneurial partner' accompanying the businessevolution and adding value to both group and finance function brand by movingstrategically towards a World Class Finance. A truly world class future finance function inthis digital world which is more agile, forward looking and decision centricshould primarily meet most of the below objectives

  • True partner to business with customer centricfocus

  • Business value centric and engaged with data

  • Leveraging innovation as a competitive advantage

  • Ensuring Healthy cash position enabling M&Astrategy

  • Sustainable profit realization and productivitygains

  • Proactive risk mitigation and governance

  • Integrate Finance and non Finance information

  • Embark on new business models, become agile andup- skill teams

Such a future finance function of enterprises should includeboth basic capabilities and also differentiator capabilities below to transitionfrom being accounting centric to decision centric

Figure 1: Differentiator capabilities for future of extended finance

SAP S/4HANA with its digital core and intelligenttechnologies like AI and Automation will play a major role in enabling thesedifferentiator finance capabilities and to enable enterprises move up on thedigital finance maturity scale.

Infosys with portfolio of AI and Automation servicesleveraging combination of In-house solutions like Infosys NIA and Assist Edge,3rd party solutions like UI Path, Automation Anywhereand SAP solutions like Leonardo is alsoenabling clients to realize their vision of future digital finance

Figure 2: Infosys AI & Automation servicesand credentials for digital finance

In the first part of this blog series, based on my recentexperiences with some of the global corporations who have advanced on theirjourney of transformation to future digital finance, I will highlight some ofthe key future trends and solutions with SAP S/4HANA and other disruptive technologiesin below three key Finance sub-functions:

  • Financial Planning and Forecasting
  • Reporting and Analytics
  • Period end closing and consolidation

I. Financial Planning and Forecasting

Key trends:

  • Dynamic planning based on cognitive tools withpredictive/prescriptive insights. Real time evaluation and analysis of newbusiness models and M&A
  • Driver based modeling of 'what-if' scenarios andsimulations to model and test the impact of changes to profitability beforecommiting to plans
  • Flexible frequencies of planning cycle withintegrated financial and operational planning processes
  • Personalized KPIs, dashboards, processes andstories for simulative, collaborative and predictive planning
  • Detailed analysis of board level strategies andplans against any version of actual, plan, prior year or rolling forecast

Key SAP Solutions: SAP Analytics Cloud, BPC Optimized for S/4HANA,BPC for BW4/HANA, SAP Digital Boardroom

Other Intelligent technologies and automation solutions: InfosysNIA and SAP Leonardo based AI solutions for predictive planning and forecasting

II. Reporting and Analytics

Key trends:

  • Transformed board room experience with real timebusiness intelligence and what if analysis to make decisions
  • Real time and multi-dimensional revenue, COGS,EBIT and profitability analysis
  • Predictive models for forward looking revenueand margin insights
  • Actionable insights embedded in business processanalytics
  • Flexible adaptation of organizationrestructuring changes into analytics
  • Smart Alerts on budget overruns and toautonomously detect unusual business situations in revenue and cost accounts
  • Automated AI based reports mimicking humanactions and analytics based 'what-if' simulations using structured and Big data

Key SAP Solutions: S/4HANA Account Based Profitability Analysis, S/4HANAEmbedded analytics with Fiori, Design Studio and Lumira, SAP Digital Boardroomcloud, ML based smart alerts for P&L analysis on SAP Cloud Platform

Other Intelligent technologies and automation solutions: InfosysNIA based automated reports mimicking human actions based on AI, Infosys NIAbased simulation and insights based on Cognitive analytics and Natural Languageprocessing (NLP)

III. Period End Closing and Consolidation

Key trends:

  • Digital close with automated close execution andmonitoring even in remote systems with real time insight into closing statusand comprehensive analytics
  • Soft and continuous close capabilities withevent triggered execution and real time reconciliations and derivations
  • Alert mechanisms and recommendations enabled by AI-based reports
  • Controls and internal audit executed by BOTS
  • Predictive accounting and close capabilities forquick corrections and data adjustments
  • Continuous Intercompany reconciliations withelimination of peaks during period end
  • Automation of repetitive period end close taskswith RPA BOTs
  • Coherent automated processes for GR/IR Clearingand Accruals Management with Machine Learning
  • Real time consolidation with full auditabilityand traceability to transaction data
  • Flexibility for local adjustments reflected inreal time for consolidation
  • Multi-dimensional consolidated data analysiswith Embedded Analytics for operational accounting and consolidation

Key SAPSolutions: S/4HANA Financial Closing Cockpit,S/4HANA Predictive accounting,Intercompany Reconciliation Tool,ML based Accruals Management and GR/IRReconciliation in S/4HANA, S/4HANA for Group Reporting, SAP Analytics Cloud,SAP Disclosure Management, SAP Group Reporting Data Collection

Other Intelligent technologies and automation solutions: InfosysHawkeye Cloud solution for business problem diagnostic capability for speedingperiod end close, Infosys Assistedge based robotics and process automation forperiod end close, Automation Anywhere RPA, Blackline Smartclose for closeautomation and reconciliation

In the second part of this blog I will highlight key futuretrends and next gen solutions in Finance sub functions of Treasury, AccountsPayables, Accounts Receivables, Cost Management, Taxation and Localization andAudit and Compliance

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