FP&A is impacted by the way we do business
From a business perspective there is a real paradigm shift ongoing, which we should focus on from a management accounting side: the high-speed change in the way we do business, like service and subscription-based business models. Also the evolution towards the circular economy, the importance of understanding the impact of sustainability aspects and how this all influences the financial performance of organization is crucial to understand for today’s FP&A professional.
With the launch of SAP S/4HANA a key architectural change with the universal journal as single financial truth was realized. But the current business environment has led us to think about how to further take advantage of this simplified architecture within SAP S/4HANA. ONLY focusing on traditional business models is a thing of the past.
360 view on financial performance
This evolution means that, for instance, products are not necessarily sold but kept on the balance sheet. Getting a 360 view on your organization’s financial performance is no longer limited to P&L alone. One of the reasons for the shift from classic “COPA” to Margin Analysis, which also includes the ability to analyze specific balance sheet accounts, like work in progress, in the same way as your P&L.
To have maximum business user-driven flexibility to report and analyze, SAP heavily invests in the way multi-dimensional reporting can be run. The evolution from the so-called design studio-based reporting towards webdynpro reporting providing the same flexibility but increased logic in the way selection criteria, variants, alerting – as shown in this example – and so on can be handled in a simple way by the end-user.
A second major evolution is the SPEED of change… and as a result the speed at which FP&A professionals need to support business steering. Hence SAP’s focus on the concept of “event-based” processes.
Scenario analysis and simulation
Proactive business steering does not stop with having quick access to actuals. As one can only take the right decision when going beyond classic planning and budgeting. To answer the growing need of scenario analysis and simulation, SAP has linked planning, simulation, and predictive capabilities closely to actuals.
Technically speaking, this is all about linking SAP Analytics Cloud and SAP S/4HANA. An evolution which has also been recognized by Gartner… who see a growing interest in getting to a single solution for planning & recording transactions. At SAP,