SAP S/4HANA James Wade March 20, 2017
Agenda Introduction to S/4HANA Introduction to Central Finance Demonstration Benefits 2
Digital Finance: What Digitalization Means
Digitalization is transforming your system of record? 1880s 1960s 1980s 2000s 2010s 2020s 4
Digital finance Process automation to eliminate manual processes and media breaks Full transparency of all information, accessible to everyone, anywhere, in the moment Machine learning for smart automation and cognitive insights 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ Internal 5 5
SAP S/4HANA Business impact TYPICAL PAINPOINTS BUSINESS BENEFIT INVENTORY High levels of inventory required to cover any seasonality / variability High costs of maintaining the warehouse supplies 30% Lower inventory SUPPLY CHAIN Cash outlays mostly precede cash receipts from customers Possible variability in terms and quality of supply relationships 20% Procurement savings PAYMENTS High amounts of AR outstanding for a relatively long time Unpredictable amount or timing of AR collections 50% Lower uncollectable AR 6
SAP S/4HANA Finance: Overview
Traditional Systems cannot support the Digital Enterprise General Ledger No Real Time Reconciliations S Lack of Visibility Aggregates Profitability Analysis Ledger Company Account Profit Center Operating Concern Market Segment Controlling Area Accounting Cost Element Material Ledger Company Material Asset Accounting Company Fixed Asset 8
Traditional Systems cannot support the Digital Enterprise General Ledger Real Time No Reconciliations No Replication Instant Insight Macro to Granular No Aggregation Profitability Analysis Ledger Company Account Profit Center Operating Concern Market Segment Universal Journal Ledger Company Account/Cost Element Profit Center Controlling Area Accounting Cost Element Coding Block Material Fixed Asset Market Segment Customer Fields Powered by SAP HANA Material Ledger Company Material Asset Accounting Company Fixed Asset Flexible Real Time Analytics 9
SAP S/4HANA Supports Live Business Financial Planning planning Accounting and & & and Analysis analysis financial Financial close Close Treasury management Financial operations Operations Governance, Risk Governance, & Compliance risk, for and Finance compliance for finance 10
Intuitive user experience macro to detailed view 11
SAP S/4HANA Central Finance: Overview
The Central Finance business transformation catalyst What we hear Multi-ERP System Landscapes (long-term vision) Manual Process to Consolidate & Report No Drill Down Capability into Source Systems 13
S/4HANA is the future BUT how to get there given my legacy system landscape? SAP R/3 4.6C SAP S/4HANA Central Finance How to get there SAP ERP? adoption dilemma Non-SAP ERPs SAP HANA Fragmented System Landscape Simplified Single System Landscape 14
Centralization of A/R reporting and central A/R process orchestration Local Real-time operational reporting with view of customer account cross-systems Central dispute management Cross-system root cause analysis Drill-down takes you back to local system logistics object SLT: Open Items & Clearing Status ALE / Web scenarios View linked logistics document Post credit memo A/R reporting: Customer Analysis Central Finance Credit * Dispute Lists* Collections Worklists* Central collections prioritization and team management Promises-to-pay documented locally Correspondence pulled from local system Central credit evaluation and management Process receivables (local open items) Check central credit limit Update credit exposures Real-time operational reporting SAP HANA Local systems report customer credit exposures via existing ALE scenarios Central system calculates/manages credit limits Central credit reporting *Credit, Dispute, and Collections require the license for SAP Receivables 15
Central Finance Business Benefits Shared Resources / Automation Improve process efficiency, self-service analytics Integrate, standardize, automate anticipate Eliminate costs for interfaces and reconciliation Minimize manual processes, reduce costs for different processing methods Reduce cycle times / transaction cost, re-deploy labor to higher value-added activities Adaptability / Agility Realize cross-entity market potential Optimize resource allocation (investments) Manage profitability (business performance) on digital micro-segment levels Improve cash management, collections, and receivables Clarity / Foresight Quickly adapt to changing business environments Align individual with corporate goals Establish single source of truth, corporate vs individual memory Introduce automated exception management 16
Receivables
SAP Comprehensive Financial Solutions Finance Solutions Treasury and Financial Risk Manage Enterprise Risk and Compliance Accounting and Financial Close Manage Financial Performance Invoice to Pay Receivables Travel Shared Services for Financials Payments and Bank Communications Enterprise Governance, Risk, and Compliance Financial Accounting Develop and Translate Strategy E-Invoicing (Inbound) Collections Pre-Trip Approval Shared Service Framework for Financials Cash and Liquidity Access Risk Entity Close Planning, Budgeting and Forecasting Document Retention and Archiving Dispute Resolution Online Booking Self Services for Financials Debt and Investment Strategies Continuous Transaction Monitoring Intercompany Reconciliation Profitability and Cost Analysis Invoice Automation Credit Evaluation and Expense Financial Risk Duty Reduction and Trade Compliance Consolidation Monitoring and Reporting Accounts Payable Accounts Receivable Notes Bank Communication Automation Billing and E-Invoicing Reporting and Analysis Disclosure Master Data Governance for Financials 18
Achieve excellence in finance operations with SAP Accounts Receivable standard process automation Manage all financial accounting related aspects of customer accounts receivable. Credit Evaluation and Helps companies implement a single company-wide credit policy and use credit analysis results to calculate credit limits. Dispute Clarify and resolve customer payment disputes quickly and efficiently. Collections Proactively manage customer collections and customer service. 19
Achieve excellence in finance operations with SAP Credit Evaluation and 10% Decrease in bad debt write-offs by enforcing global proactive credit management policies Helps companies implement a single company-wide credit policy and Source: use credit SAP analysis Performance results Benchmarking to calculate credit limits. 0.3% The amount of accounts receivable write-offs by the 25% top-performing companies (compared to 3.1% for the bottom 25%) Source: ASUG Benchmarks Dispute 56% Lower uncollectible accounts receivable write-offs (as a percentage of revenue) with integrated, automated dispute management Clarify and resolve customer payment disputes quickly and efficiently. Source: SAP Performance Benchmarking Collections 19% Lower overdue accounts receivables when companies take a holistic view of their customers at the time of interaction Source: SAP Performance Benchmarking Proactively manage customer collections and customer service. 58% Additional collection contacts per full-time employee by world-class firms versus their peer group Source: The Hackett Group, 2012 20
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SAP Receivables Benefits SAP Credit Check Credit Minimized bad debt write-offs Accelerated credit review processes Automated adaptive ratings Improved collaboration with sales SAP Dispute Resolve Disputes Streamline dispute management and reduce costs Faster resolution and lower DSOs Shorter settlement cycles SAP Collections Collect Cash Streamline collections and improve success rates Lower collections costs and bad debt write-offs Increase cash cycle velocity Reduce working capital requirements 27
THANK YOU James Wade james.wade@sap.com
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