I had the opportunity to speak at the #MasteringSAP event on May 22nd, shedding light on how SAP Customers utilising S/4HANA can navigate and address the leading financial priorities for 2024.
Off the back of a report by The Hackett Group: 2024 Finance Key Issues – January 2024, The CFO Agenda by Shawn Fitzgerald, Jim O’Connor and Tom Willman. Looking at the top three priorities I provided practical advice based on existing capabilities that organizations may be unaware of and could implement today. Below is a summary:
The top 3 finance priorities for 2024 are hardly unexpected, with organisations continuing to focus on managing costs, gaining access to insights to support informed decisions making and securing working capital to execute plans. The key insights that I derived from the report are:
1. Cost Management and Optimisation
- Finance increase workload will continue to create productivity and efficiency gaps – in other words we need to find a way to do more with less.
- Finance are counting on technology to fill the gaps – currently high levels of dissatisfaction as not necessarily seeing expected benefits.
- Wise to explore generative AI as part of a deliberate and sustainable cost reduction approach – expected over next five to seven years result in a 40% reduction in SG&A costs and staff
2. Cash Flow Performance, Liquidity and Working Capital
- Cost of Working Capital is on the rise, with liquidity coming at a cost premium
- Finance must optimize working capital – by focusing on strengthening supplier terms, inventory management and collections management.
3. Data (Timeliness, Completeness, Reliability), Insights and Actionable Analytics
- Organisations are not fully deploying data-related technologies
- Staff need to be trained and upskilled on using tools
- Need greater access to self-service and data discovery tools
- Need to implement advanced analytics tools
With S/4HANA you have a technology that is designed to improve productivity and efficiency and drive automation it is important that you leverage the underlying technology and the functional capabilities so you don’t fall into a trap of not seeing the benefits of your investment. Below is a snapshot of the practical advice I shared:
- Cost Centre Budget Availability Controls – new in S/4HANA is the ability to activate Budget Availability Controls on the Cost Centre. Once enabled this allows you to fully leverage the Cost Centre Budget Report.
Fig 1 – Cost Center Budget Report
- Situation Handling – proactively alerts users to exception events that require attention, proposing resolutions or automating the resolution process driving efficiency. You can see this in action based on a Goods Receipt/Invoice Receipt example: https://sapvideo.cfapps.eu10-004.hana.ondemand.com/?entry_id=1_5ssphrci
- Business AI – Joule is SAPs AI Copilot which is powered by Generative AI and designed to empower users in executing everyday tasks more efficiently. Launching this year, you can see an example here: https://sapvideo.cfapps.eu10-004.hana.ondemand.com/?entry_id=1_kc0ahwm4
- Cash Flow Analyzer – provides a clear cash position insights with visibility of future cash flows supporting the ability to make decisions.
- Embedded Analytics – with S/4HANA there are over 250 analytical apps that enable real-time reporting via self-service approach driving insights to action. We looked at the different styles of embedded analytics from Smart Business KPIS, Overview Pages, Analytical List pages, Multi dimensional Reports and Dashboards.
Fig 2 – Example of Multi-dimensional report – Trial Balance
- Advanced Analytics – On top of the embedded analytics within S/4HANA introducing SAP Analytics Cloud opens the opportunity to:
- Use Just Ask – ability to ask questions in natural language and get answers using AI.
- Predictive Planning – combining the planning with predictive forecasting to accelerate the planning cycle.
- Time series Forecasting – predict future values of a series based on historical data.
- Smart Predict – the ability to build trusted and actionable predictions without the need to be a data scientist.
For more information on these Advanced Analytics topics take a look at Augmented Analytics | SAP Analytics Cloud | SAP Community.
In conclusion, let’s break the mould and not be one of the companies in the survey that have invested in technology yet did not realise the expected benefits, instead let’s cultivate curiosity and explore the realm of possibilities. While I have imparted a few tips, they merely scratch the surface of what can be achieved. I encourage you to take the following steps:
- Take time to review the Fiori Application Library for Analytical Apps applicable to your organisation or role. https://fioriappslibrary.hana.ondemand.com/sap/fix/externalViewer/
- Explore the integrated Automations & Business AI that are currently available. Artificial Intelligence | SAP Business AI
- Identify manual tasks and consider employing SAP Build for automation.
By embracing curiosity and investigation, you’re one step closer to streamlining your finance processes and focusing on driving your business forward.