SAP: Simplicity, on premise, in cloud or on the fly – Thack Brown and Peter David

In a world where the sources of data are multiplying, the race is on for financial organisations to rationalise their internal processes to stay ahead of the curve. Finance Director Europe talks to SAP's Thack Brown, global head of line-of-business finance, and Peter David, the company's CFO for the EMEA region, about how its latest S/4HANA platform allows for dynamic planning in this unpredictable market environment.

For the most part, companies learn through experience. By mapping trends or learning from prior missteps, CFOs can safely chart a course most amenable to consistent, broad-based growth. Occasionally, they might divine an insight on what the future will hold independent of these constraints. Usually though, their job resembles that of a motorist driving a car with only the rear-view mirror as a guide, confined to judging the speed and direction in which to proceed by the bends and curves of the road just covered.

In some cases, CFOs do not even have that luxury. The sheer amount of data that has accompanied the digitalisation of daily transactions in the developed world has made the analysis of trends in the marketplace versus the current financial position of the firm a more difficult proposition. While it might be naturally assumed that the availability of more data would allow CFOs to draw more nuanced insights, in most cases they are unable to rely on sophisticated and fast-paced software aids that are up to the task. This has become a serious concern, not least because of the degree of market turbulence the global economy has suffered over the past few years.

"What we've gone through in the way of shocks since the 2008 crisis is unprecedented," says Thack Brown, global head of line-of-business finance at SAP and a former CFO for the company's Latin American arm. He knows from personal experience about handicaps imposed on a financial organisation by its reliance on outdated information. "From exchange rate changes to commodity price changes, and the booms and busts of individual economies, the challenges have been tremendous. And in a more globalised, interconnected world, this is going to continue."

In this environment, overcoming the hurdles imposed by the inevitable glut of information on customers' habits, market trends and internal accounts is vital. Failure to keep abreast of any one of these can often lead to a company falling behind. "Across all industries you're seeing digital enabling new market entrants," says Brown. "A clear majority of CEOs are telling us that their business model is fundamentally being impacted as a result. And to keep up with that, companies have to become digital so as to acquire data almost instantly and fully automate internal processes.

In 1972, five entrepreneurs had a vision for the business potential of technology. With one customer and a handful of employees, SAP set out on a path that would not only transform the world of finance but also forever alter the way companies do business. Now 43 years and 296,000 customers stronger, SAP has further extended its expertise into a mind-blowing 26 industries with verticalisation of its products.

Simple finance Its latest innovation is SAP S/4HANA Finance, a software platform that calls upon the services of three distinct software applications: SAP Fiori, which provides the platform's front-end visibility, as well as on-premise and cloud-based editions of the SAP-developed financial database 'HANA', facilitating the instant recall of relevant information into the platform. By combining these applications, SAP S/4HANA Finance provides CFOs the facility within which to conduct sophisticated analysis of that information at great speed to enable them to adjust the company's position in almost real time.

Integral to this has been the enhancement of SAP Fiori. Above all, the firm's technicians have focused on making the app simple to use and understand. "Business apps historically paid much less attention to the user interface than is really warranted," says Brown. "Over time, it just became the established standard to settle for complex applications that do complex things and, in the end, have a complex user interface."

As it turns out, SAP's clients don't need to be persuaded on Fiori's potential to increase the productivity level of their staff. "What Apple, Google and Facebook have shown is that it is possible to take a complicated task, and work with the system to make it easy to understand and intuitive to use," says Brown. "We've shown repeatedly that Fiori can reduce the time it takes to complete a transaction by 30-40%, thanks to less manual data input, greater automation, and fewer screen changes. Now that might mean an individual only regaining about a minute and a half back of their own life but to an organisation with a 10,000-person shared services centre, use of Fiori allows them to sustain significant increases in productivity."

This is especially pertinent in an industry where reliance on different parcels of information can often lead to misinformed analysis. "What has probably not been fully appreciated in the market is the role that the traditional relational database has played in causing those problems," Brown explains. "The whole premise between a transactional system and an analytical system is based on a construct in which you separate data and replicate it. For example, I may receive an invoice and place that on to my system. It will get recorded in different places, including a subledger and a general ledger. It may then be moved into management reporting, or it may go into a business warehouse. And every time that information gets moved it gets manipulated, is worked with and ages.

"And you always have the question, 'Well, is the information I'm looking at now the latest information?'" he adds. "This breakdown is what forces finance organisations to constantly be looking more in the rear-view mirror than looking at today and thinking about the future. And this is where in-memory technology creates the most fundamental change. What we have been able to do with SAP S/4HANA is bring all of an organisation's financial and operational data into one place. That way, you always know what the real number is."


As CFO for SAP's operations in Europe and the Middle East, Peter David has witnessed a surge in interest in SAP S/4HANA among companies in the region.

"What we've seen over the long-term, and particularly from our quarterly earnings this year, is a huge demand for the platform in the EMEA region," he says. "In particular, we're seeing strong interest from clients in what you might class the more mature economies in Western Europe. In that area, there are significant double-digit growth rates in cloud applications."

And this is precisely what, in the context of the ongoing surge in information technology development, should be happening. "When I began at SAP, the best phones were made by Nokia and we received most of our music from CDs," recalls David. "Now, researchers say that we will have over 50 billion connected devices within the internet of things by 2030. At SAP, we expect a 40% increase in the connectivity of business networks, accompanied by a major democratic shift in the number of people who are literate in the use of these technologies. After all, 75% of the global workforce will be millennials by 2030. That's going to have an obvious impact on the way finance organisations work."

It's a development that David sees as defining what in-house financial analysis will look like in the next decade, and one that SAP is uniquely prepared for with SAP S/4 HANA. "I think there will be a great deal more focus on that kind of delivery of real-time, relevant information," he explains. "The focus really will be to leverage systems like S/4HANA to facilitate this and support overall company strategy and what we call 'live business'."

Thack Brown, global head of line of business finance, SAP.
Peter David, CFO EMEA, SAP.