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Predictive FinanceHenner Schliebs, Carsten HilkerMay 2013Past Performance
©  2012 SAP AG. All rights reserved. 2Finance Excellence: Guidance on, Guiding for the futureCore functions of effectivefi...
©  2012 SAP AG. All rights reserved. 3The Finance Conundrum: What is the future ?Plans tell us where we want to go (vision...
©  2012 SAP AG. All rights reserved. 4Predictive Analytics: Examine the past. Extrapolate the futurev  Examine current an...
SAP Predictive Analysis
©  2012 SAP AG. All rights reserved. 6SAP Predictive Analysis - Analysis and OptimizationPredictive FinanceAnalysisOptimiz...
©  2012 SAP AG. All rights reserved. 7SAP Predictive Analysis - Finance Use Cases (examples)Cost, margin and other financi...
©  2012 SAP AG. All rights reserved. 8SAP Predictive Analysis - Key Finance process componentSAP Predictive Analysis allow...
©  2012 SAP AG. All rights reserved. 9Manage FinancialRiskSAP Predictive Analysis - Finance Value PropositionOptimize busi...
Analyst View
©  2012 SAP AG. All rights reserved. 11Ventana Research: Predictive AnalysisPredictive Analytics Support Human JudgmentPow...
©  2012 SAP AG. All rights reserved. 12Ventana ResearchFocus on potential problems rather than fighting firesŸ  … receiva...
Conclusionto be completed
©  2012 SAP AG. All rights reserved. 14Summary1Guiding an on organization into a financially positive future is a corefunc...
Thank youContact information:Carsten Hilker carsten.hilker@sap.comHenner Schliebs henner.schliebs@sap.com
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Predictive Finance

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http://spr.ly/SAP_Predictive - Explore how forward-looking finance supported by SAP Predictive Analysis can help you better plan, predict, and take action regarding your financial and corporate performance.

Presenters: Henner Schliebs and Carsten Hilker, SAP

Published in: Technology, Business
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Transcript of "Predictive Finance"

  1. 1. Predictive FinanceHenner Schliebs, Carsten HilkerMay 2013Past Performance
  2. 2. ©  2012 SAP AG. All rights reserved. 2Finance Excellence: Guidance on, Guiding for the futureCore functions of effectivefinance organizationsinclude:§  Reporting of historicfinancial informationAND§  Guidance on and guidingexpected (future) resultssource: Association of Accountants and Financial Professionals in Business (IMA): Conceptual Framework for Managerial Costing
  3. 3. ©  2012 SAP AG. All rights reserved. 3The Finance Conundrum: What is the future ?Plans tell us where we want to go (vision), not where we are heading (direction)Based on the past, what is likely going to happen ? Which factors are correlated with or impact the future ?Vision (Plan)Direction (Reality)Indicators (Trends)Past Performance
  4. 4. ©  2012 SAP AG. All rights reserved. 4Predictive Analytics: Examine the past. Extrapolate the futurev  Examine current and historical data tomake representations about the futurev  Representations close enough to beuseful; risk and uncertainty are inherentv  Encompasses (formal statistical) methodsv  Exploits patterns, trends, variances, andcorrelationsTerms similar to “prediction “include but arenot limited to “estimation”, “approximation”,“projection”, “forecasting”, and “extrapolation”
  5. 5. SAP Predictive Analysis
  6. 6. ©  2012 SAP AG. All rights reserved. 6SAP Predictive Analysis - Analysis and OptimizationPredictive FinanceAnalysisOptimizationWhat happened ?Why did it happen ?What will happen ?What should happen ?CompetitiveAdvantageAnalytics MaturityRecord-to-Report
  7. 7. ©  2012 SAP AG. All rights reserved. 7SAP Predictive Analysis - Finance Use Cases (examples)Cost, margin and other financial trends§  Time series (Forecasting)Profitability analysis (A also bought XYZ)§  Associations (Identification)Optimized performance management§  Classification (Decision Trees)Proactive detection of financial risks§  Outliers (Anomaly detection)Late payers - attributes (Receivables)§  Clustering (Segmentation)Company performance (external factors)§  Classification (Correlations)AnalyzeOptimize
  8. 8. ©  2012 SAP AG. All rights reserved. 8SAP Predictive Analysis - Key Finance process componentSAP Predictive Analysis allows end-to-end SAP coverage for the record-to-actmanagement process. Results of the analysis process step are used to take action(plan, re-plan, or management action outside SAP system)Record Report Analyze Act§  SAP PredictiveAnalysis§  SAP Net MarginAnalysis§  SAP BusinessPlanning§  SAP ERP§  SAP EPM§  BOBJ BI platform§  SAP Accelerators§  SAP ERPfoundation§  SAP AcceleratorsRecord-to-act management process
  9. 9. ©  2012 SAP AG. All rights reserved. 9Manage FinancialRiskSAP Predictive Analysis - Finance Value PropositionOptimize businessopportunitiesOutperform FinancialObjectivesŸ  Reach your business goals faster byturning dormant data into newopportunitiesŸ  Stay agile and gain a competitiveedge with efficient forecasting andplanningŸ  Solve problems before they happenby exposing hidden risks andhazards
  10. 10. Analyst View
  11. 11. ©  2012 SAP AG. All rights reserved. 11Ventana Research: Predictive AnalysisPredictive Analytics Support Human JudgmentPowerful as an assessment toolŸ  Assess results sooner and with greater certaintyŸ  Respond faster to actual outcomesŸ  Can be applied broadly across the company or to a specific customer, especially effectivewhen businesses are dealing with well-established cyclical patternsValuable tools for performance management.Ÿ  Automate planning or forecasting and enhance accuracyŸ  Set benchmarks to assess performanceŸ  Generate alerts to accelerate actionhttp://robertkugel.ventanaresearch.com/2011/06/10/predictive-analytics-support-human-judgment
  12. 12. ©  2012 SAP AG. All rights reserved. 12Ventana ResearchFocus on potential problems rather than fighting firesŸ  … receivables aging process to collect overdue amounts from customers. Why not take this a stepfurther? If analysis shows that a specific customer reliably pays within, say, 28 days, why not set an alert ifpayment is not received by day 32 that would trigger an automated process for contacting the customer?Ÿ  … accuracy of cash forecasting by providing a finer-grain approach to projecting receipts. Rather thanconsigning financial analytics to a rear-view-mirror view, companies should be analyzing accountsproactively to identify slow and fast payers to see if there are systemic issues that should be addressed oractions that could be taken to manage receivablesŸ  … optimize payables as well. In today’s low-interest-rate environment there is limited value to holdingonto excess cash, especially since incentives for early payment can provide a high return. Does yourcompany manage payables? Can it?Ÿ  … managing profitability strategically. Individual departments and business units typically focus on theirown profit or cost objectives. Product organizations try to maximize product profitability, salesorganizations may try to maximize revenue, call centers may try to minimize costs. Individually, each ofthese moves may be rational, but collectively they can work at cross-purposes, and few companies focuson managing the sometimes-conflicting objectives of individual parts of the businesshttp://robertkugel.ventanaresearch.com/2011/07/21/finance-analytics-innovation
  13. 13. Conclusionto be completed
  14. 14. ©  2012 SAP AG. All rights reserved. 14Summary1Guiding an on organization into a financially positive future is a corefunction of Finance2Plans tell us where we want to go (vision), not where we are heading(direction) or how to best get there (optimizations)3SAP Predictive Analysis creates extrapolations of the future (asanalysis and for optimizations) that enable high value businessscenarios with superior business return
  15. 15. Thank youContact information:Carsten Hilker carsten.hilker@sap.comHenner Schliebs henner.schliebs@sap.com
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