Optional Relentless Pressures on Organizations… Pressure to Perform is Immense – External and Internal Factors Key Points: There is HUGE pressure on Organizations and the Executive Team to Perform Pressure is coming from both Internal and External Factors One of the biggest factors is Financial Compliance and Statutory and Regulatory Reporting Expectations to consistently and predictably maximize business profitability have always existed .. but now Management are under added pressure from hedge fund activists – who instill fear into managers of underperforming companies. “ How to beat Hedge Fund Bullies” is one of the most popular articles on CFO.com There’s increased global competitive pressure – currency fluctuations, interest rates and inflation …. In addition, there are hot topic items such as corporate sustainability , energy conservation and the triple bottom line (3BL) And to compound the issue even further – the speed and volume of information access makes it even more important to understand the context and importance of it relative to other factors Other potential talking points: Financial Conditions: - Economy - Interest Rates - Inflation - Exchange Rates Increased Risk Businesses have come under increasing public scrutiny due to cross-border operations and the advent of stringent regulations in the wake of 9-11, Enron, Parmalat, trade disputes, environmental issues and other catalyzing events. Regardless of size, enterprises participating in the global economy will face the same challenges as they grapple with new and often inconsistent regulations. Additionally, activist stakeholders are aggressively challenging management on social responsibility, ethical leadership, and privacy. Factoid: Only 65% of executives are confident that they are compliant w/foreign regulations (PWC) Political Challenges: - Regulations - Lobbying - Local / Federal (Government in non-US countries) - Taxes / Tariffs Industry Challenges: - Competitive - Technology - Suppliers - Customers Globalization: - Outsourcing - Industrialization (I'd also put regulations here too?) - Security - WTO Developing nations are emerging as the main drivers of growth in global GDP. Savvy multi-nationals are localizing product and services to gain market share. Global Competition Factoid: M&A activity has accelerated with acquired assets growing by over 35% in 2005 and a predicted record of over $3.3 trillion for 2006 (CNN Money) Global Workforce Tacit and transactional work has eclipsed transformation as the primary lever for value creation. Factoid: This shift in economic activity towards information-oriented work will create a shortage of 10 million information workers in developed nations. As a result, global recruitment is targeting 33 million college educated professionals in 28 emerging nations that have invested in a qualified, accessible information worker talent pool. Factoid: Emerging nations have 4x the amount of qualified young professionals as the top 8 developed nations. Emerging nation college graduates will grow at 5x the developed nation rate (McKinsey) Business leaders, who seize the opportunities and alter their practices to capture new competitive advantages, will sustain a winning trajectory in the global marketplace.. Customer Power Entry of new customers in the global market and increased market transparency enabled by enhanced access to information has triggered a tectonic shift of power to the customer. First, customers – both consumers and businesses - are increasingly influencing design and delivery of products and services, as well as business models. Disruptive Technology The world continues to see an explosion in digital information. Putting this growth in perspective, the world produced an estimated 12 exabytes of information in the first 300,000 years of civilization. By 1999, we were producing around 2 exabytes per year or 800 MB per each of the world’s population of 6.3 billion people. It has been driven by lower communications costs, exponential growth of computing power, improving price performance ration for storage. It is also being driven by new technologies – modeling, RFID, etc.
Optional The result of these pressures can be detrimental to companies today. We all see it in the papers every day ... another company who had to restate their books, report poor earnings to their shareholders, declare bankruptcy, M&A activity that went wrong, etc.... Ultimately many of thes issues fall on the shoulders of the CFO.... Is your Company Vulnerable? Key Points: The price is HIGH if you don’t have your act together Industry publications such as CFO.com and financial news specialists such as the Financial Times are full of articles demonstrating the downside of being vulnerable and NOT being in control of corporate performance. The price can be HIGH on a Corporate basis relative to Regulatory and Financial Compliance e.g. Costly Restatements (most common) or Severe Fines and Penalties Estimated 1 in 10 public companies have restated earnings since Sarbanes Oxley – and this can affect income by millions of $ or Euros It can be even HIGHER on a Personal level e.g. CFO/CEO needs to “personally attest to the appropriateness, fairness and accuracy of company financial reports” (Section 404 of Sarbanes Oxley) 63 CFOs have either pleaded guilty to fraud or been convicted in the last 5 years – approximately 1 CFO per month. Charges include conspiracy; insider trading; accessory to fraud; securities fraud … Plus 214 Chief Executives and 128 Vice Presidents In addition there’s the obvious vulnerability poor earnings and slow growth bring …. for example …. the company being acquired, losing your job … At the end of the day its all about managing risk which affects profitability Are any of these elements at risk for you?.
Optional Key Points: Economic and business pressures mean organizations need to adapt to survive As a result, we’re seeing the role of the CFO change from being responsible for core finances to being a change agent and strategic advisor to the CEO and Senior Management (ref: survey) CFO focus is on Business Performance and Minimizing Risk to take control of performance (quote % from chart) Changing role means CFO is well positioned to take over other Executive Management positions e.g. CEO, COO Recently (July/Aug 07) .. GE promoted their CFO to Vice Chairman and both Bear Stearns and Perot Systems gave their CFOs the title of COO. CFO is best placed to help the organization deal with the pressure, keep it compliant and profitable and minimize the performance gap. Factoids: Fortune: 20% of Fortune 100 CEOs were once CFOs (date ??) CFO.com July 30th 2007 - GE promoted CFO Keith Sherin to vice chairman August 6th 2007 - In back-to-back announcements, Bear Stearns and Perot Systems give their finance chiefs the title of chief operating officer. Additional text options: There was a study done by the international federation of accountants. They interviewed leading CFOs across the world and found consistency around key topics a CFO is focused on. All of these topics are beyond financial transactions and require more time to be spent on business insight and managing risk in order to drive company wide performance (see above). It is only natural that the role of the CFO become more performance focused – they are responsible for most of the key profit and risk drivers. An independent white paper / study was commissioned by SAP and CFO.com called the SuperStar CFO (available on SAP.com) that found very similar results. (build quote) It is not surprising that 20% of Fortune 100 CEOS were once CFOs….
(mandatory slide for CPM ) Key Points: Having a gap in performance can clearly cause vulnerability to the organization but how much? It varies by organization and industry – is this something that you measure or can put an estimate on? If we take one example from a Harvard Business Review report in 2007, they estimate there is an average performance loss of approximately 40% in most organizations. Approximately 10% of this, according to the report, can be attributed to NOT having committed leadership and an organizational culture that is silo’d and doesn’t embrace performance management. And approximately 30% of this, according to the report, can be attributed to technology issues related to: “ Poorly communicated strategy Unclear accountability Inadequate consequences or rewards Actions required to execute not clearly defined Inadequate performance monitoring Inadequate or unavailable resources” *HBR claimed overall that “defects and breakdowns in planning and execution were the primary contributing factors to value destruction. Factoid: Harvard Business Review – *Adaptation from: “Turning Great Strategy into Great Performance” “ Defects and breakdowns in planning and execution cited as primary contributing factors to value destruction”
Mandatory: Key Points: This raises an important issue .. With the rate of Business Change being more frequent than that of System Change, are the methods you’re using to manage performance able to close the gap or are they contributing to it? (Select relevant questions) How are you defining and tracking strategic goals and initiatives today? What tools and techniques do you have for planning and making sure everyone is on the same page? How long does your budgeting process take? According to APQC (American Productivity and Quality Center) the average company takes 60 days - with 40% of budgets having errors & omissions when all stakeholders aren’t involved. The error rate falls to 28% when they are involved. How often have you been in a meeting when more time is spent discussing validity of data vs. agreeing on the next course of action? Do you have enough visibility into issues that could arise in the future and take you off course? Do you spend more time tracking interdependencies in Excel than actually executing? Are your systems in sync with the way your business operates? If your answer to any of these questions did not make you feel comfortable – don’t worry – we believe we can help.
Mandatory Key Points: As we’ve seen, technology isn’t the only factor in the performance gap If you have committed senior leadership and create a DNA within the organization of performance management, we believe we have a technical solution that can help you to close any gaps you may have in executing against corporate strategy Our solution enables a top-down and bottom-up approach to performance management which gives you … The best of both worlds – management understand what’s working in the field and the field understand what management’s goals are With this understanding, more effective strategies can be put in place and there’s a greater chance of adoption and execution Our solution is: Usable – to minimize training, reduce ramp up time and ensure productivity For example: Amadeus loved the fact they could use a familiar Excel interface that Finance use all the time on a single data repository – to confidently manage performance. This helped in user acceptance of the project and reduced the need for training and user support. Adaptable – to support the rapid changes that are guaranteed to occur For example: A leading aircraft manufacturer was able to improve financial cycle times by automating processes such as margin elimination and operating lease restatement. Predictive – to help you guide the organization more effectively for maximum profitability For example: Lionsgate Entertainment were able to improve the accuracy of their forecasts and increase revenues 13% - in addition to being able to reduce the budget process from weeks to days.
Mandatory (you can also switch this slide for slides 37-39 in order to provide a more complete story across GRC, ERP and CPM) Key Points: How does SAP help you more specifically to Close the Performance Gap? First, we have a modular approach that covers the complete lifecycle for performance management … from Strategy definition to Planning to Consolidated Reports to Profitability Management Typically most organizations focus on planning and consolidation but … how can you make sure your plans are aligned with your corporate goals? Or how can you make sure you’re defining strategy based on the right profitability metrics? This is an iterative process that is fine tuned over time and will provide better results as time goes on – it should become part of your Corporate DNA not be a one-time event. For example prioritization, execution, monitor, optimization (part of the 4 processes) are all on-going steps – never a one-time event. If its something you want to try for the first time in a department or group – this works too and should give you rapid results. That’s not all … (build using mouse click) With Corporate Performance Management that can be integrated with GRC to better manage risk and compliance; ERP for core financial information and employee incentives all based on 1 open platform with natively integrated business processes In fact, Gartner is one of the first analysts to recognize SAP’s achievement in this area – citing SAP as the first significant vendor to focus on the CFO in this way
Optional (you can use slide 41 instead of this slide) Key Points: How does this work in real life? Example of Closing the Books Needs to be as quick and accurate as possible CFO / CEO need to “personally attest to the appropriateness, fairness and accuracy of company financial reports” Uses the closing cockpit from ERP together with process controls from GRC to ensure compliance and finally the consolidated reporting process from CPM complete with fully documented audit trail.
Optional – you can use slide 42 in appendix instead of this slide if you prefer) Key Points: Another example … Wouldn’t it be great to not only understand the status of key performance metrics but also understand the probability of success / failure associated with these metrics too For example .. a yellow status indicator against increase a metric of “repeat customers/reduce churn” could show either a 60/40 chance of success or a 80/20 chance of success Sometimes its OK to take a risk as long as it’s a calculated risk and the potential upside far outweighs the risk to the organization.
Optional Key Points: And yet a 3rd scenario (optional) How would all products be used together in a bigger scenario For example, the activities that would occur following the merger of one company with another This process involves multiple people – CFO, Controller, Line of Business Managers and multiple components: Strategy definition Risk assessment Incorporation of assets Profitability modeling Security and Resource controls and allocation Financial modeling Closing the books Generating statutory reports
Key Points: SAP CPM has benefits for everyone in the organization not just finance For Finance – aids in reducing business and compliance risk and increasing confidence in corporate finances Finance are able to monitor key metrics such as … Total Net Revenue, Gross Profit, Net Income, Total Assets … Optimize all the drivers impacting costs and profitability to a very granular level … Ensure operational and corporate financial planning is in sync Modification of business process flows by business users to ensure new standard processes are being adhered to as quickly as possible Generate consolidated reports quickly and accurately with a fully documented audit trail. For Operations – aids in ensuring alignment with corporate objectives by synchronizing people and incentives with initiatives and metrics provides agility to make changes affecting business operations when they’re needed by enabling resources to be intelligently managed by focusing on the initiatives that will have most impact on the business Provides visibility into all finances at departmental and corporate level via the ability to use familiar office tools and intuitive web interfaces to access information in addition to intelligent action panes that guide users on what tasks to complete and how For IT – Delivers a modern solution that fits within the overall architecture and provides users with data they can be confident in and delivers information in the context and timeframe its needed. enables users to own and maintain their environment with IT being responsible for core infrastructure this allows them to free up IT resources, time and money for innovation to further aid corporate goals. Enables all stakeholders to gain awareness of how they can help the organization gain control of performance in their day to day role
Optional Great slide when not showing a demo and demonstrating (using the customer’s example) how these products could be used together. You may want to optionally refresh the audience memory by first showing slide 37 (single CPM hockey puck). Purpose here is to step through a day in the life - using these products. You may want to optionally start with slide 46 and 47 to show how you define strategy goals and review summary and detail information plus hold discussion threads on an on-going basis. This could also be a good point in which to complement the presentation with the Office of the CFO chalk talk. Key Points: Imagine its Q42007 and you are about to define/amend a strategy plan for 2008 plus medium and long term strategy that’s already been set. Instead of using your own home grown program, PowerPoint or Excel, use a solution that solves a lot of the issues associated with the performance gap. (Ask how they do this today and/or re-emphasize via example what you’ve already learnt from your discovery calls). Use audience specific example Solves many of the issues cited by Harvard Business Review for performance loss Enables strategy to be clearly articulated and communicated Accountability - tasks assigned to individuals that are aligned with corporate strategy Enables you to understand which initiatives will have most impact on corporate goals so you can allocate resources appropriately Using diagrams that are familiar e.g. corporate graphics helps in adoption of strategy Patent pending diagrams such as Pathway diagrams provide a complete picture of short, medium and long term strategy Fishbone diagrams help uncover inter-dependencies that could impact performance
Optional – good slide when not showing a demo Key Points: You’ve defined your strategy but now you need to make sure you execute according to plan. Leverage Excel running from a single data repository (for data confidence) to create plans, set budgets and forecast to make sure your operational plans and execution meet the needs of your corporate goals. (Ask how they do this today and/or re-emphasize via example what you’ve already learnt from your discovery calls). Solves many of the issues cited by Harvard Business Review for performance loss Actions required in order to execute are clearly defined and in context using intelligent action pane capability Office integration with Word, Excel, Powerpoint running from a single data repository reduces training because the tools are familiar plus Use of these tools against a single data repository promotes confidence in the answers and allows more time to be spent on execution Plus Predictive Analysis enables problems and issues to be delivered to you vs. you spending time trying to find the root cause of problems
Optional – good slide when not showing a demo Key Points: You’re executing according to plan, some business processes need to be amended e.g. the monthly financial consolidation – you can do this without involvement from IT. You need to monitor ongoing results on an adhoc basis – you can do this too without involvement from IT . (Ask how they do this today and/or re-emphasize via example what you’ve already learnt from your discovery calls). Solves many of the issues cited by Harvard Business Review for performance loss Actions required in order to execute are clearly outlined with standard business process flows showing which steps are required, optional, completed etc. Pre-packaged business process flows come with the software – these can be easily modified or you can create your own. The example here shows the process of going through the statutory reporting process Self-service Business Process Flows enable the people that are most familiar with standard processes to make the changes necessary to adapt to business change Self-service Reporting also enables end users to control their own environment when they need it and free up IT time, money and resources. Intelligent action panes assist users in identifying what steps are available to them.
Optional – good slide when not showing a demo Key Points: You’ve wrapped up your consolidation process and either on a monthly basis or at the end of the year or in fact anytime, you might want to identify profit and cost drivers so you can optimally fine tune profitability by understanding the interdependencies between different dimensions e.g. products, customers, channels in impacting profit. This can be used to feed back into the Strategy process and adapt plans. (Ask how they do this today and/or re-emphasize via example what you’ve already learnt from your discovery calls). Supports Time-Driven Activity-Based Costing models which surface the true drivers of product and customer profitability Intelligent Optimization of all profitability drivers down to granular level by any number of dimensions e.g. profit by customer by region; costs by product by supplier Most customers receive a 5-10x ROI within 6 -12 months of purchase
Optional – good slide to either introduce or summarize a demo or the description of SAP Solution for CPM Key Points: As you can see, SAP CPM technology enables you to take control of performance by being more usable with use of familiar MS Office tools blended with intuitive Web 2.0 characteristics; self service business process flows and reporting; more adaptable with intelligence built-in and enables users to effectively collaborate and communicate to make rapid changes that support evolving business demands; more predictive to enable the business to manage risk more effectively and deliver more consistent results by understanding what drives profitability and providing automatic root cause analysis together with risk adjusted planning Let’s take a look at some customer benefits ..
optional 1. KLA Tencor 2. Charles Schwab 3. Lionsgate 4. General Services Administration 5. Chevron Results with SAP® CPM Key Points: Benefits from customers – affect Net Income, Total Net Revenue, Gross Profits and Total Assets : Reduced costs Reduced cycle time – reporting, financial, budgeting Leaner operating margins Increasing net profits ROI and productivity through better alignment, reduced training requirements and reduced redundancy Identify lost revenue causes and fix them. This is a good slide to show that we have many references…. Over 1,000 customers are using one or more of the SAP CPM components. ---------------- Extra Info --------------- Credibility KLA Tencor, a producer of semiconductor manufacturing equipment, used Strategy Management in their Services organization and have received awards in Performance Management for their efforts. Novo Nordisk a producer of diabetes equipment, used Strategy Management and were able to achieve independently verified 889% ROI was calculated by IDC. The General Services Administration, the procurement arm of the federal government initially spent a few $100,000 dollars and over their lifetime have spent over $1 million dollars. Many customers of Planning and Consolidation – Lionsgate, Flextronics, Broadcom .. Likewise for Acorn – Cemex, Coca-Cola, Deutsche Bank, Johnson&Johnson, AIG
Optional Key Points: As you can see, SAP is changing the game for anyone involved in company finances by providing a solution that’s more usable, adaptable and predictive with support for key business processes from one open platform.
Mandatory slide Key Points: Benefits: Agility Via empowerment of every stakeholder to communicate, collaborate and execute on a commonly understood and defined plan of action Adjust plans and execution as necessary Visibility Via the ability for all stakeholders in the organization to own, maintain and share information in time and context Confidence In and transparency of financial information for regulatory, statutory and management reporting Calculated decision making/actions by leveraging a platform that accesses a single version of the truth Alignment Via synchronization of goals with initiatives, priorities, measures, people, incentives, business processes, resources and budgets Complete understanding of the drivers of profitability Ultimate Goals (Optional): Maximize Business Profitability – to increase market and shareholder value Optimize Operational Efficiency – to reduce operational costs and free up resources for innovation Minimize Risk to the business – by ensuring that decisions are made based on accurate data, and that statutory reports provided to regulatory authorities are in compliance.
SAP’s Solution for Corporate Performance Management Key Points: If you remember nothing else, remember Why SAP for CPM Full solution for the CFO by enabling integration of GRC, ERP and CPM with eSourcing on one open platform with natively integrated business processes Complete suite covering full lifecycle of performance management Built for stakeholders today and in the future who need maximum usability, adaptability and predictive capabilities
This slide can be used when customer has questions about acquisition strategy SAP has adopted a multi-year plan to help CFOs drive financial transformation within their organizations. We are doing this with a comprehensive build, partner and acquire strategy. Leveraging early GRC efforts in 2002 with our Global Trade Services solution, we have successfully executed on this strategy – expanding with partner solutions and building robust new financials and performance management capabilities in the SAP ERP 2005 solution, and rapidly expanding on that with key acqusitions: 1. Virsa in 2006 for Access Control applications 2. Pilot Software earlier this year for Strategy Management 3. OutlookSoft in April for planning & consolidations These are complemented by key partner solutions – eg: Acorn for profitability and jointly built apps with Cisco with GRC compliance
This slide provides a visual with both the CPM product names and CPM process Most companies only utilize part of CPM process Most CPM solutions do not integrate core business processes SAP is unique….
This slide enables you to talk to the CPM process without having to provid the big picture… It can also be used to go into a bit more detail about the CPM process with in the big picture across 3 solutions.
This is the SAP GRC process slide. You can use this if you want to go into a bit more detail about the GRC process as it relates to the big picture office of the CFO. Setup: In this part of the process, reporting structures and responsibilities are set up, and the social, environmental and financial reporting indicators are defined Aggregate: Data is collected – either automatically if the data exists in the operational systems or manually via surveys. Data is validated by the system for plausibility/correctness based on certain acceptable thresholds, and then the data is sent to a manager for approval. Data is then aggregated into the predefined reporting structures. Analyze: Cross-enterprise sustainability data is now available for trend analysis, identification of leading or lagging locations, etc. Pro-forma comparisons can be made if the organizational structure of the company changes. Improve: Based on either internal or external benchmarking results, best practices can be identified and replicated across the enterprise. For example, if a particular program such as employee safety training has led to a very low injury rate at a particular plant, this program could be rolled out across the organization. Disclose: The goal of the process, is to create a pool of data that can be sliced-and-diced as necessary to create the needed reports – at the local, national, or international level as required. Also, ad hoc questions posed by the press, analyst, and activist community can be answered as needed.
This slides provides the big picture “Office of the CFO” positioning – we will be adding in an ERP hockey puck to represent the ERP process…. In version two.
Optional. This is an alternative to slide 13 to show an example of the value of the holistic approach
Optional – this is an option instead of slide 14 to show the value of the tightly integrated solution……..
This is a good big picture slide to show a competitive comparison of our solution
Optional – these are details of the benefits
If you’d like to tell a broader story around Strategy Management – use this slide first to define strategy.
If you’d like to use more slides around Strategy Management, this slide should follow slide 46
Optional instead of the existing slide.
SAP solutions for performance management
Take Control Of Performance with SAP Solutions for CPM
The Business Challenge Solving The Performance Gap with SAP Why SAP? Next Steps
Relentless Pressures on Organizations… Pressure to Perform Is Immense – External and Internal Factors Is your company in control of performance? Political Challenges Globalization Industry Challenges Financial Conditions Disruptive Technology
Is Your Company Vulnerable? Result of Performance Gap… Poor earnings, restatements, slow growth, fines… <ul><li>Are these at risk? </li></ul><ul><li>Financial/Operational Performance </li></ul><ul><li>Top Line Revenue Growth </li></ul><ul><li>Earnings Growth </li></ul><ul><li>ROI </li></ul><ul><li>Shareholder Value </li></ul><ul><li>Asset Management </li></ul>SIGNITURE UTILITIES HAS TO RESTATE FINANCIALS FOR THE 3RD TIME…. SEC QUESTIONS CFO … DURING EXAMINATION OF BOOGLE TAKE OVER… DL Computers…. Report earnings loss, stake holders up in arms….. RETAIL GIANT DECLARES BANKRUPTCY…
The Role of the CFO 2010 Taking Control of Performance <ul><li>Key Topics: </li></ul><ul><ul><li>Developing a vision for the future </li></ul></ul><ul><ul><li>Managing the information flow </li></ul></ul><ul><ul><li>Moving away from transactions </li></ul></ul><ul><ul><li>Transforming into the chief planning officer </li></ul></ul><ul><ul><li>Concern about global markets </li></ul></ul>Source: International Federation of Accountants Financial Management Accounting Committee Interviews with leading CFOs representing well-known companies across the world <ul><ul><li>Source: CFO Magazine </li></ul></ul>26% 46% 16% 18% 19% Business Insight Compliance and Audit Finance Services Financial Transactions Today Short Term Goal CFO Time Allocation 22% 20% 32% GRC CPM ERP 20% of Fortune 100 CEOs were once CFOs
The Performance Gap Causes Vulnerability ~ Optimal Minimal Technology <ul><li>Accountability </li></ul><ul><li>Incentives aligned with corporate goals </li></ul><ul><li>Adequate resources </li></ul><ul><li>Well communicated strategy </li></ul><ul><li>Execution requirements well defined </li></ul><ul><li>Effective performance monitoring </li></ul><ul><li>Other: Strategy based on accurate data / assumptions </li></ul>* Source : Adapted from "Turning Great Strategy into Great Performance", Harvard Business Review *40% Performance Gap <ul><li>Executive sponsor / commitment </li></ul><ul><li>Corporate culture of performance measurement </li></ul>People
Is Your Technology Causing the Performance Gap? Rate of Business Change Rate of System Change Result: Business Deadlock Hard to use, rigid and inflexible? Patchwork products, old architecture? Spreadsheet hell? No confidence in answers? Rear-view budgeting? No linkage to business process? Rate of Change
The Business Challenge Solving The Performance Gap with SAP Why SAP? Next Steps
Close the Performance Gap with SAP Gain Control The right approach plus technology enables performance control USE for business productivity ADAPT to support rapid changes PREDICT for maximum results
How Does SAP CPM Close the Gap ? An Iterative Process and Holistic Financial Management for On-going Performance CPM “ SAP is the first significant vendor to focus on the CFO in this way.”
CPM Consolidation The Value of Holistic Financial Management Fast, Accurate Close ERP Closing Cockpit Transparency Efficiency GRC Process Controls Compliance
The Value of Holistic Financial Management Intelligent Risk Management Develop Risk Intelligent Strategy Develop Plan for Executing Strategy Analyze Performance and Course Correct as Needed Risk Related Data in a Performance Management Context RISK MANAGEMENT STRATEGY MANAGEMENT
The Value of Holistic Financial Management Integrated Strategy, Financial Planning and Profitability Analysis POST-MERGER SCENARIO Initiatives are created for each of the 4 objectives CFO communicates post-merger strategy with 4 key objectives: cost savings, compliance, performance management and risks Controller plans integration of financial systems; closes, analyzes costs and profitability after month end consolidation and updated forecast VP of procurement negotiates best rate for purchasing parts CRO sets up the risk profile in risk management, including environmental, global trade and financial risks Line manager uses access controls to segregate duties with newly acquired employees., Calculate resource allocation, apply to plans and predict performance All stakeholders review scorecard to measure execution versus initial goals
The Enterprise In Control of Performance For Competitive Advantage OPERATIONS Alignment, Agility and Visibility <ul><li>Modern architecture leveraging ERP, GRC for effective service and ROI </li></ul><ul><li>Accurate data repository for user confidence </li></ul><ul><li>Data delivered in time and in context to every business user </li></ul><ul><li>IT managed data access controls and security; business user managed CPM </li></ul><ul><li>Synchronize goals, initiatives, metrics with people, accountability and incentives </li></ul><ul><li>Intelligently manage resources and exceptions based on priorities </li></ul><ul><li>Intelligent action panes plus strong visualization and collaboration </li></ul><ul><li>Familiar office tools and intuitive web 2.0 interface </li></ul>FINANCE Risk Mitigation and Corporate Confidence <ul><li>Model and optimize all profitability levers </li></ul><ul><li>Streamlined financial and operational planning process </li></ul><ul><li>Self-Service Business Process Flows enforce requirements </li></ul><ul><li>Fast, accurate close, consolidated reporting with full audit trail </li></ul>People Processes Resources IT Free Up Resources, Time and Money for Innovation
Strategize and Prioritize With Strong Visualization to aid Communication Pathways visualize short, medium and long term strategy together with accountability, initiatives and measures aligned to corporate strategy Custom diagrams help gain user adoption of corporate strategy Fishbone diagrams highlight critical inter-dependencies that may cause initiatives to fail
Plan and Execute With Familiar Tools for Business Users Intuitive Web 2.0 interface with Intelligent Action Panes to guide activity and integration with MS Office Familiar Excel Interface reduces time spent on training and operates from a single data repository
Report and Monitor For Management and Statutory Reporting Self Service Business Process Flows ensure consistency in process adherence and minimize training Self-Service Financial Reporting ensures any user can create information on the fly on the web or in Microsoft Excel
Model and Optimize All Levers Affecting Profitability Intelligent Optimization of all profitability drivers down to granular level Time-Driven Activity-Based Costing models surface the true drivers of product and customer profitability
The Business Challenge Solving The Performance Gap with SAP Next Steps Why SAP?
SAP CPM Enables Organizations to Close the Gap USE for Productivity SAP Corporate Performance Management Enabling Performance Control SOLUTION <ul><li>Familiar user experience </li></ul><ul><li>Self-Service Business Process Flows™ </li></ul><ul><li>Intelligent action panes </li></ul><ul><li>Intelligent accountability and resource controls </li></ul><ul><li>Collaborative custom and patent pending visualization </li></ul><ul><li>Live discussions and operational reviews </li></ul><ul><li>Intelligent exception management </li></ul><ul><li>Modern enterprise architecture </li></ul><ul><li>Intelligent optimization of all profitability drivers </li></ul><ul><li>Predictive analysis </li></ul><ul><li>Fast close with full audit trail </li></ul><ul><li>Governance, risk and compliance built-in; integrates with SAP business suite </li></ul>ADAPT To Change PREDICT for Results
Benefits to our Customers… Enabling performance control <ul><ul><ul><li>Semiconductor production equipment manufacturer reduced the cost of the monthly reporting cycle by > 66%, while adding weekly and daily information </li></ul></ul></ul>Media company reduced its budgeting process from weeks to days, while increasing revenues 13% Leading financial services firm increased net profits by $600 M annually and reduced profitability analysis cycle time by 90% A public sector agency discovered > $300 million in lost revenue in the first 18 months by tying initiatives to objectives Oil and gas company improved its planning process by 30% while reducing spreadsheet usage by 99% “ Those who leverage cost-analytics can reduce their cost structure by 3-5%, while those who focus on profitable growth and revenue initiatives can achieve 5-15% of revenue improvements. […] clients routinely achieve a 5-10x payback within 6-12 months on their investment.” Tier 1 Consulting Firm
SAP CPM Changes the Rules for Finance <ul><li>Hard to use, rigid and inflexible </li></ul><ul><li>Patchwork products, old architecture </li></ul><ul><li>Spreadsheet hell </li></ul><ul><li>No confidence in answers </li></ul><ul><li>Rear-view budgeting </li></ul><ul><li>No linkage to any business process </li></ul><ul><li>Unprecedented usability and flexibility </li></ul><ul><li>Unified product, modern architecture </li></ul><ul><li>Easy interchange of MS Office and web </li></ul><ul><li>Governance, risk, compliance built-in </li></ul><ul><li>Adaptive and predictive planning </li></ul><ul><li>Business process inherently built-in </li></ul>Built for Finance of 1990 Existing CPM Solutions SAP CPM Solutions Built for Finance of 2010
SAP Enables Performance Control To Reach Your Ultimate Goals SAP corporate performance management Enabling Performance Control SOLUTION ORGANIZATIONAL BENEFITS GOALS Maximize Business Profitability Optimize Operational Efficiency Minimize Risk Compliance/Business <ul><li>Agility </li></ul><ul><li>Visibility </li></ul><ul><li>Confidence </li></ul><ul><li>Alignment </li></ul>USE for Productivity ADAPT to Change PREDICT for Results
SAP’s Solution for Corporate Performance Management <ul><li>Holistic Financial Management </li></ul><ul><ul><li>Full CFO Suite ( ERP + GRC + CPM ) from world's leading provider of business software with proven expertise in over 25 industries </li></ul></ul><ul><li>Complete and Cost Effective CPM </li></ul><ul><ul><li>SAP’s CPM products have broader coverage and are optimized to run on proven NetWeaver platform (over 14,000 installations) </li></ul></ul><ul><li>Modern and Innovative </li></ul><ul><ul><li>SAP CPM is more usable, adaptable and predictive – built for finance of 2010 </li></ul></ul>SAP corporate performance management Enabling Performance Control
The Business Challenge Solving The Performance Gap with SAP Next Steps Why SAP?
Appendix <ul><li>Additional slides to support the many different sales opportunities. </li></ul>
Help CFOs Drive Financial Transformation With SAP’s Multi-Year Plan 2002 2005 2007 <ul><li>SAP GRC Risk Management </li></ul><ul><li>SAP-CISCO GRC Composite Applications </li></ul><ul><li>SAP Business Profitability Management by Acorn </li></ul><ul><li>SAP Strategy Management </li></ul><ul><li>SAP Business Planning & Consolidation </li></ul>2006 Build <ul><li>SAP ERP Financials </li></ul><ul><li>SAP Management of Internal Controls (MIC) </li></ul><ul><li>SAP Strategic Enterprise Management (SEM) </li></ul><ul><li>SAP Analytics </li></ul>2004 <ul><li>SAP GRC Global Trade Services (GTS) </li></ul><ul><li>SAP GRC Solutions (SAP xEM, EH&S) </li></ul><ul><li>SAP GRC Process Controls </li></ul><ul><li>SAP GRC Access Controls </li></ul>Partner Acquire SAP Offerings for the CFO Build, Partner, Acquire Strategy
How Does SAP CPM Close the Gap ? An Iterative Process for On-going Performance CPM
How Does SAP CPM Close the Gap ? An Iterative Process for On-going Performance CPM
SAP Offers an Integrated and Complete GRC System for Managing the Sustainability Cycle
A Tightly Integrated Suite of ERP, GRC, CPM Capabilities Only SAP Addresses ALL CFO Priorities with Appropriate Linkages ERP Business Insight Business Intelligence Profitability Management Strategy Management Planning Consolidation, Fast Close CPM Compliance and Audit Access Control Risk Management Process Control Environmental Compliance Global Trade GRC Financial Transactions and Services Financial Accounting (GL, SEC Reports) Managerial Accounting Financial Value Chain Real Estate / Fixed Assets Treasury and Liquidity Management Tax
A Tightly Integrated Suite of ERP, GRC, CPM Capabilities Only SAP Addresses ALL CFO Priorities with Appropriate Linkages ERP Compliance and Audit Access Control Risk Management Process Control Environmental Compliance Global Trade GRC Business Insight Business Intelligence Profitability Management Strategy Management Planning Consolidation, Fast Close CPM Financial Transactions and Services Fast, Accurate, Close Financial Accounting (GL, SEC Reports) Managerial Accounting Financial Value Chain Real Estate / Fixed Assets Treasury and Liquidity Management Tax
A Tightly Integrated Suite of ERP, GRC, CPM Capabilities Only SAP Addresses ALL CFO Priorities with Appropriate Linkages ERP Compliance and Audit Access Control Risk Management Process Control Environmental Compliance Global Trade GRC Business Insight Business Intelligence Profitability Management Strategy Management Planning Consolidation, Fast Close CPM Financial Transactions and Services Financial Accounting (GL, SEC Reports) Managerial Accounting Financial Value Chain Real Estate / Fixed Assets Treasury and Liquidity Management Tax Intelligent Risk Management
SAP Leadership in the “Office of the CFO” Business Consolidation Business Planning Business Profitability Management NetWeaver Platform “ SAP is the first significant vendor to focus on the CFO in this way.” Strategy Management CPM ERP SAP (today) ORCL (w/HYSL) SAP (w/CFO-Suite) ERP GRC CPM
SAP CPM For the Enterprise in Control of Performance <ul><li>Agility </li></ul><ul><ul><li>Via empowerment of every stakeholder to communicate, collaborate and execute on a commonly understood and defined plan of action </li></ul></ul><ul><ul><li>Adjust plans and execution as necessary </li></ul></ul><ul><li>Visibility </li></ul><ul><ul><li>Via the ability for all stakeholders in the organization to own, maintain and share information in time and context </li></ul></ul><ul><li>Confidence </li></ul><ul><ul><li>In and transparency of financial information for regulatory, statutory and management reporting </li></ul></ul><ul><ul><li>Calculated decision making / actions by leveraging a platform that accesses a single version of the truth </li></ul></ul><ul><li>Alignment </li></ul><ul><ul><li>Via synchronization of goals with initiatives, priorities, measures, people, incentives, business processes, resources and budgets </li></ul></ul><ul><ul><li>Complete understanding of the drivers of profitability </li></ul></ul>
Strategize and Prioritize With Strong Visualization to aid Communication Strategy Maps allow for visualization of strategy in a manner that can be tailored to any end-user Balanced Scorecard provides a summary view of corporate objectives and their status - weighting metrics based on those that have the most impact on corporate goals
Strategize and Prioritize With Strong Visualization to aid Communication Balanced Scorecard can expand to show more detail behind key objectives – weighted metrics, trending, actual vs. target plus descriptions, links to external documents and ownership Discussion Threads enable greater understanding of why key performance indicators have a particular status plus who is taking action and what is being done.
Model and Optimize All Levers Affecting Profitability NetWeaver BI Enterprise Portal xApp Analytics Business Planning & Consolidation Strategy Management Step 4: Understand HOW you want to use the information Shared Services Product Profitability Supply Chain Costing Pricing Staffing Customer Value Step 3: Understand WHERE you want to use this information Step 1: Understand your company’s core assets Step 2: Understand all measures of performance: NOP, Revenue, Cost, and Capacity Customers Products Channels Segments … Transactions
Model and Optimize All Levers Affecting Profitability Time-Driven Activity-Based Costing models surface the true drivers of product and customer profitability Intelligent Optimization of all profitability drivers down to granular level