Budgeting & Planning On The SAP Analytics Cloud
SAP Analytics Cloud core financial management solutions will evolve into suites offering rich, integrated FP&A. These new capabilities will be bolstered by emerging digital technologies, such as AI and RPA. The new technologies will enable increased levels of automation and intelligence and better business outcomes.
Financial planning and analysis (FPA) solutions support the office of finance’s efforts to manage financial planning, budgeting, modeling, and performance reporting. They capitalize on capabilities that enhance finance’s ability to manage performance by linking corporate strategy and execution.
Many organizations prefer on-premises FP&A solutions struggling with spreadsheets. However, almost more than 90% of the migrations and new FP&A deployments have shifted to the SAP Analytics Cloud. These solutions offer faster time to value and are easier to design, implement, use and maintain. The SAP Analytics Cloud service provider can manage these solutions. They are less dependent on IT, and they can be administered and configured by end-users.
The SAP Analytics Cloud FP&A solutions also offer extensive self-service analytics, enabling broader adoption options. These analytics help finance users address modern demands and requirements — such as rolling forecasts and driver-based planning. Finally, these solutions deliver the application flexibility and collaborative capabilities needed to tighten financial performance feedback loops and support broader adoption in domains beyond finance. On-premises options still exist, but all vendors have made end-of-life announcements or have eliminated them from their sales offerings.
The SAP Analytics Cloud FP&A solutions are currently expanding their ability to extend financial planning processes across the organization. These include a broader range of business applications and domains. These may consist of specialized modules or models for sales, human resources, and supply chain operational planning. In time, this will require a more robust definition of FP&A — capable of highlighting its focus on supporting the entire organization beyond its traditional scope.
The market for FP&A applications is likely to grow and change dramatically over the next five years, increasing its importance to CFOs. As digital business velocity increases (along with the amount of data associated with managing it), these solutions’ importance will increase dramatically. The future state of the FP&A market will become significantly more competitive as the cumulative technology impact of integrated financial management applications supporting companywide financial and operational planning processes becomes evident.
The SAP Analytics Cloud core financial management solutions will also evolve into suites offering rich, integrated FP&A. These new capabilities will be bolstered by emerging digital technologies, such as AI and RPA. The new technologies will enable increased levels of automation and intelligence and better business outcomes.
Taken together, the eventual future state places FP&A front and center in modernization efforts. The new arrangement will lead to nothing less than the transformation of the office of finance. The finance office will assume a leading role in driving the realization of more agile, accurate, and continuous companywide planning.
In doing so, the finance organization has the opportunity to become true business partners with the rest of the enterprise.
Increasingly, digital business initiatives — such as establishing digital sales channels — will require more collaborative, agile, continuous, and consistent FP&A and enterprise performance reporting processes. These processes will need to be capable of using data from various sources outside the office of finance. Given its connection to all other business domains, the office of finance is uniquely positioned to guide and support new digital business models that require greater FP&A accuracy and more actionable insight. Traditional online-analytical-processing-only tools have typically precluded most enterprises from handling massive datasets and the management complexity. However, new vendor platform architectures continue to evolve and are quickly creating opportunities where none previously existed.
FP&A efforts using disconnected metrics and processes have impeded a broader approach to performance management. However, as financial plans become increasingly informed with operational data, organizations will augment financial goals with relevant nonfinancial information.
Modern FP&A solutions with new in-memory capabilities that utilize a hybrid, multidimensional or relational database will be capable of managing and analyzing the increasingly large datasets and sources needed to improve the financial plan’s accuracy and the strategic value of operational scenarios. These solutions will allow organizations to synchronize related planning efforts and expand overall financial plan participation.
More granular, driver-based modeling efforts (ideally incorporated into these integrated planning processes) will help enterprises to do a better job anticipating outcomes given existing assumptions.
FP&A vendors bolstered by these technological advances, FP&A vendors can rapidly increase the accessibility and flexibility of existing data integration and data management functions. These vendors will enhance their FP&A solutions with new “smart” data discovery tools that can “attract” more data from other solutions to be used as needed. New capabilities will enable financial and operational planning to be conducted in a more collaborative, continuous, and consistent manner.
Adding relevant nonfinancial data to finance and being available to others outside of finance — traditional FP&A financial reports will provide a more comprehensive performance picture.
Capitalizing on FP&A will require a single platform capable of integrating financial management applications while linking them to operational and external data sources. Vendors that offer this sort of platform will be best positioned to usher in a new era of unified, continuous, companywide financial and operational planning.
Digital Technology Drives Dramatic Increase in Automation and Intelligence
By 2024, 80% of new artificial intelligence projects in the finance domain will be deployed using out-of-the-box functionality.
By 2024, Gartner expects finance staff to use FP&A solutions to take advantage of digital technologies such as AI and RPA to automate their processes further and augment decision-making. Businesses will use embedded AI to improve predictive and prescriptive financial forecasting and planning processes.
As organizations digitalize more of their business, the amount of high-quality, real-time data available to optimize AI-driven financial and operational business models is expected to increase dramatically. Finance executives will use capabilities underpinned by AI and machine learning (ML) to analyze actual data from a range of sources (such as internal systems, third-party customer and economic data, social media, and Internet-of-Things-enabled devices). They will also be used to compare data to plans and recommend actions to achieve unmet targets.
Mathematically derived “AI scenarios” that detect relationships in highly diverse datasets will become increasingly possible. These scenarios will be used to highlight and eliminate current biases and other decision-making flaws underlying existing aggregated and driver-based methods.
FP&A solutions will also include additional automation capabilities that use RPA. Unlike AI, RPA is not “trained” and does not “learn.” Instead, RPA automates strings of basic time-consuming, repetitive, and error-prone tasks that are typically performed manually. Because RPA tools can work across multiple applications, we expect vendors to use RPA to automate complex FP&A workstreams increasingly. By reducing the time spent on repetitive tasks like manual data entry, finance staff will deliver higher-quality plans and analysis using AI tools.
Techwave Consulting is a pioneer in Enterprise Performance Management implementations. It is also recognized as a benchmark service provider for its experience in the planning & budgeting domains, especially driver-based planning and integration, having delivered numerous successful projects globally for more than a decade.
Techwave has multiple SAP implementations to its credit with some very innovative accelerators in S/4 HANA, SAP BPC, BW4 HANA, and SAP Analytics Cloud. We believe in extending the learnings, best practices, and innovations to customers in every possible way.
Techwave is consistently recognized by leading industry analysts and consistently ranked as one of the fastest-growing IT services companies in the US by INC500, CIO Review, CFO.com, and various other business journals.