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

1. Predictive Finance
Henner Schliebs, Carsten Hilker
May 2013
Past Performance

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Finance Excellence: Guidance on, Guiding for the future
Core functions of effective
finance organizations
include:
§ Reporting of historic
financial information
AND
§ Guidance on and guiding
expected (future) results
source: Association of Accountants and Financial Professionals in Business (IMA): Conceptual Framework for Managerial Costing

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The 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

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Predictive Analytics: Examine the past. Extrapolate the future
v Examine current and historical data to
make representations about the future
v Representations close enough to be
useful; risk and uncertainty are inherent
v Encompasses (formal statistical) methods
v Exploits patterns, trends, variances, and
correlations
Terms similar to “prediction “include but are
not limited to “estimation”, “approximation”,
“projection”, “forecasting”, and “extrapolation”

5. SAP Predictive Analysis

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SAP Predictive Analysis - Analysis and Optimization
Predictive Finance
Analysis
Optimization
What happened ?
Why did it happen ?
What will happen ?
What should happen ?
CompetitiveAdvantage
Analytics Maturity
Record-to-Report

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SAP 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

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SAP Predictive Analysis - Key Finance process component
SAP Predictive Analysis allows end-to-end SAP coverage for the record-to-act
management 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 Predictive
Analysis
§ SAP Net Margin
Analysis
§ SAP Business
Planning
§ SAP ERP
§ SAP EPM
§ BOBJ BI platform
§ SAP Accelerators
§ SAP ERP
foundation
§ SAP Accelerators
Record-to-act management process

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Manage Financial
Risk
SAP Predictive Analysis - Finance Value Proposition
Optimize business
opportunities
Outperform Financial
Objectives
Ÿ Reach your business goals faster by
turning dormant data into new
opportunities
Ÿ Stay agile and gain a competitive
edge with efficient forecasting and
planning
Ÿ Solve problems before they happen
by exposing hidden risks and
hazards

10. Analyst View

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Ventana Research: Predictive Analysis
Predictive Analytics Support Human Judgment
Powerful as an assessment tool
Ÿ Assess results sooner and with greater certainty
Ÿ Respond faster to actual outcomes
Ÿ Can be applied broadly across the company or to a specific customer, especially effective
when businesses are dealing with well-established cyclical patterns
Valuable tools for performance management.
Ÿ Automate planning or forecasting and enhance accuracy
Ÿ Set benchmarks to assess performance
Ÿ Generate alerts to accelerate action
http://robertkugel.ventanaresearch.com/2011/06/10/predictive-analytics-support-human-judgment

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Ventana Research
Focus on potential problems rather than fighting fires
Ÿ … receivables aging process to collect overdue amounts from customers. Why not take this a step
further? If analysis shows that a specific customer reliably pays within, say, 28 days, why not set an alert if
payment 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 than
consigning financial analytics to a rear-view-mirror view, companies should be analyzing accounts
proactively to identify slow and fast payers to see if there are systemic issues that should be addressed or
actions that could be taken to manage receivables
Ÿ … optimize payables as well. In today’s low-interest-rate environment there is limited value to holding
onto excess cash, especially since incentives for early payment can provide a high return. Does your
company manage payables? Can it?
Ÿ … managing profitability strategically. Individual departments and business units typically focus on their
own profit or cost objectives. Product organizations try to maximize product profitability, sales
organizations may try to maximize revenue, call centers may try to minimize costs. Individually, each of
these moves may be rational, but collectively they can work at cross-purposes, and few companies focus
on managing the sometimes-conflicting objectives of individual parts of the business
http://robertkugel.ventanaresearch.com/2011/07/21/finance-analytics-innovation

13. Conclusion
to be completed

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Summary
1
Guiding an on organization into a financially positive future is a core
function of Finance
2
Plans tell us where we want to go (vision), not where we are heading
(direction) or how to best get there (optimizations)
3
SAP Predictive Analysis creates extrapolations of the future (as
analysis and for optimizations) that enable high value business
scenarios with superior business return

15. Thank you
Contact information:
Carsten Hilker carsten.hilker@sap.com
Henner Schliebs henner.schliebs@sap.com