Data Architecture and Real-Time Embedded Analytics
This is the second part of the blog series on S/4HANA for finance and the digital transformation of the finance-function. Part one can be found here. In this part we focus on the data architecture that enables real-time embedded analytics.
Before S/4HANA, finance had two modules, Financial Accounting (FI) and Management Accounting (CO), with own data architecture creating inefficiencies. Instead of analyzing, the CFO office focused on assembling data. In S/4 FI and CO are in one Universal Journal, meaning that financial accountants and management accountants work with the same data. This provides a single source of truth with a holistic view of financials. Giving instant insight to action and aggregation on the fly for all kinds of dimensions, as well as drill-down from balance sheet to line item. You benefit from spending more time with value adding tasks, and a lower cost of ownership for the finance department.
Typically, ERP systems have not provided real-time data and it is not rare to have months delayed Balance Sheets, and that is quite alarming as a CFO. S/4HANA have real-time KPIs and continuous financial reporting visibility, you have instant overview of important financials. You can monitor the Profit and Loss or the Balance Sheet. How about real time profitability analysis of products sold, providing you with insights? This enables you to see trends, focus on the increasing working capital and take informed decisions to increase value creation. Moreover, S/4HANA have embedded analytics and hundreds of standard Fiori Apps for finance analytics, regardless if it is for accounts payable or treasury. If you do not have the report needed, users can build or modify existing ones. For example, the Accounts Payable Overview app gives you a 360-view and the ability to see trends. The CFO have the information to see where to focus. When time is limited, this is the overview you need. That is the value of real-time financials and embedded analytics.
In the third and final part of this series, we look closer at the local and group financial closing. In the meantime, have a look on how we supported Clemens Food Group in their digital transformation to S/4HANA.