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Automating the Last Mile of Finance #2
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From Systems of Record to Systems of Engagement.

Our goal
As we were writing in our previous article we’ve set ourselves three innovative goals to help US companies run their enterprise performance management (EPM) financial close process better. The first goal is to simplify, secure and accelerate the "last mile of
finance" process for US companies through software automation. Secondly, we will fuel the software solution with our unique business process knowledge and US GAAP regulatory expertise. Thirdly, we will embark our innovations within SAP technology strategy and seize new opportunities by leveraging technologies like cloud, in-memory, and mobile computing.
This solution is named SAP® Financial Close and Disclosure Management rapid-deployment solution for US GAAP and SEC.
In addition to the planned availability dates we’ve been sharing previously, we’d like to give you a picture of what the final innovation will look like for enterprises reporting under US GAAP and filing to the SEC. Below is a holistic graphical representation overview of our planned innovation stack – where we’ve highlighted in blue the new EPM and Mobile BI assets we plan to release.
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We want companies to take advantage of SAP in-memory innovation with SAP HANA™ and SAP® Business Planning and Consolidation powered by SAP HANA™ to run their US GAAP reporting. Get systems of record and systems of engagement connected from day one with our SAP® ERP/EPM Connector. Automate and streamline regulatory compliance with SAP® Business Planning and Consolidation for SAP NetWeaver – powered by SAP HANA™ and SAP® Disclosure Management starter kits for US GAAP and SEC including preconfigured chart of accounts, reports, rules, financial statements and XBRL taxonomies. With our SAP® financial close starter kits installer, customers will also benefit from starter kits upgrades and maintenance when US GAAP or SEC regulation is being updated. Leverage our SAP® BusinessObjects™ Mobile BI dashboards for iPad® designed to help CFOs monitor key US GAAP financial KPIs and secure their last mile of finance. Go live in weeks, not months, with our fixed-scope and fixed-price rapid-deployment solution. Within the next weeks we will be explaining the innovative content of each blue box.
   
Systems of Record
In the article A Sea Change in Enterprise IT Geoffrey Moore, creator of the distinction between Systems of Record and Systems of Engagement says that “those of us old enough to have senior management positions understand enterprise IT through the lens of data processing. That is how it grew up around us and we grew up with it. We spent the last half of the 20th century building up this capability from rows of punch cards that could process census data to global information systems that capture every dimension of our commercial landscape, from financial transactions to human resources to order processing to inventory management to customer relationship management to supply chain management to product lifecycle management, and on and on.” And Moore to continue “These are the great systems of record, and like the interstate highway systems of a prior generation, they have paved the way for an enormous economic expansion.” Systems of record are the enterprise’s living memory. Enterprise Resource Planning (ERP) is the example of a typical system of record, meaning it provides reliable information for enterprise leadership to keep their business moving forward and streamline their business operations.
      
Systems of Engagement
Systems of Engagement such as EPM software are tapping into the information stored within the Systems of Record to help chief executives make better, more informed decisions, based on the most accurate data on their company. A good definition of these systems and their future can be found on the AIIM® paper entitled A “Future History” of Content Management. Yet today, according to APQC Fortifying the Financial Close-to-Disclose Process research paper, “finance executives often complain that they have to spend too much time assembling, reconciling, and consolidating data, and there’s precious little time left at the end of the process for critical review. They desperately want more time to think through what the financial results say about underlying performance drivers. They want to prepare meaningful analyses for senior executives, board members, and external stakeholders. They want more time to fine-tune their approaches to investor-relations issues, get ready for the “earnings call,” etc. But an over-hang of data wrap-up work at the 11th hour gets in the way of process effectiveness. For many, delays in the so-called upstream processes come home to roost. For many, a big source of this problem has to do with the ungainly need to (a) take transaction data that had previously been pulled into the general ledger by automated systems and (b) pour that data into manual processes for the final steps of close-to-disclose.”
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Today we’ll start with our goal to “get systems of record and systems of engagement connected from day one with our SAP® ERP/EPM Connector”, which is one of the most critical pieces in the process.
  
Get systems of record and systems of engagement connect ed from day one with our SAP® ERP/EPM Connector
On January 10, 2013 SAP® Business Suite Powered by SAP HANA® Reinvents the Real-Time Enterprise press release we announced the availability of our ERP powered by in-memory technology, a new option for SAP Business Suite customers. To help customers take full advantage of their ERP/system of record in their EPM/system of engagement, we are currently developing a connector to automate the transactional data load process into SAP® Business Planning and Consolidation – powered by SAP HANA™. The connector is designed to “(a) take transaction data that had previously been pulled into the general ledger by automated systems and (b) pour that data into processes for the final steps of close-to-disclose.”
 
The below diagram provides a summary view of the SAP® ERP/EPM Connector process.
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  1. SAP® ERP/EPM Connector for US GAAP and SEC data leverages our SAP® ERP Central Component (ECC) data load capability sitting in SAP® New General Ledger (see 0FIGL_O10 above).
  2. This feature enables data load automation from source systems into a SAP® Business Information Warehouse (SAP BW) reporting InfoCube (see 0FIG_C10 above).
  3. Then everything sits in the system of engagement/EPM. SAP® Business Planning and Consolidation Staging InfoCube (see ZFIGLC10PP above) is populated according to the company ERP/EPM extract-transform-load principles.
  4. Finally SAP® Business Planning and Consolidation US GAAP and SEC chart of accounts is automatically updated (see SAP BPC Model for US GAAP and SEC above).

 

What's Next
Stay tuned, in our next article we’ll give you insight on SAP® Business Planning and Consolidation, starter kit for US GAAP for SAP NetWeaver – powered by SAP HANA™ currently being developed by our teams based on extensive product expertise derived from assisting hundreds of customers to deploy and configure this application over many years. The starter kit can help you perform, validate, and publish a statutory consolidation in accordance with US GAAP. It relies on a generic and US GAAP-oriented chart of accounts, using properties that enable you to update all configuration elements related to the accounts. The kit contains prebuilt input documents and associated controls. Comprehensive business rules enable you to produce consistent consolidated data. Your deployment team can then enhance this foundation to meet your individual requirements.
 
 
Sincerely,
Elizabeth Milne, SAP EPM solution marketing elizabeth.milne@sap.com
Kristina Henn, SAP rapid deployment solutions kristina.henn@sap.com
Stephane Neufcourt, SAP EPM solution management stephane.neufcourt@sap.com
 
 
Sources

SAP “Automating the Last Mile of Finance, What’s New for US Companies?”

http://scn.sap.com/blogs/financialclose.starterkits/2013/02/04/the-last-mile-of-finance-whats-new-for-us-companies 

AIIM® “Systems of Engagement and The Future of Enterprise IT, A Sea Change in Enterprise IT”

http://www.aiim.org/~/media/Files/AIIM%20White%20Papers/Systems-of-Engagement.pdf

AIIM® “A “Future History” of Content Management”

http://www.aiim.org/documents/content-management-future-history.pdf

APQC® “Fortifying the Financial Close-to-Disclose Process”

http://www.apqc.org/knowledge-base/documents/fortifying-close-disclose-process-0

SAP Press Release, “SAP® Business Suite Powered by SAP HANA® Reinvents the Real-Time Enterprise”

http://www.sap.com/corporate-en/news.epx?PressID=20221

  
 

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