Data & Analytics in the Finance Function of the Future

As digitisation spreads, corporate decision-makers need increasingly faster access to the right information in the right place at the right time.

Published 5. September 2017

Depending on their position and role, there is a difference in the type of information that is needed and in the way in which the contents are handled. This requires flexible reporting based on consistent data presented in an informative manner.

In larger companies in particular, information has to be represented at a number of different aggregation levels and from a variety of points of view. The situation becomes even more complex when new business processes are initiated and incorporated into reporting as a result of digitisation. Many companies suffer the effects of cumbersome processes that are difficult to manage. All too often, the staff involved find themselves dealing with tools and repetitive tasks. They do not have enough time left over for analysing and commenting on the situation. If more and more complex data is incorporated into reporting, efficient management within the company becomes even more difficult. A comprehensive business analytics approach, including an in-memory database, a data warehouse and a cloud and reporting solution, is required in such cases.

Authors:

Thea Caminada

Director Advisory, Zurich, PwC Switzerland

+41 58 792 28 47

Email

Roland Gilles

Director and COO PwC Digital Services, Zürich, PwC Switzerland

+41 79 792 76 98

Email

Christian B. Westermann

Partner and Leader Data & Analytics, Zurich, PwC Switzerland

+41 58 792 27 97

Email

Discover below four practical examples from the field of data & analytics, which describe the way forward to the “future of finance”.

1. Reporting 5.0

Heterogeneous system landscapes and complex business processes place increasing demands on reporting and planning. Data from a variety of different sources must be summarised and presented in a uniform manner as mobile solutions. Informative analyses form the basis for operational and strategic decisions.

Complex interdependencies can be demonstrated for the target group, information can be accessed anywhere and at any time. Modern, predominantly automated management reporting with recipient-oriented report contents provides the management with highly aggregated information and additional context for decision-making.

Through the use of eye tracking and behavioural feedback, Reporting 5.0 makes it possible to understand the information requirements of different readers and to provide customised report structures. New questions and potential answers are constantly added to ensure that the system makes continuous learning progress. In addition, Reporting 5.0 automatically carries out follow-up activities such as arranging appointments or sharing selected contents, acting as a forerunner for the efficient, effective control of your financial function.

Practical example: An online retailer wants to monitor and control working capital in real time

Problem definition

A German retailer wants to monitor, analyse and control working capital key figures and cash flows in real time. The first step should be to carry out financial and operational analyses to gain an insight into the strengths, weaknesses, opportunities and risks of the current working capital. The second step involves developing a working capital dashboard for ad-hoc analyses at various levels of detail.

Result

A mobile working capital dashboard solution, divided into different modules for the relevant business fields, together with a complete overview of key figures in terms of business assets for C levels, allows a detailed drilldown and ad-hoc analysis at operational level.

Solution approach

  • Quantitative analysis of data and derivation of key figures
  • Expert discussions and workshops to analyse operational processes and business requirements
  • Consolidation of SAP-ERP transaction data and non-SAP data sources in HANA via ETL
  • For the implementation of analysis solutions in SAP BO Design Studio: visualisation of key figures and changes in key figures in relation to the previous year for each module
  • Different dimensions and hierarchy levels allow segmentation and drilldown analyses - depending on the requirements of the business unit.

2. Predictive analytics

Predictive analytics identifies patterns in large data volumes and helps to minimise future uncertainties. Detailed data is transformed into forecasting models from which new findings can be generated. With the help of statistical methods and algorithms, historical data is analysed and used to make predictions about the future. Strategic decision-making is facilitated as a result. Predictive analytics recognises hidden patterns so that the finance department can implement the necessary measures. Precise forecasts and analyses provide a sound basis for decisions and increase the company’s financial capabilities. Resources can be used more efficiently and be made available for other value creation activities. Thanks to the automation of analyses, resources can be saved and mistakes avoided, thereby reducing costs. 

Predictive analytics is used in various financial areas, such as

Sales forecasting

Sales volumes are forecast on the basis of external factors such as the seasonal nature of business or changing consumer behaviour.

Fraud prevention

Forecast algorithms analyse patterns in transactions and predict which are “not normal”.

Liquidity forecasting

Algorithms use historical data and external data (e.g. economic indicators and Internet data) to forecast the liquidity of a company, recognise bottlenecks and allow the finance department to take steps accordingly.

3. Planning

Planning figures form the basis for strategic decisions in every company. Their accuracy is vital to ensure economic success. SAP BI Integrated Planning offers a standard solution for the various planning activities of a company.

Practical example: A German chemical company automates its monthly sales volume forecasts

Problem definition

A German chemical company wants to predict sales volumes for 60,000 country and material combinations over the next twelve months. Until now, the company planned sales volumes manually using historic data from a variety of sources.

Result

Precise forecasts prevent inaccurate planning and increase financial performance. Less time is needed for the different planning process stages. Resources can be put to more efficient use and be made available for other value creating activities, thereby saving costs.

Solution approach

  • Workshop on statistical methods that are used in advanced analytics. Data on material consumption and sales from the past three years can be used as forecasting indicators.
  • Identification of four forecasting models to predict sales volumes with varying data quality.
  • Implementation and automation of the model comprising various forecast algorithms in SAP HANA by means of the Predictive Analytics Library.
  • A dashbaord reporting solution visualises the results and allows updated forecasts to be monitored throughout the financial year.

4. The Digital Boardroom

An appointed time when all the participants have their laptop with them and rummage through piles of printed reports at the same time. Participants have figures from different dates – and yet the required figures are still not available, because it is impossible to guess in advance which problems will be discussed. A video conference for discussing standard reports that simply highlights the symptoms rather than investigating the real causes of the problem. A report that is only just ready by the deadline – and then the first question at the meeting is “Where do these figures come from? I’ve never seen them before!”

Difficulties like this will play no part in the future of the financial function.

The “Digital Boardroom” (SAP®) combines all data sources in a single tool. Not only is it possible to consult analyses that have already been carried out, but data can also be examined in an exploratory manner. Virtual meetings can benefit from sharing interactive contents – during or outside of discussions. Analytical storylines are created and shared with the help of tools.

An example: The CFO detects a drop in EBIT and asks his controller to explain the reasons for it. The controller analyses the causes and compiles a storyline for presentation in the Digital Boardroom. During the meeting, he does not need any slides, but can simply carry out his analysis directly in the software – live, on the basis of figures available in real time. To give a regional perspective, he switches to a map and expands on his spatial analysis by showing business units or factories and illustrating their performance worldwide.

The Digital Boardroom combines financial and non-financial data. It links different viewpoints for real time decision-making from a virtual command centre. In addition to referring to storylines prepared in advance, data can also be investigated at will. A flexible authorisation model allows the right degree of detail and flexibility to be adopted to suit every request and requirement – for everyone from Board members to controllers. As a standardised application for analyses and simulations, the Digital Boardroom allows authoritative interpretations to be drawn, in order to understand and analyse your company.

Practical example: A global automobile supplier standardises its HR planning processes with SAP Business Objects Cloud for Planning

Problem definition

Reporting solutions are complicated and are restricted by complex data structures, missing processes, templates and data availability. Personnel planning is not standardised and consists of a variety of manual tasks. Process, operational and strategic key figures need to be evaluated. Data protection regulations must be taken into account. Consequently, it is necessary to analyse HR data quantitatively and effectively.

Result

All the phases of requirements management are covered, and a register of HR key figures is defined for implementation and hypercare purposes. Compliant HR reporting is set up, taking data protection and security into account. Business requirements are met in terms of management reporting and external reporting. Valuable information is made available to assist with reliable personnel planning and talent management.

Solution approach

  • Identification of all the functional and technical requirements of future reporting and planning solutions, in association with business, IT and social partners
  • Harmonisation of a variety of structural and organisational elements; implementation of time dependencies and hierarchies; mapping of multiple positions in order to give a consolidated view of HR key figures
  • The creation of different dimensions and hierarchical levels allows segmentation and drilldowns – depending on the requirements of individual user groups
  • Integration of predictive analytic functionalities

Contact

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