managing financial performance.pdf
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7/27/2019 Managing Financial Performance.pdf
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Managing Financial PerForManceIntegrated, enterprIse-WIde perormance
and rIsk management
SAP Thought Leadershipei p m
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Hih ui ubl h i hi ,bb xl u wihu uu iui, il hiv ui ul. a h li izi i ii ii h vlu ui uii i lui u, , i hi iil iil .
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4 Executive Summary
5 Analyzing High-PerformingCompanies
7 Cost and Profitability Modeling
7 rl c pibili ml i cl-L epm
7 c pibili mli Iih
7 c pibili mli aili
8 What-If Modeling
9 Enabling Integrated Risk- Adjusted Planning
9 th rl ri m
i cl-L epm
11 Closing the Loop11 Bi cl-L
p m11 shi h ph wih sap
Buiobj sw
conTenT
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th ivii i - bui, ibili -i, , iili, i . Wihhii epm lui, -i i, , i-iz i-wi, i-ju .
sap® Buiobj™ epm luiliv b-i i uili, wihiul u livi hi l wh-i ili. I epm lui bl hl i lhuhu h izi h, ui, llb – b bui ii.
1. rb s. kl dvi p. n, th exuin piu: Linkin sy oin ciiv avn (B: Hv Bui p, 2008).
execuTive SuMMary Best-practIce perormance management
Ili iiviul i - (epm) lii bi bi i-zi, ill wh li iii hli l uh h. Bu b-i
, uh h plliu exuipiu p™ u b d rb kl dvi n i th exuin piu , ui - u ll lii.1 ei-wi ii bl h h-i , ili llbi uii, iv ii i izil ili.
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epm i ju wih hii-l i vi li.
Vi hii iil vlu, h hw l h iil u uli iu. Wh i iih i h iil iv vu , wih i- wi l bii h u-- lihi. thi w, ui iv ii h iizuu ibili.
th iil -il i ll llw bll-uv iibui. rlivl llub lw hih u ih , whil h ji i,
hivi v ul, ul hil. Hih ui ubl hi hi , bb xl -u wihu uu iui, il hiv ui ul.th li izi i-il iz h vlu uiuii epm lui u,, i hi iil iil bui .
m izi hv h i - i l: h -u l bu uil u hi w hi bjiv. Wh i w h iu-i i h iv bi - hlih liv l-l - . thi ixl b d rb kl dvi n, wh ix-plliu exui piu p™
i hw i iu 1.2 th b-i ibb kl n ui - ull i - lii.thi lvl ii hi ibl h i,bli bui llb- b ui ii h iv h izih ili i i ’ i
ui.
chiv i -
bui, ibili -i, , iili, i . alhuh i izi ill w h hl-i epm, i xb h iil i uiiil iil . k iil ilu bu lii i i ibili l, uh l vl-u, u ui ,
i uilizi.
2. Ibi.
analyzing HigH-PerForMing coMPanieSreLIance on UnIIed epm soLUtIons
Figure 1: The Palladium Execution Premium Process™
D r i v e
p e r
f o r m a n c e
c l a r i f y st r a t e g y
o p
t i m
i z
e
d a t a
et
1 Dp th stt
•Definemission,vision,and vlu
•Conductstrategicanalysis•Formulatestrategy
2 Tst th stt
•Definestrategicobjectives h
•Selectmeasuresandtargets•Selectstrategicinitiatives
3 a th t
•Alignbusinessunitandh vi i
wih i•Alignprocessestodeliver
iiv v i l
4 P pts
•Improvekeyprocesses•Developsalesplan•Planresourcecapacity •Preparebudgets
6 Tst d dpt
•Conductprofitabilityanalysis•Conductstrategycorrelation
li•Examineemergingstrategies
5 Mt d
•Holdstrategyreviews•Holdoperationalreviews
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c ibili i hiv u iil iv-, bu izi hv u-
h w i hi iil epm. o h ii hiil exuiv Iil (eI)uv b lbl lg I. i ail 2010 w h“19.6% iil viwui u u i-bili h i” – wi i h iuh .3 th ii ih ibili i iill b hih-lvl i- h il l h u u-
- lihi bw -u u h uu i ui vih. sw ul il lul uli l ii h vluh h i. I i, il ibili i b b-buh i i h. m h hi
ibili i u h u iili l, uh h,
iil ul ili u li , i-hu lui.
dul t. Hi h wihv il u h hlii h u--iil h ui ivi-bi iu b h l h- i vli i l izi. a wll-il i b u iil li-hi bw bui vlu
uh l vlu ub u; ui uiv-i ; x, vu, i. a Hi ii, h uli i i l hi, ii whih h il h iil uu. Hvi vli- i h li hlu ibl ul iv ui i h l.4
t ul l h l bl i-ju li, i i- i h iz-
i, vl i. thiv hi, izi u vi hli ll l wih h l ii h i-w ii.
3. Jh e. V d, 2010 gn feI thnly suy rh cllin (ail 28, 2010), 13.4. dul t. Hi, I my B Wn, Bu I dub I: Hw aunin Inin Unin pibiliy (rlih, nh cli: Lulu, 2008).
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Role of Cost and ProfitabilityModels in Closed-Loop EPM
c ibili l hv i l i epm l bi w iil bi.
c pibili mli Iihth bi l ibili li u u ibl h ibili u, u, hl b ui uli u.
kl n v h u ibili
i i :“a i viw i -, i hul i u h u- i i xii b xii ivi-b i h hw h i l h u li, u, , hl, i. exu-iv will h wh h xii h u il, ul h uiu l i xih l ibl -
i.”5 I hul l b h , whih uil l-ul ibili i, u hu ul h i-l iv ilbl .
c ibili li hl u bh h ul-i ibili h
i iv ibili. xl, u wih hih v, i u h lii uu ll i il, ii – vi
bh h h u.Viibili i h i u ibili u , ii-iv ii i.
c pibili mli aili c ibili l li h u u bil (iu), h u wbi (ivii), h uu h , uh h ub
h u bi u l h ub u. m izi x hi u hl b i hii ibili b ui wh-i uili u-i bu h uu. mli ii- l vlu h iu vl il -uivi iv, bli -izi vi u i- l il xiiil bui ivii.
Operational viability – ouui hih-lvl i l u -ivl i h h iill bl liv h l vlu hiv hl-’ iil xi wihihivbl uivi lvl u- i i. thi h h i ivl vlib il bu ,
liii h ub ii il -w iil bj-iv wih b-u bu.
Capacity containment – Hvi il u i l – i
h ub te ih ibili v i– hl u h x i iiiiz h izi. thi will ul i vi h ih h b li will u h bui .
Increased agility – Bi bl - i wh-i l l hi , uh h i il uivi lvl,
w hih-lvl i l u will iiil uh i u -. I hi b i ili, bui, i, ab gu l u hb-i-l i w ii u h ubu-l wih i ili.th w l iiil lil l wh-i i ui hi . th uh h h hli
hl hi h u w h - viw i i h h. th hiz h i i w uh iil h.6
coST anD ProFiTabiliTy MoDeling assessIng perormance, IdentIyIngUnderLyIng caUses
5. rb s. kl dvi p. n, “mi h m s,” Hv Buin rviw (Ju 2008): 76.6. finnil plnnin, Buin n fin: mnin in diiul eni ti , ab gu (bu 2009).
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iu 2 hw h wh-ili h b h -i x i bui wh ui h sap Buiobjpibili c mlii. I l hw hw h
uu b h wih h sapBuiobj pli cli-i lii u li,bui, i hl bl ili.
m u bi iii- bi. a i wh i iil, u viwhi u ui
h b li wih .Wh’ , wh-i l ivibl ilu i bui iv,uh iz, h, uivi lvl, whih - viul hv b ii h izi lh h. Bu h i w viibili h uli uiivlv i ui h bu, - hv l ui ubi bu h b il hiv i u hi bu. ov
i, v hul b wiw il i –hi h uh l h bw u ul ivizil ii.
th h i bi -u i i b viibili i uu . I ll h iv- iil , iluiuivi lvl, l wi , h, wh,
u ul bi, h i-zi i b bl iu. rh h ublu iu i uu i, b whih i i b j bl, h izi iv ili h lil i h i li ii . I i ili – iili h b li.
WHaT-iF MoDelingBeneIts o reqUent reorecastIng
Dynamic What-If Modeling in the SAP® BusinessObjects™ Profitability and CostManagement Application
Figure 2: Dynamic What-If Modeling in Closed-Loop Performance Management
Hh- fs
rvu l
oi x
Hih-lvl xir
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Data shared with the SAP BusinessObjects Planning and Consolidation applicationfor detailed line-item budgeting
sl vlu
et dt
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Lil iu
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Business drivers•Resourceconsumptionrates•Productivityratios•Cycletimes•Saleswinrates•Customerretention,etc.
Capacity•Currentprovisioning•Constraints
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t ul l h - l bl i-juli, i ii hizi, vl- i. t hiv hi,
izi u vi hl- i ll l wih h l i-i h i-wii.
Bu izi ll i i i hi li bui ivii.pl hu “i i h i”, wi v-u ji i u i h wll-
i, u, uii. Wihuh i uih, i xlii l b, ii, ii.
The Role of Risk Management inClosed-Loop EPM
t bl i-ju li, -i u iiu iw iuul i. ci u
hi i i hv -i l. ri ii h iz-i u b iii , wih i bbilii u, j i vu x, .r l ii i ub il. x-l, h i ii ul b wih l ui huhulil uli b ii hu iv w il
h. ill, h iii
enabling inTegraTeD riSk- aDjuSTeD PlanningenterprIse-WIde perormance
and rIsk management
7. B pi: pn mnn dWp’ Jbn plu: a pvIt c suy ,Idc gv Iih (Jul 2009)..
Jobcentre Plus
p h Ui ki’ d- W pi (dWp),Jb plu vi u
bi h ul.7 I h70,000 l i i h Ui ki ibu £3.3 billi (Us$5.4 billi). wih v iv uivi u, h il whi h lbl “i li ” – l-l b h l:• Performance management – a
bl -ill i ii i
• Understanding of the cost base –c li vi u i vi ulil ii bli h i hi lvl i- ui hv uuu i
• Continuous planning – pvii u libl ii
h iu i h h il viw v h i i h
Jb plu u h sap®Buiobj™ pibili c m lii hiv h l. Ui h li-i h iv h b ui --
h llw i bh- ui h i-zi i ii b -i. th iih hv iv - h ii h
h ul iv h h h il. a ul, h h x ll i iv , wih ii vi 5.6%, whih iuivl ul vi £1.2 billi (Us$1.9 billi).
Bu h u h lii b luli ui . B ui h wh-i uili, h il h
i lil i h -x hi ui u l hih-lvl iil h- i hiz. thi i lih ul i u ibh bu. I l i i ui h jui u i-il ui wih hi ub ulh ul h lbli wu.
a h i, h bili ui h h i iv iiiiv b vli b h il-. th iih iiiz hi ilu iv hi h ii-iv ii.
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i, l wih h ’, u b iuul i- .
Wh i hii,i-wi lui h bl
izi i i - ii . thsap Buiobj ri m- lii h lui ih sap Buiobj lihl i ii, , ii- i h izi.
thuh i ii wih sapBuiobj pli cli-i, sap Buiobj rim i i-
viibl i h bui -. pl h ivlv ih bui i ibilii lilih,h i , -il ul h. shiiuili iv hlhuhu h izi h l ii h b-i, i-w ii.Wih i-ju li, u -izi :• c u bu
ji• m b bui ii wih
hlii iv h ilui, iil, h iv
• Buil ulu h i w bh h uii h ill i
Zions Bancorporation
“W hli wih v 500 b bh i 10 wU.s. ,” mhw di,
bui l ci Zi Bi,“ w li u sap Buiobj w.” a xl, i buii Zi u h sap®Buiobj™ pli clii lii l-i bui h sapBuiobj pibili c m lii, -bi wih sap Buiobj
Xliu® ei w,* li .
Zi u i - lui , h- wih i luli h b’ u- iilui l l vii, i “ibili ” – h lul i h iiviulu lvl. “kwi hw i- u i u vlu h b
i iill i bui- ii h xuiv hv ,” di. thi ii hl hi, xl, wh i ll hw i iiviul l.
Bu h b will uh i ili sapBuiobj lui hil b--b l h li l-l -
. x-l, h w vlu ivi ui h li liilii bi h wih i i i hhl vlul, whih uiz h i h ibili . I huu, Zi l u hiuili uul h i li i i i
bu. thi h bui will l hv x hlv il viw hiu h.
I l h bu will bui u u-. I ii, hi buiuili will llw ul ll-i i, h h hiil ul bu i-ul viw, bli h b
u i ihl li wih .
* sap Buiobj Xliu ei i w ll sap Buiobj dhbw
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Benefits of Closed-LoopPerformance Management
cli h l wih ii i - lui
bl hl h ,ui, llb. Wihsap Buiobj epm lui,i liv b-i,i-ju uili l huhuh izi liz bi:• Agility – al vi i
i i , iiiv h bl i-v iiv
v• Insight – gi u-i h uli iv ,ibili, i iz vi, buil u bu, ii -i i
• Alignment – ali vil hizl i, ili ibili -, h vi u wih li iv ii izi
• Visibility – Iv viibili iuu ibili huh i u h u-l l l il iiiz h lilih vi
th l l-l u h i (cpm) ul ul w i u b h abgu, whih ul 350
.8
th u h
h 70% i h cpm jiv i i. mv, h ul wi iu iz, wih h v
iv bi 5% i i u (roa) 4.9% i i i. Hwv h u hh h cpm h b-i-li i iiil i h hi , h hiv b ul.
B-i-l i h
cpm li wih uh hi h llwi:• Bl vu iiviul
i• ciuu iv l-
l ii • c-uil u li• w-li bui l-
i iuli
ai hi ab guu, i h l h
b-i-l cpm h-
li – 12% h l – iii-l u hi iii bh roa i. sii-ll, h u i wh h iu b 5.4% roa b 4.8% i i. a
h u i wh blw h iu b 8.8% i roa b 7.8% i i.
Smoothing the Path with SAPBusinessObjects Software
m izi l hv hul i - i l. th hv bui ; h i
i; h ui. I i h iiviul b u b b--b - w, i h lbiu - ii. Bu v wh b--b lii l,h l i llw hi ii xh ui vi h ili .
sap wi w
vi h bl i - . slui sap bl h, lxiblii i wih ii hl-l bu wi w h l- sap Buiobj epmlui h v h ull lil i ,ui u iivl i l bli h ili u ivl i i ui. m sap u l ui w
epm lui xhi
Wh i iihi h iil iv vu , wih
i-wi lbii h u-- li-hi. thi w, ui iv ii h i-iz uu ibili.
cloSing THe looPBeneIts o sHarIng dataBetWeen appLIcatIons
8. th c pn mnn Bnhk r: Ivin c diin mkin thuh piv anlyi , ab gu, www.b./u//bh/_093004b. (sb 2004).
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bw h h w li hi bjiv l-l i .
sap Buiobj w -
vi hiv u hili i - . th epm lu-i, whih hv b il h plliu exui piup™ (Xpp), hl i -i , liviiih hl u li bui -i b hiv iilxll:• SAP BusinessObjects Planning and
Consolidation application – I
u i li v lvl, whil ui bu l i
• SAP BusinessObjects Profitabilityand Cost Management application –ebl bui u ii hu u,
h i h, i u iizibili ii uh u, u, hl
• SAP BusinessObjects Risk Manage-ment application – div i-ju-
li; xiiz u ilb ilii i,i lui i, buili iv ii ixii bui
• SAP BusinessObjects StrategyManagement application – allwu l, i, i - hih-lvl bjivw il i
• SAP BusinessObjects FinancialInformation Management applica-tion – ebl iil il h i,i, li, xhiii u h epm lui
th ivii i
bui, ibili i, , iil i, i -. Wih hii epm lui, i i, , iiz i-wi, i-ju .
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www.sap.com/contactsap
50 104 901 (11/04)©2011 sap ag. all ih v.
sap, r/3, sap nWv, du, pe, Bdi,sap Buiobj exl, sW, h sap u vi i hi wll hi iv l i sap ag i g h ui.
Bui obj h Bui obj l, Buiobj,cl r, c l dii, Wb Illi, Xliu, h Bui obj u vi i hi wll hi iv l i Bui obj sw L. Bui obj i sap .
sb aiv sv, iawh, sb 365, sqL awh, h sb u vi i hi wll hi iv l i sb, I. sb i sap .
all h u vi i h hi iv i. d i i hi u vil u l. nil u ii v.
th il ubj h wihu i. th il vi b sap ag i fli i (“sap gu”) iil u l, wihu i w i, sap gu hll b libl ii wih h il. th l wi sap gu u vi h h h i h x w i uh u vi, i . nhihi hul b u iui iil w.