1. Business Transformation - Finance Transformation
Leveraging SAP Solutions
Venu Kumar Nalabothula
BIS Strategy, Planning & Innovation
MillerCoors
Session Code: 2005
Georg Fischer
Vice President
Product Management – SAP Financials
SAP AG

2. 2
• How can I obtain more insights about my business?
• How can I increase my sales revenue?
• How can I increase my profitability?
• How can I increase my market share?
• How can I plan my business functions (Sales, Marketing, Finance and
Supply Chain) so they are aligned with Enterprise targets?
• How can I reduce my Supply Chain costs e.g. stock outs, inventory costs?
• How can I ensure adequate internal controls are operating in my
enterprise?
• How can I reduce my procurement and SG&A costs?
• How can I optimize my working capital needs?
• How can I bring more innovative capabilities leveraging technology fast
into my enterprise?
• How am I able to free up my talent to devote more time on value added
insights?
Overview – Are we addressing these key questions?

3. 3
Overview – Are we addressing these key questions?
Global environment is highly competitive, companies must continue to
grow, innovate and transform to remain competitive and survive in the
market. Hence the need for Business Transformation!!!
• Competitors from emerging markets hone disruptive approaches
• Product lifecycles are shrinking
• Lot of consolidations are taking place in various industries
• Competitive advantage is dissipating more rapidly than ever before
• Companies need to transform – or risk becoming forgotten!
Mastering transformation is becoming a competitive imperative

4. 4
• Transformation is a fundamental change to the way a business operates
• Bridging the gap between strategic intent and the capability to act
• Major corporations successfully "reinvent" themselves
• Business transformation is a MUST to maintain growth curve of the
company during these days of slow economy
• Business transformation encompasses all functions – Sales, Marketing,
Finance, Supply Chain, HR etc. – both to increase sales and reduce costs
During Business Transformation
• Complexities are great
• Stakes are extremely high
• Companies need to make the necessary mid-course corrections
What is Business Transformation?

5. • Increased revenues
• Improved marketing ROI
• Enhanced growth
• Understand market trends and become a trendsetter
• Stronger innovation
• Reduced time to market
• Reduced costs
• Improved business processes
• Faster adaptability to external changes
• Increased customer satisfaction
• Motivated employees
• Increased ROI to shareholders
5
Benefits of Business Transformation

6. • Kimberly Clark shifting from a paper provider to a CPG leader
• Apple’s stock increasing almost 40 times seven years after a decade of stagnation
• Procter & Gamble moving from soaps to laundry to skin care to health care – shows
that successful transformation is possible
• Lenovo’s 2005 acquisition of IBM’s PC operation set up a far-reaching business
challenge – to create a new global operating model that would meet its goals
6
• RIM – Once a leader in Smart Phones for the corporations – slow to transform!
• Kodak – Once one of the most innovative companies – did not transform with speed!
• Nokia successfully moved from rubber boots to a global leader in mobile phones. What
is its current market share?
Transformation is a journey – not a Project !
You need to continuously transform and adapt to changes
Case Studies of Business Transformation

7. Let us focus on one of the key functions in a company
i.e. Finance and discuss how to approach transforming
the Finance function using criteria that made several
companies successful as well as how to utilize SAP
capabilities to achieve that goal
7

8. Transaction Processing
 Business processes are not
integrated
 Time-consuming month-end
close process
 Complex finance and
operational regulations
 Consolidated reporting is very
cumbersome
 Organizational structure doesn’t
align with current /future
reporting needs
 Inconsistencies in the setup and
use of Chart of Accounts
 Disparate fixed asset accounting
systems
 Redundant master data /
inconsistent data
 Cumbersome multi-GAAP
reporting options
 No standard way to achieve
balanced segment reporting for
SEC/IFRS
Risk, Compliance and
Controls
 Multiple compliance
requirements
 Limited visibility of the
enterprise-wide risks
 Compliance is silo-ed with
Manual processes
 Higher duties from not
leveraging trade
agreements
 Increased risk of
fines/delays
 Increasing complexity of
regulations and policies
 High cost to establish and
maintain compliance
 Risk information not
relevant
 No consolidated view of
risks
 No strategic context
 Ability to manage cash
Business Insights
 IT systems take long time to run
the reports due to volume of
data
 People are tied-up with
transaction processing versus
providing insights to customers
 Long planning and budgeting
cycles due to lack of integration
 Lack of rolling forecasting
capabilities to respond more
quickly to business needs
 Multiple versions of truth, since
data is not integrated between
planning and consolidation
systems
 IT systems are not quick to adapt
to business changes in case of
any mergers or realignments
 Poor reporting capabilities
related to customer and product
profitability analysis
 No single source of dashboard
and score-carding capabilities to
link strategy to execution
Strategy, Operating Model &
Talent
 Industry consolidation and
globalization
 Energy and commodity costs
 Change in core product
demand
 Cancellation of major
customer contracts
 Performance standards and
service quality
 Non-transparent markets
 Economic recession
 Ability to provide support to
other functions
 Talent issues
8
Challenges of Finance Organization

9. Today’s CFOs
Strategist:
Provide Financial leadership in determining strategic business direction
Grow the Talent required to support Business Transformation
M&A Financing
Controller:
Provide and preserve critical assets of the Organization, and Create a risk-intelligent culture
Eliminate and/or simplify complex structures, processes and technology
Accurately report on Financial position and operations (Int & Ext)
Business Partner:
Ensure Business Transformation is integrated across all functions of the Enterprise
Accountant:
Balance capabilities, costs and service levels to fulfill core responsibilities
9
What is Finance transformation
Source: Deloitte Development LLC
Finance transformation: an umbrella concept that focuses on improving performance, stewardship
and control of the company by enabling chief financial officer (CFOs) and their finance organizations
to have greater impact on strategy formulation and execution across the enterprise.
Companies have begun to realize the value of Finance in transforming their business operations
by providing strategic, insightful, value-adding and cost effective services
What is Finance Transformation?

10. • Improve the operational performance of all finance functions
• Align Finance skills and responsibilities to stakeholder needs
• Minimize non-value add activities to improve focus on business insights
• Standardize and integrate systems and leverage enabling technologies in
corporate performance management
• Reduce the cost of Finance function
• Profit from innovation
• Leverage shared services to deliver routine, high volume transaction
processing with economies of scale
10
Benefits of Finance Transformation
Benefits of Finance Transformation

11. Leading Finance organizations are evolving to become value integrators and thereby
more effective executing on their core Finance activities, monitoring business performance,
driving the integration of information across the organization and managing enterprise risk..
Finance execution excellence
matters more than ever. CFOs that
have more efficient Finance
organizations are more successful at
driving operational excellence.
Deliver value through analytics and
business insight. Those that have
strong business insight are helping
drive greater value across their
enterprises.
By doing both well – executing core Finance activities efficiently and providing
the insight their businesses need – Value Integrators are helping their
enterprises make smarter decisions.
Source: IBM Institute for Business Value, The Global CFO Study 2010
11
IBM CFO Study 2010 Highlights

12. 12
Integrate with Organization wide Transformation initiatives – e.g.
Sales, Marketing, Innovation and Supply Chain
People and Talent Management
Governance Risk
and Controls
 Transformation
program to
simplify processes
across the
organization
 Streamline the
applications
landscape
 BIS capabilities to
industry standard
 Optimize sourcing
model
Transaction Efficiency
 Process Financial
Transactions in an effective
and efficient manner
 Report Financial results
and disclosures to
management and
shareholders
 Achieve faster close times
 Leverage shared services
Business Insights
 Real time customer and
product profitability analysis
available to business
 Perform detailed financial
scenario planning
 Improve forecasting
capabilities
 Provide insights to
customers
 Increase the capability of
partners
 Become trusted advisor
Collaboratively provide strategic, insightful, value-adding and cost effective services
Governance, Risk &
Compliance
 Manage risk effectively
and cost efficiently
 Simplify internal control
structure by leveraging
the latest SEC/PCAOB
guidance, rationalizing
controls, and minimizing
testing, etc.
Strategy & Execution
 Help define the right
strategy together with
CEO
 Ensure that investments &
operations follow strategy.
 Finance Transformation
program to simplify
processes across the
organization
 Reduce Finance
applications landscape
 Ensure effective Change
Management
 Grow talent to support
transformation
Finance Transformation Framework

13. Real Estate Lifecycle Management
Receivables Management
Invoice Management
Travel Management
Shared Services
SAP BusinessObjects enterprise
performance management
(EPM) solutions
Treasury and Financial
Risk Management
Manage Enterprise Risk
and Compliance
Accounting
and Financial Close
Manage
Financial
Performance
PLAN &
EXECUTE
STRATEGIZE &
PRIORITISE
MONITOR &
ANALYSE
MODEL &
OPTIMZE
Ensure Regulatory
Compliance and Effective
Transaction Processing
Deliver Superior Service
at Reduced Cost
Outperform Financial Objectives
and Create Sustainable Value
SAP ERP Financials
Including Controlling modules
and Partner solutions
SAP BusinessObjects governance, risk,
and compliance
(GRC) solutions
SAP can help you in Transactional efficiency,
Business Insights and Managing Risk

14. Leveraging detailed
financial information
across all business
dimensions is difficult
or impossible
Financial analysis and
reporting processes with
high volumes of data
can be very time-
consuming
Financial decisions are
often based on
incomplete, inaccurate
and often outdated
information
Deep insights into large
volumes of financial data Access to real-time
financial information
Fast and flexible
analytics and reporting
Make smarter financial
and managerial decisions
Empower finance with
true real time
Accelerate key
financial processes
SAP HANA
IssuesOpportunitiesforFinance SAP can help you in providing Business insights
with HANA

15. 15
for Better Business Results thru Business Transformation
• Grow your top talent
• Get closer to your best customers
• Leverage ERP supported end-to-end, integrated processes with best practices
• Run leaner operations – consider aspects of Lean Six Sigma
• Gain deeper insights from thru enterprise performance management tools
With every economic crisis comes opportunity
Some companies will go from good to great
Others will just fade away, making room for more innovative competitors
Senior Executives should strongly consider industry best practices that provide a
balanced approach to moving forward by making smart investments in
Business Transformation
Source: SAP
#1 SAP provides guidance to its customers to jumpstart Business Transformation
#2 Work with your Business Transformation consulting advisors and IT Systems
Integrators(SI) to help you navigate thru Transformation
Overview Managing Efficiency, Effectiveness
and Risk with Strategic Focus

16.  Develop strategy: The CFO's Finance Transformation strategy must be developed in the
context of the organization's strategy and its requirements of finance, and industry best
practices that serve as enablers of transformation.
 Assess and Benchmark current performance: Benchmark baseline performance levels
by assessing key metrics such as cost, headcount, monthly close, productivity and
quality. SAP & ASUG Benchmarking is a great starting point
 Develop a blueprint for end state: A detailed end-state vision and effectively blueprint
to detail all planning elements of the operating model, people, process, and technology
requirements across each major category of services by Finance team
 Develop detailed plan: Develop the detailed plan, identify all necessary steps, risks,
issues, dependencies, people and cost requirements.
 Create a business case: A finance transformation business case should leverage outputs
from the assessment & present business value and expected ROI from transformation.
16
Adapted from: PWC CFO Study 2010
Transformation Best Practices

17.  Obtain executive-level support: Executive sponsorship is critical to gaining the support
and involvement of the organization in the transformational effort.
 Create a high-performing team: It is vital that the core team be competent, have
enterprise focus and have proven execution track record.
 Execute few quick-win projects : A pilot project provides a low-risk, limited scope
opportunity to establish quick wins and gain credibility.
 Execute Change Management plan: Having a robust change-management process to
address the impact that the transformation has on the organization and its people. This
is very critical for the success of the Transformation.
 Execute End State Blueprint: Deliver the business value thru superior execution by
meeting project schedule, budget, scope and quality for all initiatives in the
transformation.
 Recognize and Reward your team: People are key assets of the organization.
Transformation is not an easy journey – recognize and reward your people for their
contributions and celebrate the wins!
17
Adapted from: PWC CFO Study 2010
Transformation Best Practices Contd.

18. 18
 Business Transformation is a journey, not a project
 Finance Transformation is an integral part of Business Transformation
 People are the most important asset of the organization
 Always consider enterprise-wide end-to-end business processes
 SAP Suite of Products provide industry best practices and enable implementation
of integrated end-to-end business processes
 Streamline Application Landscape by exploiting full capabilities of SAP
 Disciplined execution of Strategies is key to the success of the Organization
 Continue to develop the business acumen of all business & IS teams to prepare
them to support business transformation
 Ensure IS Project Portfolio is fully aligned with the growth strategies of your
company
 Harness the creativity and innovativeness of the Business & IS team by
implementing Innovation Management Program across the company
 Streamline all Business Processes including IS Process – Apply Lean Six Sigma and
Value Stream Mapping methods
 Delight the customer by demonstrating Execution Excellence always!
KEY LEARNINGS

19. 19
Recommended Initiatives Strategic Benefits
Supply Chain Execution
Drive Cost reductions and efficiency gains
• Reduce Procurement Costs
• Reduce transportation and logistics Costs
• Analyze key manufacturing and supply chain processes and optimize
management of working capital to accelerate cash conversion cycles
and reduce operating expenses
Working Capital Management
Social Media
(Social Media Branding, Social Media Marketing
• Leverage social analytics to engage customers and enhance
relationships with consumers
• Integrate social media insights in Category Management with retailers
Trade Promotion Management
Trade Promotion Effectiveness
Trade Promotion Optimization
• Streamline promotional calendars, communicate promotions
• Incorporate pricing strategy, determine promos with sales lift
• Determine post-event analysis, true net effect of promotions, and
improve execution to derive significant benefits
Mobility
• Get ahead of the tidal change in CPG due to consumerization of IT
• Mobile is the primary connection to improve relationship
management, targeted marketing and increase sales
Recommended Strategic Initiatives during
Transformation (1/2)
• Obtain holistic view of all marketing drivers to drive growth
• Leverage deep understanding of consumer preferences
• Provide information advantage and reduce uncertainty and risk
• Identify right innovation and marketing opportunities
Consumer Insights, Analytics and
Predictive Analytics

20. 20
Recommended Initiatives Strategic Benefits
Demand-Driven Supply Networks • Obtain real-time demand across customers and trading-partners
and respond faster and smarter with integrated business processes
Integrated Sales and Marketing
• Fully Integrated processes from consumer insights to advertising &
trade promotions and in-store execution to maximize the sales
Collaborative Innovation
• Develop the capabilities to Collaborate with consumers, retailers and
distributors for product innovation, develop deeper relationships,
reinforce brand loyalty, and drive growth
New Product Development &
Introduction
• Transform innovation and product development operating models by
leveraging social media to understand customers preferences
Big Data & Demand Signal Repository (DSR)
• Obtain near real-time in-store performance data to drive action
• Collect data from mobile, digital and social media to provide additional
holistic insights and engage consumers with relevant brand messages
Leverage existing SAP investments • Exploit SAP’s full benefits by incorporating their innovations & new
capabilities
• Transform application footprint by eliminating legacy systems
Recommended Strategic Initiatives during
Transformation (2/2)

21. References
 “Leadership makes the difference during Times of Global Financial Crisis” white paper by Chakib
Bouhdary, Chief Strategy Officer of SAP AG.
 “Leadership in Times of Crisis” white paper series by Chakib Bouhdary & SAP Value Engineering
team
 “The Global CFO Study 2008” by IBM Institute for Business Value
 “The Global CFO Study 2010” by IBM Institute for Business Value
 “Focus on Finance - Dare to be Excellent” - Australian General Practice Network
 “CFOs: Not Just for Finance Anymore” by Dr. Howell, Tuck School of Business, Dartmouth College
 “Why Finance Transformation Matters in Global Manufacturing” - A Deloitte Research Global
Manufacturing Study
 “Making finance more than just a scorekeeper” by PWC
 Summary of SAP Product Functions – SAP AG
21
References

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SESSION CODE: 2005
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