SAP’s Director of Business Analytics Paul Devlin examines different ways of fostering a culture of analytics in organisations, to aid in the decision-making process
AS EINSTEIN is famously quoted as saying, “the definition of insanity is doing the same thing over and over again and expecting a different result”.
Yet, as I travel across the Middle East and meet with finance executives, I still see the same pattern, time and again. Data is silo’d, companies can only look in the rear view mirror of their business, the CFO cannot make strategic decision based on data and therefore plays a tactical role in decision making in the company.
Planning and budgeting
Audit takes weeks, instead of days. Quarter end and year end reporting takes weeks instead of a few days. The process of planning and budgeting is often not integrated and its impact on strategy non-existent. With this is mind, how can the CFO ask the “what if” question and have it answered in seconds. How does the CFO make the transition from tactical to strategic and with it, guide every decision the business makes, based on data?
Today, the pace of business is changing at a rate unlike anything we have ever seen before. The time it takes to get a new product to market has gone from years to months.
To make things even more challenging, organisations are also dealing with an increasing volume of information, mass adoption of mobile devices and social media, heightened risk, and increasing compliance regulations. To run better, we need to be smart about our businesses. This applied to everything we do, both within the company and across our ecosystem. So, where do we start?
Business Analytics Solutions
To deal with it all, more users need more access to more information than ever before. Gartner, the world’s leading information technology research and advisory company, states that by 2014, 50 per cent of employees in a typical organisation will have access to some kind of analytic system. This rises to 75 per cent by 2020.
The good news is that companies are seeing real return on the investment they are making in analytics. Nucleus Research did a study that showed a return of $10.66 for every dollar spent on analytics. So how do you foster a culture of analytics in your organisation?
First, we need to make sure our users are informed. We need to break down barriers to getting information where and when it’s needed to whatever level of detail that is necessary to solve the problem. Users need enterprise systems that are Apple-simple and Google-fast without the need for a lot of training or IT support.
US online grocer FreshDirect used SAP BusinessObjects business intelligence (BI) solutions to help them significantly manage down delivery costs. Parking tickets are a huge part of being a New York-based business, especially one with more than 250 trucks going out into the city.
FreshDirect built a database of its parking summonses, parking tickets and included latitude and longitude information so it could plot the locations of the parking tickets. The company also captured the drivers of the routes who got the tickets, and who the route supervisors were.
The company also incorporated unstructured data from the New York City department of transportation about its parking laws, including information on where parking was allowed on every block, and what hours of the day parking is allowed or prohibited. The company created a map-based dashboard to show where the tickets were issued, who the employees were that got them and the managers’ names.
Analytics allowed FreshDirect to drive accountability in the organisation and drive costs down, as well as giving managers a visual way to have a proactive conversation with their employees about how to avoid the ticket the next time.
In the past, companies have sought to be built to last. Now, to survive, companies have to be built to change. To do that, it is more and more important to have everyone aligned around the execution of strategies and objectives set for the company.
Maintaining alignment across an enterprise in a world of constant mergers and acquisitions, divestures and a variety of other outside pressures is challenging when you are managing all of this on a bunch of Excel spreadsheets.
Using both SAP BusinessObjects BI solutions and SAP solutions for enterprise performance management (EPM), American sports clothing and accessories company Under Armour aligned its business around key performance indicators (KPIs) that helped it improve operational efficiency. The company also leveraged these tools to allow greater collaboration on the plan to make it a living document. With this solution, they had a better perspective on the most significant drivers of financial impact across the enterprise.
Companies need to quickly adapt to a changing market while keeping an eye on risks throughout the business. The need to be resilient in the face of change is a requirement for enterprises today. As we have seen over the last decade or so, the companies that have been the most resilient to the effects of a stricter regulatory environment – as well as those that have been able to adapt to changes in the market – are the ones that have not only survived but thrived.
More and more companies have been investing in SAP solutions for governance, risk and compliance to ensure that they can withstand the pressure of change.
Denim firm Levi’s, for example, has deployed a programme using SAP technology to ensure that there is a strong Separation of Duties policy enforced to stay in Sarbanes-Oxley compliance. Therefore, the company doesn’t have someone who can both create a vendor and pay a vendor.
Achieve remarkable results
SAP has been investing in new innovations that will completely revolutionise the decision-making process by making them easier to deploy, smarter and available at critical moments of engagement. SAP has built in-memory database technology to power all of these solutions so that Big Data is no longer a barrier to relevant information.
In context, advanced analytics solutions let businesses and the CFO understand drivers of past performance and model future directions using “what if” analysis and predictive functionality. SAP has built a mobility strategy that crosses the entire platform, so that we can have access to information anywhere, whether it is in the boardroom, a construction site or in a coffee shop. It not only focuses on easy-to-use applications, but also secures applications.
Finally, SAP recognises the need for companies to be able to have a variety of deployment options. The company has added cloud-based options for fast, affordable deployments that don’t require significant IT involvement. You can’t have a revolution without a culture to support it. SAPs solutions are all about helping to drive this culture of analytics throughout your entire analytics ecosystem will allow you to truly revolutionise the decision-making process.
So let’s banish Einstein’s definition of insanity to history. Through SAP, the CFO has the ability to have control of the entire business. Through this control and collaboration, across all the disciplines of his organisation, he can plot a brighter future for the company, creating renewed and continuous differentiation. Ensuring increased customer satisfaction, extending shareholder value and ensuring the discipline of finance and accounting remains strategic in the boardroom.