CFOs Will Benefit from In-Memory Corporate Performance Management

SAP Sapphire event

 

Last week I took part in SAP’s SAPPHIRE NOW event in Orlando, Florida. It was a great opportunity to sharpen perspective on how in-memory database technology will benefit our corporate performance management (CPM) customers, especially the Office of the CFO. Tagetik believes in the promise of in-memory data processing. It allows Finance to incorporate more data in models and analysis and take finance-related processes to a finer level of granularity. For example, in-memory CPM can enable real-time consolidations and allocations at deeper levels of detail than previously possible. CFOs can leverage in-memory technology like SAP HANA to expand data sources beyond traditional financial data, using unstructured data as well as data from external sources and departments across the organization.


The impact of this expanded and enriched data on financial processes such as budgeting, planning and forecasting will be significant, and opens intriguing possibilities for CFOs. Moreover, the speed and efficiency of response to queries and modeling should jump dramatically, despite the greater data volumes. The gains from increased speed and scalability are not just found in valuable staff hours saved – more important is what happens when Finance and other departments have freedom to model and query with greater detail, scope, volume, and speed. I anticipate more creative, more productive, and more frequent modeling and forecasting from in-memory technology will enable finance to be much more strategic in its analysis and to spend less time and effort on critical but burdensome processes.


SAP HANA

SAP now bases its product strategy on the in-memory technology of SAP HANA, which some benchmarks have rated as being 3,600 times faster than standard disks. At SAPPHIRE NOW, HANA was the focal point of nearly every keynote, and was presented as the ideal common platform for the application progression from ERP to CPM/BI and analytics.
At Tagetik, we have adopted in-memory data processing via our OEM partnership with SAP, which helps us provide CFOs with a corporate performance management solution that can take advantage of SAP HANA’s impressive speed and scalability to manage huge amounts of financial and non-financial data.


Big Data for CFOs

Another point heard often at SAPPHIRE NOW: Because HANA’s speed allows much larger data models to be analyzed and queried, it is the answer for the exploding volume of Big Data, which takes “large” to an entirely new level by drawing on external sources. That includes non-financial data and unstructured information for use in analysis, modeling, budgeting, and forecasting.

 

CFOs may not see Big Data as their most pressing challenge; the volumes in most core financial applications do not hit the terabyte or petabyte range. Nevertheless, Big Data has significance in corporate performance management.  It is likely to be leveraged in most areas of Finance where in-memory is expected to play a role:

  • Planning and forecasting.  Data-driven budgeting and rolling forecasts will incorporate external data and go beyond traditional Finance data.
  • Advanced financial and management analytics.  For monthly closing, consolidation, statutory reporting and variance analysis.
  • Profitability modelling and optimization. Complex cost analysis, product/customer profitability and allocations.
  • Compliance. As nervous regulators want to see more data, more frequently. Solvency II, for example, requires insurers to hold information about counterparties, while IFRS demands segment-by-segment data.  
  • Fraud control.  In-memory is suited to continuous analysis of details of every transaction to detect signatures of fraudulent behavior.


HANA—how fast is really fast, and what’s the end benefit?

Just to give one illustration: HANA is so fast, there’s no need for a separate analytics platform anyone who has spent time in IT can appreciate the resources that saves. HANA’s performance, and SAP’s vision for it, are two key reasons we have incorporated HANA as an underlying database for Tagetik.  
In the bigger picture, in-memory will be an element of realizing the promise of CPM and enterprise IT. As Marco Pierallini wrote in a recent blog, CPM ideally “enables a style of management characterized by more frequent assessment and smaller course corrections, which are more effective in running a business—and consume fewer resources than infrequent, more severe course corrections.”  Tagetik driven by HANA is a powerful enabler.


How will your company leverage in-memory processing?

Not every company is ready to move to an in-memory platform, of course; this is always the case with relatively new technology. For enterprise IT, the handwriting is on the wall: just as cloud computing was a slow but unstoppable tidal wave, in-memory processing is too. Oracle, Microsoft, IBM, and Teradata agree— as they all have embraced in-memory database technology.
Finance organizations should determine how they will leverage the speed and scalability of in-memory processing. My suggestion is to start with  a low-risk way to get experience and benefits more quickly, especially for those not yet ready to move all their transactional systems to HANA. Also, strongly evalutate a hybrid HANA/Non-HANA environment which is where many organizations—even strong SAP adherents—are likely to be for the next several years.

 

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