Should Finance care about SAP HANA?

What is SAP HANA?

There has been a lot of buzz around In Memory Computing (IMC) in the tech world.  But what is it and what does it mean to finance?  In a nutshell, IMC moves transactional processing from a physical drive into memory, eliminating the Input/Output (IO) performance lag that comes with reading and writing data to a hard drive. Think about it - every time you do a calculation the computer goes to the database to read data, performs the calculation, and then writes the result back.  Depending of what process you are running and how much data is necessary, the time lost doing IO can be significant. SAP HANA is an IMC platform that eliminates much of this IO which can greatly improve performance. 

 

How can it help?

A good example in finance is when doing financial and profitability analytics. In Corporate Performance Management solutions, this type of multi-dimensional analysis is best suited for an OLAP cube but these cubes are not the best for managing complex finance processes with hundreds of users and high volumes of data. So, to accomplish both typically requires a relational database for scalability and traceability and OLAP for multidimensional reporting and slice-and-dice analytics. In some cases it can take a bit of time to actually “spin up” that analysis cube when you want to do analysis, especially if you have a decent amount of data.

Architecture Pre - SAP HANA

Each one of these steps in Figure 1 takes time. This could take seconds, or minutes depending on the amount of data in each.  Now let’s look at the same process but with an SAP HANA architecture.

SAP HANA Architecture

 

The best of relational and multidimensional

In HANA’s unique architecture the cube is actually created instantly as the data is processed in the database. This completely eliminates the downtime of creating the cube itself, and because it is in memory there is no IO lag, so analysis is truly “real-time” and performance is significantly improved. 

 

Why should finance care?

What this means is as your data is processed through financial consolidation, budgeting, and planning, you immediately have the ability to do analysis.  No more waiting, or lag in data being analyzed vs what’s in the database. It is truly real-time analytics for you to measure the performance of your business, enabling you to make informed decisions in a timely manner, during the process not after. 

 

Taking Financial Analytics to the Next Level

It also helps when processing any type of advanced calculations, such as advanced allocations or predictive analytics.   With a traditional relational database these processes could involve millions of transactions reading and writing against the database server.  By moving this into memory you get near-instant results, giving you immediate insight into product or customer profitability. So, the combination of the financial functionality required to build these calculations and the IMC technology of SAP HANA means the sophisticated or very detailed allocations and profitability analysis that has traditionally brought CPM systems to their knees will now be possible.  At Tagetik we are one of the few CPM vendors that can support these types of sophisticated calculations and HANA will allow us to do even more in this area.  Tagetik on HANA will take financial and profitability analytics to level never seen before that will still be owned and managed by Finance.  That is what gets us excited about what HANA can do for Finance.

So, in my opinion, the buzz around IMC and specifically SAP HANA is for good reason and is a technology innovation that will stand up to the hype.  Understanding and applying this technology to finance processes is what my development team has been working on for almost a year and we are very excited about the doors it will open for improving the way that finance works.  So should Finance care about SAP HANA?  The answer is a resounding YES.  

What are your thoughts?  What could you do if you had real-time financial analytics at any level of detail you need?  

 

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