Achieving Financial Excellence

Can organizations quickly gear up

to the current challenges?

Rajamani Srinivasan

Vice President – Solution Engineering

SAP Indian Sub-continent

Date: 28th May, 2009

Challenges for a CFO in the current times1

2

Agenda

Summary3

Achieving Strategic Agility through innovative

solutions from SAP

© SAP 2007 / Page 3

Gaining Efficiency in Finance

Optimizing Working Capital

Free-up Working Capital

Decrease Day Sales Outstanding

Decrease Bad-debt write-offs

Driving Strategy and Growth

Supporting Excellence in

Corporate Operations

Manage Real-Estate

Manage Global Travel Policies

Develop Talents & Leadership

Ensuring Compliance and

Mitigating Risks

Measure Profitability

Control Costs

Define Benchmarks and KPIs

Link Strategy with Execution

Handle Mergers & Acquisitions

Control Processes Efficiently

Manage Risks

Support Audits Decrease Cost of Finance

Accelerate Financial Close

Organize Finance Operations

Efficiently across the Enterprise

CFO – Multi-faceted responsibilities

Speed

• Fast close

• Fast transformation

• Fast reporting

HRMS Enterprise Applications

Compliance Speed

Transparency

Compliance

• Compliance with

rules and regulations

• Detection of

exceptions

Transparency

• Accurate, auditable

accounting

• Consistent internal and

external information

Corporate Governance Objectives

Corporate Governance Objectives

Corporate governance involves the responsible management and

supervision of a company focused on long-term value creation.

Risk Management

Good Governance has an Impact On Credit Ratings

To meet Standard & Poor’s requirement, a formal Enterprise Risk Management

process must be in place covering business risk (not just compliance)

Starting Q3 2008, all enterprises will be evaluated on their ERM practices, and in

Q2 2009 the ERM score will impact credit rating calculations

Poor ERM scores could substantially impact an enterprise’s cost of capital

1 Year Credit Spread for Industrial Companies, Source: S&P

For example:

Drop from A to BBB+ = 70%

increase in cost of capital

Drop from BBB to BBB- = 75%

increase in cost of capital

Internal Controls and RM as Proof of Good Governance: Effective and Efficient Management

Challenges for a CFO in the current times1

2

Agenda

Summary3

Achieving Strategic Agility through innovative

solutions from SAP

Today’s Priorities in Finance Translate

into Technology Requirements

Strong Demand for

Analytical Applications and Corporate Performance Management

Integrated Approaches to Governance, Risk & Compliance

Automation of Core Finance Processes

Flexibility and Extensibility, e.g. supporting

Financial Shared Service Center

Impact

for IT

SCOPE IN 3 YEARS

Compliance & Audit

Finance Services

Financial

Transactions

Business Insight Drive Strategy and Growth

Ensure Compliance & Mitigate Risk

Provide Excellence in Finance Operations

Pressure to Lower Costs

…Is Driving Shift in FocusIncreasing Pressure on Finance

26%

20%

22%

32%

TODAY

18%

19%

17%

46%

Strategy to Execution Today ….

in Many Enterprises

ERP &

Transaction Systems

Execution

Strategy

Strategy Inititiative tracking

Performance

Analysis

Group

Consolidat

ion

Business Planning

KPI

dashboards

Project Reporting

Budgeting

Simulation

Cost Tracking

Risk

Management

Internal Controls

Situation Analysis

Data

Warehouse

Companies often manage

most (~70%) of their most

critical information with

Excel sheets and other

point solutions, whose access,

control, distribution, accuracy and

integrity is extremely difficult to

ensure.

Resulting in*:

95% of a typical workforcedoes not understand itsorganization’s strategy

90% of organizations fail toexecute their strategiessuccessfully

70% of organizations do notlink middle managementincentives to strategy

60% of organizations do notlink strategy to budgeting

*Source: Performance Collaborative

Survey 2007

SAP Financial Performance

Management

World-class applications supporting all

financial processes enabling closed loop

financial performance management

Performance Management Across

the Enterprise

SAP Solutions for the Office of the

CFO

Innovative (Business User-focused)

and integrated solutions

(example integration of Strategy

Management with GRC Risk

Management solution)

Superior user experience

Addresses SAP and non-SAP

systems

Consolidation

PlanningStrategyManagement

Cost and ProfitabilityManagement

Define strategy and prioritize accordingly to help ensure alignment with corporate goals

Gain insight to manage and measure business plans and enable proactive, rather than reactive, business tactics

Meet all legal and management reporting requirements with automated, robust consolidation processes

Drive enterprise profitability through a real-time understanding of cost,capacity, and revenue

Providing the framework for an

integrated approach to GRC

SAP Business Objects solutions for GRC

Enterprise Risk ManagementRisk

Business

Applications and

IT Infrastructure

Access

ControlCompliance

& Controls

Governance Corporate Sustainability Management

Industries

Life Sciences

High Tech

Chemicals Oil & Gas

Utilities

ESOA Platform SONA

Process

Control

Global

Trade

Environ-

mental

GRC

Composites

SAP ERP Non SAP

SAP ERP Stack for Sustaining Compliance:

Localized versions for > 120 countries

Audit information system

SAP ERP Financials Applications Design Document principles

Inherent and Reporting Controls

Self-auditing processes by integration and standardization

SAP NetWeaver Technical Security Standards

Authorization Concept

Tracking of table changes

SAP ERP Stack for Sustaining Compliance:

Localized versions for > 120 countries

Audit information system

SAP ERP Financials Applications Design Document principles

Inherent and Reporting Controls

Self-auditing processes by integration and standardization

SAP NetWeaver Technical Security Standards

Authorization Concept

Tracking of table changes

Risk based approach to

internal controls

Proper segregation of duties

Automated process controls

Real-time management

© SAP 2007 / Page 11

Fast close – Accelerate the account

to report process

Customer Quotes:

“We decided to use SAP because our controllers can execute the period-end closing within the SAP R/3

environment more efficiently. We achieved a time reduction of 25% in the closing process.”

– Zeiss Optronik“

“

„The new general ledger management functionality enabled us to map the complexity of our finance and

accounting processes within one central system. We now have one single source of truth throughout

the whole company“.

– Dieter Bankosegger, Head of Finance, HDI Austria

“

Closing Preparation

LocalClose

GroupClose

Audit Support

ReportValuation

forAccounting

Closing

Cockpit

Audit Information

System (AIS)

SAP Business

Objects Reporting

Integrated

Financial Accounting and

Management Accounting

Intercompany

reconciliation

Business

ConsolidationSAP GRC So Financial Analytics

„With BusinessObjects Financial Consolidation, we’ve been able to move from a limited bimonthly

financial close of 33 days to a 10-day monthly full close process. The outcome is a significant

improvement in the quality of data, which in turn has increased our confidence and understanding of

Nissan’s performance“

– Alain Pierre Raynaud, Global Controller of Group Finance and member of the Nissan Group Executive Committee

© SAP 2007 / Page 12

Financial Supply Chain Management

and Treasury with SAP

SAP provides enhanced Tools to Improve Cash Flow and Cash Management

Choose from the following options according to your individual needs

Issueinvoice

Forecastcash

Financeworking capital

Resolvedisputes

Collectcash

Checkcredit-

worthiness

Settle& pay

Reconcile

Electronic billpresentment and payment

SAP Dispute management

SAP Collectionsmanagement

SAP Credit management

Cash and liquidity

management

SAP Treasury and risk

management

SAP In-house cash

SAP Bank Communication

Management

Challenges for a CFO in the current times1

2

Agenda

Summary3

Achieving Strategic Agility through innovative

solutions from SAP

© SAP 2007 / Page 14

Gaining Efficiency in Finance

Integrated Standard-Processes

Integrated Financial and

Management Accounting

Fast Close Solutions

Support of Shared Service Centers

SAP’ Game Plan for Financial

Excellence

An Integrated Platform for Efficiency and Growth

Optimizing Working Capital

Financial Supply Chain Management

Cash and Liquidity Management

Treasury and Risk Management

Driving Strategy and Growth

Management Accounting

Financial Reporting and Analytics

Business Intelligence Platform

Financial Performance Mgmt.

Supporting Excellence in

Corporate Operations

Real-Estate Management

Travel Management

Talent Management

Ensuring Compliance and

Mitigating Risks

“Self-auditing” integrated processes

Inherent process controls

Audit Information System

SAP GRC (Governance, Risk, and

Compliance)

Top Reasons why SAP is

chosen

An example:

GRC + EPM + BI value proposition in Finance

SAP - Market Leader in Business

User Applications

Most complete, more

modern, more usable

business user suite

Growing importance of risk in

GRC applications

Superior usability and more

functionally complete EPM

applications

#1 Business Intelligence (BI)

platform and tools to unify

information across silos

Optimized for SAP (especially

ERP), but runs in non-SAP

“SAP is the first significant vendor

to focus on the CFO in this way.”

- Leading Analyst Firm

Help CFO understand

where the business is goingKeep CFO compliant, and

mitigate risk

Help CFO run

business efficiently

Give CFO one version

of the truth; distribute

information for all users

SAP: #1

SAP: #1

SAP: #1 SAP: #1

Thank you!