SAP announced this week that it earned the 2012 PR News CSR award for its 2010 Sustainability Report. The interactive report covers SAP's efforts in designing software for energy management and sustainable operations. The 2010 report includes the following statement from SAP in a pop-up message within the online report:
"Today, SAP helps an estimated 900 million consumers live more safely by providing producers of intermediate and final products with safety solutions for labeling, documentation, handling and safety data related to these materials. Intermediate products – such as flavors, fragrances, or basic chemicals – have an enormous impact on consumer safety because they wind up in downstream finished consumer products. We estimate that the customers we work with provide materials that end up in more than 1/3 of finished manufactured goods. In turn, these goods are utilized by consumers throughout the world – or approximately 1/3 of the global population of 6.8 Billion."
Another feature in the report is a link titled "What matters to you?" This link opens a dashboard that shows the respondents' thoughts about a list of topics such as employee, customer, supplier, governance, and energy. Energy topped the list at the time of this writing.
The report also includes information about SAP's greenhouse gas footprint and explains its plan to reduce its greenhouse gas emissions to year 2000 levels by 2020.
Peter Graf, chief sustainability officer at SAP, issued the following statement with regard to the award:
"Our impact has been significant, from helping hundreds of millions of people consume healthy and safe products, to increasing our own energy efficiency for the fifth year in a row, all the way to impacting a million lives through our social investment activities. The ideas and passion of our customers, partners, employees, shareholders and the public are the source of our innovation that turns our vision of helping the world run better and improving people’s lives into a reality. We designed the SAP sustainability report to engage a year-round conversation with our stakeholders by using the report as a conversation starter.”
For more information on sustainability, refer to these GRC Expert articles:
I recently reached my first anniversary here at WIS publishing. It was a fast year. I remember in my first blog that I wrote a year ago I used a slowly melting mound of snow in our driveway as an analogy for the economy slowly gaining momentum again after being mired in hard times. This past winter in New England was nonexistent -- at least in terms of snowfall. In fact, last month we experienced a few days that were much warmer than usual, and yet during one of those days, I noticed a small mound of snow in the same place that I noticed one last year. This mound was staying on the ground in defiance of the warmer days.
This time the small patch of snow reminded me of how a vulnerability or a risk element can be present in your organization even while you think all your transactions are secure. In a question-and-answer article for GRC Expert, Sonny Dasgupta, senior director, solution marketing, SAP Governance, Risk, and Compliance Solutions at SAP, made the following comment in response to a question about the types of software businesses can use to protect their SAP systems from fraud:
"SAP solutions come off the shelf with controls embedded in them. A good example would be SAP ERP, which has key controls already in place for companies to implement, based on their business scenarios. But having controls is not enough. You have to also prove that these controls are working efficiently and mitigating risks for your company. As part of the SAP BusinessObjects GRC portfolio, SAP BusinessObjects Process Control provides users with capabilities, and our EBS (Enterprise Business Solution) partner, Oversight Systems, also enables businesses to monitor every transaction in their ERP and other systems to look for opportunities to improve business processes and reduce cost by eliminating fraud, waste, errors, and abuse."
Read more of Sonny's comments about continuous transaction monitoring in the full article on GRC Expert.
I recently moderated a web forum with SAP's Birgit Starmanns on SAP's disclosure management functionality. Birgit took questions on the timetable for XBRL compliance, the application's integration with SAP financials and costing, the rapid-deployment solution for the application, and other topics.
For the full Q&A, you can view the questions and Birgit's responses in the Financials Forum or read excerpts from the transcript of the Q&A below.
Gary Byrne (moderator): Thank you for joining us today!
In today's Financials Forum, we will be asking SAP's Birgit Starmanns questions on new options from SAP for automating financial and regulatory reports, including XBRL submissions and quarterly reports. I invite you to ask your questions as well, as you consider how this will affect your financial teams.
I'd also like to thank Birgit Starmanns for taking questions today for readers of Financials Expert and members of Insider Learning Network. Birgit is a frequent contributor to Financials Expert, and she also spoke at the Financials2012 event in Las Vegas just a few weeks ago. She wrote an article in Financials Expert detailing the new SAP BusinessObjects Disclosure Management solution.
Birgit, do you want to start with a quick overview of the challenges of compiling financial reports, and why an organization might turn to a financial disclosure solution? And how have XBRL requirements affected this process?
Birgit Starmanns: Thanks for the question, Gary! The challenges that we see are that it is time-consuming for companies to gather data from different sources; the process of combining financial figures with narrative/unstructured data is usually done via cut-and-paste, which often results in errors. In addition, if a report is sent out internally for approvals, multiple inconsistent edits may be requested, resulting in even more manual adjustments.
XBRL is involved because many companies have begun to look at automating the disclosure process because of the mandate to file financial statements with regulatory agencies in the XBRL format. If the tagging of information is outsourced, there is also a risk of last-minute adjustments resulting in inconsistent information between the financial statements (such as an annual report) and the XBRL instance document that is filed. Ultimately, the same process of bringing together the financial information with narrative benefits the production of both the annual reports as well as the electronic filings.
BeckyMoores: What is the time table for having the capabilities to use this functionality for an enterprise governmental unit? I assume that's down the list of priorities but is there any idea of when?
Birgit Starmanns: Hi Becky,
The timetable will vary by country. There are over 30 countries that currently have XBRL initiatives in place. For the U.S. SEC, 2011 was the year by which all public companies needed to file in XBRL format; in the first year, the level of detail is only "level 1" tagging, and by the third year that a company files in the XBRL format, it must be "level 4" tagging. Level 1 means tagging a footnote as a single block of text, level 2 means tagging each significant accounting policy, level 3 means tagging each table within a footnote, and level 4 means tagging each amount (e.g., the value, label, rounding - thousands vs. millions, currency, etc.).
Mark Chalfen: What are the tools that are generally used by clients who currently don't use Disclosure Management?
Birgit Starmanns: Hi Mark,
Most companies use Microsoft Office software to bring together the key figures (from a financial or consolidation system) and enter the narrative manually. For approvals, those are often tracked in e-mail systems (such as Microsoft Outlook), making it difficult to keep track.
With Disclosure Management, we also leverage Microsoft Office as a tool, but we deliver an add-in which allows financial team members to access the functionality of Disclosure Management from within Word/PowerPoint/Excel in order to maintain only one version of the truth, as well as an audit trail.
Mark Chalfen: Have you seen examples of clients who use Disclosure Management for local entity reporting (monthly management packs) as well as group packs for the main board and shareholders?
Birgit Starmanns: Mark,
Yes, I have seen companies use Disclosure Management for management reports -- it is ideal for executive board packages where it is necessary to bring together financial key figures, narrative, as well as graphics. This is a use case that is actually getting more and more interest from our customers.
Gary Byrne: Birgit, in your article, you state that the information flow of SAP BusinessObjects Disclosure Management includes three stages: gathering the information (inputs); managing the revisions, validations, and approvals of the information (processing); and generating reports in various formats.
Which of these stages poses the biggest challenge to finance teams and how does SAP BusinessObjects Disclosure Management help the teams meet these challenges?
Birgit Starmanns: Gary,
Actually all three stages are almost equally challenging.
For the inputs, most companies have more than one source of data (such as different consolidation systems or general ledgers), plus the narrative information. Disclosure Management allows you to gather all of the information in one place, so that it can be used in all relevant financial reports and statements.
For the processing, the benefit of Disclosure Management is to ensure only one version of the truth -- team members can check out only their sections, which ensures that others cannot make conflicting edits. And we also enable an audit trail of all changes to each version, as well as for the approval process. The workflow enables the collaboration and notification of team members when changes have been made.
For the output, the benefit is that once the information has been consolidated and validated, it can be used for multiple reports, so that it is not necessary to re-validate for each output format (PDF, MS Office, XBRL, HTML).
harsh1209: How does this capability integrate with other core SAP financials and costing?
Birgit Starmanns: Disclosure Management integrates with financials and costing in that the information serves as an input (source) into the disclosure process. Disclosure Management is a tool for the disclosure/reporting process; we do not actually post financial entries there, so there is no write-back that is needed.
Mark Chalfen: Birgit,
Thanks for reply -- do you have any measures for the benefits the solution can provide a global organization?
Birgit Starmanns: Mark,
Yes, there are definitely benefits. Gartner published in 2010 that they estimate a process cost savings of 30% for companies. We have actually seen a few customers achieve even higher cost and time savings, both for the creation of the annual reports as well as board packages.
Mark Chalfen: Birgit - in terms of the 30% cost saving, how does this translate into a ROI? 3 months or 3 years?
Birgit Starmanns: Mark,
We are actually working with a few customers as well as our Value Engineering organization in order to come up with some ROI figures...stay tuned, I hope to be able to publish something soon. One customer (whose story is already published in German) expects a 20% savings within the first year, so the ROI is not as long as 3 years!
Scott Wallask: Hi, Birgit
We know that many folks in our audience work with multiple consolidation systems. For these companies, how will the Disclosure Management solution support that from a technical perspective? And does the solution help financials users understand where the data is being pulled from?
Birgit Starmanns: Scott,
I agree, most companies have more than one consolidation system, and sometimes these are heterogeneous systems (SAP and non-SAP). With Disclosure Management, we can pull information from multiple consolidation systems; we then place it into the data repository within Disclosure Management. From there, it is leveraged in multiple financial reports and statements.
The link to the source system is done in the initial set-up -- for example, a query into SEM-BCS or a link to our BPC consolidation system. The financial team members can then just click a button to refresh the data; they have visibility of the source of the data, and can refresh either all data (from all source systems), or they can select one data source by name and just refresh that.
MarkChalfen: Could you share some insight into how the product could evolve -- what are the areas you are focusing for product development?
Would there be a link to a mobile app -- potentially for approval of content, or to download the final content? Most senior managers like their shiny iPads and rather than play Angry Birds they could do something useful on them!!
Birgit Starmanns: Mark,
In terms of the roadmap, we have already made enhancements -- for example, localizing into additional languages, additional regulatory requirements (such as the E-Bilanz in Germany) and usability (allowing for XBRL tagging not only in Excel, but also in Word). We continue to focus on usability and tightening the integration to other SAP solutions.
I have heard them ask for mobile requirements -- we have a proof of concept demo that we have put together for a customer, although it is not standard at this time. (Nice comment on Angry Birds :)
Have a few more questions:
1. How much time may it take for a customer already on SAP ECC to build this capability?
2. Is it part of SAP BI?
3. Apart from internal reporting, does Disclosure Management also facilitate external reporting as per different GAAPs like IFRS and US GAAPs?
Birgit Starmanns: Harsh,
For a customer to implement Disclosure Management, we typically estimate about 3 months. One customer actually implemented at the same time that they were generating their Q3 reports.
Disclosure Management is part of the EPM (enterprise performance management) suite. It is a separate application.
Disclosure Management definitely facilitates external reporting. It supports all accounting standards (e.g., IFRS, US GAAP, Indian GAAP, Chinese Accounting Standards, etc.), both through financial statements as well as XBRL filings. We have several starter kits for the various accounting standards to help facilitate the XBRL tagging.
Many thanks for your reply. So if I understood correctly, since this is part of a separate EPM app, it may work independent of SAP BI. In other words, a customer who is not using SAP BI for reporting may still implement this for financial reports. Is this statement correct? Thanks.
Birgit Starmanns: Harsh,
Yes, that is correct - this is a separate application. Where SAP BI allows you to do analytics, Disclosure Management implements the collaboration and audit trail needed for external disclosures, and provides the capability for XBRL disclosures.
Mark Chalfen: Can you provide some more information around the pending RDS for Disclosure Management?
What is the scope -- what extra steps would you need to perform?
Birgit Starmanns: Mark,
The RDS has actually just been released! The scope includes tying Disclosure Management back to either the BPC consolidation system or the FC consolidation system (FC - Financial Consolidation, also an EPM solution from SAP). It also includes the pre-tagging for IFRS, as well as pre-defined reports. The additional steps would primarily be any additional reports that a company needs; also, if the accounting standard is not IFRS, there would be some additional work for the initial XBRL tagging for the other standards (although you could leverage an existing starter kit for this).
Mark Chalfen: The RDS sounds interesting -- has this been released for all countries or just the US?
Does the link to BPC link to 7.5 or 10?
Birgit Starmanns: Mark,
The RDS (rapid-deployment solution) is not limited to the US. Either version of BPC will work. The official name is "SAP rapid deployment solution for financial close and disclosure management."
Heather Black: Hi, Birgit,
We are hearing a lot about the challenges of unstructured data -- and it comes up again here with financial disclosures.
Do you have any tips for financials and IT teams as they try to identify and collect unstructured data when trying to automate the financial disclosures? Are organizations you work with usually clear on what data they need to collect, and from what sources? Or perhaps you have some advice on the less obvious data or creative uses for unstructured data?
Birgit Starmanns: Hi, Heather,
Most companies know which data they need to collect, but are still managing the narrative in a word processing document.
For unstructured data, we actually have a solution called "Notes Management" which is most often used with either BW or SEM-BCS. It allows companies to capture unstructured data, or break down accounts into additional details, while validating the information against a consolidation system.
M.S. Hein: We have readers who are dealing with maybe 20-30 reviewers of a quarterly report, for example, with multiple changes along the way. Do you have any advice for best practices for migration of this workflow to Disclosure Management?
Would this solution significantly change this workflow for the financial or corporate reporting team? What about the new process for the reviewer?
Thanks so much!
Birgit Starmanns: Hi, Margaret,
The workflow that a company currently has can be built in Disclosure Management, there is no need to change the process of the corporate reporting department. For each step, you can define who the next person is who needs to either edit or approve a particular chapter or entire statement. There may be a series of editors, followed by a series of approvers. After one person has completed their task (editing or approving), a notification can be sent to the next person. You can also drive the status of the chapter (or entire statement) based on where you are in the editing and approval process.
harsh1209: Thank you, Birgit, for valuable info. And thanks, Gary, for scheduling this informative session.
Gary Byrne: Thanks to all who followed today's discussion!
A full summary of all the questions will be available here in the Financials Forum and in the Financials Group. I encourage you to join these groups for ongoing information and additional resources, and you can post your questions at any time here in the Financials Forum. You can also review Birgit's article in Financials Expert.
In a brief interview at Financials2012, Rohana Gunawardena of Quality Systems & Software answered questions about tips for optimizing FI, configuring SD and FI, and integrating FI and MM. He also discussses misconfigured currency types and offers some advice for Financials2012 conference attendess. Rohana has written several articles for Financials Expert. Here is the transcript of this interview.
Gary Byrne: This is Gary Byrne of Financials Expert. I'm speaking today with Rohana Gunawardena of Quality Systems & Software. Rohana has published numerous articles for Financials Expert on topics such as credit management, financial reporting, and closing. Thank you for joining me today, Rohana. Rohana, I want to ask you first about the customer discussion forum at Financials2012 on tips for automating FI. Could you list a couple of the questions you'd expect to find at a forum like this and any tips you might have yourself?
Rohana Gunawardena: First off, Gary, thank you very much for inviting me to speak with you and giving me this opportunity to share these thoughts. Before I answer this question, let me just quickly explain about the customer discussion forum. The discussion forum is a different format from normal sessions. Attendees talk about their issues and other attendees who have had the same issue respond.
I am there to facilitate, but really it's about attendees getting real solutions from other attendees. A lot of what's really great about this conference is not just its content; it's the opportunity to network with other SAP users, and often you find things you thought were your unique problem are actually a common problem many people have. There are a lot of creative solutions different companies have used.
In terms of things people expect to ask me about optimizing, one of the first steps, I think, could be report performance and finding the correct type of report to use. Within the SAP system, there are numerous reports, many undocumented. How do you find the right report?
Another area a lot of people are looking up is how to speed up month-end close. We talk about things like how to use closing cockpit, and how to align processes to help speed up month-end close.
Another area is finding the best functionality in an SAP system for a given issue or a given process. Within an SAP system, just within financials, there are many, many modules. If you have some kind of reporting issue or process issue, what's the best module to use? Often, I tell people in an SAP system that there are two or three if not five or six solutions -- you need to look carefully at all of them and then choose the best possible solution.
For a couple of tips about functionality, one is a tip about open item clearing and how to trace clearing documents. This is functionality built into the display FI document for displaying the clearing change, one not everybody is aware of.
The second tip is a focus on end user education -- getting the most out of the SAP system's functionality you already have as opposed to going out and building new functionality. If you can educate your users to use what's there in a more effective way to help ramp up your superusers and your regular end users, that can really help things like your month-end close. One very simple example is educating your user about the SAP List Viewer, ALV, and being able to use that functionality effectively to improve their reporting.
Gary: I know that SD and FI configuration issues are still a big concern for many in this audience. Can you talk a little about how the dynamics of FI and SD teams actually lead to significant issues with configuration? Do you have any tips to avoid those issues and help reconcile SD and FI transactions?
Rohana: On that, the first thing I want to talk about is how an SAP system deals with an end-to-end process like the order-to-cash process, where with SD you've got the front end where you're creating your order and your quote, and at the back end, you have FI where you're doing your accounts receivable and cash receipts. The beauty of SAP is it's very highly integrated. You've got these separate modules, but it's pretty transparent to the end users or even when configuring -- the transaction moves from one module to another. Also, we've got the MM module in the mix when we're shipping out our inventory or doing our post goods issue. That's the strength of an SAP system.
One of the problems is that finance users especially, being at the end of supply in the general ledger, think about the GL and think, "Oh, I go to transaction FB01 or FB70, I create a JV, and that's how I get FI postings." In reality, 90% of FI postings come from other modules. It's the result of something that happened in MM, a goods issue or a goods receipt. It's part of the order-to-cash process, the procure to pay process, part of the manufacturing process, or HR where you're on payroll and that creates finance postings. All these other processes are causing feeds into the FI module, and a lot of what happens in posts in FI is dependent on getting the transactions up front correct. For example, somebody makes the wrong entry in a sales order. That could mean the wrong reporting in COPA, and it's very difficult to clean up those things.
What is important is that there's an alignment between the SD and FI teams and they appreciate each other's viewpoint -- that they don't operate in a silo. I've seen this dealt with the best at companies where the teams are actually built on a process basis, so they have an order-to-cash SAP team, they have a procure-to-pay SAP team, and so on, as opposed to more of a silo where here's the FI team, here's the SD team, here's the MM team, here's the PP team. Then people realize, "When I'm setting up the customer master and I'm setting up the account assignment key, that's actually going to impact what happens when selecting the GL account." Most of the time in SD or MM, if you're just an SD user or SD configurator, you're thinking, "Let me just put some config in here so it will just go to FI, I'm not too worried about how it flows through to FI," whereas if you're part of an integrated team you're thinking "OK, this is going to impact the other team."
The most important thing is that the SD, MM, and FI teams have an appreciation for the difficulties that each team has, that they start communicating with each other early on rather than working in silos, and also come to configuration ownership. If you have an area like MM/FI, SD/FI crossover, certain people say, "Oh right, well, this is in the SD section of the IMG, so us FI people won't touch it," and then SD people say, "Well this is in our section of the IMG, but it's about GL accounts and we don't know anything about it." It's in those areas in doubt that FI should really step up and own it. The reason is that if there's bad config, generally FI suffers more.
Also, when do you detect that problem? Usually, it's not at go-live -- it's a few weeks later when you're trying to do your month-end close. Usually, with SD problems, SD people find out their problem pretty early on, within the first day or two of starting a transaction process, whereas FI people will have a big bunch of cleaning up to do at the close and post close.
In these crossover areas between MM/FI and SD/FI, FI should step up and take ownership, and all team members should try to get an understanding of the end-to-end processes. If you're someone in SD and AR, it's good when you're doing your testing if you have the knowledge and the skill level to be able to go create a sales order and push that sales order to delivery, PGI the delivery, create an AR, receive cash, and do the whole process end to end, so you understand where the bits and pieces fit together. It gives you a better appreciation of what your SD and MM colleagues are trying to do.
Gary: Another integration issue is between FI and MM. If FI and MM activities are out of sync, what are the symptoms?
Rohana: With that there are probably two levels of things being out of sync and being the symptoms. I'd say there's the immediate problem, where you just can't move forward, and the more insidious minor, but long-term issue.
What I'd say is an immediate problem you would see is, for example, you're trying to post goods issue and MM can't complete post goods issue because they see an error message saying, "GL account for evaluation type 7200 key GBB is missing" and they can't post. So they want a solution straight away and you've got to fix it. Usually that type of error doesn't make it into production. You catch it pretty early on in testing when you're working on your SAP system.
The other problem you can have is you may have created a new movement type. You made a 900 range copy of, say, the 412 movement type, and you've got one of the flags incorrect on that. It'll post through into FI, and if you're lucky you'll detect it the first month in. Sometimes this can go on for quite a while, where you have the inventory balances out of sync. I've had two customers who had this type of problem, and in both cases, they only found out about it because the auditors came and said, "Can you prove to me this FI balance really matches? You say you have $10 million worth of inventory. I have an inventory stock count list. Can you prove it really matches up?" When people try to do that match up, they say, "We've got a mismatch here," and do a large investigation. Usually it's quite a subtle error -- it might just be that one config field in a movement type is out and it's throwing you. Those are considered the more insidious errors, where they can carry on at a low level. It might be a year before you find out about the problem, and then you've got to correct the problem and you've got to do the cleanup in production for it.
One of the tips I've been talking about is doing the table 30 configuration for automatic account determination in MM. There's a transaction OMWB where most people go to do the configuration. There's also a button in there for the simulation function, so you can say if I go with this material type with this movement type these are the GL accounts I'm going to hit. That's a very useful tool. I talk about how to use that tool because I find that's an underused piece of functionality within SAP.
Gary: I'm also curious about your session on dealing with misconfigured currency types. What are you seeing with customers of multiple currencies at work?
Rohana: The biggest issue I find with customers is actually they have missing currency types. One interesting thing with the SAP system is that when you go live, you set up your company code and you've got to say what your local currency is for that company. Also with an SAP system, you have a group currency, your client-wide currency, and you may forget to switch that on. Unfortunately, the way the SAP system is, if you don't switch that group currency on on day one, you can't switch it on on day two without doing some very complex work. Actually, switching on group currency post go-live is an activity that my firm, QS&S, works on a lot and we specialize in.
Also, we've worked a lot to help customers who are starting up with material ledger, especially if they're trying to implement multiple valuations. For example, they want profit-centered valuations as well as legal valuation. A material ledger needs a special currency type to support profit-centered valuation. Again, that currency type can't be switched on on day two. Typically, when people go live they don't turn on material ledger, but they turn it on two or three years later after go-live, and at that point, all the currency types have been set. That's another area where we work very closely with customers, to enable those currency types post go-live, which is a very difficult thing to do. You can't just switch on the flag.
Types of customers we've worked on as well are people moving to what's now known as SAP GL. A lot of customers move to SAP GL because they want to meet IFRS requirements and they're looking to get their consolidations done out of SAP GL, and they've found out they have that issue with missing group currency. People may have had a workaround, like they've used special ledger or PCA to make up for the missing group currency in General Ledger, but when you move to new GL, those options move away. Again, we've been in there to help customers correct those issues with currency types. One of the things I focus on is, how do the customers who are turning on new company codes with new implementations set up the configuration correctly the first time so that they don't have to go through that clean up process.
Additionally, I've got another session where I focus on FASB 52 compliance. FASB 52 is the Financial Accounting Board's Standard 52 about foreign currency valuation and translation. I talk about it in terms of SAP GL. In previous conferences there have been sessions about this but they focus on classic GL. I'm looking at transactions which your end users may be familiar with called FAGL_FC_VAL and FAGL_FC_TRANS.
Gary: The last question, Rohana. We always like to ask speakers to offer their advice to attendees about enjoying the conference and getting the most out of it. Any thoughts for those attending?
Rohana: Yes. My number one tip for everybody is wear comfortable shoes. All your colleagues back in your office are thinking you're going to Vegas, you're having a wild time, you're partying, you're gambling. Having been at many of these conferences, I realize it's actually a lot of hard work. Wear comfortable shoes, dress comfortably.
Another point is take the opportunity to network. When you sit down at a session, talk to the person sitting next to you, find out what his or her company is doing. As I mentioned earlier, like in the customer discussion forums, you may have problems you think are unique, and then you find a lot of other customers have come across that. Now is your opportunity to find out about the real-life solutions other customers have used.
Do plan the sessions you want to attend in advance. When you register you're given the conference planner. Do have a look through the conference planner and check off the sessions you want to attend, the ones you're going to like. There are a lot, a lot of choices.
Also, because it is a long time here, don't be afraid of missing a session and taking a break. Maybe you need to go to your room, lie down, or nearby there is the MGM Grand spa or pool, and you can go in and take an hour's break there in between.
Gary: That's very good. Thanks for the great advice.
In a podcast with Andrea Haynes, group editor of SAPexperts, Birgit describes the functionality of SAP BusinessObjects Disclosure Management, discusses challenges finance teams face in explaining the results of a financial close to stakeholders within and outside of their businesses. Birgit also explains how SAP BusinessObjects Disclosure Management can help you handle problems of reporting in multiple formats, address version control and other document management issues, and manage unstructured data.
Read the transcript of this podcast here, and if you have your own questions about XBRL, managing financial disclosures, and SAP BusinessObjects Disclosure Management, post them in a live Q&A with Birgit Starmanns on Tuesday, April 3, at 12:30 p.m. EDT in the Financials Forum. Register today for details on the Q&A and look at Birgit's recent Financials Expert article on the topic.
Andrea Haynes: This is Andrea Haynes of SAPexperts. I'm speaking today with Birgit Starmanns of SAP. Birgit is senior director, EPM and finance solutions at SAP Global Marketing. She has more than 13 years' experience at SAP across solution marketing, solution management, and strategic customer communities. Before joining SAP, she was a principal in management consulting organizations for nine years, redesigning business processes and implementing SAP solutions for numerous Fortune 500 and SME companies, with a focus on management accounting. She was also a speaker at our recent SAPinsider Financials 2012 event, but at SAPexperts, we know her as a frequent contributor, most recently in an article in Financials Expert.
Birgit will introduce the SAP BusinessObjects Disclosure Management application, which we'll be talking about today. Thank you for joining me today, Birgit. It's so nice to talk to you again.
Birgit Starmanns: Thanks, Andrea. It's great to be here.
Andrea: Let's start with a brief description of SAP BusinessObjects Disclosure Management.
Birgit: Our new Disclosure Management solution allows companies to gather the data that they need in order to create financial statements in XBRL electronic filing. It automates a process that most companies do in a very manual way, currently, after they close their books. It's really the communication of those results to stakeholders, such as either internal board executives or external investors and, obviously, governmental agencies such as the US SEC.
Andrea: Thank you. Now let's continue with the scenario you laid out in your Financials Expert article, about automating the disclosure of your financial and regulatory reports using SAP BusinessObjects Disclosure Management. You've completed the financial close, but then there's the communication of those results to stakeholders inside and outside of the company. Can you lay out the challenges the finance teams are facing at this point in the cycle?
Birgit: Definitely. One of the biggest pain points is that collecting data from multiple sources is very time-consuming. Many companies have multiple consolidation systems, maybe multiple financial systems, and they first need to gather that information from the various source systems. In some cases, that might even come from Excel. In addition to those financial figures, there have to be narratives to explain those figures. For example, explaining a year-over-year change or some investments that a company has made. Typically, that is not information that is stored in a system, so it's very unstructured data. That means that a lot of companies need to do a lot of cut and paste in order to bring the financial information together with the explanatory narrative.
The other pain point is needing to manipulate that data after the cut and paste. Documents are being put together, and then they get emailed out. If you email out 30 copies of a document, you'll probably get more than 30 edits back and, very often, those edits actually contradict each other, so there is more manual processing involved in reconciling the different edits and making sure that the correct information is actually captured.
Finally, being able to publish those results. In a lot of companies they outsource the tagging of the XBRL filings. That means that it's more difficult to get a last-minute update or elimination entry into the process, and that increases the risk of inconsistent information. Those are all the pain points that we've heard from our customers.
Andrea: How does Disclosure Management handle the problems of reporting in multiple formats?
Birgit: Once you've collected all of this information and you've validated and gotten all the information approved, it can actually be published in multiple places. Once you have, for example, the figures in place, you have the figures that you feed into your annual report, and they can be published in a Word format, HTML format, or PDF format from Adobe. The same information can also be used for that tagging with the XBRL tags for the electronic filings. That reduces the chance of inconsistencies as part of that workflow. By being able to publish in multiple formats, you're only going through that whole collection and validation process one time, and you can leverage that for those multiple output formats.
Andrea: I imagine that some organizations are facing version control issues and document management challenges, given all the people who have to edit and review the statements. How does this work, and how does it simplify the process for the finance team?
Birgit: In our SAP BusinessObjects Disclosure Management solution, one of the biggest benefits that customers get is the ability to collaborate. As part of that collaboration, the different chapters or subchapters of these statements and forms are structured, then different financial team members who have responsibility for those chapters can actually check out those chapters. As that chapter is checked out, it is not possible for somebody else to overwrite that information. Essentially, that means we only have one version of the truth.
As the financial team members check that information back in, we can actually send notification to the next person that either needs to edit that information, or if it's time to have that information approved, it sends a notification in terms of approval. That way, we have a whole workflow in place that controls the status. It controls what you're able to do with each individual chapter, and it also makes sure that you can gather all of the different approvals and have an audit trail for all of those different approvals. That's a really critical piece of that.
Those approvals can be done on a chapter level. They can also be done for the entire statement so, for example, you might have different approvers for the revenue chapter, versus the fixed assets chapter but then, ultimately, the person who's signing off on the entire annual report, for example the CFO, can approve the entire statement all at once as well. We can handle the checking in and checking out of the information at multiple levels, as well as the approvals.
Andrea: Earlier, you mentioned unstructured data. What are the natural integration points between disclosure management and other SAP and non-SAP solutions?
Birgit: The integration points we work with are various solutions that we have to support the accelerated financial close. For example, we can take data from our SAP ERP financial system. We can take information from our consolidation systems and, as you may know, we have multiple consolidation systems. Some of our customers are using the Strategic Enterprise Management BCS or Business Consolidation System, which is built on the Business Warehouse platform. We also have our SAP BusinessObjects Planning and Consolidation solution, as well as our SAP BusinessObjects Financial Consolidation solution.
We can also take information from our Business Intelligence and Business Warehouse solutions, and we can take information from non-SAP systems, so there's no prerequisite that this consolidation system or the financial system is actually an SAP system. That allows customers who might have a heterogeneous environment to bring that information together.
In terms of unstructured data, we have a Notes Management application. If you think of those financial figures that you manage in consolidation, Notes Management is a separate application that allows you to track commentary that can be mapped to those financial figures as you're going through the consolidation process. Ultimately, a lot of financial team members will just type information directly into Disclosure Management.
We allow the financial and corporate reporting team members to leverage their use of Microsoft Office products, for example, Word or Excel, to actually create these statements. We have an add-on that allows them, from within Word and Excel and PowerPoint, to access capabilities from Disclosure Management. We make it very easy to use, so if a company decides that they're going to enter the unstructured data directly into Disclosure Management, it's very easy to support.
Andrea: Who is most affected by Disclosure Management? For example, who will typically set it up? What do you recommend teams do as they scope out the processes and needs for their financial documentation?
Birgit: Typically, this is an application that is owned by finance or corporate reporting. If you think about the finance department that makes sure that the correct information is there, that has the correct information from the financial close, whether it's an entity close or a corporate group close, that information needs to come in. It's typically going to be a corporate reporting department, sometimes investor relations, to make sure that the commentary is appropriate. Because of that use of the Microsoft Office applications, we do expect that it will be owned by finance.
IT is typically involved when we first set up Disclosure Management. They need to make the connections to those other systems. I mentioned earlier that you can bring in information from ERP Financials or from Consolidations, so when that initial mapping is made, IT is typically involved as part of that, but Disclosure Management then remembers where that information comes from, so it's really the press of a button for the financial and corporate reporting teams to get that information into Disclosure Management after the actual setup.
Andrea: I mentioned that you recently presented a session at the Financials 2012 conference. At the end of each session there's a question period, and I think it's fascinating to hear what people are wondering about. Could you go over one or two attendee questions from the conference, and explain what advice you gave?
Birgit: Definitely. One of the questions that came up is, as the financial team members check these chapters in and out, a lot of times there's a question about the audit trail and being able to know who made which changes. I mentioned a little bit earlier that we have an audit trail. If someone checks out a chapter and then checks it back in again, we have an audit trail for all that, but we actually track all of the changes that were made inside the document as well. That might be a change because of an addition or elimination entry that came in from Consolidations. It might be a change in the verbiage.
If you're looking at some of the comparisons, year over year, a figure might have increased versus decreased. We can actually automate that and then track every single change that happened. We can compare against any version, and we can roll back to those versions. That was one of the biggest topics that came up. Another topic that came up was the use of Disclosure Management for board packages. We can also use Disclosure Management not just for formal annual reports or XBRL instance documents, but for board packages and leverage something like a PowerPoint for charting and being able to create board packages in PowerPoint using that information from Consolidations, merging it with graphics and merging it with unstructured data. It's a really good way to handle multiple languages.
The third question that came up quite often is the XBRL taxonomies. For every jurisdiction that a company needs to file in, whether it's in the United States or the UK or Germany or India, most of these jurisdictions have different taxonomies. We support all of those taxonomies. We can import what those standard taxonomies and labels and tags are. We also have the ability to extend those taxonomies, so if there's a unique situation where a company needs a tag that is not in the standard taxonomy, and if that regulatory agency allows extensions, we can handle those extensions within SAP BusinessObjects Disclosure Management. It makes it a very flexible tool for the finance and corporate reporting group.
Andrea: Thank you, that's very informative. I thank you for spending this time to expand on your Financials Expert article, as well as your session at the Financials 2012 Conference.
Birgit: Thank you. Thank you very much for having me. It's been a pleasure.
The closing process in a business involves several stages, including entity closing and the corporate closing. After the company's books are closed for a quarter or a year, however, the company still needs to disclose the results to investors, stakeholders, regulatory agencies, and corporate executives. In her Financials Expert article, "Automate the Disclosure of Your Financial and Regulatory Reports — Including XBRL Submissions," Birgit Starmanns, Senior Director, SAP Marketing, EPM and Finance Solutions at SAP, explains how SAP BusinessObjects Disclosure Management can help you automate management of producing, publishing, and filing of financial statements and regulatory disclosures, including eXtensible Business Reporting Language (XBRL) submissions. According to Starmanns,"the information flow of SAP BusinessObjects Disclosure Management includes three stages: gathering the information (inputs); managing the revisions, validations, and approvals of the information (processing); and generating reports in various formats (outputs)."
She adds that during "each step of the disclosure management process, you can use collaboration to enable better communication between team members to accelerate the completion of the financial and regulatory statements, as well as to ensure that there are no conflicting edits to the chapters and reports."
For more tips on automating disclosure management processes, listen to Birgit's podcast with Andrea Haynes, group editor of SAPexperts.
Do you have your own questions about XBRL, managing financial disclosures, and SAP BusinessObjects Disclosure Management? Post your questions in a live Q&A with Birgit Starmanns on Tuesday, April 3, at 12:30 p.m. EDT in the Financials Forum. Register today for details on the Q&A and look at Birgit's recent Financials Expert article on the topic.
I heard on the radio that today is the 70th anniversary of Casablanca, the classic movie about an American expatriate who becomes involved with resistance against the Nazis in World War II at the expense of losing the woman he loves. Suffice it to say that there was a lot of fuss in the movie over travel papers.
With regard to travel management in today's world, Gaurav Kumar Aggarwal, a senior consultant at Infosys Limited, offers finance managers some advice for streamlining travel and expense settlement in an SAP system. In his Financials Expert article titled "Automate Travel Expense Settlement and Transfer to Finance," Aggarwal outlines seven key steps for travel expense management in a standard SAP system. One of these steps is creating a posting run for transfer of a trip report. When you are ready to execute the settlement and creation of a posting run, Aggarwal states that "you have two options for selecting periods for which you want to settle and create the posting run:
Current period. When you use this option, the payroll period is used to determine the period for execution. This option should be selected for automation when your payroll execution is happening in SAP regularly and the payroll period is representing the current period.
Other period. When you use this option, you need to provide the calendar year and calendar month for execution. This option is more relevant for automation batch job creation as your payroll period does not need to be the current one for automation to work."
Ilsa Laszlo also had two options: stay with Rick in Morocco or get on a plane to Lisbon with her husband. Rick, of course, makes the decision for Ilsa. I'd like to have a dime for all the people who have wiped their eyes with handkerchiefs when Rick places his hand under Ilsa's chin, looks into her eyes for the last time, and says, “Here’s looking at you, kid.”
In a presentation at Financials 2012, Tamara Emerson of Accenture offered the following advice for building enterprise performance management capabilities with SAP BusinessObjects Planning and Consolidation:
When you are implementing SAP BusinessObjects Planning and Consolidation, consider the timing, especially if SAP BusinessObjects Planning and Consolidation is part of a broader implementation of an SAP application at your organization (e.g., SAP ECC). Don't lift and drop existing business planning and consolidation data into SAP BusinessObjects Planning and Consolidation unless your implementation has reached a benchmarked level of maturity.
In the Financials keynote address at Financials 2012, Frank Laluyaux, senior vice president and general manager EPM, GRC, and finance applications, referred to a world that is undergoing dramatic change. For example, Brazil's tax code changes every day. He said that finance should be a steward, strategist, operator (ensure expenses get paid), and catalyst (lead by example).
He cited three pillars of a financial organization: 1. Ensure regulatory compliance and effective risk management 2. Outperform stakeholders' financial expectations 3. Deliver superior service at reduced cost
He said that in-memory, mobile, and cloud technologies are changing enterprise performance management.
Mark White, chief financial officer, global customer operations, at SAP AG said that innovation will bring success to organizations. He cited the following points as key to success for organizations:
*Operate with high quality * Focus on the customer *Attract, develop, and retain talent
He also said that finance should lead by example and talk with customers. He added that compliance must be a foundation and part of a company's culture.
At the Financials Expert Live session earlier today, Paul Ovigele offered attendees a tip on how to update functional areas in documents that have already been posted. Implement SAP Note 677630 to use the following program:
ReleaseProgram Prior to 4.7 ZRFCORRFA 4.7 RFCORRFA ECC 5.0 and higher ZRFCORRFA_FAGL