Launch2SAP Redefines Analytics in the Cloud” – that was the headline for the press release announcing SAP Cloud for Analytics which was formally unveiled during the keynotes at SAP TechEd Las Vegas. SAP Cloud for Analytics brings together the ability to analyze, predict and plan in one product. So whether you’re a business analyst that needs to do data discovery and visualization; a business operations person who needs to do reporting and planning; an FP&A pro who needs to do planning, profitability modeling, and forecasting; a data scientist that needs to build predictive models for the aforementioned to leverage; or a manager consuming key metrics and performance indicators in a report or dashboard, there’s now one interface to do it with the ability to collaborate with your colleague’s in context.

Bernd Leukert

Bernd Leukert, Member of the SAP Executive Board, Products & Innovation at SAP, introduces SAP Cloud for Analytics during SAP TechEd Las Vegas Keynote

To date these capabilities have been delivered in a siloed product approach – you can buy this planning tool here but it doesn’t do data discovery; you can buy this BI tool there if you want to do in depth analysis but it doesn’t do planning; and you can buy this predictive analytics product if you want to do predictive modeling. All separate products- all separate product categories. But here’s the kicker, and here’s why we designed SAP Cloud for Analytics – Finance professionals, business analysts, board members – anybody who is involved with decision making, needs a combination of these capabilities to do their jobs.

Why should they have to buy and integrate a patchwork of point cloud solutions? This question is what inspired us to build SAP Cloud for Analytics.

SAP Cloud for Planning becomes SAP Cloud for Analytics

SAP Cloud for Analytics was born out of SAP Cloud for Planning (generally available since February 2015), our built for SaaS application targeted at Financial Planning and Analysis (FP&A) professionals. SAP Cloud for Analytics is the new name for SAP Cloud for Planning reflecting the additional capabilities of data discovery and visualization, and predictive analytics. When we designed SAP Cloud for Planning, we rethought how an FP&A person would want to use a planning application and where current cloud offerings from planning and Enterprise Performance Management (EPM) vendors were missing the mark. That’s the advantage of being a late entrant to a space – you get to see where others are not solving current problems and bring to market an innovative solution that does. What we noticed were three key things:

  • current cloud solutions only solved part of the problem requiring people to stitch together multiple products to do their jobs
  • most current cloud offerings were based on old technologies and paradigms (some well over 10 years old) with performance limitations that restricted what questions could be asked
  • many current cloud EPM offerings were just too difficult to use limiting adoption

Something that only solves part of the problem is not a solution

From a Finance perspective, FP&A’s job involves, “acting as the analytical engine of the company to provide insights and support optimal decision making”. This includes planning/modeling, budgeting, forecasting, and variance analysis, “to provide accurate and timely recommendations” (that’s where predictive analytics and in-memory computing come into play). To date, no product provides these capabilities in one interface, so most finance teams are using a hodgepodge of tools to try and do this or worse, just using standalone spreadsheets. It’s been virtually impossible to pry Excel out of the hands of Finance because they like the formula driven modeling capabilities and flexibility which they aren’t getting in current tools.

With SAP Cloud for Planning we strategically decided to embed analytics into the planning interface so that FP&A wouldn’t have to integrate multiple products and flip between products/screens to do their jobs of supporting optimal decision making. We also made the modeling environment formula driven vs the traditional OLAP approach. Building this on the SAP HANA Cloud Platform removed performance barriers from the equation. This allowed us to give Finance the benefits of Excel without the downside of using Excel spreadsheets.

But the plan was never to stop at just planning and analysis for Finance. We realized that the same issue for Finance was being experienced in lines of business – artificial disconnect between planning and analysis, disconnected business planning processes, and difficult to use tools again fostering the use of Excel. In fact, some of our first opportunities for SAP Cloud for Planning were not for financial planning requirements but in lines of business for sales planning and headcount planning.

EPM is more of a process than a product category

At the same time that we built SAP Cloud for Planning, we started to question the separation between the product categories of Business Intelligence (BI), EPM, and predictive analytics. Do these really need to be separate products/categories? I’ve spent the last 12 years in the analytics space (5 years in BI and the last 7 years in EPM) so I’ve seen the market from both the EPM and BI perspective. The real difference between BI and EPM is the audience not the technology. In the past, BI was typically sold to IT/developers to create reports consumed by others, and EPM to Finance as “applications” for monitoring KPIs, financial planning, and consolidations/disclosure.

But these “stereotypes” of BI and EPM are already being challenged. Self-service agile data discovery and visualization has replaced IT driven “production reporting” as the predominant form of BI. Business operations analysts also do planning. Finance teams build reports in addition to planning and forecasting models. In fact, I’d argue that EPM is more a process than a software category – the process of managing business performance using BI tools, methodologies (ex. balanced scorecard), and processes (ex. annual budgeting). Only one of these elements is pure technology – BI tools. Methodologies and processes are best practices that make their way into technology as content (formulas, logic, reports, KPIs, etc.) and that’s what gets delivered in the form of “EPM applications”. In other words, EPM to date has been about selling analytic applications with prebuilt content to Finance and pretty much finance only.

SAP Cloud for Analytics

SAP Cloud for Analytics for planning provides an intuitive interface for planning, visualization, and reporting.

Cloud for Analytics looks beyond Finance to serving the entire analytics needs of the organization

Driving better decision making and business performance requires cross-organizational participation and EPM application adoption has never broken out of Finance. Many analysts are recognizing this and rethinking how they define EPM. For example, Gartner is splitting their Corporate Performance Management (CPM) category into “Strategic CPM” and “Finance CPM” – the former more oriented towards business planning and analysis and the latter at purely Finance functions (consolidations, close, and disclosure management). In, “the Breakup of the CPM Suite[1]”, Gartner states, “Management reporting has evolved past traditional responsibility reporting. Organizations are expecting more robust visualizations and an integrated performance perspective from their applications, bringing together KPIs/metrics, results and forecasts for operational areas linked to financial reporting (the flip side of IFP) into consistent playbooks and performance reports. For many organizations, these capabilities are a combination of disclosure management, BI and traditional CPM capabilities, yet extended beyond traditional accounting walls.”

The siloed approach to EPM has also been challenged by Ovum’s Surya Mukherjee who states, “The SAP Cloud for Analytics announcement is noteworthy because it is the harbinger of a unified analytic future across departments and an end to the ‘data myopic’ mentality that has long affected finance. For too long, EPM has existed as an analytic silo, isolated from the rest of enterprise in every sense – in data, analytics, and skills. This means that line-of-business professionals have never properly understood the rationale behind financial planning and haven’t been able to contribute meaningfully to finance processes.”

With SAP Cloud for Analytics we deliver embedded finance functions, formulas and other content for finance today and also plan to deliver packaged application extensions for sales, marketing, and HR. IT can still build reports if required and even embed SAP Cloud for Analytics in other applications. The difference is all this is done in one experience/platform across capabilities and across all users which not only makes it easier for you as a user to do your job but easier for you as a company to buy, manage and roll out a solution to drive better decision making across your entire organization.

Because SAP Cloud for Planning has been available since February, you can already start using the planning capabilities of SAP Cloud for Analytics today. New data discovery and visualization capabilities are planned to be available soon (you can request a trial here) and embedded predictive analytics in early 2016. Beyond that we look to bring risk management into the equation continuing to redefine analytics and to further enhance your ability to drive better, fact-based decision making and results.

[1] “The Breakup of the CPM Suite”. John E. Van Decker, Christopher Iervolino. Gartner Inc. 28 July 2015

This blog originally published on CFOKnowledge and has been republished with permission.

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