Most finance professionals in Asia-Pacific recognise the need to quickly interpret data to better respond to market changes, but believe their organisations lack advanced analytic capabilities to support decision making.
Only 17 percent of these executives believed their businesses had advanced analytics tools, such as methods to predict outcomes and model complex business scenarios, revealed a survey by SAP and CFO Research, which polled 292 respondents from Singapore, Australia, China, Hong Kong, India, and Japan. They were part of a global survey of 1,544 finance professionals from large corporations that also included North American, European, and Latin American markets.
Across the six Asia-Pacific markets, 50 percent expressed a lack of confidence that their finance functions were well-equipped to generate meaningful business analysis and reporting, said Richard Mclean, SAP's Asia-Pacific and Japan CFO, who presented the findings at a briefing Wednesday in Singapore.
This apparent inadequacy should be disappointing, especially since 80 percent of the region's respondents recognised the importance of being able to quickly interpret and translate data into actionable insights, in order to ensure their organisation's success over the next five years. This was crucial to keep pace with the rapidly changing industry and increasingly complex business environment.
Noting that complexity was a key barrier to digital transformation, Mclean said: "Less than 1 percent of today's data is being converted into business benefits, and 40 percent of management's time is wasted on non-revenue generating activities."
In Singapore, 74 percent of the survey's respondents expected increasing complexity and data volume over the next five years to further complicate the conversion of information into swift action, he said. Furthermore, 76 percent felt growing pressure to slash the cost of finance, with 79 percent pointing to the need to enhance their company's speed, flexibility, and ease of use of its data systems to better enable the finance team to provide more value to the business.
Findings were similar across the other Asian markets, including China where 89 percent of respondents expected greater demand within their organisation, over the next five years, for reporting that encompassed meaningful insights in addition to the underlying data. Some 80 percent anticipated increasing complexity and data volume, making it more difficult to interpret the information into decisive action.
Among the Chinese respondents, 92 percent believed their company's success would depend on its ability to effectively tap advanced analytics. However, 90 percent felt that their organisation did not have capabilities in advanced analytics.
In Australia, 83 percent expected greater demand within their organisation, over the next five years, for reporting that encompassed meaningful insights in addition to the underlying data, while 73 percent said increasing complexity and data volume would make it tougher to interpret the information into decisive action. Like their peers in Singapore, 80 percent of respondents Down Under believed their organisation currently did not have capabilities in advanced analytics. This despite the revelation that 87 percent of Australian respondents believed their company's success in the next five years would depend on its ability to effectively use advanced analytics.
"Finance departments are becoming more integrated with the business and are starting to realise the correlation between business agility, technology adoption, and organisational success," Mclean said. "As they take steps towards digitising and automating processes internally, it is important to provide them with technologies that enable swift decision-making based on real-time data to generate insights and analysis, which can steer their enterprises towards success."
SAP touts newly launched Digital Boardroom
At the briefing, SAP executives hitched a demo of its Digital Boardroom offering, which was launched to general availability just last month after the concept was first announced at the software vendor's Sapphire event earlier this year.
Touted to "contextualise and simplify performance reporting across all areas of business in real-time", the new application is built on SAP's Cloud for Analytics and runs data from the SAP S/4 HANA platform. It looks at data from inside as well as outside the company, including risk value by country, stock performance, and analyst estimates.
It also assesses feeds from social media, among others, to evaluate market sentiments and enable organisations to gauge, for instance, public reception of a new product, explained SAP's Asia-Pacific and Japan COO Scott Russell. Digital Boardroom has more than 200 pre-made tiles, including revenue performance and sales pipelines, from which enterprise customers can choose to run predictions and scenarios.
Stressing the importance of running analytics based on real-time corporate data, Russell said finance executives should no longer be constrained by outdated information that were days old to make critical business decisions. He added that the new SAP product would enable these executives to tap real-time data to provide better forecasts and actionable insights on what the organisation would need to do to achieve its identified targets.
"In today's fast-paced business environment, adaptability and agility are key attributes that have the potential to set successful companies apart from others," he said.
Digital Boardroom customers would need to run SAP HANA, he noted, adding that the vendor had no plans to offer the tool on other third-party platforms. According to Russell, SAP has more than 1,300 enterprise customers in Asia-Pacific that currently are running HANA.
He added that SAP itself had been piloting Digital Boardroom based on its own data. Asked if any customers had sign up since it was introduced last month, SAP said there had been "broad interest globally" and some customers were using the new offering. However, it declined to provide details about these enterprise users, citing the lack of permission to do so from the clients.