Moore's law is slowing down, organization with focus on cost advantage will have better chance to thrive

Is Moore's law about:

A. Smaller, faster transistors? OR
B. Economics of chip making?

My answer is 'A', until 'B' holds true.

"The culprits (for the slowing of Moore's Law) are the rapidly rising costs associated with technology development and the capital equipment needed to produce next-generation nodes" 

McKinsey identifies this trend in the semiconductor industry in this article, and many Industry experts agree with this trend.

With pressing economic challenges and slower technological breakthroughs, organizations are focusing on cutting costs and consolidating of the value chain (via Partnerships and/or Acquisitions) 

The challenge for decision-makers within an organization is:- 

1. Do I have the right information from all functions within an organization to model and plan for the future?

Traditionally EPM vendors had 'whiteboard' models – i.e. models with some features for financial planning but none for Sales and HR. Implementation of these EPM suites took six months or more, with minimal interaction of the various models.  Host Analytics offers a true, unified Cloud EPM suite, where most of the features are right out of the box. Financial, Workforce, Sales and CAPEX planning are all part of Host Analytics EPM offering.

B. Rising costs - How do we manage or decrease its unfavorable effects
Breaking down costs through Activity-based costing (ABC) (or Segment/channels for Sales/Marketing) can help organizations to identify the activities (expensive production process, or segment with higher costs) which need further analysis. You can view this information in Host Analytics (Actual's loaded from ERP and other systems), identify the issues and plan accordingly
Host Analytics offers integration services to many ERP and other systems, and drill-down to transaction details is also available.

C. Rolling forecasts, reporting and what if scenarios - Volatility, ConsolidationsWith Host Analytics Cloud EPM Suite, organizations can create rolling forecasts and create the most realistic picture possible of the future. There is no complex setup to create a rolling forecast.
You don’t have to purchase a different system for close management or consolidations, its available within the Host Analytics suite. Yes, it can even offer multi-currency consolidations and complex intercompany and equity eliminations.
You can also run 'what if' scenarios for consolidations and view the impact on the Balance Sheet and Income Statements.

D. Modeling of non-Financial information
Host Analytics 'Modeling' module recognizes the need for modeling of non-Financial information and flexibility to model and plan using Microsoft Excel as a front-end. With Host Analytics Modeling, you can model e.g. sales leads/opportunities or inventory SKU planning and then link then to other models .

To find out more, register for a Free demo

The Host Analytics Future of Finance Tour Tours starts in San Francisco on August 12th, 2015 

Cloud CPM suits positioned to be next 'Leaders' in Gartner's 2015 report.

Cloud CPM suite providers -Host Analytics, Adaptive Insights, Tagetik and Anaplan are moving into 'Leader' quadrant. Gartner has published 'Magic Quadrant CPM 2015 Report' and identifies trends in CPM suites.

Current hosted solution providers - SAP , Oracle and IBM are current leaders in CPM solution offering. They are late to understand customers needs, as their focus was on their cash cows 'ERP'. Cloud CPM suite providers realized this opportunity, and now with high customer satisfaction, they will move in 'Leader' quadrant.

Three strengths which cloud CPM has are

1. Pure-play 'Cloud' solutions- which translates to reduced costs per user and easy upgrades
2. Mobile device accessibility- user friendly UI and web analytics
3. Pre-built models for planning and consolidation, and function specific rich features. e.g. HR and Sales models.

Host Analytics, was the first pure-play cloud vendor. Host Analytics started offering its cloud CPM service in 2007. It maintains its 'visionary' vendor position. Host Analytics provides function specific rich features to HR and Sales models.

To make migration to Cloud, vendors offer migration paths and tools to move your models and data from legacy to cloud CPM suite.

If you have a need for cloud CPM solution, please contact us. We will be happy to assist you in moving away from 'Excel chaos' or expensive hosted solution.

World Cup 2014 -Predictive Analytics Showdown

Are you in World Cup 2014 friendly pool? Get help from 'experts' on statistically predicting 'who would advance and win the 2014 World Cup'.

If your betting window is closed, enjoy the game.

The models being off-target and you lose, it's very likely you will forget the loss (Freakonomics, bad predictions are rarely punished). Statistical models always learn from past recent events and refine the variables. Hope you win next time.

Here are the collections of World Cup 2014 Data Analytics and Visualizations

Nate Silver Vs. Goldman Sachs Vs. Bloomberg

Remember Nate Silver, 2008 US General Elections Prediction?, He and his team at FiveThirtyEight have statistical models on various subjects- Politics, Economics, Science, Life and Sports.

I like FiveThirtyEight.com the visualization of the model.

FiveThirtyEight explains the statistical models which calculates the probability of teams advancing to the World Cup 2014 final. This model uses ESPN's SPI (Soccer Power Index).

Bloomberg with BSports have a good visualization, you can add your predictions and visualize.

The third model is by Goldman Sachs (they have been doing this since last four World cups)

SAP vs SAS vs R

SAP Lumira has fun facts and profitability.

There is not much analysis by SAS team, except this blog.

R-Bloggers contributors have posted statistical predictions -one favoring Germany and other Brazil.

Statsinthewild has interesting stats and data visualization.

Data Visualization

My favorite tool to visualize and learn World cup data is Google Trends. It uses real-time search data and uses interesting visualization techniques. I LOVE IT !!!

Tableau uses ESPN SPI statistics

What's is the difference between Prediction and Forecasting?
Prediction is a estimate of a specific event in the future. Forecasting is identifying all possible outcomes with each having its own probability, the total probability of all events will be close to 1.

The world just woke up now to 'Predictive Analysis'. The below Google Trends graphs seems to agree

Sneak Peek of New SAP Smart Accounting Functionality-2013 CO Conference

SAP Smart Financials 1.0

We see the next evolution of SAP Business Suite on HANA for Financials in Smart Financials 1.0

SAP Smart Financials 1.0 has new functional features, thanks to the underlying SAP HANA. The is to have

• More granularity for better reporting, and
• Faster close (by removing the reconciliation effort)

SAP Smart Financials is not just a technical change, to implement a good Change Management strategy and high adoption rate is required.

Financial Planning with SAP Smart Financials 1.0

1. The one area which interests me is Financial Planning, Smart Financial data is not available in ERP (as of release 1.0) . This is not a major issue if users report variance in BI. (The release note says the data is stored in BI). 
2. Any processing of financial planning is not supported. This implies users loose 'Integrated' planning scenarios in ERP. It is not good news for clients which use the Integrated Financial Planning feature in SAP ERP.

This above changes should not be a surprise as SAP has been commited on SAP EPM as the planning solution.

To read more about the release note click here SAP Smart Financial Release Notes. Select SAP solutions > SAP ERP Add-Ons > Smart Financials

Comparison of SAP Smart Financials, New GL and Old GL

	Smart Financials 1.0 (SAP ERP on HANA) (2013)	New General Ledger (2005)	Old General Ledger
	Compatible with New GL only
Data Storage	Document tables and line item tables	Document tables, line item tables, indexes	Document tables, line item tables, indexes, has different FI/CO tables
Totals table	None, no inconsistencies between FI documents and totals tables	Yes along with document/line item tables	Yes along with document/line item tables
Views	Tables (index) are replaced by views. View are available for BSIS, BSAS, GLTO, FAGLFLEXT
Special Purpose Ledgers (SPL)	Not available	Available, Can use ‘Ledgers’ concept	Available
Credit Management	Recommends FSCM-Credit Management (FSCM-AR)	FSCM-AR, FIN-AR-CR	FSCM-AR*, FIN-AR-CR
Asset Accounting	New Asset Accounting replaces Classical Asset Accounting	Classical Asset Accounting	Classical Asset Accounting
Constraints	-          Balance Sheet Planning no longer available -          Reports for comparing planning data and actual data in Profit Center Accounting -          Destruction of data or deletion of FI documents (Information Lifecycle Management)

New Features in SAP Smart Financials 1.0

New Asset Accounting: Ledger Approach and Accounts Approach

·         With Smart Financials both the actual values of the leading valuation and the values of parallel valuation in real time.

Line Item Based Controlling with Period Close Optimizations (Enhanced) 

Variance Calculation for Cost Centers (Changed)

·         Option to process the controlling area currency only or both the controlling area currency and the cost object currency.

·         The execution time for processing the controlling area currency only is around half that required for processing the controlling area currency and object currency

WIP Calculation and Results Analysis (Changed)

·         The production orders are valued at actual cost for the selected plant with the defined legal valuation for a single result analysis version

·         Customer enhancement and WIP calculation for product cost collectors and process orders are not supported

·         Multiple valuations is not supported

Variance Calculation for Production Orders (Changed)

·         Accelerated collective variance calculation on production orders compares the target costs (in the form of standard costs) with the control costs (actual cost less scrap cost) of all production orders in the plant, and assigns the resulting variances to variance categories

Smart Financials Reporting (New)

·         Line items reports supported SAP HANA

Integrated Business Planning (New)

·         In the first release of this new planning solution, the development of functionality has been focused on enabling plan data capturing in a very user-friendly way.

·         If further plan data processing is necessary, releasing them to the classic FI/CO plan data tables may be considered in future releases

SAP EPM 10- Matrix Security

I have posted a video here, to demonstrate the Matrix Security in SAP EPM10. You can use multiple dimensions to build you data access profile. This allows administrators to have a complex scenario, and also reduces the total number of data access profiles.

In the video i have demonstrated, how you can create a DAP using a Region and Product combination.

Data Access Profile	Footwear	Apparel	Accessories
VP_Sales	World	World	World
Apparel_Sales	Africa, AsiaPac, Europe	Africa, AsiaPac, Europe, N America, S America	Africa, AsiaPac, Europe, N America, S America
Footwear_Sales	N America, S America	Read Only	Read Only

Is it possible to create a Matrix Profile with three dimensions- Region, Product and Time?

The above scenario will be useful when e.g. a Footwear Sales Manager's role evolves (FY 2015, FY 2016

) and is responsible for apparel and accessories in three year planning cycle. Or a Sales Manager's role will be shrunk  (in FY 2015, 2016) to only Footwear, as the company grows it adds apparel and accessories to a new sales manager.

Link to the YouTube Video

Profitability Analysis in SAP BPC with HANA

If you have a background in SAP COPA (Controlling-Profitability Analysis) and wondered if similar planning can be done in SAP BPC, you will find this article interesting.

SAP COPA is a great tool to collect the actual data, but does not have a good user interface for planning. Users of COPA usually plan in Microsoft Excel sheet and plugin the values in COPA planning templates. This defeats the whole purpose of interactive planning. This is due to the fact the templates are not flexible and cannot be generated dynamically.

In earlier blog we discussed about 'Key Figure' limitation in BPC. 

The other limitation is COPA can have 50 Characters, whereas a BPC Model ('Application' in 7.5 am older versions) can have only 20. An Environment ('ApplicationSet' in BPC 7.5 an older versions) can have 50 or more dimensions, if required we can create multiple Models each with different sets of COPA characteristic (or Characteristic groups) and join them using a common denominator (e.g. a segment).

We have helped clients to address COPA planning limitations in BPC. Contact us to discuss your case scenario.

With HANA, many limitations of COPA using traditional database can be overcome. We will cover COPA+HANA in over next blog.