Data is the new oil.
Mathematician Clive Humby coined this phrase in 2006, explaining that data in the 21st century is like oil in the 18th century. It’s a valuable, unrefined resource with untapped potential. Those who work to extract it have a huge advantage over those who don’t.
In 2011 Peter Sondergaard, former Gartner Executive Vice President, added to the analogy while presenting at the Gartner IT Symposium/Xpo. “Data is the oil of the 21st century,” he said, “and analytics is the combustion engine.”
It’s easy to see the connection. A car’s engine is the powerhouse that converts gas into mechanical energy and propels it forward. Similarly, analytics tools transform data into insights and empower companies to move forward with key metrics.
Today, over a decade later, organizations have expanded on this concept once again. If data is the oil, and analytics is the engine, extended planning and analysis (xP&A) is the GPS.
xP&A is a planning approach that goes beyond traditional financial planning and analysis. It builds and integrates strategic, financial, and operational plans across an organization to maximize business value. When combined with data and analytics, the oil and the engine, it acts as the business’ GPS by:
- Creating an aligned route for all users with a shared destination
- Using contextual data to turn insights into a plan of action
- Adjusting the course based on real-time conditions and roadblocks
The key is to use all three—the data, the analytics, and the xP&A approach—together.
But what does this look like in practice?
Here are the stories of three organizations that paired SAP HANA, our in-memory database foundation, with SAP solutions for extended planning and analysis, which include SAP Analytics Cloud and SAP Integrated Business Planning, to optimize their performance.
Clariant developed an end-to-end forecasting tool
Clariant is a world leader in specialty chemicals and a key player in multiple global supply chains. To keep up with the rapid pace of change in volatile markets, their finance team needs to be able to predict future expenses. Clariant had been using an in-house forecasting solution, but it was costly, difficult to maintain, and often caused delays.
They partnered with MIBCON NDC to develop a robust product costing solution that simulates costs for multiple scenarios and uses data from a wide array of sources. Together, they built a calculation engine that runs on SAP HANA and is fed with data from SAP S/4HANA and SAP Business Warehouse. They introduced SAP Analytics Cloud to provide reporting capabilities.
After implementing their new solution, Clariant gained near-real-time, dynamic simulations of impacts caused by supply trends. Now, rather than creating one simulation per quarter, users can easily access instant forecasting in a variety of scenarios.
Robert Vultier, Project Business Owner, Procurement at Clariant noticed a remarkable improvement. “Before, so much time was spent on converting purchasing forecasts into business effects that they became outdated by the time they arrived at sales,” he said. “Now, we can immediately report on changes and thus have a closer connection between sales with procurement.”
Roche optimized forecasting with historical data
As the world’s largest biotechnology company, Roche is committed to advancing the healthcare industry. Over the next ten years, they aim to deliver twice the number of medical advances to society at half the cost. Their team had been using a manual forecasting process, but it was time-consuming and disconnected across business units, and they were looking for a better way to plan.
Roche decided to automate their financial forecasting process. They connected their existing SAP Business Warehouse solution, which was built on an SAP HANA data foundation, to SAP Analytics Cloud, and were able to access and analyze years of data in one place.
Now, the finance team can develop more precise and streamlined forecasts in less time. Generating billion-dollar financial forecasts used to take several weeks, but now users can create similar forecasts in only two hours. It’s given them more time to guide their scientists in optimal resource allocation, which brings them even closer to reaching their goal.
David Dubowsky, Head of R&D Finance Centre of Excellence, expanded on this, saying, “Every minute we allow our R&D organization to focus on the science has an exponential impact on bringing transformative medicines and treatments to society.”
Signify established a standardized analytics platform
Signify, a spin-off of Phillips, is an industry leader in conventional, LED, and connected lighting systems. In their journey to become an intelligent enterprise, they sought to optimize their data analysis processes. They had been accessing data from siloed sources across their organization, and their team was spending much of their time trying to standardize the results.
To achieve cost savings and enhanced insights, Signify streamlined their analytics platform. They now use one data warehouse, built on SAP HANA, and introduced SAP Analytics Cloud to centralize their analysis processes.
Users can access the same information from one source, which has given them data consistency and improved security. Leveraging SAP HANA and SAP Analytics Cloud has empowered the team to make faster, more data-driven decisions and has enabled Signify to provide their customers with improved products. Since implementation, they’ve achieved a 20% reduction in the total cost of ownership.
“The information is much more easily accessible,” said Kurt De Ruwe, CIO of Signify. “Using the SAP technologies, we provide fact-based insights to users, and that helps them to provide better services to our end consumers.”
Transform your analytics strategy with SAP xP&A solutions
Clariant, Roche, and Signify leveraged xP&A solutions to align their teams, mitigate risk, and plan with confidence. Their stories demonstrate the power of uniting data and analytics with extended planning and analysis.
To go back to our automotive analogy, they’ve added a GPS to their oil and engine. Using the three tools together gives them an advantage in navigating market uncertainties and driving business value. Better business outcomes are achieved by strategic plans that are flexible and executed tactfully. After all, if you were going on an important trip, wouldn’t you turn on your GPS?
To learn more about SAP xP&A solutions, try the Guided xP&A Experience.
For a deeper dive into the three customer stories, check out the business transformation studies:
- Clariant: staying ahead of volatile global markets with real-time, dynamic price forecasting
- Roche: advancing medicine by optimizing financial forecasting with predictive planning
- Signify: transforming into a data-driven enterprise with SAP Analytics Cloud
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