From data labyrinth to real-time control

The discrepancy is becoming increasingly critical in view of accelerated reporting cycles, growing compliance requirements and the demand for real-time information. Against this backdrop, integrated solutions such as SAP S/4 Hana for Group Reporting open up new perspectives on efficiency, data quality and strategic control capability.Functional, but slow and unreliable - this is probably the best way to describe legacy systems in consolidation and reporting. Although they fulfill their purpose, they harbor risks and, above all, no longer meet current requirements: financial statements often take more than one working week, currency conversions, intragroup eliminations and mergers require many manual adjustments, the necessary processes are spread across several individual solutions - many companies are unaware of these shortcomings in their financial consolidation or even accept them.

The price is high

In the end, there is a financial statement, but the price is often unnoticeably high. The technological basis of many consolidation processes is characterized by a large number of isolated systems, different reporting standards and manually maintained data sources. Consolidation processes often require recurring reconciliations, data extractions and manual additions - with a correspondingly high level of effort and a risk of inconsistencies that should not be underestimated.

Continuous Close

Especially as the complexity and data requirements in financial consolidation are increasing noticeably: Quarterly and monthly financial statements are increasingly based on „fast close“ or „continuous close“ principles. The reporting frequency is therefore increasing - while at the same time the framework conditions are becoming more complex. This is because new topics and obligations are emerging, such as ESG reporting, CSRD, Pillar 2 and sector-specific regulations.
In addition, CFO organizations want to reduce silo structures and standardize data models due to platform consolidation in the ERP environment. Last but not least, heterogeneous IT landscapes are increasing as a result of M&A activities, start-up investments and global business models. All of these developments require a reassessment of established consolidation systems, both from a technical and an organizational perspective.
SAP S/4 Hana for Group Reporting addresses these challenges with an integrated data and process model. Depending on the system architecture, the solution utilizes the possibilities of SAP Hana's in-memory technology and enables a closer connection between individual and group data.
Among other things, the system makes financial information available at an early stage, as redundant data replication can be partially dispensed with. It also maps consolidation logic in a standardized way and reduces reconciliation costs thanks to consistent structures.

Heterogeneous corporate landscapes

In heterogeneous group landscapes, additional integration and data collection processes remain necessary. However, these can be mapped in a structured manner via the SAP Group Reporting Data Collection (GRDC). Modern interface technologies (APIs, event-based integration) are increasingly playing a role here, and their use can significantly influence the degree of automation. While many consolidation steps still require specialist control, organizations can use SAP S/4 Hana for Group Reporting to unlock significant potential in the process: Workflow and validation mechanisms, rule-based automation, standardized data models and harmonized master data and reporting structures make the consolidation process much more efficient overall.

Transparency and governance

These developments are in line with a broader market trend:
The finance sector is developing into a data-driven control center in which transparency and governance are key success factors for regulatory compliance and strategic management. At the same time, technologies such as machine learning, process mining and predictive analytics are increasingly coming into focus. They can be used in the future to identify anomalies at an early stage, measure process quality or further shorten completion cycles - even if these approaches are currently still predominantly supplementary in consolidation practice.
In addition to the core consolidation functions, S/4 Hana for Group Reporting supports a multidimensional reporting and analysis infrastructure with the connection to the SAP Analytics Cloud (SAC). The departments benefit from integrated data models for operational and consolidated data, visualized management and compliance key figures as well as simulation options for forecasting and planning. This enables them to meet modern challenges such as the expectation to provide not only backward-looking reports, but also early decision-making aids and scenario-based analyses.

Cloud or on-prem?

S/4 Hana for Group Reporting is available both as an on-prem and as a cloud solution, so that companies receive a system tailored to their specific needs. The choice between on-prem and cloud operation is not based solely on technical considerations, but also on strategic, regulatory and economic considerations: The cloud offers shorter release cycles, relief for basic operations and access to newer functions, particularly in the areas of analytics and integration.On-prem, on the other hand, enables greater configuration freedom, in-depth system control and remains relevant for companies with strict compliance and data protection requirements. Both variants follow the market trend of harmonizing platforms and focusing on standardized, continuously developed systems.

The right solution?

There is no general answer as to which solution is the right one for a company, as each group has specific requirements and system requirements. When choosing the right solution, advice from external experts is therefore crucial. They have the necessary detailed knowledge of the solutions, experience from other projects and valuable know-how that is required for implementation. (Source: Caleo)

Conclusion

Traditional, fragmented consolidation systems no longer meet the increasing demands for speed, transparency and compliance. However, SAP S/4 Hana for Group Reporting provides companies with an integrated, powerful solution that makes consolidation processes considerably more efficient and reliable thanks to real-time data, standardized structures and high automation potential. At the same time, the close connection to modern analysis tools opens up new possibilities for data-supported control and strategic decision-making. Whether cloud or on-premises - the choice of the right operating model remains an individual, strategic consideration.
However, one thing is clear: modernizing the consolidation landscape is increasingly becoming a key success factor for a sustainable finance and reporting system.

Continue to the partner entry: