SAP's Journey of Implementing SAP Disclosure Management and Notes Management Session 2002 Sonja Simon/Corporate Financial Reporting and Kirk Anderson/EPM Solution Management, May, 2012
Agenda Overview: Notes Management and Disclosure Management Implementation of Notes and Disclosure Management at SAP AG How SAP is using Notes and Disclosure Management Implementation Details. (Timeline, Resources, Major steps (milestones) Implementation Recommendations (Tips/Tricks during implementation) Key Benefits realised or expected. Future Plans XBRL at SAP Summary Question and Answer 2011 SAP AG. All rights reserved. Customer 2
Overview
SAP Disclosure and Notes Management in the Accounting and Financial Close End-to-End Process Financial Accounting Entity Close Corporate Close Reporting and Disclosure As part of the enterprise performance management (EPM) solutions, the new collaborative disclosure management solutions complete the end-to-end accounting and financial close process General Ledger Sub-Ledgers Intercompany Reconciliation Entity Close Management Consolidation Notes Management Reporting and Analysis Disclosure Management Financial Close Governance Internal Controls Master Data Governance for Financials 2011 SAP AG. All rights reserved. Customer 4
Overview: SAP Disclosure Management Create Financial and Non-Financial Statements and Filings Input SAP BusinessObjects Disclosure Management Output Entity Close Data (e.g. General Ledger) Workflow External files (e.g. Spreadsheets) Business Intelligence (e.g. Data Warehouse) Data integration Collaborative editing Workflow Audit trail Corporate Close Data (e.g. Consolidations, Notes) Holding SGE 1 SGE 2 SGE 3 ZH 2 EG 3 EG 5 SGE 4 ZH 1 EG 1 <HTML> EG 4 EG 6 EG 2 2011 SAP AG. All rights reserved. Customer 5
Overview: SAP Notes Management Streamline the collection and management of financial notes and other supplementary data Flexibility Collect supplementary financial data for disclosures Associate descriptive information with financial data Scale the management and re-use of financial notes Simplicity Enable intuitive entry and reporting of financial notes Automate aggregation and validation of notes data Designed to complement SAP reporting landscapes Compliance Supports multiple financial and regulatory reports Ensure compliance with changing regulations Enable a compliant audit trail for unstructured data 2011 SAP AG. All rights reserved. Customer 6
Overview: SAP Notes Management Designed to complement SAP reporting landscapes Supplement quantitative data in SAP landscapes Consolidation systems, including SAP SEM- BCS and SAP BusinessObjects EPM solutions SAP NetWeaver Business Warehouse SAP ERP Financials Management of qualitative data for use in follow-on processes Reporting of narrative data available within SAP BusinessObjects Notes Management Notes data serves as input into SAP BusinessObjects Disclosure Management 2011 SAP AG. All rights reserved. Customer 7
Implementation of Notes and Disclosure Management at SAP AG
About SAP SAP aktuell SAP Group: Total revenue 2011: 18,5 Billion USD (14,2 Billion Euro) More than 190,000 customers in more than 120 countries 59,000 employees (as of March 31st, 2012) 235 consolidated subsidiaries in more than 50 countries (as of March 31st, 2012) SAP-shares are listed on the following stock exchanges / indices Frankfurt Stock Exchange New York Stock Exchange Part of the German DAX 30 as well as the Dow Jones STOXX 50 2011 SAP AG. All rights reserved. Customer 9
Implementation of Notes Management Implementation of Notes Management @ SAP: Implemented in 2009 by members of SAP s Corporate Financial Reporting department Use of Notes Management @ SAP: Gather additional information required from the subsidiaries for the notes to the consolidated financial statement that is not available in the accounting records, e.g. pension disclosures Gather documents from the subsidiaries (e.g. internal certifications from local CFOs to CEOs/CFO) Ad hoc information requests from Corporate Financial Reporting (e.g. XBRL requirements) Ad hoc information requests from other departments (e.g. Treasury) 2011 SAP AG. All rights reserved. Customer 10
Implementation of Notes Management Benefits of Notes Management : Questionnaires can be easily adjusted without IT support Easy to use implementation was done by accountants Cockpit provides always an up-to-date status on what is still open Electronic locks indicate when the questionnaire is finalized and ready for audit / submission to corporate Once locked, only pre-defined authors have permission to re-open the questionnaire Questionnaires can be split into different chapters allows employees to work on several questionnaires at a time 2011 SAP AG. All rights reserved. Customer 11
Implementation of Disclosure Management Implementation of Disclosure Management @ SAP: Corporate Financial Reporting (CFR) received Disclosure Management in May 2011 Implementation by CFR as part of our daily work Only additional support needed: Technical support and advice on best practice regarding setup by SAP internal consultants on a limited basis Interruption of existing IT systems not absolutely necessary No significant training needed 2011 SAP AG. All rights reserved. Customer 12
Implementation of Disclosure Management Use of Disclosure Management @ SAP: Q2 2011: Used for internal analysis provided to the Executive Board Q3 2011: Used for internal analysis and quarterly report (similar to 10-Q) Q4 2011: Used for internal analysis plus entire year-end reporting: Press Release Group Financial Statements in German and English Management Report in German and English Stand-alone Financial Statements of SAP AG Form 20-f in English (similar to 10-K) Accounting and Revenue Recognition Guidelines for the SAP group Future uses planned: Sustainability Report Powerpoint presentation for press release XBRL at subsidiaries Etc. 2011 SAP AG. All rights reserved. Customer 13
Implementation of Disclosure Management Key Functionality Automation of data transfer Focus on value-added activities rather than data transfer Automation of data transfer not only in Excel-tables but also Word documents Reduces potential for errors Use of multiple data sources, e.g. not only accounting data but also reports from Notes Management One source of truth concept ensures consistency of data Validation report identifies rounding errors and inconsistencies Reduces reporting times for the 2011 close, SAP shortened preparation time for Financial Statements by one full week! Used for all reports of internal / external reporting Word / Excel / Powerpoint 2011 SAP AG. All rights reserved. Customer 14
Implementation of Disclosure Management Key Functionality Administration of Reporting Documents @ SAP various departments collaborate in the preparation of our financial reports (e.g. Global Communications, Investor Relations, HR, Treasury, Legal, Sustainability, etc.) Team members are spread across the globe more than 100 users currently established All information can be subdivided into chapters; yet easily combined into an entire report Role-specific access can be granted keep the level of insiders to confidential financial information restricted No more e-mail traffic of the latest version all versions are in Disclosure Management Easily track changes made Users work in the MS Office environment they are used to 2011 SAP AG. All rights reserved. Customer 15
Implementation of Disclosure Management Key Functionality Mark-up of changes Last-minute journal entries are not unusual but: reporting deadlines will not be moved! Disclosure Management updates the data in the entire report at once or chapterspecific as required Changes in tables and documents are marked-up important from control perspective Comparison of documents Disclosure Management enables automatic comparisons between versions both for Word and Excel documents Re-use of reports Roll-forward existing reports to future periods without losing the established connections 2011 SAP AG. All rights reserved. Customer 16
Implementation of Disclosure Management Lessons Learned Implementation: Allow for adequate time to establish reports Establish a number of power users: @ SAP, most of the 100 users received a 30- minute training enough to enable them to work within Disclosure Management. A few power users were trained to handle more complex tasks Define a standard for set-up of Excel-Sheets Change management: Ensure everyone is engaged and problems are addressed early Last but not least: Enjoy the benefits you will gain! 2011 SAP AG. All rights reserved. Customer 17
XBRL at SAP
XBRL @ SAP Relevance of XBRL @ SAP XBRL for SAP s Group Financial Statements Due to our listing on the NYSE, SAP will have to submit our group financial statements in XBRL format going forward SAP has prepared Level I tagged financial statements since 2009 and Level IV tagged financial statements since 2011 available on our website Tagging of 2011 Group Financial Statements with Disclosure Management XBRL for other uses: Increasing number of our subsidiaries worldwide are now subject to XBRL reporting requirements for stand-alone financial statements and/or tax purposes Start working with these subsidiaries to assist with their XBRL reporting requirements GRI Sustainability Taxonomy: assist Sustainability team with tagging Summary: XBRL is quickly becoming the standard for electronic exchange of financial information and therefore a critical capability. As part of an integrated implementation approach however it needs to be considered as one additional output format! 2011 SAP AG. All rights reserved. Customer 19
Summary
SAP BusinessObjects Disclosure Management Reduce the time, risk and cost of regulatory disclosures Key Features Speed and Flexibility Accelerate the generation of disclosure statements Integrate data for a single view across the organization Optimize the close from source to digital disclosure Business Value Reduces Time Accelerates the collection and management of information across the entire enterprise to support regulatory disclosures Collaboration Assign disclosure responsibility to distributed teams Automate integration and data flow Designed for ownership by finance professionals Reduces Cost Streamlines and automates the collection, validation, and approvals with an easy-to-use, visual interface Compliance and Control In-house production of trusted financial statements Support multiple financial and regulatory statements Enable creation of XBRL-based statements Reduces Risk Enables the production and publication of reliable, complete, and auditable financial and regulatory statements 2011 SAP AG. All rights reserved. Customer 21
SAP BusinessObjects Notes Management Streamline the collection and management of financial notes Key Features Flexibility Collect supplementary financial data for disclosures Associate descriptive information with financial data Scale the management and re-use of financial notes Business Value Increased transparency Enables the collection and re-use of unstructured, descriptive data to support financial figures Simplicity Enable intuitive entry and reporting of financial notes Automate aggregation and validation of notes data Designed to complement SAP reporting landscapes Compliance Supports multiple financial and regulatory reports Ensure compliance with changing regulations Enable a compliant audit trail for unstructured data Increased usability Provides intuitive entry and automated validation and reporting of unstructured notes data Increased confidence Improves consistency and reliability of qualitative data in financial notes 2011 SAP AG. All rights reserved. Customer 22
Question and Answer
Thank You! Contact information: Sonja Simon Head of Group Accounting and Reporting Sonja.simon@sap.com +49-171-3070045 Kirk Anderson Vice-President Solution Management Enterprise Performance Management Kirk.anderson@sap.com +1-416-218-6570
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