Julie Devoll
Welcome to the HBR Video Quick Take. I’m Julie Devoll, editor for special projects and webinars at HBR. Today we’re with Eric van Rossum, chief marketing and solutions officer for SAP Cloud Enterprise Resource Planning. We’re here to talk about what midsize company finance leaders need to succeed. Eric, thank you so much for joining us today.
Eric van Rossum
Thanks for hosting me; I am excited to talk about what all this means for midsize companies.
Julie Devoll
To kick us off, what are some of the issues keeping CFOs up at night?
Eric van Rossum
Great question. At the end of the day, what keeps the CFO up at night, with all the topics throughout the day, and what’s top of mind? CFOs are in a tough spot. We’re in a low-growth, inflationary economic environment. But stakeholders and shareholders still expect revenue growth.
CFOs are thinking: “How do I set the right strategy and roadmap for growth in this volatile and uncertain economy?” And they face some challenges from that perspective. First, they need to create reliable financial forecasts and models when things are so unpredictable. And second, there is a need to ensure the availability of adequate capital to support the growth strategy, as well as the day-to-day operations, which with rising interest rates, means conducting a more focused review of different financial instruments, opportunity costs, and time horizons.
Julie Devoll
How can finance leaders at midsize businesses leverage technologies like Cloud ERP to manage today’s needs? But also, drive towards future growth?
Eric van Rossum
I think there are three things: One, Cloud ERP isn’t limited to just a moment in time. Two, Cloud ERP puts companies on a journey of continuous innovation. And lastly, three, Cloud ERP provides standardization.
And let’s start with that first point, that Cloud ERP isn’t limited to a moment in time. Solutions like S/4HANA Cloud, public edition, grow with you. They allow companies to adopt the capabilities they need as they grow. And particularly for midsize companies, they can get started with the essentials they need to operate today and build from there.
Speed is the name of the game. It’s about going live in two to three months and iterating from there. And this tees up that second point—that Cloud ERP puts companies on a journey of continuous innovation. Companies can leverage quarterly innovation cycles to deploy new capabilities. And this is how we deliver software today, on regular intervals.
And then lastly, there’s standardization. Midsize companies will get the same time-tested processes as their larger competitors out of the box with Cloud ERP without expensive customization. And SAP is known for defining the industry best practices in ERP, and we’re working on defining the next-generation ERP best practices as well. And as I mentioned, customers get these out of the box, driving a quick time to value based on those industry best practices.
Julie Devoll
You’ve mentioned how an organization’s finance and accounting teams can lead the way in ensuring growth and resiliency, both for today and tomorrow. But what can finance do to get the most powerful social and environmental results?
Eric van Rossum
For finance leaders, they can do three things. First and foremost, understand their role. Finance leaders play a key role in driving social and environmental results. They’re going to be stewards and decision makers who help set targets and KPIs for their business, whether that’s carbon accounting or key metrics around social commitments, diversity, inclusion, or environmental impacts.
Second, they can lead by example by incorporating sustainability into the discussions around financial planning, bringing the rigor they’re known for in finance and accounting and applying that to ESG requirements and companywide controls as well. And thirdly, they can partner and collaborate. As ESG requirements evolve from voluntary to mandatory across the globe, standardization and transparency are needed.
That’s going to work best when companies get collaborative and partner with like-minded organizations within and beyond their own standards.
Julie Devoll
Eric, is there anything you’d like to say today in closing to our audience?
Eric van Rossum
Absolutely. At SAP, we’re taking a very active role in supporting efforts to bring more standardization to sustainability. We recently announced plans to introduce what we call a green ledger, which is ledger-based accounting for carbon. Companies can manage carbon entering and leaving their systems and balance their responsibilities to society and the environment, aka their “carbon books,” the same way we do financial books.
ERP has always been the system of record for finance, and with this green ledger, we’re working to make it the system of record for sustainability as well.
Julie Devoll
Eric, this has been a great conversation. Thank you so much for joining us today.
Eric van Rossum
Likewise. I enjoyed it very much and hope to talk with you again soon.
Learn more.
Eric van Rossum is chief marketing and solutions officer for cloud ERP at SAP.
