SAP's Journey of Implementing SAP Disclosure Management and Notes Management Session 2002

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SAP's Journey of Implementing SAP Disclosure

Management and Notes Management

Session 2002

Sonja Simon/Corporate Financial Reporting and

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Customer

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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

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Customer

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SAP Disclosure and Notes Management in the

Accounting and Financial Close End-to-End Process

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

Entity

Close

Corporate

Close

Financial

Accounting

Reporting and

Disclosure

Financial

Close

Governance

Internal Controls

Master Data Governance for Financials

General Ledger

Sub-Ledgers

Intercompany

Reconciliation

Reporting

and Analysis

Consolidation

Notes

Management

Disclosure

Management

Entity Close

Management

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SAP BusinessObjects

Disclosure Management

Overview: SAP Disclosure Management

Create Financial and Non-Financial Statements and Filings

Holding SGE 1 SGE 2 SGE 3

ZH 1 ZH 2 EG 1 EG 5 EG 3 SGE 4

Corporate

Close Data

(e.g.

Consolidations,

Notes)

Business Intelligence

(e.g. Data Warehouse)

External files

(e.g. Spreadsheets)

Entity Close Data

(e.g. General Ledger)

Input

<HTML>

Output

Workflow

Data integration

Collaborative editing

Workflow

Audit trail

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Customer

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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

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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

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Implementation of Notes and

Disclosure Management at

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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

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Customer

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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

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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

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Customer

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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

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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

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Customer

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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

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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

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Customer

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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

chapter-specific – 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

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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

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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

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SAP BusinessObjects Disclosure Management

Reduce the time, risk and cost of regulatory disclosures

Key Features

Business Value

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

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

Reduces Risk

Enables the production and

publication of reliable, complete,

and auditable financial and

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Customer

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SAP BusinessObjects Notes Management

Streamline the collection and management of financial notes

Key Features

Business Value

Flexibility

Collect supplementary financial data for disclosures

Associate descriptive information with financial data

Scale the management and re-use of financial notes

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

Increased usability

Provides intuitive entry and

automated validation and

reporting of unstructured notes

data

Compliance

Supports multiple financial and regulatory reports

Ensure compliance with changing regulations

Enable a compliant audit trail for unstructured data

Increased confidence

Improves consistency and

reliability of qualitative data in

financial notes

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Thank You!

Contact information:

Sonja Simon

Head of Group Accounting and Reporting

+49-171-3070045

Kirk Anderson

Vice-President Solution Management Enterprise Performance Management

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