The evolution of finance Steps for modernizing the office of the CFO

Transcription

1 The evolution of finance Steps for modernizing the office of the CFO February 13, 2018

2 Webcast notes Resources List: Download today s slides and access other helpful links by clicking the icon Q & A: Have a question? Click the icon Polling questions: click on the radio button (circle) to the left of your desired response, then click Submit to record your response Help: For technical assistance, click the widget at the bottom of your screen. You may also try refreshing your browser if you experience technical issues, such as your screen freezing.

3 CPE credit eligibility Remain on the webcast for a minimum of 50 minutes Participate in polling questions (75% response required) To answer a polling question, click on the radio button to the left of your desired response, then click Submit to record your answer You do not need to have the correct answer but must participate to receive credit 1.0 CPE credit will be issued to eligible participants at the end of the event Visit the Certification center and click the download icon to access your certificate Be sure to save a copy to your computer before the end of the event RSM employees: CPE will appear on your MyLearning transcript Group CPE credit is not available for this event; each participant must be logged in to the webcast NASBA will not issue credit if all criteria are not met, without exception

4 The evolution of finance Steps for modernizing the office of the CFO February 13, 2018

5 Today s presenters Dan Wheadon Partner Technology & Management Consulting Finance & Accounting Practice Lead Gavin Backos Principal Technology & Management Consulting Performance Management & Analytics Lead Pete Emerling Director Technology & Management Consulting Corporate Performance Management Solutions Lead 5

6 Course objectives Overview: The digital evolution is transforming the way finance professionals must approach their job as well as the skills and tools they must use on a daily basis to drive organizational success. This session will help you learn how best practices and finance technologies can help you leverage digital and the cloud to transform the finance operation and modernize the office of the chief financial officer (CFO). Attendees to this session will learn how to: Leverage disruptive technologies in finance to: Reduce the close cycle by approximately three to five days Automate repeatable financial procedures increasing efficiencies by approximately 30 percent Establish an effective finance platform that significantly reduces the risk of error and strengthens financial control Make informed business decisions by integrating the financial planning function Bridge the financial gap by integrating the value chain of various technologies into an enterprise financial close cycle Quantify the benefits of digital finance 6

7 The digital evolution Digital disruption What is digital disruption? Digital landscape What are the effects of digital on operations? Disrupt Evolve Effects Manage Digital evolution. What is the path to becoming a digital disruptor in finance? Managing How do I manage the timeline towards digital? 7

8 DIGITAL DISRUPTION

9 What is digital disruption in finance? Digital disruption is an effect that changes the fundamental expectations and behaviors in a culture, market, industry or process that is caused by, or expressed through, digital capabilities, channels or assets.* 9 *Gartner IT Glossary

10 What does digital disruption look like? 10

11 Digital disruption in finance Cloud Robotics Advanced analytics Scalable and flexible technology enables services to be provided via the internet. Large scale software investments can be replaced by a full suite of as a service functionality Automated bots allow the automation of recurring processes and communication between systems Primarily autonomous tools allow the rapid examination of data. Complex tools and techniques yield significant insights and the ability to make predictions Cognitive computing Advanced artificial intelligence (AI) enabled to think like humans and incorporate machine learning 11 Blockchain Utilization of a two way entry system and global digital ledger of transactions. Continuous updates can potentially render it almost impossible to defraud

12 DIGITAL EVOLUTION

13 Finance digital evolution Value drivers Scalability Speed Costs Vision Control Insight Digital solutions Cloud Robotics Cognitive computing Advanced analytics Blockchain Finance organization Integrated ERP and financials Highly trained finance teams 13

14 Digital evolution Becoming a disruptor The path to becoming a digital disruptor is directly aligned with modernizing the finance function, many CFO s consider themselves further along than they truly are Disruptor Transactional Disjointed processes Legacy apps Transitionally overburdened Non existent digital initiatives Structured Automated basic business needs Continuous assessment of process and pains Inconsistent and poorly integrated apps Digital initiatives executed on a project basis Explorer Automation of key transactional areas Integration of critical apps End to end viability to drive performance Alignment of digital priorities with IT Finance provides consistent but not innovative products Transformer Automated and dynamic End to end integration Fully informed decision making Synergetic with IT Full alignment of Finance digital roadmap with IT Internal channels leveraged to enhance customer experience Digitally enabled product / service experience on a continuous basis Continuous improvement of digital and functional processes Ecosystem awareness and feedback continuously pushes innovation Finance organization supports primarily analytical activities to drive business activities 14

15 Key technology investments are critical to the evolution of middle-market finance functions Unified business applications Today s technology is widely available and more affordable. Middle market firms should consider these investments at a minimum to optimize their finance function. Corporate performance management Analytical tools Financial close automation Communication and collaboration tools Cloud technology plays a critical role in making these investments a reality. 15 Remote accessibility

16 DIGITAL LANDSCAPE MANAGING THE CLOSE

17 Where are finance organizations headed? Organizations are migrating to cloud-first Business user ownership of applications are moving away from IT Finance will own change management Significant automation to non-value added processes Improving integration between ERPs, planning, close and consolidation processes Focusing on analytics with increased strategic focus 17

18 Voice of the customer Technology disruption Source: FSN 72% of senior finance professionals believe more CFOs will be responsible for technology in the future, but almost a third of them are currently Source: FSN 81 percent of senior finance professionals believe CFOs ultimately will be responsible for corporate data in the future. Source: Gartner / FEI 84 percent of CFOs surveyed said that half their companies transactions will be delivered through SaaS in the next four or more ears. struggling to make the best use of technology. Source: ACCA 90% of spreadsheets contain serious errors, while more than 90% of spreadsheet users are convinced that they re error-free. Source: Big 4 thought leadership Robotic Process Automation provides competitive positioning that will automate an additional 45% of work activities. 18

19 Introducing the CAP game plan C.A.P - Supporting the need for change by reducing cost, enhancing cycle time, service and quality. C C lose automation & controls Reduce the amount of days to close by 3-5 Cloud based close automation technology Unaltered integration with ERP, GL & Sub-ledger ERP / System agnostic Improving efficiencies > 50% Completeness validation, reducing control risk CAP Integrated finance and accounting A A ccounting/erp & transactions Integrated financial ERP with all financial applications ERP designed to support effective processes (process led technology enablement) Enables real-time visibility into financial drivers P P erformance management & analytics Integrated CPM tool with GL and other financial data sources Eliminates use of Excel / informed decision making Aligns financial performance with expectations Reduces planning cycles by > 50% 19

20 Technology disruption - Strategy to vision Immediate reduction of near term risk > 40 % efficiencies - focus on more value add activities 20% - 50% enhancement in timeliness to close Building the finance technology roadmap Bridging the gap Performance management & analytics VISION Effective workforce, standardized and repeatable functions Enhanced financial controls, integrated technology and less manual intervention Ease of continuous performance measurement STRATEGY Close automation & controls Freed up talent to focus on: o o o Accounting / ERP & transactions Business transformation Performance improvement More value added functions Process led technology enablement Opportunity to transform to a cloud based ERP Free up talent to focus on planning, reporting and analytics Enhance areas of spreadsheet sprawl for example budgeting, forecasting, modeling > 40 % efficiencies in planning cycles Ability to make informed business decisions quickly Proactive vs. reactive 20

21 Integrated finance Record to report Value of modern cloud technology Data recording & accounting Period end financial close Consolidation, reporting and performance mgmt. Accounts payable Accounts receivable Fixed assets Inventory Bank, POS, etc. General ledger General ledger close Non-financial information Financial consolidation Internal reporting External reporting Performance reporting & analytics Account reconciliation Transaction matching Task management Journal entries Variance analysis Consolidation integrity Financial consolidations Disclosure management Financial planning Financial reporting Performance reporting Cloud Robotics Cognitive computing Advanced analytics Insight Control Vision Cost Speed Scalability Blockchain 21

22 Client overview About the company Services Outcome Global telecommunications company based in Cupertino, California Recently acquired by private equity group Immediate need to streamline the financial close cycle as well as increase visibility into processes happening internationally Challenges with every aspect of their financial cycle including delays in meeting reporting requirements before board meetings 1. BlackLine Phase I Implementation account recs and task management for corporate accounts 2. BlackLine Phase II Implementation account recs and task management global expansion 3. Host Analytics Enhancement Develop custom reports 4. Audit AICPA Financial Audit - USA 5. Business Application Great Plains Report development Managed services 6. Argentina Audit (RSM Argentina) AICPA financial audit - AR BlackLine s account reconciliations and task management, enabled the company to standardize reconciliations, create a formalized month-end check list and created corporate visibility across all global location including in the US, India, Ireland, Uruguay, and Argentina 75% reduction in close cycle times allowed for timely reporting to the board 30% reconciliations auto-certified 50% reduction in time spent on reconciliation An enduring relationship with the manager of finance and accounting who sees RSM as first choice advisor and comes to us with any issue they encounter GP turned into support on a continuous basis as well as RSM being named their Microsoft Partner of Record 22

23 MANAGING THE DIGITAL TIMELINE

24 What does the modern CFO want from digital? Ability to support LOB mgmt. Access to real time data that enables decision making Strategic departments that are viewed as business partners Access to a dynamic and young workforce Systems to enable the Millennial workforce Reduction in transactional tasks to retain top talent Improved ability to respond to regulatory requirements / costs Reduced regulatory fines / fees Reduced audit costs Reduced audit timelines Reduced F&A operational spend Decreased costs for transactional finance activities Improve enterprise risk management Aligned financial control structure without gaps Increased bandwidth to focus on risk activities, cash management, credit management, etc. Improve financial close and reporting Shorten close cycle times to 5 days or less > 40% reconciliation efficiencies Fully integrated financials Improved business planning and forecasting Significant reduction in planning cycle time Integrity and reliance of data $ Shift back office operations to analytical activities Remove data entry and manipulation tasks Shift labor force to highly skilled staff focused on analytical activities Ability to engage in broad business transformation Reliance on financial analysis to identify transformation opportunities Ability to focus on continuous improvement Agile reporting platform 24

25 Continuous management Focus on meeting your primary objectives (Plateau A), focus on continuous improvement (Plateau B) and avoid the decline (Plateau C) Plateau B Perpetual innovation Automation and functionality achieved Implementation Complete Implement program vision Establish program Plateau A Establish digital requirements / needs Business alignment (process evaluation and engineering) Establish value chain and vision Measure adaption and performance Optimization and stabilization Adoption and change mgmt. Maximized digital platform Check-the-box use of the tool Program expansion (utilize success for greater adaption) Continued reliance to legacy tools i.e. Excel Declining proper use of the tool driving poor reporting Continuous monitoring and performance management Plateau C Achieved functionality Efficiency gains Tool use decline risk Tool value and use not well perceive(merely a repository and workflow automation vehicle) Think global 25 Implementation t1 Tool utilization/optimization t2 Time

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