The Future of Learning for the CFO of the Future

Transcription

1 The Future of Learning for the CFO of the Future Texas Society of CPAs Accounting Education Conference October, 24-25, 2014 Hilton Austin Airport Kenneth Witt, CPA, CGMA Technical Manager, AICPA Business, Industry & Government Team

2 Kenneth W. Witt, CPA, CGMA AICPA Technical Manager Ken serves as Technical Manager in the Business, Industry and Government team at the American Institute of Certified Public Accountants. Ken is the staff liaison to the Business & Industry Executive Committee which provides insight and guidance on professional issues and trends relevant to AICPA s members working in business and industry. He is especially involved in thought leadership and professional development activities for the Chartered Global Management Accountant (CGMA) designation. 2

3 What do employers need? Education Pathways Commission 3

4 4

5 The future business paradigm? 5

6 Complexity and Competencies

7 Complexity is increasing AICPA Business and Industry Economic Outlook Survey Q CPA decision makers (primarily CFOs, CEOs and Controllers) Given the changing US and global economic and regulatory environment 7

8 how would you gauge the change in the level of general business complexity that you and your business have experienced over the past 3 years? No change in complexity 7% Slightly more complex 25% Significantly more complex 30% Slightly less complex 0% Moderately more complex 38% More Complex 8 = 93%

9 looking ahead 3 years, how do you see the level of general business complexity changing? No change in complexity 5% Slightly more complex 22% Significantly more complex 32% Slightly less complex 1% Moderately more complex 40% Even More 9 Complex = 96%

10 And The role of finance is changing In addition to traditional financial accounting and reporting 10

11 what areas have become your focus? Risk Management and I/C Strategic Business Planning Acctg Information Systems Management/Governance Legal and Compliance Tax Strategy and Planning Pricing and Cost Analysis Human Resources 67% 58% 55% 46% 44% 43% 41% 39% 0% 10% 20% 30% 40% 50% 60% 70% 11

12 IBMs Chief Future Officer 12

13 CFOs say that almost everything they do is now more important Measure/monitor business performance Provide inputs into enterprise strategy Develop talent in the finance organization Optimize planning, budgeting and forecasting Drive enterprise cost reduction Support/manage/mitigate enterprise risk Drive integration of information Execute continuous process improvements Strengthen compliance programs/controls Manage investor/stakeholder relations Process transactions Importance 2010 Importance 2013 IBM Global C-Suite Study

14 CFO The Architect of Business Value Delivering Growth and Managing Complexity 75% 70% CFO ROLE IN CHALLENGING AND SUPPORTING STRATEGIC DECISION-MAKING HAS INCREASED CFO INFLUENCE OVER EXECUTING BUSINESS TRANSFORMATION INITIATIVES HAS GROWN Accenture 2014 High Performance Finance Study 14

15 Accenture Study - high-level findings Managing Volatility Significant progress in ability to meet challenge of permanent volatility Navigating Complexity CFO as Architect of Business Value Rise of Digital on CFO Agenda High performing businesses find opportunities optimizing, streamlining, simplifying Cost control no longer primary emphasis investment in growth, building value Unique position of CFO a clear opportunity cloud, mobility, big data, analytics Accenture 2014 High Performance Finance Study 15

16 High-performance businesses have More Influential CFOs Influence in Key Strategic Activities High Levels of Satisfaction Accenture 2014 High Performance Finance Study 16

17 Implications for the Future The Evolving CFO Agenda Align Strategy Transform Operating Models Manage Performance Embrace Digital Develop Finance Capability Prioritize Scarce Resources Agility & Flexibility Forward Looking Speak Digital Geography /Industry Evaluate Risks Scalability Holistic Evaluate ROI Data Analysis Accenture 2014 High Performance Finance Study 17

18 Before Digital Embracing Digital Monday Tuesday Wednesday Thursday Friday Other Activities Developing Reports Collecting Data Collecting Data Maintaining Spreadsheets Performing Analysis Maintaining Spreadsheets Developing Reports Accenture 2014 High Performance Finance Study 18

19 After Digital Liberates the Finance Function Monday Tuesday Wednesday Thursday Friday Collecting Data Other Activities Performing Analysis Interacting with Decision Makers Interacting with Decision Makers Strategic Initiatives Performing Analysis Personal Development Accenture 2014 High Performance Finance Study 19

20 Future success depends on data skills 40% Reported high-end analytical skills as being the future success of their organization But only 15% Of those have these skills available Turning the Tide; Accenture 20

21 The Future of Learning/Teaching Accounting

22 Competency Development HBR Nov

23 What do employers need? Education Pathways Commission 23

24 Lighting the Fire Strategies to fuel the future of learning

25 Business and profession transform Disruptors emerge overnight Increased regulation Hyper-specialization Globalization adds complexity Technologies transforming business American Institute of CPAs

26 Workplace evolves 2020 Outlook Acute global talent shortage Corporate curriculums will use game mechanics Hiring/promotion based on reputation capital Lifelong learning becomes a business requirement Peer-to-peer learning is preferred method of learning Mobile devices office, classroom, virtual concierge Social media literacy required Source: The 2020 Workplace American Institute of CPAs

27 Future of Learning Recommendations Innovate and Experiment Ignite a Passion for Learning Make Learning Personal Measure What Matters

28 Innovate and Experiment Adapt and evolve learning to meet the needs of high-performing professionals Leverage technology to enhance learning experiences Small changes to learning can have a huge impact

29 Ignite a Passion for Learning Create meaningful, purposeful experiences that motivate and engage learners Start with the learner Make learning engaging and relevant

30 Gaming and simulation improving outcomes American Institute of CPAs

31 Making learning meaningful Competency models focused on output Creating Creating Evaluating Evaluating Analyzing Applying Applying Understanding Understanding Remembering American Institute of CPAs Adapted from "Bloom's Taxonomy of Learning Domains" by Dr. Benjamin Bloom, 1956

32 CGMA for a Day CGMA Role Playing Experience

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34 CGMA Exam January 1, 2015 All CIMA and AICPA Candidates take same capstone exam for CGMA May 2015 First exam for AICPA Candidates Resources Practice Exams Sample Pre-seen Material Practice Exam Answers 34

35 CGMA Role-playing experience We ve raised the stakes. Do you have what it takes? Interactive, online simulation based on format and design of CGMA exam The goal is to test the candidate s ability to apply knowledge and understanding to real-world scenarios. 35

36 Setting the Stage Your Role You ve just been hired as a executive management accountant for La Vie clothing company a retail fashion chain that operates in Europe selling trendy clothing for men, women and children as well as home furnishings. As the executive management accountant, you report directly to the CEO. 36

37 La Vie - Company Info Founded on the fast-fashion principle where speed from drawing board to retail store is vital, the company operates in the highly competitive clothing retail market in difficult trading conditions. 630 shops in operation worldwide Almost 2.8 billion in sales Operating profit of 634 million forecast for 2013 (before finance costs and tax). Planned operating profit of 690 million forecast for 2014

38 First Trigger from CFO Board of Directors Meeting Next Tuesday LaVie Three Proposals Second Distribution Center Franchise Shops in Asia Appoint Famous Designer

39 Proposal 1 Second Distribution Center Eastern Europe w/in 300 km of 75% of suppliers Transportation cost savings est. 4.2mil per year Additional rent 0.6mil per year 80 new employees -annual staff costs of 1.8 million 70 layoffs - cost = 1.0m; annual savings = 2.0m IT investment cost = 1.0m Operating costs additional = 0.2m Inventory holdings additional 3 days slower time to shop; Dec 31 holdings = 280 million = 94 days sales Possible sub-lease rental income = 1.2m per year 39

40 Proposal 2 Franchise Shops in China 900 total LaVie shops by 2019; 100 more than plan La Vie responsible for marketing, IT, inventory system Franchisee responsible for site and operating costs Franchise operating profit = 235mil over 4 years Company-owned stores - 5 year plan Original = 800 company shops; Revised = 750 shops Average operating profit = 1.4mil profit per shop Capital cost = 4.4mil per shop 40

41 Proposal 3 Appoint Famous Designer Designer to prepare 4 collections per year for 3 years expected to increase sales, expand customer base Exclusivity Non-compete with La Vie competitors Limited to.5 million items per year shops Sales - 60 million per year (average price = 30 per item x.5 million items) Designer Fee to be negotiated 10% - 50% of line gross margin (approx. 22.5%) La Vie accepts 100% of risk designer fees, marketing, unsold inventory, etc. 41

42 Task 1 Prepare a presentation for the CFO to present to the Board of Directors evaluating the 3 proposals on the table with recommendations on whether or not to proceed. 15 mins

43 The CGMA Exam Process weeks prior exam 0-1 hour 1-2 hour 2-3 hour Pre-Exam Research Case Study Examination Role Simulated Trigger #1 Trigger #2 Trigger #3 Stakeholders New Resources Response # 1 New Resources Response # 2 New Resources Response # 3 Company Information Tools Tools Tools Scenario Task #1 Task #2 Task #3 Illustrative process only. Pre-read timing may change. Number of triggers or tasks that are presented to students in the three hour 43 exam may be between three and six and various length.

44 2015 CIMA Syllabus Strategic Level Management Level Operational Level Enterprise Pillar Performance Pillar Financial Pillar 44

45 CGMA Competency Framework Applying accounting and finance skills in the context of the business to influence and lead

46 CGMA Competency Framework Outline Proficiency Levels Foundational Intermediate Advanced Expert Skills Technical Business People Leadership 46

47 CFO of the Future will create strategic impact 47

48 CGMA Resources for CFOs of the Future

49 CGMA - Robust portfolio of resources Reports Big Data CGMA Magazine Innovation Fraud Risk Tools Value Chain Building Resilience Harvard ManageMentor 49

50 Building World Class Businesses: For the Long-term World-Class Businesses focus on: Clear Strategy Satisfied Customers Cost Leadership Durable Supply Chain Motivated Staff Innovation 50

51 Strategy and The Business Model How do we make money? Customer Value Profit Margin Processes 51

52 Managing Innovation Finance as business partner throughout the innovation lifecycle 52

53 Leading innovation and managing risk The role of finance throughout the innovation lifecycle 53

54 Big Data and Business Intelligence From Insight to Impact: Unlocking the opportunities of big data Focuses on finance role in linking decisions to data Key questions: What drives the business? What do customers care about most? 54

55 Levels of Analysis What is Big Data? Scale and Complexity of Data 55

56 Managing Big Data Who is the Customer? 56

57 Management Accountant and Big Data Reduce Costs Increased Efficiency Increase Revs Customer Segmentation Develop and Monitor KPIs Monitor External Risks Driver Based Forecasting 57

58 Data Quality An obvious concern 58

59 Educator Resources AICPA CGMA /HowtoQualify/Pages/Academics.aspx Beginning in January 2015, applicants will be required to pass a strategic case study exam in management accounting. 59

60 Questions? CGMA. org Thank You