CFO Day 2013 High Performance Finance in Practice. Scheveningen June 6 th, 2013

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1 CFO Day 2013 High Performance Finance in Practice Scheveningen June 6 th, 2013 Copyright 2013 Accenture All Rights Reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.

2 In the last 10 years we executed High Performance Business studies to identify and learn from High Performing Businesses Scope Analysis Conclusions Publish Findings 29 industries 330 companies 25 AEX companies 305 International peers Data from S&P and Bloomberg 8 metrics and 14 key drivers Relative performance Scores per industry Analyze and rank High Performers Conclusions based on analysis and external interviews Lessons learned from High Performers Management scope special Press release in Dutch national media Bring most noteworthy findings to clients Initial Set of Companies Companies analyzed Company performance sector Average σ 2

3 The High Performance Business study evaluates current performance and future positioning through eight key metrics Addition to the Global HPB methodology 3. Revenue growth Ability to grow revenues 4. Consistency Ability to consistently create value over the last 7 years 5. Market expectations Ability to grow according to the market expectations (FV) 6. Market differentiation Ability to improve profitability (based on analyst reports) 2. Profitability Ability to generate profits Current performance Future positioning 7. Market position Ability to grow revenues 1. Shareholder performance How the company has performed over the past 7 years How the company is positioned for future performance 8. Fuel for growth Ability to create shareholder value Ability to extract capital to invest in future growth from High performance business 3

4 Bottom 25% Below average Above average Top 25% Future positioning Findings from our recent High Performance Business Study in NL indicate improvements in the positioning of AEX companies The average AEX performance has increased in 2012 on both current performance and future position The relative position of the AEX companies has slightly improved between 2011 and % ASML Holding NV 75% Unilever NV 50% 25% Current performance Positioning for the future % 0% 25% 50% 75% 100% Current performance More information on: 4

5 Lessons learned: High performers achieve long term success by continuously and intensively looking outward and forward Outward looking Forward looking Agility is an powerful competitive weapon to respond at chronically uncertain markets Innovative solutions make investments lucrative Collaboration aims for synergy where all strategic partners can benefit Talent and leadership are crucial for successfully executing a long term strategy Presence in emerging markets is essential to grow revenues Sustainability will become increasingly important for new business models 5

6 Does finance really matter to an enterprise s overall growth, competitiveness and ability to be a High Performance Business? A more than 70 percent correlation does exist between High Performance Businesses and governments and High Performance Finance organizations Key findings from our Dutch High Performance Finance study: 1. Finance organizations are good at reporting and analyzing existing performance, but lag in driving future business value 2. CFOs may have to rethink their focus on finance cost reduction and invest in value adding capabilities 3. Finance workforce management appears undervalued at a time when development of new capabilities is required 4. CFOs limitedly plan to invest in Risk management capabilities 6

7 Competitive Advantage Real business value is derived from leveraging analytics to manage the what s next and the now what Generate insight Take Action Optimization What s the best that can happen? Predictive Modeling Forecasting/ extrapolation What will happen next? What if these trends continue? Predictive Analytics (the what s next ) Statistical analysis Alerts Query/drill down Ad hoc reports Why is this happening? What actions are needed? What exactly is the problem? How many, how often, where? Descriptive Analytics (the what ) Organization, Process & Technology (the now what ) Standard Reports What happened? Sophistication of Intelligence 7

8 Financial controllers Value Provided by Controlling Business controllers Controlling is expected to take on that responsibility to enable value-added insight and grow into a true Business Partners Strategic Business Partnering Reporting & Analytics Proactive, forward looking decision-support Decision making participant Control & Reporting More advanced analytical skills sought after by BUs Translation of financial goals into operating plans Transaction & Control Basic analytical skills reactive and historical Dual focus GAAP and business units Transaction processing Closing Basic cost center and P&L reporting Emphasis on Business Partnering Capability 8

9 The evolving Finance roles can be depicted for Business Partners, SSC/BPO, Centers of Expertise and Group Finance Finance Business Partners: Strong business acumen, financial and commercial expertise Forward looking analysis Predictive analysis Understanding cost drivers Ability to assess merger and acquisition opportunities Influence decision making through fact based analysis and ideas Balance short and long term view FP&A Business = Finance Partners Partners Policies Group and standards Finance Centres Centres of of Expertise Excellence Transactional Finance Shared Services = / BPO Business Support Centres Shared Services / BPO Transactional Finance All backward looking activities Maximum advantage of wage arbitrage Continuous improvements Collaborative culture with the retained organization Metrics driven, service culture Financial Reporting Centres of Expertise (Tax, Treasury, Information Services) Redeployment of standard, valueadd, non routine tasks Focus on delivery reporting & analytics Prioritises capital allocations Underpinned by Standard end to end processes & ownership Standard ERP & technology enablers Data infrastructure one source of truth Group Finance Finance policies and controls Enforces standard operating procedures Owns global processes and reporting systems Plans and monitors group financial performance Owns external reporting 9

10 True Business Partners make impact and add value to the business by leveraging organization, process and technology Key conclusions from our study: 1. There is a > 70% correlation between high-performance businesses and governments and high-performance finance organizations 2. The finance organization and the CFO should recognize their impact through this strong correlation, by investing in value adding activities and developing capabilities accordingly 3. High performing businesses use Analytics as a vehicle to leverage the vastly available data into forward looking information 4. True business partnering is the result of accurately developing and managing the organization, its processes and technology 10

11 Contact details Jules Smeets Senior Manager Accenture Management Consulting Finance & Enterprise Performance Gustav Mahlerplein MA Amsterdam