Cloud Computing: What is it? And how can it transform your finance organization?

Transcription

1 Cloud Computing: What is it? And how can it transform your finance organization?

2 Agenda Cloud Basics The Strategic Shift for CFOs How the Cloud Enables the Transformation Takeaways 2

3 3 The Cloud Impacts All of Us as Consumers

4 4 And Now Also for Your Business Applications

5 Software-as-a-Service: Run your Business Applications in the Cloud Cloud computing is a broad term encompassing everything from B2C services to infrastructure Software-as-a-Service is a subset of cloud computing focused on enterprise business applications Mature, high function applications Flexible to configure and integrate World class operations and maintenance Support and service level agreements Vastly better economics than 5 on-premises

6 Agenda Cloud Basics The Strategic Shift for CFOs How the Cloud Enables the Transformation Takeaways 6

7 CFOs Have a Strong Desire to Change Their Organization s Role 100% CFO Role Expectations 80% 60% 40% 20% Score Keeper Gate Keeper Provider of Analysis Business Accelerator 0% Current Role Desired Role Source: Armanino McKenna, The CFO Evolution TM Benchmark Survey Results, Dec

8 The Strategic CFO Emphasizes Strategic Planning and Evaluating New Opportunities Activities Needing Additional Focus from CFO Organization Long-term strategic planning 93% Evaluating new business models 83% Corporate development activities 78% Evaluating new market opportunities 75% Building support for new initiatives 72% Working with Board or Analysts 61% Source: Armanino McKenna, The CFO Evolution TM Benchmark Survey Results, Dec

9 And Expectations Have Increased STAGE Transaction Management Controlling the Business Controlling the Business Integrated functional excellence ROLE Bean Counters Process managers Business partners Value managers Number of transactions Consistent process excellence Talent and insight Into value drivers Leadership and performance management Source: McKinsey & Company 9

10 Inefficiency in the Accounting Function Often Hinders Focus on Business Leadership Top Issues for CFO Organizations Top Bottlenecks in Monthly Close Process Source: Armanino McKenna, The CFO Evolution TM Benchmark Survey Results, Dec

11 Agenda Cloud Basics The Strategic Shift for CFOs How the Cloud Enables the Transformation Takeaways 11

12 How the Cloud Enables the Transformation Supplies Insight for Better & Faster Decisions Focuses Resources on Core Business Boosts Productivity of Financial Processes Offers Scale for Growth 12

13 Cloud Financial Management Upgrades Financial Processes Through Automation and Integration Boost Productivity Automation Integration Focus on what matters/costs most to the business: Quote-to-cash Procure-to-pay Revenue management Budgeting and planning Time and expense 13

14 Manual effort Re-entry Inconsistent data Example: Software Quote-to-Revenue Process Before Boost Productivity Price List Sales Price List Finance Quote Contract Order Invoice Collect Recognize Revenue Contacts Customer Master Sales & Finance use different SKUs/prices = inaccurate fulfillment and invoicing Inaccurate contact info = inability to book and invoice orders Contract has nonstandard terms or terms not captured in order = inaccurate finance order and invoice and revenue leakage Customer name on contract not in Master = creation of duplicate customer accounts and incomplete view of customer relationship Sales lacks visibility into invoicing/collection status = added losses for orders taken from bad accounts Customer complaints about order/invoice errors = slower collections Revenue recognition not directly tied to events (e.g. fulfillment, collection status) = inaccurate revenue & restatements 14 Contract often prepared manually from Quote = added sales operations effort Order manually entered into financial system from signed contract with inevitable data entry errors = inaccurate fulfillment and invoicing; significant manual effort in order entry Invoicing requires manual effort (e.g. manual creation; recurring billings) = delayed billing/collections; added finance operations effort No status updates to Sales = large burden on Finance & Sales conveying simple information/correcting errors; slower collections Order/Invoice information reentered into Excel for manual revenue recognition calculation = inaccurate revenue & restatement; lack of revenue predictability; significant manual effort

15 Example: Software Quote-to-Revenue Process After Boost Productivity Sales Price List Finance Quote Contract Order Invoice Collect Recognize Revenue Customer Master From: Data entry errors Revenue leakage Extended DSO Customer invoicing issues To: Consistent data across entire company Entire process is visible and accurate Integrated and automated; quote to revenue recognition Lower costs, greater efficiency and customer satisfaction 15

16 Cloud Speeds the Time to Insight, Enabling More Timely Adjustments and Actions Supply Insight Real-Time, consistent, secure information in the cloud A single version of the truth 24x7 accessibility by all stakeholders Instant feedback on performance to plan Tighter alignment across the organization Personalized reporting and dashboards 16

17 The Cloud Lets You Access Your Data Anywhere Supply Insight A single source of data Access from anywhere, anytime Labor can be located anywhere in the world Simultaneous users 17

18 The Cloud Changes Visibility Supply Insight The Traditional Close 1. Wait for month end close 2. Review books 3. Make decisions A New Approach Live P&L is available 24x7 No more waiting for books to close Informed decisions can be made immediately 18

19 Cloud Financial Management Provides Analysis Needed for Growth Supply Insight From: Management by spreadsheet Manually intensive, error prone Trapped in silos on the desktop To: Access to historical data and trends for planning, budgeting and forecasting Visibility into real performance vs. plan Visibility into sales and revenue (by customer, product, entity, & geography) Visibility into cash inflows and outflows Ability to combine financial and nonfinancial metrics to create and monitor your own KPIs Create, save, and share multi-scenario analyses with others stakeholders 19

20 The Cloud Gets You Out of the No Value Added IT Business Focus Resources Cloud vendors operate and maintain the system for you Better infrastructure and operations than nearly all companies can afford Fortune 100 class data centers 24x7x365 operations Continuous backups and disaster recovery SAS 70 type II audited Possible because costs are amortized across thousands of companies 20

21 Tasks You No Longer Have to Worry About When Running Your Systems in the Cloud Focus Resources Ongoing IT Workload Maintenance and Upgrades Fixes and Patches Power Downtime Rewrite Customizations Performance Tuning Rewrite Integrations Upgrade Dependent Applications Air conditioning Disaster Recovery 21

22 Costs and Risk are Shifted to the Cloud Provider Focus Resources Subscription-based pricing: Pay only for what you need Higher ROI and faster payback: Provide real time visibility: Anytime, anywhere access Better faster business decisions Cut costs and speed up revenue: Automate & streamline processes Higher employee productivity Minimal IT costs Fast and low risk implementations Superior revenue management Ongoing Cost Comparison On-Premises Ongoing IT workload Fixes, Patches Maintenance & upgrades: Hardware Security Network Database Downtime Performance tuning Rewrite customizations Rewrite integrations Upgrade dependent applications Disaster recovery On-Demand Subscription fee Training Configuration 22

23 The Cloud Brings You Closer to Your Vendor Focus Resources Customer Feedback Continuous Innovation Rapid Access to New Features 23

24 The Cloud Lets You Focus Resources On Your Core Business Focus Resources From: Big IT staff Down time Large up front cost To: No IT staff Cost to run a cloud program is just the bill No IT department needs No servers Staff is 100% focused on customers Downtime CapEx & Opex are free to use elsewhere 24

25 Your Business Will Grow in Size and Complexity Offer Scale for Growth Increased complexity may include: New business entities Multiple currencies New geographies New GMs that want a consolidated view of their segment Acquisitions to be integrated Tax optimization Buddy Software (USD) (acquisition) Software US (USD) Software Japan KK 51% ownership (Yen) Software International Inc. USD Software Development Israel (ILS) Software Development India (INR) Software Sales UK (GBP) Software Sales Europe (EUR) 25

26 When Running Your Business on SaaS, It Is Easy to Integrate Systems When Needed Offer Scale for Growth 26

27 The Cloud Provides Scale to Support Growth Offer Scale for Growth Easily and cost effectively scale & adapt to business needs: Pay only for what you need Simultaneous and distributed users with strict permissions, separation of duties and financial control Support for large data files (customers, vendors, employees, etc) Industry leading system performance & reliability Add-on capabilities and integrations when you need them 27

28 Example: Acquisition Rapidly Integrated as Separate Entity Offer Scale for Growth From: Consolidating entities on spreadsheets Multiple instances of QuickBooks Merged entities on different systems Manual journal entries for inter-entity transactions To: View multiple entities consolidated or separately Differing charts of accounts, calendars and accounting treatments Various ownership structures Single click consolidations Automated inter-entity transactions and eliminations 28

29 Agenda Cloud Basics The Strategic Shift for CFOs How the Cloud Enables the Transformation Takeaways 29

30 ERP System Change Addresses the Top Issues for CFOs Top Issues for CFO Organizations Top Bottlenecks in Monthly Close Process Source: Armanino McKenna CFO Evolution 30 TM Benchmark Study, 2011

31 Systems Change is a Strategic Opportunity Systems Enable Transformation Drive productivity via automation Supply all required accounting functionality Provide reporting and real time business visibility Integrate to other business systems Scale to support growth Cloud Makes It Reality Rapid Deployment Anywhere, anytime access Lower operational costs Reduced hardware/ software costs 31

32 Starting the Transformation Boost productivity of financial processes Where do you spend your time now? What is being done in Excel? Supply insight for better and faster decisions How old is the information from which you are making decisions? What is the bottleneck in getting the data? Focus resources on your core business What other financial or related systems are critical to your business? Where can you eliminate duplicate entry, entry errors etc? Deliver scale for growth What are business needs 3-4 years from now? Do you have a business systems map to meet those needs? 32

33 Questions?

34 Thank You!