Rethinking Your Finance Functions

Transcription

1 Rethinking Your Finance Functions Budgeting, Planning & Technology BDO Canada Daniel Caringi ( dcaringi@bdo.ca ) September 25th, 2014

2 A journey of a thousand miles must begin with a single step. - Lao Tzu

3 WHAT WE WANT TO SHARE WITH YOU Technology Trends And Its Impact On Finance Getting Started On Your CPM Journey Best Practices And Evaluation Considerations

4 BIOGRAPHY Daniel Caringi, Business Analytics Practice Leader 12 Years of Business Solutions Experience. Specializing in advising, defining and delivering Corporate Performance Management (CPM) and Business Intelligence (BI) technology. Direct: Columbia Way Suite 300 Markham Ontario L3R 0C9 Worked with Thousands of Clients. To evaluate and implement budgeting, planning, forecasting, consolidations, reporting and dashboard solutions. 2 years with BDO. Helping lead the expansion of BDO s Business Analytics practice in North America. Favourite Quote. Perform at your best when your best is required. Your best is required each day. John Wooden

5 ABOUT BDO CANADA The Leader in Accounting and Advisory Services Offering a breadth of expertise, innovative thinking and valuable insight. BDO Canada is the fifth largest accounting and advisory firm in Canada. 5th 100+ Offices 465M+ Largest 3K Staff 90+ Years of Experience Revenue AUDIT TAX ADVISORY SOLUTIONS

6 TECHNOLOGY TRENDS AND FINANCE The way we re conducting business has changed

7 CURRENT RESPONSIBILITES OF THE CFO The reach and influence of the CFO has increased Source: FEI Canada

8 CURRENT RESPONSIBILITES OF THE CFO CPM is the #1 and #2 Focus Area for the Canadian CFO Source: FEI Canada

9 TOP INITIATIVES FOR FINANCE Business Analytics is the #1 Focus Area for Finance

10 THE CLOUD: INCREASING ITS REACH INTO FINANCE CFOs see a significant increase in the Cloud as a major technology initiative

11 THE COMMON THREAD AMONGST ANALYTS FIRMS GARTNER IDC FORRESTER Mobile Apps & Applications Emerging Markets Mobile Applications Web-Scale IT Big Data Technology Big Data Platforms Cloud/Client Architecture 3rd Platform Migration Application Platforms The Era of Personal Cloud Global IT Spending Customer Intelligence & Analytics Platforms Mobile Device Diversity & Management Hybrid Cloud & IT as Service Broker Mobile Device Growth Cloud Services Mobile Platforms Infrastructure as a Service Software Defined Anything Cloud-dedicated Data Centers Big Data Platforms Leading analyst firms agree, the cloud is a key technology focus Smart Machines Industry-focused Platforms Sensor Systems & Smart Computing The Internet of Everything Internet of Things Business Intelligence 3-D Printing Social Technology Collaboration and Social

12 WHO IS READY FOR THE CLOUD? Canada ranks 5th in terms of cloud readiness based on its economic, demographic and enterprise adoption indicators Source: Pyramid Research

13 HIGH GROWTH EXPECTED FOR THE CLOUD

14 CLOUD COMPARED TO ON-PREMISES Model On-Premises Cloud Acquisition Perpetual License Subscription Service Business Capital Expense Operational Expense Access Internal Networks Over the Internet Technical Customer Maintains System Vendor Maintains System What this means to you: New Rules Reduced Management Increased Productivity Pay for what you use No patching, Maintenance Always the latest version Shift from CapEx to OpEx Multi-layered security Internet enabled Accelerate speed to value Reliable up-time Accessible anywhere

15 KEY TAKEAWAYS With the Cloud technology is no longer an IT project, but a business project Finance leads 80-90% of CPM projects Chances are, you re using the Cloud today in both business and your personal life Business Analytics is the next wave of innovation in the Cloud - Gartner Rethink your spreadsheet based Processes The Cloud is the future of CPM BPM Partners

16 GETTING STARTED ON YOUR CPM JOURNEY The correlation between Business Analytics and Finance

17 WHY IS TAKING ACTION IMPORTANT? Speed And Agility Are Incredibly Important Information Is Vast & Travels Fast Transparency, Control & Accountability Failure to act is often the biggest failure of all. - John Wooden

18 CROSSING THE CHASM FROM TACTICAL TO STRATEGIC Accountant Transaction Management Performance Management & Analysis The Chasm Business Leader Strategic, Data- Driven Decision Making Tactical Strategic Coming together is the beginning. Keeping together is progress. Working together is success. - Henry Ford

19 MOVING FROM TACTICAL TO STRATEGIC 70% 25% 5% Source: Gartner - CPM Maturity Model

20 HOW CPM APPLICATIONS ADDRESS EACH LEVEL Consolidations Revenue Planning Strategic Planning Reporting Forecasting Analysis Collaboration Personnel Planning Dashboards & Scorecards Budgeting Workflow Best in class companies spend less time searching for data and more time making timely business decisions

21 AUTOMATION: INCREASES PRODUCTIVITY 101 Person Scenario On average, a full time employee during a 40 hour work week spends 8.7 hours or 22% of time Utilize searching a CPM for solution the right with information. 10 Users and Based potentially on IDC research free up and factoring a in year a 50% or increase in over productivity 4 years in (4.35 saved hours) productivity with using to be a spent CPM solution, on more has value the added potential tasks. to In save other $6,526 words, a year each month without through automation improved operational is potentially efficiencies costing $5,438 and individual a month employee in lost performance. productivity $65,259 $261,035 Other Consideration 8.7 hours or 22% of time finding data or searching for the right information 13.2 hours or 33% of time working with the Office productivity suite 3.1 hours or 8% of time in their ERP solution 7.2 hours or 18% of time reading and responding to 4.5 hours or 11% of time analyzing information $13,052 Per Year $19,803 Per Year $4,651 Per Year $10,801 Per Year $6,751 Per Year Solution Benefits Assumption: Based on IDC Research and an average salary of $60,000/yr

22 5 STEPS TO HELP YOU START YOUR CPM JOURNEY

23 1. DEFINE AND DEVELOP THE RIGHT TEAM FUTURE Recruit The Right People Build An Engaged High-performance Team Build an organization to efficiently deliver the future

24 2. GET ORGANIZATIONAL BUY-IN Communication Buy-In Set Metrics Communication skills Analytical skills Industry Knowledge Technology knowledge Leadership skills Change management skills Regulatory compliance Deeper knowledge of geographic markets Performance reporting and analytics Project management skills Strategic Capabilities Budgeting and forecasting Target setting Risk management 33% 29% 27% 24% 24% 21% 19% 17% 16% 15% 15% 14% 12% 11% Source: Accenture

25 3. ESTABILISH RELEVANT METRICS Measure The Right Things Tie Measurements & Metrics Goals/Objectives/Forecasts Build a Risk Process (Low, Medium, High) What you monitor, you can measure; what you measure you will manage.

26 4. LINK STRATEGY, EXECUTION AND REPORTING Past Report and Comply Account Consolidate Report Comply Financial Systems and Data Plan and Predict Plan and Strategize Set Goals Budget Forecast Future Understand the Past. Navigate the Present. Redefine the Future. Measure and Optimize Measure Analyze Resolve Optimize Present Forrester - Align Financial Processes And Systems For Better Business Value And Compliance, August 2011

27 5. EMBRACE TECHNOLOGY TO HELP TAKE ACTION Speed & Agility Rigor & Analysis

28 KEY TAKEAWAYS Understand what Level of maturity your school is at Automation of repetitive processes increases productivity Change management begins with assembling the right culture and attitude Get organizational buy in to Performance Management Help your managers run their businesses more effectively Failure to act is often the biggest failure of all

29 BEST PRACTICES & EVALUATION CONSIDERATION Questions to ask on your Cloud journey

30 5 BUSINESS PLANNING BEST PRACTICES 1 Switch From a Fixed Budget Process to Using Rolling Forecasts: o Business agility is important and as such plans should never be out of date o Automate the import of actuals to compare against plan and re-forecasts o Enable employees to work in tandem towards organizational goals 2 Automate Repetitive Processes (Spreadsheets): o Spend less time collecting the data and more time analyzing it o Streamline and automate manually intensive and error prone processes o Enable spreadsheets to becomes a tool to leverage, not the tool of record 3 Utilize Driver Based Plans and Different Scenarios: o Access historical data and trends for planning, budgeting and forecasting o Create detailed plans including revenue and utilization of key driver o Effectively scenario plan through what if analysis

31 5 BUSINESS PLANNING BEST PRACTICES 4 Enable Enterprise Wide Collaboration: o Make the execution of strategy an ongoing process, not a onetime event o Employee accountability helps drive both behaviour and performance o Break down data silos with a unified view the business 5 Close and Disclose Quickly: o Gain visibility into real performance vs. plan in a timely, repeatable manner o Provide Finance the tools to reach into operations o Equip employees with self service analysis, reporting and dashboards

32 STARTING A CHANGE MANAGEMENT INITIATIVE 1 Consider the 5 primary change drivers to technology adoption: o Growth o Profitability o Control o Risk Reduction o Cost Reduction 2 For each of the 5 primary drivers ask yourself: o Tactically, what are you trying to accomplish? o Operationally, how are you going to accomplish it? o Strategically, why are you doing this? 3 Steps to consider in your evaluation: o List the challenges and needs from your employees (system audit) o Remember that you re evaluating processes not features and functions o Evaluate for configuration not customization o Involve your team early and often (effective change management) o When in doubt work with industry leaders

33 CONSIDERATIONS FOR WHEN EVALUATING OPTIONS 1 Functionality: o o o Seeing the forest for the trees Recognizing most will meet your needs 5 decision metrics when selecting the right technology and vendor All things being equal the remaining 4 drivers become the basis for a decision 2 3 Costs: o Operational expense vs. Capital expense projects o Total Cost of Ownership and Return on Investment = Overall Value o All things being equal doing business is getting easier Timing: o Current vs. long term needs o Understanding where you re with your business cycle o A healthy backlog is a positive its not when you can start, but finish

34 CONSIDERATIONS FOR WHEN EVALUATING OPTIONS 4 Viability: o Partner viability is more important today than ever before o Is there a supporting partner ecosystem or is it proprietary o Work with those you can see doing business with 5 Technology: o IT mandated ecosystem or endorsement o What is right for your business the Cloud or On Premise Understand the impact of not only the right technology, but business partner will have on your project

35 QUESTIONS?

36 THANK YOU FOR YOUR TIME BDO Solutions specializes in the selection, implementation and support of business solutions Daniel Caringi