How to Bring About Finance Transformation on Your Own Terms
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The webcast discusses the transformation of finance through digital innovation, emphasizing the role of CFOs in establishing finance as a strategic business partner. Key topics include the need for upskilling, the integration of digital tools, and the shift towards a more agile and data-driven finance function. The document highlights the importance of addressing talent shortages and incorporating diversity and inclusion within finance teams while adapting to changing business models.
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How to Bring About Finance Transformation on Your Own Terms
- 1. Finance of the Future Digital finance and leading practices Webcast: How to Bring About Finance Transformation on Your Own Terms June 2021
- 2. PwC 2 With you today Brett is a Principal with PwC’s Financial Services Advisory group with more than 28 years of consulting and industry experience. He leads the Financial Services practice for Finance Transformation in the US and focuses on leading finance transformation, operating model design, and cost reduction. Within the finance transformation area, he has advised top-tier global institutions on finance systems architecture and implementation, organization design, process standardization and digital automation. Principal, Advisory PwC US (773) 960 1840 [email protected] Brett Maher John joined Workday, Inc. as VP, Financials Products and Go To Market in 2015. Prior to Workday, John was Senior VP & Corporate Controller, and Principal Accounting Officer, at Life Time Fitness, Inc., a Minneapolis, Minnesota based Healthy Way of Life company. Previously, John held accounting and financial leadership roles with CompleTel Europe, N.V., Jones Intercable, Inc, and started his career at Arthur Andersen LLP. John has a B.B.A. in Accountancy from Iowa State University, and is a Certified Public Accountant (inactive) in the state of Colorado. VP, Financials Products & GTM Workday (952) 454 8740 [email protected] John Hugo Shivani is an Associate at Financial Executives International. Associate FEI (937) 765 1027 [email protected] Shivani Somaiya
- 3. PwC Topic Objectives Pages Today’s CFO • CFO as the driver of change • Top performer metrics • Finance function characteristics 5-7 Digital Enabled Finance Operating Model • The changing operating model • Digital finance implementation approaches • Citizen-led approach 8-12 Digital Enabled Finance Operating Model • Enterprise-led approach 14-16 The Finance Journey • The journey 18-19 Workforce of the Future • The post pandemic workforce 20-22 Q&A Session / Next Steps Agenda 3
- 5. PwC 5 By the numbers, what sets Top Performers Apart? Sourced from PwC's Global Finance Effectiveness Benchmarking Database Leading Finance teams have more people in business partnering roles 45% Leading Finance functions are spending more time on data analysis, rather than data gathering 19% 25% Leading Finance functions run at lower cost than average 35% Reduce waste: Management Reporting General Accounting Tax Accounting 40% 23% 27%
- 6. PwC e CFOs as drivers of change CFOs’ top priority for the finance function is to: • Establish finance as the business partner across the enterprise. • Other priorities include automating processes and reducing cost as a percentage of total revenue. Doing more with less – and the challenges of the pandemic magnified that concern. As CFOs lead the charge toward growth, they have the opportunity to: • Play a more active role around strategy, beyond the tactical applications of the finance function. Agile decision-making, collaboration and better partnering across functions, and focusing on the company’s broader strategic objectives. • Driving transformation and the enterprise agenda puts CFOs in a position to help drive change across the organization and shape the post-pandemic business model. But one risk related to people looms large: • A lack of talent and skills shortage. Like most executives surveyed, 93% of CFOs believe the availability of talent with technical skills is critical In order to drive growth • CFOs need the right people with the right talent and skills – and upskilling, hiring and onboarding people is important across the enterprise. • As CFOs focus on talent, they need to make sure to align with the company’s diversity and inclusion (D&I) efforts and goals. Over the next year, 62% of CFOs say their company plans to increase D&I training, and 51% expect an increase in D&I reporting to internal stakeholders. Finance function: moving from tactical to strategic Establishing finance as the business partner to the business Automating processes using intelligent automation Reducing cost as a percentage of total revenue Advancing goals for diversity and inclusion (D&I) Increasing investment in compliance functions Revising enterprise risk management (ERM) practices Enhancing ESG reporting and disclosures Using artificial intelligence to build predictive models for financial planning and forecasting Establishing governance and reporting controls for non-financial metrics Moving finance to the cloud More transparent disclosure 47% 41% 39% 24% 23% 21% 21% 19% 18% 14% 5% Q: What are your top priorities for your finance function in 2021? (Select up to three) Totals may not add up to 100% due to rounding. Source: PwC US Pulse Survey, March 12, 2021: CFO base of 182 6 Strategic Priorities and Risks Tactical Priorities
- 8. PwC 8 The changing finance function Radical automation and exploding data volumes Industry convergence and changing business models Changing regulations Accelerated M&A Process Digital Core CONTROL EFFICIENCY INSIGHT …requiring Finance organizations to increase agility, incorporate new skills & technology, and adopt new ways of working while continuing to balance efficiency, control and insight. Digitization and macro-economic trends are profoundly impacting the Office of the CFO… When to consider a transformation journey • Lagging performance • Disconnect between Finance & the business • Divestiture, merger and acquisition • Evolving workforce & skills gap • Leadership changes • Outdated systems & manually intensive processes • GAAP and regulatory change • Control deficiencies or fraud Leading Finance organizations are meeting these challenges head on and with an emphasis on… Becoming digitally enabled and focused on speed Integrating and analyzing information on a real time basis, enabling on-demand insights Upskilling Finance and transforming the service delivery model to remain competitive Dramatically reducing cycle times, cost & size of Finance Transacting events as they occur ...while maintaining control and managing changing regulatory environments
- 9. PwC Citizen-Led innovation Digital transformation approach requires dual-effort: Both top-down and bottom-up Micro solutions developed by end users • “Innovation” and collaborative mindset • Upskilled and comfortable with digital toolkit • Incentivized and rewarded by leaders • Target the countless opportunities that fell through the cracks High-value programs developed by the enterprise • Create and encourage a culture of innovation • Target the big definable opportunities • Provide the learning, data, technology and infrastructure capabilities for citizens • Review and ensure quality across citizen-led solutions Receive Grassroots innovation feeds back to the overall digital transformation efforts Industrialize Provides capabilities and support to execute programs Create Enterprise-Led innovation 9 Review Distribute Innovation Cycle PwC
- 10. PwC What is “digital”? Applying relevant tools, skills and mindset to transform the way we work, resulting in: Leveraging a wide array of tools (e.g., automation, visualization, analytics, machine learning, etc.) to enhance controls, deliver high quality and timely information, and allow for better insights/decision making Digital technology can reduce/eliminate non-value add, manual, and repetitive processes resulting in significant cost reduction; the digital business case and return on investment is fairly straightforward Harnessing the optimism and excitement around digital innovation, coupled with a robust digital training curriculum, a “workforce of the future” can evolve organically, while also attracting and retaining talent By encouraging (and rewarding) adoption of digital tools, a grassroots effort can lead to quick results; in parallel, the business-led focus can be on foundational elements (e.g., governance, data, toolset, etc.) Digital tools and citizen-led innovation are transforming how Finance functions work 10 Improved processes Cost savings Citizen-led Execution Upskilled workforce Robotic process automation Automation of repetitive, manual tasks on the desktop Chatbot A computer program that attempts to simulate the conversation of a human via text or voice interactions Data transformation Transform data based on a series of functions for further use Natural language processing Review/Validate text that is not in compliance within a set of rules Document collaboration Streamlines reporting through collaborative work spaces and data automation Visualization Visualization of complex data sets; includes ability to “slice and dice” Machine learning and anomaly detection Using algorithms to improve rule sets that an activity is actioned on and ability to isolate data points Natural language generation Generate text in human language using a set of pre-configured data points Types of digital tools used to deliver solutions to address business pain points: PwC
- 11. PwC The problem Burdened by highly manual and repetitive processes, a large global retail and investment bank’s Finance function recognized the availability of new technologies that could quickly provide both quantitative and qualitative benefits to the organization. What we did Demonstrated the benefits of a citizen-led model through rapid digital use case development, beyond RPA into analytics/AI, while creating the governance, operating model, controls, and training curriculums. The results $15+ million Annualized FTE benefits 200+ Digital use cases identified 300+ Citizen developers identified 80+ Participants in in-depth trainings Citizen-Led innovation Case study: Digital innovation Digital tools and citizen-led innovation transforming how Finance functions work. 11 PwC
- 12. PwC A service-based architecture that utilizes a common data backbone to curate, store data and cohesively integrate application and data structures that empowers the Finance function and brings insights on a real-time basis Cloud Financials, Planning and Budgeting and HCM Process Excellence Tool (e.g. RPA) Information Anytime, Anywhere Machine Learning & AI Advanced Analytics & Visualisation Real-time Self serve Computing Data Internal, External, Structured, Unstructured Cloud based Platforms What is the Enabling Technology…….. 12 Enterprise-Led innovation
- 13. PwC Workday financials and HCM provides a single cloud platform 13 Enterprise-Led innovation ONE TECHNOLOGY PLATFORM PROJECT BILLING INSIGHT APPS PROCUREMENT INVENTORY REVENUE FINANCIALS PROJECTS EXPENSES STUDENT TIME TRACKING RECRUITING HUMAN RESOURCES TALENT PAYROLL BUSINESS PROCESS FRAMEWORK REPORTING & ANALYTICS ORGANIZATIONAL FOUNDATION PLANNING
- 15. PwC There are common themes in the journey CFOs are taking towards a more modern Finance function 15 The journey to modern Finance is rooted in a few core concepts: • Modern cloud ERP supported by an accounting rules engine / subledger • Flexible organization that efficiently use SSCs and CoEs • Clear data strategy and governance to standardize and automate data • Robust performance management across the organization • Deployment of digital tools and empowerment of employees to deploy ERP Deployment • ERP Cloud Solutions – single or multiple global instances • Process execution tools bought or built around the ‘edge’ (e.g. Invoice, Expense initiation) Shared Services • Global process standards and owners for Record, P2P, Payroll & T&E, Stat Compliance & Fixed Assets • Offshoring and captive onshore model for transaction processes • Ongoing improvement model to drive efficiency and onboard new processes Data & BI Standards • Standard data model to support external reporting and internal insight / analysis • Accessible and automated data storage for Finance • Common, central definition of Tier 1 KPIs, reports, and data • Performance management set at enterprise level with KPI cascade, templates & cadence Performance Management • Shift focus from revenue to P&L and customer insight including margin, profitability and capital planning • Flexibility to integrate deal and business initiatives integrating new business models into portfolio to address customer & product gaps • Reporting, forecasting and planning tools to support decisions across the business value chain (financial reporting, sales, marketing, operations) Modern Finance • Cloud-based ERP and EPM journey initiated and in planning • Desktop analytics and productivity adoption across Finance processes, in particular EPM execution • Desktop robotics and process automation primarily in accounting and finance shared services • Digital transformation office to coordinate finance innovation investments • Machine learning-based innovation in forecasting, reconciliation, and compliance & risk monitoring functions • Cognitive analytics introduced as digital workforce enabler to Finance employees
- 16. PwC 16 Workforce of the Future
- 17. PwC The case for upskilling 17 Digital upskilling priorities ● 50% of workers will need upskilling in the next 5 years ● Only 18% of companies have made ‘significant progress’ in establishing an upskilling program Job disruption ● 85 million jobs will be disrupted by technology ● 133 million new jobs will emerge ● 79% of business leaders concerned about key skills Financial demands ● 79% of CFOs plan to implement cost containment ● 66% of companies believe profitability will suffer if they don’t transform quick enough ● COVID-19 shutdowns, regulations could impact revenue PwC CEO SURVEY & WORLD ECONOMIC FORUM FINDINGS Top Line growth with headcount essentially flat 8.6 million hours automated ● 6,000+ automations built and scaled across our practices ● 11 million executions of those automations 50K+ people upskilled 3% reduction of costs to run the business in two years PwC AS A CASE STUDY PwC
- 18. PwC Digital technologies require changing the skills & capabilities in the organization, ultimately redefining existing roles… 18 Analytics and Value Manager Digital Accountant Global Process Owner Data Scientist Responsible for leveraging cross-functional and business data to inform strategic, operational and domain specific decisions. Expert at leveraging systems, tools, functionalities for efficiency and expertise End to end ownership of the process with emphasis on process design, standardization, and technology implementation Responsible for developing and implementing decision models based on collating multiple sources of data Transformation Lead Leads the organization’s transformation journey.
- 19. PwC © 2021 PwC. All rights reserved. PwC refers to the US member firm and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only and should not be used as a substitute for consultation with professional advisors. Thank you pwc.com