Digital Finance Transformation Simon Wilkins€¦ · The Future of Finance You can start on...

London School of Mines

6 June 2019

Digital Finance Transformation

Simon Wilkins

2

Introduction

Simon Wilkins

Finance transformation director

Simon is a Finance Transformation Director who is a qualified

accountant and has worked in and around the finance function for

twenty years.

Most recently Simon has been the lead Director on multiple global,

digital technology driven, large scale finance transformations.

He has a vast amount of global experience working throughout

Europe, the US and Asia Pacific and has extensive knowledge of

Mining, Energy & Utilities, Media and Health sectors.

Proprietary and confidential. Do not distribute.

The Future of Finance

How is our industry and business

changing?

How can Finance respond and what does the future of Finance look like?

What’s the opportunity for our

people?

How do we organise ourselves?

What Digital Finance enablement is

required?

What is the business case for change?

PwC – The Future of Finance

How is our industry and business changing?


Environmental, technological and business model disruption will be relentless

Resource scarcity &

climate change

Demographic & Social Change

Shift in global economic power

Accelerating urbanisation

Changingglobal politics

Megatrends3-D

Printing

The Essential

Eight Artificial Intelligence

Augmented Reality

Blockchain Drones Internet of things

Robotics Virtual Reality

The Subscription Model

The Access over Ownership Model

The On-Demand Model

The Freemium Model

The Eco-System Model

The Experience Model


How can Finance respond and what does the future of Finance look like?



Finance can respond and drastically change its impact with the business.

Successful transformations are enabled by a seven point Modern Finance agenda.

Pre-configured Cloud ERP

Predictive Risk & Regulatory

Process Excellence & Automation

Finance Modern Workplaces

Performance Excellence

Connected, Self-service Data

Finance Workforce of the Future



You can start on

different pathways

but the opportunity

to transform and

deliver value is lost

if the pathways

don’t come

together!

Lead with People

Lead with Process

Lead with Performance

• An upskilled workforce that’s digitally savvy

• Supplemented with new human and machine based roles

• With modern and collaborative spaces & structures

• With a highly effective operating model

• A simplified process with next gen pre-configured ERP

• Supplemented with automation to further drive efficiency

• With controls automated and predictive

• A connected digital core enabled by ERP, EPM, data lakes & self service insight

• Supported by voice recognition and Chatbots

• Applying analytics, Machine Learning & AI to deliver relevant & real time business function insights


What is the opportunity for our people?


A different

set of skills

and

competencies

will be

required

Task

oriented

mind set

Making

sense of

past

performance

Siloed

decision

making

Skills for an

analogue

work place

Value-

focused &

tech

savvy

Inquisitive,

commercial,

proactive and

collaborative

mind set

Driving a

strategic

agenda

Skills for a

modern

work place

Actionable

insights Certified &

connected data

Forward

looking

Customer

centric

Real time &

self service

Finance Skills

Shift



The roles in the Finance workforce of the future will be delivered in different ways

● Julie is a Connected Finance Shared

Services GPO, leading a virtual

process owner team and a third-party

outsourcing relationship

● Julie deploys intelligent bots to

streamline processes within the P2P

cycle and facilitate real-time

monitoring

● She has excellent technical and

interpersonal skills which she uses to

manage her human and virtual teams

Julie - Human Being

GPO, Full time employee

40 hours per week

● Emma is a Data Scientist who

identifies revenue growth

opportunities

● Her skills are valuable and scarce,

but the company doesn’t need her

on a full time basis and contracting

suits her

● She’s often resourced on a daily

basis to assist new market and

product initiatives

Emma - Human Being

Data scientist, Contractor

7-14 hours per week

Rocket - AI programme,

Full time digital asset

168 hours per week

● Rocket is an AI resource who

supports Finance whichever way

he can, continuously learning as

he goes

● He can analyse big data and

provide instant insight and

perform analysis in minutes that

previously took days

● He has his own email address,

can be assigned tasks 24 hours a

day and will respond when you

speak to him on internal

messenger


Now meet Julie, the Connected Finance Shared Services GPO

Pre-configured Cloud ERP Finance workforce of the future Connected, Self-service data

Process excellence and automation Performance excellence Risk and regulatory

The advent of cloud computing has enabled and

driven a fully standardised global process

environment. This has transformed her role,

providing her with oversight and control over the

processes and operational teams. Enabling her to

focus on driving global process improvement

Her staff, both bots and humans are now working

harmoniously. She has overseen the transition

from a purely transactional finance team to one

who now scope, manage, govern and develop the

digital workforce, expending effort on driving

optimal business solutions.

She utilizes Real-time self service performance

dashboards – display the full range of KPIs, from

operational performance to strategic KPIs –

e.g. DPO, cost to serve. These dashboards

are used to inform her regular operational and

strategic governance forums, using the drill

down facilities to understand root cause issues

and drive behaviours.

She deploys intelligent tools to conduct process

performance health checks. These quantify FTE

and BOT effort, and highlights bottlenecks,

exceptions, workarounds and non-standard

processes. This MI is utilised in process

excellence forums to drive adherence to

globally standardised processes & utilisation

of automation.

She oversees RPA and AI improvements, such as

streamlining supplier set. The bot captures vendor

set-up information, validation against supplier

policy, and onboarding supplier information into

ERP. Further, continually monitor suppliers

against KPIs to identify any risky vendor activity

with dashboards available to her

The core focus of her efforts is identifying controls

risk for regulatory, process and systems changes

and using trends to continually enhance the

controls implemented which are fully automated

preventative controls. All audit reporting and tax

submissions are automatically generated and

digitally submitted.

I am the global process owner for

the procure-to-pay cycle,

responsible for both a virtual

process owner team and third-

party outsourcing relationship. I

am dependent on daily

instrumentation of systemic

process issues and quick response

automation to address them.

“

!!!



How do we organise ourselves?



Business-located Finance

Increased capacity,focussed and integrated with the business

Centres of Excellence

Greater scope, higher skills and a hybrid offixed and virtual locations

Finance will look and feel completely different

14

Finance Operations

Smaller, cheaper, highlyautomated & location agnostic.

Corporate Centre

Smaller, focussed on strategy, Investor Relations and regulation

Today

Tomorrow

Today

Tomorrow

Today

Tomorrow

Today

Tomorrow

PwC’s Digital Services

▪ Single portal of access to all Finance

information and transactions

▪ Personalised experience

▪ Single Point of Contact for operational services

▪ Ticket/query handling support, answer and route questions and

requests

▪ Local/remote specialists

▪ Complex query resolution

▪ Specialists in the Centres of

Excellence will help Business

Partners answer particular topics e.g.

Treasury, Tax, Commercial Pricing,

Regulatory and Legal issues

The way Finance services its customers will shift towards personalised, on-demand delivery

The future of Corporate Services - DRAFT

15

Automated Self Service(chatbots, portal, content

management system)

65% 20% 15%

SME help / Assisted Service (Messenger, telephony, Case mgmt tool,

Workflow/document mgmt, functional tools)

Busines located Finance / Centre of

Excellence

Chat

Intranet

Workflow

EmailMail Phone

App Kiosk Ticket

Applicants

Aspirational

customer demand

modelEncouraging customers of Finance to “self-help” wherever possible is key

Digital technology is enabling far greater self-service with chatbots answering simple questions like “when is my supplier going to get paid”. The

user experience will be key – intuitive, easy-to-use interfaces and rapid answers.

More complex questions will handled by SMEs who can drill into data real time and collaborate with a wide set of stakeholders to solve issues.

What Digital Finance enablement is required?


A cohesive Digital Finance strategy toenable a transformation is required


ChatBots & Speech Recognition

Digital EPM

Blockchain

Robotic Process Automation

Mobile Computing

Machine Learning & AI

Analytics & Visualisation

Real-time/Self serve Computing

Cloud & Next Gen

Digital ERP

Enabling process excellence

We should look at the opportunities for the ‘doing’ and ‘thinking’ categories of Finance Function tasks

‘Doing’

▪ Processing

▪ Reconciliation

▪ Month end tasks

▪ Producing reports

▪ Administration


‘Automate’with Digital ERP, RPA & Chatbots

‘Thinking’

▪ Problem solving

▪ Spotting trends

▪ Understanding drivers

▪ Scenario modelling

▪ Commentary & recommendations

‘Augment’with Analytics, Visualisation, ML & AI

Now see how Jun, the Digital FP&A Leader leverages technology

Intelligent automation Assisted Insights Connected, Self-service Data

Modern finance workforce Predictive enterprise risk Pre-configured Cloud ERP

His time is mostly spent on strategic analysis

now that his time has freed up from the monthly

KPI and reporting package which he has

automated through ETL and RPA. Reports

loaded in teams with an automated notification

when ready for distribution.

His business planning process is supplemented

with machine learning to drive predictive forecasts

which are more accurate than past practices of %

on top of historicals.

His team spends less time ‘cleansing data’ as

they now pull in queries from a common data lake

and can create strategic analyses beneficial for

the business due to the accessibility to data.

His FP&A staff have a clear and robust career

journey through well developed learning and

development programs, individual development

plans, coaching plan and performance

assessment. They can turn to him anytime for

real-time feedback either in person or via a

Teams meeting.

He leverages an enterprise risk platform

which proactively identifies any potential cash

leakage events which may impact his forecasts

and drive variances.

His EPM platform connects seamlessly with his

pre-configured ERP which comes pre-loaded with

leading practices for planning and analysis –

including industry KPI dashboards – loaded into

Teams for his team to view.

I manage an analysis Center of

Excellence that tackles building

and maintaining models for annual

planning, quarterly forecasting, and

segment performance analysis.

I need my team to stay on top of

trends & work together on models

and messaging to the Street.

“

System source

Structured and

unstructured data

!!!



What is the business case for change?

How the Finance focus will shift in the Next Generation Digital World


Plan Transact Account Control Comply Report Analyse Advise

Plan Transact Account Control Comply Report Analyse Advise

• Strategy• Target setting• Financial

management• Forecasting• Tax / Treasury

• Supply payments• Employee

payments• Customer receipts• Cash

management

• Transaction accounting

• Asset accounting• Tax accounting

• Accounting close• Accounting

reconciliation• Error processing• Internal audit

• Statutory reporting

• Tax filling• Statutory

compliance• Policy compliance

• Enterprise performance reporting

• Financial reporting

• Management reporting

• Enterprise performance reporting

• Portfolio analysis• Performance

analysis• Investment

analysis

• Business advisor• Strategy

execution support• M&A support• Board

engagement

Pa

stF

utu

re

Finance focus

Automated and digitized

The Finance Function will be significantly more effective as a result. It will be able to pivot to an advisory role for the business

Current

State Focus

Transaction

processing

Reporting and

compliance

Insight and

action

IT run cost

Prepare

Advise

Analyse

Future

State Focus

Prepare

Analyse

Advise More effort on

value creation

Less effort

doing the

basics

Efficiency

opportunity

Investment in IT &

cloud savings

Further

efficiency gain


Continuous

improvement Upskilled function Greater self service

Multi-channel with

faster response

Reduced cost to

deliver

Improved customer

service

Improved pricing

decisions

Commercial

excellence

Greater working

capital insight


PwC’s Finance Effectiveness Benchmark Report

0.82%

0.93%1.02%

0.93%0.89% 0.86% 0.85%

0.54% 0.56%0.61%

0.56% 0.53% 0.55% 0.55%

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

2009 2010 2011-12 2012-13 2013-14 2015-16 2017-18

Median Top Quartile

Cost of finance at top quartile firms

0.55%

Cost of finance, as a percentage of revenue, at typical firms

0.85%

Finance cost as a % of revenue

36%40%

36%

50%46%

65%48% 50% 47%

60% 60% 78%

0%

20%

40%

60%

80%

100%

2010 2011-12 2012-13 2013-14 2015-16 2017-18

Median Top Quartile

Percent of time spent on analysis (vs. data gathering)

How do we help our clients accelerate and deliver a Future of Finance transformation

25

Lead with People

Lead with Process

Lead with Performance

Finance Workforce of the FutureUpskilling Finance workforces to be digitally savvy and supplemented with new human

& machine-based roles

Finance Modern WorkplacesRe-thinking collaboration spaces & structures for Finance employees & external parties

like suppliers and customers

Process Excellence & Automation Applying automation to simplify, accelerate, or re-design processes within your Finance

organization

Predictive Risk & RegulatoryApplying automation and new operating models to rationalize & re-design control

structures to shift from detective to predictive controls

Pre-configured Cloud ERPShift and upgrade the existing ERP to deliver new Finance capabilities in public/private

Clouds

Connected, Self-Service DataEnabling the enterprise digital core connecting ERP/EPM tools and data lakes to self-

service, voice-activated information supported by AI

Performance ExcellenceApplying analytics & machined-based models to deliver business function insights &

FP&A improvements

Vis

ion &

Str

ate

gy

Where do you start?

Our Future of Finance

Vision and Strategy will

identify which of the seven

journeys are needed to

modernise Finance as well

as define the business case.


What’s our approach?

To envision the Modern

Finance ways of working,

we use a persona

workplace walk through to

show, not tell, what the

Future of Finance could

look like.

Bringing to life optimised

operating model, process

excellence and automation,

skill changes and

technology enablement.

Solana, the Controller“I manage a global team of accountants spanning multiple timezones that drive the end-to-end record, close, consolidation and report cycle. I am dependent on real-time collaboration, especially during month- and quarter-end close.”

Jun, the FP&A Leader“I manage an analysis Center of Excellence that tackles building and maintaining models for annual planning, quarterly forecasting, and segment performance analysis. I need my team to stay on top of trends & work together on models and messaging to the Street.”

Michael, the Finance Shared Services GPO“I am the global process owner for the procure-to-pay cycle, responsible for both a virtual process owner team and third-party outsourcing relationship. I am dependent on daily instrumentation of systemic process issues and quick response automation to address them.”

Kara, the Treasurer“I am responsible for our investments, daily cash position and forecast, real estate and pension portfolios, and intercompany financing. My team is comprised of specialists who need accurate, complete portfolio information that eliminates ‘the noise’ to focus on real issues.”

Adam, the Compliance & Controls Leader“My global team is dispersed in our core operating businesses and maintains the ‘second line of defense’ monitoring to get ahead of issues before internal audits. I need to focus my team on high risk issues rather than executing checklists while maintaining SOX compliance.”

Alina, the Tax leader“I am responsible for statutory compliance, tax reporting, audits and returns, and providing advice to company strategy and regulatory matters. We operate a mobile workforce to move where the regulatory changes occur, while maintaining a Center of Excellence at HQ.”


What’s our approach?

Our tools are part of an

Integrated Future of

Finance Solution and

help to accelerate Finance

transformation, release

capacity, embed new ways

of working and support a

broader employee

engagement and

behavioural change.

PwC Perform; operational excellence and

behavioural change approach delivers

performance benefits quickly (20-35%) and

creates the behaviours required to make

future change stick.

PwC Realise; creates a digital replica of the end-to-

end Finance function value stream (the ‘Digital Twin’),.

Identifies and quantifies where opportunities exist to

simplify, standardise and automate processes.

PwC Digital Fitness App; providing a

rapid individual and Finance wide

assessment and learning tool that informs a

tailored digital workforce transformation

program.


THE FUTURE OF FINANCE

video

https://youtu.be/5pUTrEpGmJ4

29

Questions?

Simon Wilkins

Finance transformation director

[email protected]

+44 7561 789187

pwc.com

Thank you

This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

© 2019 PricewaterhouseCoopers LLP. All rights reserved. PwC refers to the UK member firm, and may sometimes refer to the PwC network.

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Digital Finance Transformation Simon Wilkins€¦ · The Future of Finance You can start on...

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