The Strategic CFO: Changing the Game for Finance
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Transcript of The Strategic CFO: Changing the Game for Finance
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#CFOD13#CFOD13The Strategic CFO — Using Cloud Computing to Change the Game for Finance
Marc Linden
CFO, Intacct
Jeff Haslow
CFO, The Knowland Group
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Today’s Agenda
Cloud basics
The strategic shift for CFOs
How the cloud enables the transformation
Takeaways
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The Cloud Impacts All of Us as Consumers
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Now Also for Your Business Applications
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Cloud Computing: Served Up 3 WaysSaaS: Software as a Service
• Delivery of business applications over the Internet; Mature feature set and world-class operations
PaaS: Platform as a Service
• Availability of a programming platform and tools as a service over the Internet
IaaS: Infrastructure as a Service
• Raw computing resources (processing power, storage, etc.) over the Internet
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Today’s Agenda
Cloud basics
The strategic shift for CFOs
How the cloud enables the transformation
Takeaways
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CFOs Have a Strong Desire to Change Their Organization’s Role…
Current Role Desired Role0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Score KeeperGate KeeperProvider of AnalysisBusiness Accelerator
CFO Role Expectations
Armanino McKenna, “The CFO Evolution – 2011 Benchmark Survey Results”, Dec 2011
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What Does a Business Accelerator Do?
Long term strategic planning
Evaluating new business models
Corporate development activities
Evaluating new market opportunities
Building support for new initiatives
Working with board or analyst
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And Expectations Have Increased…
STAGE Transaction Management
Controlling the Business
Planning and Analysis
Integrated Functional Excellence
KEY CAPABILITIES
• Financial accounting• Management
reporting• Tax and Audit• Treasury
• Performance management
• Analysis
• Superior decision support to invest wisely
• Business development• Enterprise risk mgmt.
ROLE “Bean Counters” “Process Managers” “Business Partners” “Value Managers”
CHALLENGE Number of transactionsConsistent process excellence
Talent and insight into value drivers
Leadership and performance management
Source: McKinsey & Company
1 2 3 4
• Focuses on processes and risk minimization
• Focused on decision support
• Provides sound financial analysis to management for making financial and operating decisions
• Integral part of management team to support value/wealth creation
• Identifies opportunities and provides critical information and analysis to make superior operating and strategic decisions
• Dominated by reporting and compliance functions
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Inefficiency in the Accounting Function Often Hinders Focus on Business Leadership
Source: Armanino McKenna, “The CFO EvolutionTM Benchmark Survey Results,” Dec 2010
Top Bottlenecks in Monthly Close ProcessTop Issues for CFO Organizations
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Today’s Agenda
Cloud basics
The strategic shift for CFOs
How the cloud enables the transformation
Takeaways
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How the Cloud Enables Transformation
Boosts Productivity of Financial Processes
Supplies Insight for Better & Faster
Decisions
Focuses Resources
on Core Business
Offers Scale for Growth
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Cloud Financial Management Boosts Productivity Through Automation
Focus on what matters/costs most to the business:
Quote-to-cash
Procure-to-pay
Revenue management
Budgeting and planning
Time and expense
Boosts Productivity
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Example: Software Quote-to-Cash Process Before Price ListPrice List
Order InvoiceContractQuote Collect Recognize Revenue
Sales Finance
Customer MasterContacts
Incon
sis
ten
td
ata
Man
ual
eff
ort
Re-e
ntr
y
Sales & Finance use different SKUs/prices = inaccurate fulfillment and invoicing
Inaccurate contact info = inability to book and invoice orders
Customer name on contract not in Master = creation of duplicate customer accounts and incomplete view of customer relationship
Revenue recognition not directly tied to events (e.g. fulfillment, collection status) = inaccurate revenue & restatements
Contract has non-standard terms or terms not captured in order = inaccurate finance order and invoice and revenue leakage
Contract often prepared manually from Quote = added sales operations effort
Order/Invoice information reentered into Excel for manual revenue recognition calculation = inaccurate revenue & restatement; lack of revenue predictability; significant manual 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
Sales lacks visibility into invoicing/collection status = added losses for orders taken from bad accounts
Customer complaints about order/invoice errors = slower collections
Data entry errors
Revenue leakage
Extended DSO
Customer invoicing issues
Boosts Productivity
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Example:
Software Quote-to-Cash Process After
Price List
Customer Master
Collect
Recognize Revenue
Sales Finance
Order InvoiceContractQuote
• Integrated quote-to-cash recognition
• Consistent data across entire company
• Entire process is visible and accurate
• Lower costs and greater efficiency
Boosts Productivity
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Supply InsightThe Cloud Enables Real-Time Access to Central Repository of Information
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
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The Cloud Lets You Access Your Data from Anywhere
A single source of data
Access from anywhere, anytime
Labor can be located anywhere in the world
Simultaneous users
17
HR SERVICES
MANUFACTURING
SALES
SUPPLY CHAIN
Supply Insight
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Cloud Financial Management Provides Analysis Needed for GrowthFrom:
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 non-financial (“statistical”) metrics to create and monitor your own KPIs
• Create, save, and share multi-scenario analyses with others stakeholders
Supply Insight
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The Cloud Gets You Out of the “No Value Added” IT Business
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
SSAE 16 (previously SAS 70)
Possible because costs are amortized across thousands of companies
Focus Resources
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Tasks You No Longer Have to Worry About When Running Your Systems in the Cloud
20
Ongoing IT Workload
Fixes and Patches
Maintenance and Upgrades
Downtime
Performance TuningRewrite Customizations
Rewrite Integrations Upgrade Dependent Applications
Disaster Recovery
Power
Air conditioning
Focus Resources
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Costs and Risk are Shifted to the Cloud Provider
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 and streamline processes
Higher employee productivity
Minimal IT costs
Fast and low risk implementations
Superior revenue management
9% Software Licenses
43% Implementation
26% Hardware
14% IT Personnel
7% Maintenance
1% Training
68% Subscription
Fees
32% Implementation, Customizations,
and Training
On-Premises Cloud Computing
Ongoing Costs Ongoing CostsApply Fixes, Patches, Upgrade
DowntimePerformance tuning
Rewrite customizations Rewrite integrations
Upgrade dependent applicationsOngoing burden on IT
Maintain/upgrade hardwareMaintain/upgrade networkMaintain/upgrade security
Maintain/upgrade database
Subscription feeTraining
Configuration
Focus Resources
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The Cloud Brings You Closer to your Vendor
Customer Feedback
Continuous
Innovation
Rapid Access to
New Features
Focus Resources
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Your Business Will Grow in Size and Complexities
Increased complexity may include:
New business entities
Multiple currencies
New geographies
Acquisitions
New GMs that want their consolidated view
Tax optimization
Software International Inc.USD
Software Development
Israel(ILS)
Software Development
India(INR)
Software Sales
UK(GBP)
Software Sales Europe(EUR)
Software US
(USD)
Buddy Software
(USD)(acquisition)
SoftwareJapan KK
51% ownership(Yen)
Offer Scale for Growth
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When Running Your Business on SaaS, It Is Easy to Integrate Systems When Needed
Why SaaS is easier to integrate:
SaaS web services are widely accepted technologies
Many vendors support it
Availability of 3rd party intermediaries
Both self service or consultant-built options
Offer Scale for Growth
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The Cloud Provides Scale to Support Growth
Easily and cost effectively scale and 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 and reliability
Add-on capabilities and integrations when you need them
Offer Scale for Growth
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Example: Set Your Accounting System Up To Easily Manage AcquisitionsFrom:
Consolidating entities on spreadsheets
Multiple instances of QuickBooks
Merged entities on different systems
Manual journal entries for inter-entity transactions
To:
• Consolidate with built-in automation
• View multiple entities consolidated or separately
• Differing charts of accounts, calendars and accounting treatments
• Migrate complex accounting structures
• Single click consolidations
• Automated inter-entity transactions and eliminations
Offer Scale for Growth
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#CFOD13Jeff HaslowCFO, The Knowland Group
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About the Knowland Group
Founded in 2004 – high-growth mode for the past 9 years
SaaS, Data, Analytics and Services to more than 3,000 hotels and 25,000 users worldwide – billed monthly
150 employees in three locations
Bootstrap funded until first private investment last year.
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Today’s Agenda
Cloud basics
The strategic shift for CFOs
How the cloud enables the transformation
Takeaways
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ERP System Change Addresses the Top Issues for CFOs
Source: Armanino McKenna, “The CFO EvolutionTM Benchmark Survey Results,” Dec 2010
Top Bottlenecks in Monthly Close ProcessTop Issues for CFO Organizations
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Systems Change is a Strategic Opportunity
Systems Enable Transformation
Drive productivity via automation
Provide reporting and real-time business visibility
Integrate to other business systems
Scale to support growth
31
Cloud Makes it a Reality
• Lower cost of entry
• Pay-as-you-go
• Buy only what you need
• No need for significant IT
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Starting the TransformationWhat You Should Be Asking Yourself
Boost productivity of financial processesWhere do you spend your time now?
What is being done in Excel?
Supply insight for better and faster decisionsHow old is the information from which you are making decisions?
What is the bottleneck in getting the data?
Focus resources on your core businessWhat other financial or related systems are critical to your business?
Where can you eliminate duplicate entry, entry errors etc?
Deliver scale for growthWhat are business needs 3-4 years from now?
Do you have a business systems map to meet those needs?
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Interested in Learning More?
Try Intacct with a free 30-day trialhttp://www.intacct.com/trial
Attend an upcoming webinarhttp://www.intacct.com/webinars
Follow us on Twitter@intacct_corp
Connect with us on Facebookhttp://www.facebook.com/Intacct
Contact us [email protected] | 877-437-7765
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Thank You!
FOR MORE INFORMATION:www.intacct.com | [email protected] | 877-437-7765
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