CFO 4.0The CFO of the Future

Making Better and Faster Decisions ina Disruptive WorldSeptember 2017

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Agenda

2September 2017The CFO of the Future

Agenda Item Slide Number Start Time

The Changing Role of the CFO 3

Leveraging Automation 6

Supporting Strategic Objectives 9

Rapid Response 13

Bringing it all Together 16

Traditionally…Reporting and budgeting

responsibilities dominate the functionof the CFO

Predictive analytics has been focusedon gaining/maintaining competitivenessin other business areas:

1. Sales & Marketing: Optimizingproduct marketing efforts to enhancecustomer buy rates

2. Operations: Predicting machineryfailure rates to drive lowermaintenance costs

3. Crime prevention: Ensuringoptimal security force deploymentbased upon crime hotspots

1

2

3

“From bean countersto bean sprouters.”

- Jeff Thompson, CEO ofInstitute of Management Accountants

1Source: Robert Half Management Resources - 2014

Business Area % of Responses

Human Resources 21%

Information Technology 19%

Operations 18%

Marketing 17%

Sales or businessdevelopment

10%

None/role hasn’t changed 14%

Don’t know 1%

In the past 3 yearsalone…

85%

of CFOs have assumedresponsibilities in newdepartments, mostcommonly HR and IT

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Supporting the TransformationWhat are the Necessary Capabilities?

• Evolution presents new opportunities andthreats to the function of the CFO:

- Automation of traditionally manual tasks

- Increased focus on risk management,both market wide and idiosyncratic

- Rapidly evolving business landscape –requires proactive strategic maneuveringto maintain competitiveness

- Societal changes: increased focus onsustainability and globalization

1. Automation

• Increase usage of automation• Frees up time of Finance staff for higher-

value activities• Allows for increasing complexity

2. StrategySupport

• Explore new market and profitopportunities

• Democratize decision making• Validate and monitor ROI

3. RapidResponse

• Reduce risk exposure• Rapidly understand impact of new

regulations

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1. Leveraging Automation

What can Automation do for your business?

The CFO of the Future September 2017

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The Case for AutomationWhat are the drivers and benefits of automation?

Globalization: Increased complexityand volume. More ‘work’ to do thanever before!

Regulation: We are operating in anincreasingly regulated environment.Cost of adherence is increasingrapidly.

Efficiency: Perform low-value tasksmore rapidly and with reduced risk.Lower costs whilst freeing-up staff towork on higher-value, strategicallyaligned tasks and projects.

Increased Volumeand Complexity

DecreasedCosts

IncreasedEfficiency

andReliability

The CFO of the Future September 2017

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The Case for AutomationHow do we actually go about implementing automation?

Technology

•Plays supporting role•Does not drive changeper se

Processes andProcedures

•Business Process Re-engineering

•Change Management

• Comprehensive change management iscritical in ensuring automation realizespurported benefits

• Embed as much non-judgementalbusiness logic as possible (i.e. quantitativelogic – if amount is above $X then dosomething)

• Many good candidates:

• Anti money laundering/transactionmonitoring

• Business-as-usual accounting

• Tax preparation and filing

The CFO of the Future September 2017

“The first rule of any technologyused in a business is thatautomation applied to an efficientoperation will magnify theefficiency. The second is thatautomation applied to an inefficientoperation will magnify theinefficiency.” – Bill Gates

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2. Supporting Strategic Objectives

Becoming a strategic partner…

The CFO of the Future September 2017

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Risk ManagementEmbedding Data Analytics to Reduce Exposure

The CFO of the Future September 2017

Regulatory

• Maximizeassetutilization

Eventmodelling

• Idiosyncratic• Market wide

Predictivemodelling

• Riskquantification

• Traditionally: Risk managementconcerned with examining past and currentperformance

• Opportunity: Enhance risk managementwith:

Event modelling (e.g. what if thesedebtors default?)

Predictive modelling (e.g. whatequipment is likely to requirepreventative maintenance?)

Regulatory maneuvering (e.g. howcan I maximize asset utilization whilstmaintaining regulatory compliance?)

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SustainabilitySupporting Sustainability in the Finance Function

• Business value of sustainability is wellunderstood, however:

Challenging to quantify: energy andresource usage, greenhouse gases, supplychain performance.

Even more challenging to drive change:What are the factors influencing resourceusage? Where do we have opportunitiesto improve our supply chainperformance?

How do we measure ROI of strategicinitiatives around sustainability?

1. Consume• Consume and organize large

volumes of disparate data

2. Analyze• Perform analysis to uncover

trends• Utilize statistical methods to

define influencing factors

3. Implement• Implement business process

improvements andmodernizations

4. Monitor and Refine• Monitor response of business

to quantify response• Tune process and repeat

The CFO of the Future September 2017

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Human ResourcesMaking Better Hiring and Retention Decisions

Key Benefits:

• Understand what factors lead to staffturnover and establish more representativeperformance metrics.

• Gain insight into what makes for a high-performing hire vs. a low-performing hire.

• More accurately align requisitions tobusiness need. Prevent excess resourceovercapacity.

• Balance costs with market demandsthrough greater insight into market salarychanges.

The CFO of the Future September 2017

“Aligning people to the business,the changes, the expectations andour purpose is absolutely key.” -Susan Lloyd-Hurwitz, CEO andManaging Director of MirvacGroup

Gambling on talent

Despite the importance of getting the right talent, just30% of CEOs are making changes to their focus on skillsand adaptability in their people. And despite theirembrace of technology in all things customer-related,companies are doing little to change either how they usetechnology to improve productivity or their use ofworkforce analytics, with only 4% of CEOs seekingchange in that area.1

30%

5

1Source: PwC 19th Annual CEO Survey

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3. Rapid Response

Responding quickly to market trends

The CFO of the Future September 2017

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Exploiting OpportunitiesUsing Data to Achieve and Maintain a Competitive Advantage

• Collecting, analyzing, modelling andreporting on data has traditionally been atime-consuming, expensive process.

• Technology is accelerating the rate marketdata is analyzed, rapidly uncovering newopportunities.

• Organizations that are able to exploit thesenew opportunities are more likely to disruptthe market and emerge as a leader.

The CFO of the Future September 2017

PwC Approach: Supplement corporatelymandated data with the ability to explore ad-hoc,unstructured data in parallel.

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Performance ManagementFailing-fast and providing ROI measurement and assurance

The CFO of the Future September 2017

• Tomorrow’s CFO will need to:

1. Demonstrate alignment of initiativesto business strategic goals.

2. Predict future ROI, risks andmitigation strategies.

3. Measure and monitor ‘in-flight ROI’– i.e. real-time performance monitoringof new programs and initiatives.

4. ‘Fail-fast’ – respond rapidly toinitiatives that are not producing thedesired (and predicted) results. Iterateand repeat.

1. StrategicGoals• Identify keystrategic goals

2. KeyPerformanceIndicators•Derive KPIs (e.g.GM%)

3. BusinessDrivers•Model ‘drivers’(e.g. Total Costand Gross Rev)

4. Measureand Monitor• ‘Real-time’responsemonitoring

5. Iterate andInform•Fail-fast• Integrate learnings

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4. Bringing it all Together

Deploying capabilities rapidly and efficiently

The CFO of the Future September 2017

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Bringing it all togetherBuilding out an ‘Action-Platform’ toEnable Smart Decisions

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Bringing it all TogetherKey Messages

The role of the CFO is fundamentally changing:

Change is market-driven: failure to evolve with the marketplace presentsopportunities for competitive disruption.

Automation is key: Appropriate implementation of automation is necessary tofree-up resources for higher-value activities.

Transformation must be business driven: Technology is an enabler, and it iscrucial for it’s implementation to support a value-adding process, not thereverse.

Data is at the heart: We collect huge volumes of data which enables us to makemore accurate decisions more quickly. The applications for better, fasterdecisions are multiple and a common approach and platform is necessary torealize these benefits.

The CFO of the Future September 2017

Thank you…

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

© 2016 PricewaterhouseCoopers LLP, an Ontario limited liability partnership. All rights reserved.

PwC refers to the Canadian 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.

Ramy SedraPartner,Data Analytics Consulting Leader514-205-3972ramy.sedra@pwc.com

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