Dineshrie PillayDineshrie Pillay

Career & Employability Speaker

www.neospectives.com

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Three reasons:

� Asia

� Automation

� Abundance

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� In order to survive in this working world, you have to

ask yourself 3 questions:

1. Can the work that I am doing be outsourced?

2. Can a computer do my work faster?

3. Is what I am offering still relevant in an age of abundance?3. Is what I am offering still relevant in an age of abundance?

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“Accountants could go the way of (the UK’s) coal miners!

A mighty industry that once employed three quarters of

a million and helped bring down a government.

Today it employs fewer employees than SmithKline

Beecham. Beecham.

I believe that accountants in industry could go the same

way if they do not realise the fundamental changes

they need to make.”

Sir Hugh Collum

Former CFO, SmithKline Beecham

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In an Accountancy Age article in January 2006, Professor Andrew Likierman of London Business School wrote that:

‘the changing management agenda, along with changes in technology and the drive towards outsourcing, is a

threat as well as an opportunity’ for the F&A function.in technology and the drive towards outsourcing, is a

threat as well as an opportunity’ for the F&A function.

‘Finance is a natural home for good performance measures.’

‘The F&A function ‘ought to be playing a big role in strategy formulation as well as execution.’

To perform this role, finance has to become a partner to the business.”

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The Pressures of a CFO!

Need for Need for

good

decision

External Pressure:

1. Competition

2. Regulation

3. Shareholder

demands

Internal Pressure:

1. Business Demands

2. Changing Customer

3. Mngt Info Needs

making!

decision

making!

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This means that decision making, could

become the link in the value chain

whereby companies can still achieve

superior performance.

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� Accountants can improve the process of decision

making by:

� Providing metrics and analysis to support decision making;

� Their ability to provide timely and accurate management

information efficiently;information efficiently;

� Their ability to work closely with the business to combine

financial expertise with business understanding to inform

decision making.

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Value,

Growth,

Advantage, etc

Re

gu

lato

ry a

nd

com

pli

an

ceM

an

ag

em

en

t

acco

un

ting

Strategic

Reporting,

Audit,

Tax, etc

Advantage, etc

Re

gu

lato

ry a

nd

com

pli

an

ceM

an

ag

em

en

t

acco

un

ting

Tactical

Operational

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Finance Cost as a Percent of Revenue

1.17%

0.59%

50%

Drivers of

Change

� Process simplification and standardization

� Leverage of new technology

� Re-alignment of the organization, e.g. provided by Shared Services

Source: The Hackett Group, 2006

Peer group World-class

LaborTechnology

OutsourcingOther

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� World class companies have:

� Fewer than half the number of F&A staff relative to turnover

than the peer group and

� Labour costs are a higher proportion of their total F&A costs.

� This reflects that:� This reflects that:

� Not only are staff efficient but

� World class companies employ higher paid people and

� These people spend more time on value processes (planning

and analysis) to better support the business.

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REALITY CHECK: IMPACT OF AUTOMATION

OLAP / EIS

The

Desktop

Computer

2. Analytical Applications 3. Reporting

The Technology Landscape

1. Transaction-based

SystemsSales

SystemsMRP2ERP

Financial

Systems

Value-based

Management

Performance

MeasuresABC / ABM

Process

Simulation

Process

Modeling

Work Flow

Automation

2. Analytical Applications 3. Reporting

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Role transformation

Business partnering

Control

30%

Decision

support

10%

CFO, Architect of the Corporation’s Future, PriceWaterhouse, Wiley, p3

transformation

Process redesign

Value added services

Integrated systems

Decision

support

50%

Control 10%

Reporting 20%

Transaction processing 20%

Cost reduction1%-3% of turnover Much less

Transaction

processing

40%

Reporting

20%

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Shared Service Centres

were originally set up

for transactional for transactional

services.

With concentration of

expertise – have

capacity to provide

higher value services.

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� Finance transformation has improved efficiency.

� Achieving further efficiency gains presents challenges.

� Shared service centres have further potential.

� BPO offers more than lower costs; a step change can

be achieved.be achieved.

� The real benefit from improved efficiency is expected

to come from the capacity released to provide finance

/ business partnering.

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� Can you answer these questions on your company?

• Which parts of the business are creating value?

• What are the real drivers of your performance?

• Which customers and products are profitable?

How are we performing relative to the competition?• How are we performing relative to the competition?

• Which customers are delivering the bulk of our

profit?

• What is driving cash generation ?

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Long-term

goalsAction

PlansStrategic

Direction

1. What does success look like and

what is the strategic context within

which we are operating?

6. What actions are we

taking to improve

performance?

2. Are we focusing

on the right

things?

3. Are we deploying

resources effectively to

meet our objectives?

Strategy &

Performance

Monitoring

Strategi

c

ChoicesRisk

Management

Results

Agenda

4. How does risk

impact our work

programs?

5. Are we heading in the

right direction? How

well are we performing?

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• Excellent analytical skills:

• Using not just financial analysis but also customer

and market analysis, statistical and also sophisticated

modelling techniques.

• Use of multi-disciplinary team approach

• To inform key decision making as well as the ability to

integrate inputs from diverse non-financial sources.

• Strong commercial acumen:

• Characterised by strong product, process and

market knowledge.

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� The role of finance is changing from:

• Merely reporting on historical financial performance

• Preparing budgets

• Reporting detailed variances

• Analysing ledgers• Analysing ledgers

• Reconciling ledger accounts

� To a much more challenging role of:

� Analysing organisational information in order to provide

strategic decision support across the entire organisation.

� Finance is transforming into a value adding role.

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“To create competitive advantage by supplying

management with forward looking, timely, high quality and

value-adding financial and controlling support, we will

strive and prove to be an invaluable partner in shaping the strive and prove to be an invaluable partner in shaping the

strategy and persistently challenging operational

excellence.”

- A leading pharmaceutical firm

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� Decision making is becoming the basis of competitive

advantage and value creation.

� Accountants have key roles to play in the decision

making and implementation through to impact.

� The F&A function must improve its efficiency in � The F&A function must improve its efficiency in

providing reliable financial and management

information.

� Finance’s main challenge is to develop people who

can collaborate with the business to support decision

making.

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� CIMA Website

� http://www.cimaglobal.com/Innovation/Research-

topics/Finance Transformation

� CGMA Website

� http://www.cgma.org/Resources/Pages/ResourcesDefault.as� http://www.cgma.org/Resources/Pages/ResourcesDefault.as

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