Sponsored by:
Page 2
Future of finance – EY perspective
Technology
Three technology innovations set to transform the finance function: 1. Advanced data analytics and forecasting2. Robotic process automation3. Cloud and software-as-a-service (SaaS)
People► Building a smarter, more forward-looking and resilient finance function► Challenging the assumptions about what constitutes finance talent
Where from here?
Context1
2
3
4
Page 3
► 55
The DNA of the CFO series
Part 1: Do you define your CFO role? Or does it define you? The disruption of the CFO's DNA.The CFO role is being reshaped by four forces: digital, data, volatile risk and stakeholder scrutiny and regulation.To meet these challenges, CFOs need to re-evaluate their own competencies, and those of their team. Visit ey.com/dnaofthecfo to learn more.
Part 2: Is the future of finance new technology or new people? Preparing for the future finance function.Technological innovation is providing an opportunity for CFOs to transform their finance function into a fact-based decision center for the whole organization. But as many traditional finance tasks are automated, the profiles and skills of finance people will need to evolve.
Page 4
While automation and new technology will have a transformative effect on finance functions, people will continue to play an essential, albeit different role.
Page 5
Technology
Page 6
Three technology innovations set to transform the finance function
Advanced data analytics and forecasting1
Robotic process automation2
Cloud and SaaS3
Page 7
Advanced analytics capabilities will transform forecasting, risk management, and management’s understanding of value drivers
EY asked CFOs if they could only focus on one thing to improve Finance, what would it be? The highest rated response was:
“Improving big data and analytics capabilities to transform forecasting, risk management and understanding of value drivers is a priority for the finance function”
Improve ability To predict outcomes
Help CFO’s better understand
the financial impact of strategic
and operational decisions
Provide better and faster
Information To key
stakeholders
Finance functions are mastering the processing of large amounts of data, keeping track of new types of data and incorporating them into their models as they emerge.
1
Page 8
Robotics process automation (RPA) will drive evolution in how finance is delivered
65%Standardizing and automating processes and building agility and quality into processes
Combining state-of-the-art technology with process improvement
58%
Respondents emphasized the importance of RPA technology as a significant priority for the finance function:
2
Page 9
RPA executes processes as humans do, at a significantly lower cost
RPA People
People build relationships, provide subjective judgement, deliver low-frequency and exception tasks, and manage change and improvement► Resolve discrepancies► Approve invoices for payment► Manage working capital
Robots deliver repetitive, deterministic, high-volume tasks efficiently► Vendor master data management► Process invoices and payments► Duplicate invoice check► Invoice/PO matching
Finance Process:Accounts Payable
An effective deployment plays to both robotic and human strengths:
How does Robotic Process Automation (RPA) work?
RPA uses software to execute business processes in a
repetitive, audited and controlled manner
It orchestrates existing legacy applications for transaction
processing, data manipulation, response triggering and
communication
It does all of this with very limited human participation
2
Page 10
Cloud and SaaS technology drives analysis, reduces costs, provides greater flexibility, improves disaster recovery
Cloud and SaaSvalue to the finance function
Enhance decision making capabilities
► Drives analysis and decision-making by enabling disparate teams to more seamlessly access and analyze the same information
Reduce costs► Eliminates costly capital and
operational expense associated with hosting and maintaining traditional information systems
Provide greater flexibility► Supports flexibility in provisioning of
new technologies► Improves disaster recovery as back-up
solutions can be accessed remotely
Cloud services provide the capacity for finance to access ERP and other systems on the web, rather than through physical servers.
While Cloud and SaaS provide significant opportunities toimprove performance, they will need to be weighed against the need to conform to
out of the box processes and the loss of control over which and when new functionality will be rolled out to the business
3
Page 11
People
Page 12
Priority one: A smarter, more forward-looking, better aligned, more resilient operating model
Future operating
model
Smarter
Better aligned to the business
► All transactional finance processes will be fully automated in outsourced or captive finance factories.
► Transactional information will be available sooner and will be more accurate
► Finance professionals will spend more time working alongside key internal stakeholders, challenging their strategic plans and modeling and predicting different scenarios.
More forward-looking
More resilient
► The future finance function will combine finance data with external information to help model and predict business outcomes, identifying the most profitable opportunities
► The future finance function will be more focused on managing uncertainty through strategic risk management.
► It will use predictive analytics to investigate the implications of strategic decisions, to plan for possible shocks, and to manage the growing threat of cyber risk.
1
Page 13
Priority two: challenging the assumptions about what constitutes finance talent
Rethinking what constitutes
finance talent
Look beyond traditional financial analysis skills
Develop better finance business partners
Find digital finance talent
Use alliances to go beyond what your organization can deliver alone
2
Page 14
What’s next for the Finance Function?
A clear vision for the future finance function, which:► Is aligned with the
organization’s overall purpose and business strategy,
► gives finance team members around the world a common ambition,
► provides focus for efforts and investment decisions.
A bold technology strategy for the finance function which builds systems and tools that enable disparate teams to share information and make connected, data-driven decisions.
Invest in developing new skill sets and attracting new profiles by:► finding or developing the
new skills and capabilities required to exploit new technologies and increasing volumes of data,
► building their people’s softer skills, such as their communication and influencing skills
1. Define a vision 2. Rethink technology 3. Invest in people
Imperatives for future Finance Operations
Flexible Cloud Deployment
Inter-operability
Embrace Digital Technology
Governance& Compliance
360° view & access
Digitize Financial Processes Seamless
Information Flow
360
DigitalWorkplace
Value add focused
Business CentricServices
Re-Imagine Service Delivery Customer
Satisfaction
Integrate the moving parts
When using CRM, billing and planning systems • Avoid content silos• Deliver analytical insight across application
boundaries• Simplify access with minimal training• Provide self-service capabilities
DigitalWorkplace
Seamless Informatio
n Flow
360° view & access
360
Forecasts & hidden relation-
ships
Integrate the moving parts
Content sharing with customers is the norm rather than the exception:• Documentation received from suppliers
or subcontractors • Quality inspections• Proofs of service/delivery• Expenses for recharge
Information-Fueled
Business Processes
OpenText Confidential. ©2016 All Rights Reserved. 18
Example Process: Opportunity to Cash
Campaign &Lead Gen
Opportunity& Quote Sales Order Engineering
(Project)Production &
Delivery Service
Quote
Product Information
Collaterals
Lead Sheets
Contract
Product Specification
Sales Order
Order Confirmation
Requirements Specification
Enginering Drawings
Project Documentation
Detailed Specification
Purchase Orders
Material Requirements
Quality Inspections
Case / Problem Documentation
Customer emails
Solution Description
LegacySystem
How to act fast and accurate and compliant
Replace transactional work with agile processes • Optimize and automate:
• Eliminate manual steps• Leverage a shared service
organization• Measure results
• Trust built-in compliance:• Segregation of duties• Contextual intelligence
Order to Cash
Procure to Pay
Record to Report
Example: Top five value drivers for optimizing invoice-to-pay
Value Driver Baseline Improvement % Estimated Benefit (Annual) Assumptions and Benefit Rationale
Reduce Accounts Payable invoice processing costs related to invoice routing, exception handling, and duplicate invoices
$1,799K 36.5% - 63% $602K - $1,039K Based on previous studies 40-60% of AP spend is related to invoice processing
Reduce missed early payment discount rate $1,514K 40% - 50% $555K - $694K
ADP estimates that average early payment discounts are in the range between 1.6% - 2% of invoice value
Reduce payment processing costs for approvers $1,982K 30% - 40% $548K - $731K Based on previous studies it takes 15
minutes on average to approve an invoice
Reduce cost of data entry for paper invoices $1,439K 41% - 62% $541K - $818K Based on previous studies 30-50% of AP
spend is related to invoice entry
Increase additional discounts due to improved vendor relations $5,311K 10% - 20% $446K - $892K
Paystream estimates that 66% of companies are offered discounts on approximately 5% of their invoices
TOTAL - Client $2,692K - $4,174K
Your gain.Guaranteed governance
Reduced administrative
costs
Faster implementation
Reduced legal risk and liability
Reduced service center response
time
Real-time forecasts and closing
Increased staff productivity
Better customer satisfaction
Reduced IT administration and
storage costs