The CFO’s Expanding Role – Reality or Delusion?

By Gary Cokins, Founder of Analytics-Based Performance Management LLC

Did my last blog on the topic of the annual budget resonate with anyone? I have a suspicion that it probably did. Here in my final blog for a few weeks I am going to turn my attention to the CFO.

Am I alone in wondering if the many references and articles concerning the CFO’s emerging role as a “trusted advisor” is more hype than reality? Increasingly, I read articles and research studies alleging this emerging CFO role to be actually happening. In an article written by Gianni Giacomelli, senior vice-president at Genpact, titled “Can a CFO Innovate?” he states:

“Modern financial executives are moving toward a more central and expanded role as stewards of the company’s longevity, using the finance function to enable growth, especially in new markets and in response to market changes. For those who are ready for change, the new finance is an exciting and rewarding way to help shape a more intelligent enterprise that is better connected to the market and its customers.”

Really? Just to devil’s advocate for a moment, what proof do we have that Gianni’s observation is true? When we cut to the chase, what are CFOs more concerned about – regulatory compliance or organizational performance improvement? Certainly many CFOs monitor and report on performance using scorecards and dashboards. But do they actively participate in assisting line managers to move those dials. For example, do they:

  • Assist sales and marketing managers with identifying which types of customers to retain, grow, win back, and acquire?
  • Assist operations managers to determine which productivity actions and projects will realize gains in efficiency, effectiveness, quality, and cost reduction?

Or do they simply serve as gatekeepers and keep score?

Bean counter or bean grower?

In an article by Myles Corson, a consultant with the Financial Accounting Advisory Services of Ernst & Young LLP, titled “The Evolving Role of Today’s CFO”, he writes:

“In addition to overseeing the company’s financial health, CFOs are increasingly involved in setting operational and commercial strategy, navigating their companies safely through tighter credit markets, more complex regulation and unstable trading conditions. … As organizations continue to adjust to market volatility and economic uncertainty, CFOs must increasingly provide expert advice to support boardroom decisions. In fact, many CFOs feel that they are in an exceptional position to offer this level of strategic counsel because of their ability to gather information from disparate parts of the company.”

But is this evolving role one of just better reporting or one creating a greater impact on analysis and decisions?

In a survey conducted by my fellow Big Fat Blogger Mary Driscoll of the America Productivity and Quality Center, titled, “A New CFO Priority,” she writes:

“Surprisingly, only five percent of survey respondents believe that finance is currently delivering game-changing value to their enterprises. Is this cause for concern? … Finance organizations that are seen as a partner to the business generate thoughtful, clear, and authoritative analyses. However, the biggest barrier preventing business partnership is the lack of time to perform this same work.”

My intent is not to be a naysayer and deny there is truly an evolving and expanding role of the CFO. In fact, my intent is just the opposite. I am a believer that, particularly given the opportunity provided by the nexus of technological forces ( advanced analytics, cloud, in-memory computing, mobile and social computing) the CFO’s finance and accounting function is uniquely positioned at this moment in time to accelerate the adoption rate of enterprise performance management (EPM) methods along with emerging business analytics to gain crucial insights that were previously inaccessible and truly facilitate business innovation in new and novel ways. Finance and accounting professionals were born with a quantitative aptitude – which technology will only further fuel.

Boeing 747 Jetliner Taking Off, Sunset Silhouette

Delusion or reality?

But do we know or just think we know? Which is it – delusion or reality? I along with my colleagues, for example, bemoan the slow progress in performance improvement methods such as the adoption of activity-based costing (ABC) principles. If ABC is done at all it is typically only taken as far as product and service-line gross profit margin line reporting and does not look beneath that line to report and analyze channel and costs-to-serve for arguably more critical customer profitability reporting and analysis. And what about marginal / incremental expense analysis for that matter? This involves classifying available / used resources as sunk, fixed, step-fixed, semi-variable, or variable. This involves an understanding managerial economics, not just managerial accounting. How many finance organizations have built core competencies in these functions?   My suspicion is that many finance organizations are for the most part dealing with more fundamental problems and have yet to build core competencies in many of the practices espoused by analysts, consultants and business pundits.

For now though, my opinion is the CFO function is about to enter a golden age of business analytics and managerial accounting. But we need more evidence. Are CFOs taxiing on the runway, or have they begun lift-off?

I hope that you have enjoyed reading my series of blogs over the last few weeks. I’m taking a break now as I prepare to head to Chicago for the SAP Conference for EPM on 13/14 October, where I’ll be talking more about the subject of performance management and analytics and looking at best practice approaches, as well as taking a look to what we might expect to see in the future. If you’re in Chicago why not pop along and take in the show – but if not then please watch out for my next article as I shall look forward to resuming my blog series soon. Thanks for reading!

 

About the Author: Gary Cokins, CPIM

Gary_Cokins

Gary Cokins (Cornell University BS IE/OR, 1971; Northwestern University Kellogg MBA 1974) is an internationally recognized expert, speaker, and author in enterprise and corporate performance management (EPM/CPM) systems. He is the founder of Analytics-Based Performance Management LLC www.garycokins.com . He began his career in industry with a Fortune 100 company in CFO and operations roles. Then 15 years in consulting with Deloitte, KPMG, and EDS (now part of HP). From 1997 until 2013 Gary was a Principal Consultant with SAS, a business analytics software vendor. His most recent books are Performance Management: Integrating Strategy Execution, Methodologies, Risk, and Analytics and Predictive Business Analytics.

gcokins@garycokins.com; phone +919 720 2718

http://www.garycokins.com

Linkedin.com contact: http://www.linkedin.com/pub/gary-cokins/0/15a/949.

Hear Gary share some of his thoughts concerning EPM innovations and best practices at the SAP Conference for EPM in Chicago, October 13/14, 2014

The best part of the annual budget is when it is over!

By Gary Cokins, Founder of Analytics-Based Performance Management LLC

Jeremy Hope (1948 – 2011) was a special type of management consultant and colleague who I highly respected. He started a revolutionary movement when he co-authored with Robin Fraser the book, Beyond Budgeting: How Managers Can Break Free from the Annual Performance Trap (Boston: Harvard Business School Publishing, 2003). Their basic message was that the annual budgeting process is so broken and dysfunctional that the best solution is not to reform it but rather to abandon the process altogether.

Their solution was to understand the underlying purposes of a budget and apply methods, like driver-based rolling financial forecasts, to fulfill the purposes of the budget.

The best part of the annual budget is when it is over!

During a breakout session at a finance and accounting conference that I attended last year, a CFO remarked that the best part of the annual budget is when it is over! The laughter was thunderous. Sadly there is truth in the humor. Many are questioning if the value of budgeting is worth the effort. An annual budget process can take six months or more to develop and finalize (following multiple executive tweaks and revisions), and it can be obsolete almost from the moment it is finished.

Jeremy Hope and Robin Fraser suggested a better way. They co-founded with Peter Bunce an organization called the Beyond Budgeting Round Table (www.BBRT.org ). These BBRT founders explain that the annual budget is a fiscal exercise done by accountants that is disconnected from the executive team’s strategy and is usually insensitive to forecasted volume, product and customer mix. Typically the budget simply increments or decrement’s each department’s line-item expense (e.g., 3% for inflation) without considering the interdependencies of cross-departmental process flows.

The BBRT solution acknowledges that budgeting line-item expense limits are more like shackling handcuffs on managers who may need to justifiably spend more than was planned and approved many months ago in the past in order to capture benefits from newly emerged opportunities. BBRT replaces budget controls by giving managers the freedom to make their own decisions regarding the use of resources. BBRT does invoke controls, but it does so by monitoring non-financial key performance indicators (KPIs) against targets. As a result managers do not avoid being held accountable.

Nor does BBRT leave the accountants empty-handed. Treasury cash flow management, periodic interval-based rolling financial forecasts, and probabilistic what-if marginal/incremental expense scenarios (e.g., make versus buy decisions) are modeled using activity-based costing methods that calibrate cost consumption rates with substantial accuracy.

Risks from being blunt and radical

Jeremy Hope was radical in his thinking. To accounting and finance traditionalists, the thought of operating without an annual budget may be beyond their comprehension.

Perhaps, they could reflect that the electric light bulb replaced oil lamps that replaced wax candles for producing light – while reading Hope’s book in a candle lit room.

I admire radical thinkers like Jeremy. He will be missed. So many organizations are wed to tradition and insulated from change. It is a bit like keeping employees in an echo chamber to ensure they reinforce the same rigid ways of running the business. Jeremy’s observation was that the closer one is to a customer, the faster things speed up and the more dynamic they become. Therefore a static budget is like a fixed contract with managers accountable for meeting or exceeding the planned fiscal year-end results. Locking up resources in an annual plan is too long a horizon. It severely limits an organizations need for agility and flexibility in the face of continuously changing conditions for which constant adjustment and fine-tuning are needed.

Management movements for progressive methodologies need more activists like Jeremy Hope.

In my next blog, to be published just a few days before I am due to speak at the SAP Conference for EPM in Chicago, October 13-14, I’m going to turn my attention to consider the expanding role of the CFO, and ask if this is in fact a reality, or whether it is just hype.

 

About the Author: Gary Cokins, CPIM

Gary_Cokins

Gary Cokins (Cornell University BS IE/OR, 1971; Northwestern University Kellogg MBA 1974) is an internationally recognized expert, speaker, and author in enterprise and corporate performance management (EPM/CPM) systems. He is the founder of Analytics-Based Performance Management LLC www.garycokins.com . He began his career in industry with a Fortune 100 company in CFO and operations roles. Then 15 years in consulting with Deloitte, KPMG, and EDS (now part of HP). From 1997 until 2013 Gary was a Principal Consultant with SAS, a business analytics software vendor. His most recent books are Performance Management: Integrating Strategy Execution, Methodologies, Risk, and Analytics and Predictive Business Analytics.

gcokins@garycokins.com; phone +919 720 2718

http://www.garycokins.com

Linkedin.com contact: http://www.linkedin.com/pub/gary-cokins/0/15a/949.

Hear Gary share some of his thoughts concerning EPM innovations and best practices at the SAP Conference for EPM in Chicago, October 13/14, 2014

Where Do You Begin Implementing Enterprise Performance Management?

By Gary Cokins, Founder of Analytics-Based Performance Management LLC

I’m half-way through my current blog series where last time I looked at the budgeting process, and just two-weeks away from appearing at the SAP Conference for EPM in Chicago, October 13-14, where I plan to expand further on some of the concepts and ideas I’ve been writing about. So far I have considered the constituent parts of EPM, what makes for good and for bad EPM systems, and pointed to some ideas for evolving and improving EPM. But as organizations embrace the full vision of enterprise performance management – not just the narrow financial definition of better budgeting, planning and control – they frequently ask, “Where should we start?” Some may be eager to begin with a balanced scorecard, others by measuring channel and customer profitability. Still others want to take it to the limit by redesigning their core business processes.

In fact, there is no one-size-fits-all answer. So where you start depends on which enterprise performance management methodology you consider provides the fastest significant return and gets the employee buy-in ball rolling quickest.

Enterprise performance management is not new. Organizations have been doing it for years, arguably even before computers arrived on the scene. The traditional version of enterprise performance management involved a weakly communicated strategy that was followed up by measurements of customer service, sales and order-fulfillment functions. There was no attempt to integrate the varied components of enterprise performance management or to develop proactive core processes. Today, top performing organizations realize they must integrate methodologies and their supporting systems, visually display measurements and apply predictive analytics to all their processes. This is the new version of enterprise performance management.

As organizations realize that enterprise performance management is really much more about improving performance rather than just controlling and managing it, they begin asking, “Where do we begin to take what we already do to a much higher level?”

Accept that enterprise performance management is about integration and speed

An organization attains the full vision of enterprise performance management when executive leaders expediently communicate strategy to managers and employees alike and are committed to providing continuous updates to their plans.

leaders1_birds

This allows everyone to act in sync and without wasted effort. Speed matters in communications. Performance suffers when managers and employees are forced to repeatedly react to unexpected changes. To realize maximum benefits, any of the methodologies – such as strategy mapping, customer relationship management, Six Sigma, lean management and anticipatory capacity resource planning – must be robust, seamlessly integrated and in sync. Because some organizations already have several of these methodologies in place but not necessarily connected, the “where to get started” question depends on identification of the key factors relating to the organization’s current situation.

For example, if a reasonably sound, activity-based accounting system already provides information on which specific combinations of products, services, channels and customers earn or lose profit, executives may want to focus on successfully incorporating this information into a strategy map and associated balanced scorecard implementation. Failure to execute a well-formulated strategy is a major frustration that frequently prompts executives to pursue a broad enterprise performance management initiative. On the other hand, the executive team might be receiving cost information that is either incomplete, for example, because the team is receiving only product- or service-line profit information and not the full-channel and customer-segment information or inaccurate, perhaps because of distorting indirect cost allocations. In this case the executives may want to upgrade their management accounting system by applying activity-based principles.

Again, determining where to start on integrating an enterprise performance management framework depends on the organization’s weaker links.

Any approach to enterprise performance management begins with the attitudes of senior leaders. If they launch into enterprise performance management with a Darth Vader attitude – seeking underperformers to expose and cut off their air supply – the process will be painful with potentially negative repercussions. Employees will experience fear. Enterprise performance management should focus on remedy not punitive measures; A trust-based approach involves a great deal of accountability from individuals for achieving desired results. Wise leaders see their role as setting direction and continuous redirection, clearly communicating their ideas, and empowering their managers and employee teams to determine the best methods for moving the organization forward in the direction communicated by its leaders. These fine leaders are coaches not dictators.

Assuming an enlightened leadership team, then what?

Organizations will not make speedy progress by focusing exclusively on one methodology, such as better forecasting, and taking a year or longer to implement these improvements. If you take this approach then in all likelihood your competitors will beat you, or your customers’ expectations will outpace you. Instead, you need to enact multiple methodology improvements simultaneously. An increasingly accepted best practice for such improvements is to apply the “plan, do, check, act” (PDCA) cycle. Start with rapid prototyping, followed by iterative remodeling for all of the relevant methodologies. Naysayers will argue that the organization can handle only a few projects at a time, but they underestimate the capabilities of people to work together when they are being guided by leaders, not just managers.

With these rapid prototyping techniques, an organization makes mistakes early and often, not later when more has been invested and it is more costly to make corrective changes. This do-it-quick approach accelerates learning and brings fast results that in turn gain buy-in from employees who by nature are naturally resistant to change. Iterative modeling allows for scaling each of the prototyped methodologies into repeatable and reliable production systems. Enterprise performance management is like gear-teethed cogs in a machine: The more closely linked and better meshed the methodologies are during implementation, the smoother and faster the organization moves forward Software applications are very relevant, but their purpose is to support all of the methodologies. They are enablers of processes, not complete solutions on their own.

Embrace uncertainty with predictive analytics

Gradually, managers and employee teams will begin to see and understand the big picture, including how all of the methodologies fit together. Those in commercial organizations will realize that creating higher profits and increasing shareholder wealth is not a goal but a result. For these organizations, the true independent variable is finely managing the innovation-based R&D and spending on marketing to focus on the desired customers to retain, grow, acquire and win back – and cut lose the unprofitable ones. Leaders in public-sector organizations may view funding as a scarce commodity; therefore, they need to maximize outcomes by increasing output or improving service delivery without the use of additional resources.

Executives are constantly on a quest for the next breakthrough in managerial innovation. My suggestion is to start by integrating and enhancing existing methodologies that have proved their worth. It’s likely that the organization has attempted applying already to some level of competence. However, integration deficiencies may exist in some areas, leading to time lags that cause excessive and costly reactions.

Successful organizations can gain much insight by performing much deeper analysis, such as better and more granular customer segmentation. This more detailed business intelligence can be utilized within the methodologies in use and supporting systems for better decision making. The next major task is to get in front of the wave, using predictive analytics to mitigate risk by making changes before the effects can occur. Predictive analytics may well be the next major competitive differentiator, separating successful from mediocre or failing organizations. The uncertainty of future demands or events should not be viewed as a curse, but rather embraced as something organizations can tame with the powerful and proven probabilistic tools that already exist.

So what to do? Start now – everywhere. Most organizations over-plan and under-execute. For organizations that have experienced recent upheaval, now is the time to regain some order. With a nurturing attitude from executive leaders who act more like coaches than bosses then organizations can move quickly towards completing the full vision of enterprise performance management. But it requires a willingness for executives to step forward, initiative and empower their organizations to embrace enterprise performance management as the new culture for how the business operates.

Next time I shall discuss why modeling is an essential capability within an EPM system.

 

About the Author: Gary Cokins, CPIM

Gary_Cokins

Gary Cokins (Cornell University BS IE/OR, 1971; Northwestern University Kellogg MBA 1974) is an internationally recognized expert, speaker, and author in enterprise and corporate performance management (EPM/CPM) systems. He is the founder of Analytics-Based Performance Management LLC www.garycokins.com . He began his career in industry with a Fortune 100 company in CFO and operations roles. Then 15 years in consulting with Deloitte, KPMG, and EDS (now part of HP). From 1997 until 2013 Gary was a Principal Consultant with SAS, a business analytics software vendor. His most recent books are Performance Management: Integrating Strategy Execution, Methodologies, Risk, and Analytics and Predictive Business Analytics.

gcokins@garycokins.com; phone +919 720 2718

http://www.garycokins.com

Linkedin.com contact: http://www.linkedin.com/pub/gary-cokins/0/15a/949.

Hear Gary share some of his thoughts concerning EPM innovations and best practices at the SAP Conference for EPM in Chicago, October 13/14, 2014

Are Exceptional EPM Systems the Exception?

By Gary Cokins, Founder of Analytics-Based Performance Management LLC

Last time out I set a challenge for readers of this blog to question the performance management strategies and practices of their own organizations and executive teams. I hope you found this to be a useful and interesting exercise.

Quite naturally, many organizations over-rate the quality of their enterprise and corporate performance management (EPM / CPM) practices and systems. In reality they lack in in terms of how comprehensive and how integrated they are. For example, when you ask executives how well they measure and report either costs or non-financial performance measures, most proudly boast that they are very good. Again, this is inconsistent and conflicts with surveys where anonymous replies from mid-level managers candidly score them as “needs much improvement.”

Every organization cannot be above average!

What makes exceptionally good EPM systems exceptional?

Let’s not attempt to be a sociologist or psychologist and explain the incongruities between executives boasting superiority while anonymously answered surveys reveal inferiority. Rather let’s simply describe the full vision of an effective EPM system that organizations should aspire to.

First, we need to clarify some terminology and related confusion. EPM is neither solely a system nor solely a process. It is instead the integration of multiple managerial methods – and most of them have been around for decades arguably even before there were computers. EPM is also not just a CFO initiative with a bunch of scorecard and dashboard dials. It is much broader. Its purpose is not about monitoring the dials but rather moving the dials.

What makes for exceptionally good EPM is when multiple managerial methods are not only individually effective but also are seamlessly integrated and enhanced through embedded analytics of all flavors. Examples for using analytics to enhance EPM are to perform data segmentation, clustering, regression, and correlation analysis.

Winds section in orchestra

EPM is like musical instruments in an orchestra

I like to think of the various EPM methods as an analogy of musical instruments in an orchestra. An orchestra’s conductor does not raise their baton to the strings, woodwinds, percussion, and brass and say, “Now everyone play loud.” They seek balance and guide the symphony composer’s fluctuations in harmony, rhythm and tone.

Here are my six main groupings of the EPM methods – its musical instrument sections:

  1. Strategic planning and execution – This is where a strategy map and its associated balanced scorecard fits in. Together they serve to translate the executive team’s strategy into navigation aids necessary for the organization to fulfill its vision and mission. The executives’ role is to set the strategic direction to answer the question “Where do we want to go?” Through use of correctly defined key performance indicators (KPIs) with targets, then the employees’ priorities, actions, projects, and processes are aligned with the executives’ formulated strategy.
  2. Cost visibility and driver behavior – For commercial companies this is where profitability analysis fits in for products, standard services, channels, and customers. For public sector government organizations this is where understanding how processes consume resource expense in the delivery of services and report the costs, including the per-unit cost, of their services. Activity-based costing (ABC) principles model cause-and-effect relationships based on business and cost drivers. This involves progressive, not traditional, managerial accounting, such as ABC rather than broadly averaged cost factors applied without consideration of any causal relationships.
  3. Customer Performance – This is where powerful marketing and sales methods are applied to retain, grow, win-back, and acquire profitable, not unprofitable, customers. The tools are often referenced as customer relationship management (CRM) software applications. But the CRM data is merely a foundation. Analytical tools supported by software, that leverage CRM data can further identify actions that will create more profit lift from customers. These actions simultaneously shift customers from not only being satisfied to being loyal supporters.
  4. Forecasting, planning, and predictive analytics – Data mining typically examines historical data “through the rear-view mirror.” Then using hindsight directs attention forward to look “through the windshield”. The benefit of more accurate forecasts is to reduce uncertainty. Forecasted sales volume and mix of products and service are core independent variables. Based on these forecasts, process costs can be calculated from the required resource usage. CFOs increasingly look to driver-based budgeting and rolling financial forecasts grounded in ABC principles to determine future requirements of other dependent variables such as headcount and related spending.
  5. Enterprise risk management (ERM) – This cannot be overlooked when discussing EPM. ERM serves as a brake to the potentially unbridled gas pedal that EPM methods are designed to step on. Risk mitigation projects and insurance requires spending, therefore somewhat reducing resources that could otherwise be directed towards revenue generating activities. Many executives are resistant to anything that impacts profits – and bonuses. So it takes discipline to ensure adequate attention is placed on appropriate risk management practices.
  6. Process improvement – This is where lean management and Six Sigma quality initiatives fit in. Their purpose is to remove waste and streamline processes to accelerate and reduce cycle-times. They create productivity and efficiency improvements.

EPM as integrated suite of improvement methods

CFOs often view financial planning and analysis (FP&A) as synonymous with EPM. It is better to view FP&A as a subset. And although better cost management and process improvements are noble goals, an organization cannot reduce its costs forever to achieve long term prosperity.

The important message here is that EPM is not just about the CFO’s organization; but it is also the integration of all the often silo-ed functions like marketing, operations, sales, and strategy. Look again at the six main EPM groups I listed above. Imagine if the information produced and analyzed in each of them were to be seamlessly integrated. Imagine if they are each embedded with analytics – especially predictive analytics. Then powerful decision support is provided for insight, foresight, and actions. That is the full vision of EPM to which we should aim to aspire in order to achieve the best possible performance.

Today exceptional EPM systems are an exception despite what many executives proclaim. If we all work hard and are smart enough, in the future they will be standard practices. Then what would be next? Automated decision management systems relying on business rules and algorithms? But that is an article I will write about some other day.

In my next blog I shall change focus slightly, to look a little more deeply at the budgeting process, the challenges many organizations face in producing budgets and the possibilities for taking different approaches.

 

About the Author: Gary Cokins, CPIM

Gary_Cokins

Gary Cokins (Cornell University BS IE/OR, 1971; Northwestern University Kellogg MBA 1974) is an internationally recognized expert, speaker, and author in enterprise and corporate performance management (EPM/CPM) systems. He is the founder of Analytics-Based Performance Management LLC www.garycokins.com . He began his career in industry with a Fortune 100 company in CFO and operations roles. Then 15 years in consulting with Deloitte, KPMG, and EDS (now part of HP). From 1997 until 2013 Gary was a Principal Consultant with SAS, a business analytics software vendor. His most recent books are Performance Management: Integrating Strategy Execution, Methodologies, Risk, and Analytics and Predictive Business Analytics.

gcokins@garycokins.com; phone +919 720 2718

http://www.garycokins.com

Linkedin.com contact: http://www.linkedin.com/pub/gary-cokins/0/15a/949.

Hear Gary share some of his thoughts concerning EPM innovations and best practices at the SAP Conference for EPM in Chicago, October 13/14, 2014

The 2014 SAP Conference for EPM: Strategy AND Execution

In EPM (or enterprise performance management if you prefer full names), we talk a lot about the Strategy to Execution cycle, believing that enhanced performance is possible by linking and continually re-aligning operational plans with business strategy and objectives.

While EPM as a solution area is focused primarily on the area of Finance within organizations, the principle of linking strategy with execution spreads far wider than this, and having an eye on your goals despite all that goes on around you can prove to be a success factor in many parts of business, if not personal lives also.

I’m presently involved in planning for the 2nd annual SAP conference for EPM, which is a collaborative venture between TA Cook Conferences and SAP. Being mindful of the strategy to execution link has been a big part of our planning cycle, and as we now approach the event (with just 5 weeks to go), I am pleased that we took the decision to set out our objectives early, defined a plan to work to, have held regular alignment calls with central and dispersed teams so that we can adjust plans and correct our course in light of new information or changes – with the result that we are now well on track towards holding a terrific event that has an excellent speaker line-up, fabulous sponsors and so far is seeming to attract interest and registrations from many Finance executives and managers.

stage

Customer stories are key

Given my involvement in the event planning team I thought it might be remiss of me if I didn’t share some details of it with you in the coming weeks. After all, many readers of this blog channel are Finance professionals, and so it’s something that I hope will be of interest. At the last event we took feedback from many customers who attended, and by-and-large they told us that the thing they wanted to hear most at the conference were stories from other customers about their EPM solution experiences. With that in mind we set out our stall this year to focus squarely upon giving our customers’ the stage – with the result that we have eleven SAP EPM customers joining the event next month to talk about their experiences in implementing and using EPM solutions. With speakers from a range of industries using varying EPM solutions, there will surely be “something for everyone” interested in EPM. Our speaker line-up this year includes:

  • Blue Cross Blue Shield of Michigan
  • Citrix
  • City of Henderson
  • Dolby
  • HealthNet
  • John B. Sanfilippo and Sons
  • Lexmark
  • Mars
  • Owens Corning
  • Pacific Gas & Electric
  • T-Mobile

As well as this impressive customer line-up, we also have some special guests joining the conference including Joel Bernstein, SAPs CFO Global Customer Operations and Paul Hamerman, Principal Analyst at Forrester Research who are both due to take part in a discussion panel on day-1, and Gary Cokins of Analytics-Based Performance Management who will present the day-2 keynote. More details are available in the event brochure

Collaboration leads to better results

Our ability to secure this excellent speaker line-up has in many ways been a result of great collaboration with our sponsoring business partners. I’ll mention them more in my next blog as partners have been a key factor for us in creating a well-rounded agenda. Suffice to say as a result of that collaboration, we can expect to hear some terrific EPM stories from the customer speakers who have decided to join us at the event.

There’s no particular secret to setting up and hosting events. Obviously you need the right subject matter, but that alone doesn’t create the event. What you do need is a clear strategy, a workable plan and then you have to execute on it. This needs careful thought, planning, collaboration and continual re-alignment towards the overall goal despite the many challenges that occur along the way. And that’s really no different to many processes in business…albeit just a bit more “glitzy” perhaps in the end result!

Lessons Learned on Writing a Book for Finance

From Malcolm Faulkner, Senior Director Product Marketing EPM, SAP

I recently blogged on my book on Financial Planning and Analysis (FPA). If you are thinking about writing your first book too, then you are probably interested in the experiences of others including myself as to what to expect. So here’s my story – with my best intent to encourage you to follow your dreams of becoming an author. I hope this will make you a little bit more prepared in your undertaking.

People studying in library

Let me say off the bat that I like books. I like browsing in book stores, I like the feel of new books, I like libraries, and I like the idea of absorbing knowledge. I especially like well-written books – the ones that have beautifully crafted sentences and contain elegant turns of phrase.

Most importantly you’ve got to have both the desire to write and the idea for the book. I always wanted to write a book and assumed one day I would. It came down to a matter of timing – having a thorough-enough idea for a book and the relationship with a publisher. I suspect in these days of self-publishing the latter is less important in terms of writing the book. But it certainly helps to manage the project – because that is a huge part of it.

The SAP Connection

Because of my role at SAP, I had the opportunity to meet personally with SAP Press and talk to them about the idea. So getting a publisher to listen to me wasn’t a problem. I still had to pitch an idea and have them do their own internal analysis as to the viability of it. Part of this process involved producing a fairly detailed, chapter-by-chapter outline of the proposed book. This I found quite challenging but it really helped later. Even if the contents change – and it will – having a plan is an essential first step if it is ever going to get done, just like any project.

I also had two book ideas. The first was on the concept of business transformation in finance processes – how to make finance more efficient and effective through process improvements and the judicious use of software applications. In hindsight, while this is a topic of interest to me, it is not where I spend much of my time in my current job. So writing a book on this subject would have been too much of a challenge. Lesson learned – pick a subject in which you have some experience as well as an interest.

Making It Happen – Challenges and Obstacles

For the book I did choose to write, I had a co-author, William D. Newman.   It was, for me, the price of admission since a related book had already been published by SAP Press previously. This, even though our new book was of a much grander scale and had a completely different objective in mind than the earlier work.

Writing a book with someone else has pros and cons. Certainly, there are advantages in having other authors writing chapters and sections. But you also have to deal with differing schedules, styles, viewpoints, and so on. It’s not for everyone and something to consider carefully if you’re facing a similar situation. That said, it would have been extremely hard to complete the book without my co-author (or even get the project off the ground). So for that, I am eternally grateful.

In the end, it was not the actual writing that was difficult for me for the most part. That’s not to say there weren’t times when I had writer’s block. Largely, it was the amount of research and access to relevant content that I found most challenging. I often found myself, to quote John Naisbitt, “drowning in information but starving for knowledge.”

In part this was due to the subject of my book – using SAP solutions for financial planning and analysis is a massive topic.

Achieving the Author’s Objective

Towards the end, completing the book wasn’t much different than finishing a software product. It was a compromise between content and timeline. Any creative work is likely to be never perfect at least in the eyes of the creator. That is what next versions are for, and today with the internet there are plenty of options for continuing to evolve a topic beyond the foundation provided by a book.

Signs that Your Financial Close Process May Be Broken

From Elizabeth Milne, Senior Director Product Marketing EPM, SAP

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Recently I worked with Deloitte to publish the paper “5 Signs that Your Financial Close Process May Be Broken (and What to Do about It).” Deloitte is a fantastic partner with massive experience working around the close process and helping organizations shorten the close cycles and improve quality.

I worked with John Steele, Principal, Stuart Scott, Senior Manager, and Swapna Satwik, Manager at Deloitte on this paper. We had many conversations sharing our experiences working with customers to define the “5 Signs.”

The area of the financial close is where I’ve been focused pretty much since the beginning of my career. I started out working in finance at The Walt Disney Company and at Warner Bros closing the books and creating financial reports. Later, I moved to the software side of things and spent eight years implementing consolidation software.

Part of the fun of working on implementations is working with the customers to understand their processes and how we can improve them. The area of financial consolidation certainly has it’s complexities, but there are also consistencies across organizations.

So what are the five signs?

  • No defined close process
  • Not enough automation
  • No access to real-time data
  • Poor integration with plan and actual data
  • Manual creation of financial statements

And what should you do about them? Well, download the paper to find out!

In order to improve the close process, you need to identify any area where you can standardize, automate, and centralize. This analysis should cover people, processes, and technology.

To read the paper, visit Deloitte’s collateral kiosk and search on Financial Close.

 

This article was originally posted on the SAP Analytics blog channel, 21 August 2014