Driving a Future-Ready Enterprise

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1 #SmarterEnterprise Driving a Future-Ready Enterprise Dan Beer, Director, Performance Management, IBM Business Analytics [email protected]

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IBM's Dan Beer on using predictive analytics to help CEOs and CFOs plan for an era of growth at unprecedented scale. Presented at the Smarter Enterprise Summit in Ottawa, October 9, 2014.

Transcript of Driving a Future-Ready Enterprise

Page 1: Driving a Future-Ready Enterprise

1 #SmarterEnterprise

Driving a Future-Ready Enterprise

Dan Beer, Director, Performance Management, IBM Business [email protected]

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19Middle East and Africa 51

Asia Pacific

Central and Eastern Europe57Western Europe

155

Japan98

North America102

South America94

CFO insights from the IBM Global C-suite Study: 576 CFO interviews from around the world

Source: Question E--Participant Country

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CFOs rank second only to CEOs in collaborative C-suite influence

C-Suite collaboration partners

Source: Question B6--Which of your C-suite peers do you work most closely with in support of the enterprise?

78%

65%

24%

CEO CFO All others

Source: “CFO insights from the Global C-Suite Study”, IBM Institute for Business Value, 2014

Finance has a role in bringing balance to the funding of innovation. We play a role in challenging ideas and callingout where they are not working.Finance applies discipline to theprocess

CFO, Life Sciences, Unites States

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Technology is of ever-increasing importance to CFOs–the key moving forward is capturing its potential

2010 2013Macro-economic factors

Market factors

Technology factors

Regulatory concerns

People skills

Geopolitical factors

Socio-economic factors

Environmental issues

Globalization

We need to have the right information on time and give it the interpretation value. There is a need to frame information in a financial focus

CFOIndustrial Products company, Mexico

Source: Question E8--What are the most important external forces that will impact the enterprise over the next 3 to 5 years?Source: “CFO insights from the Global C-Suite Study”, IBM Institute for Business Value, 2014

Most important external forces

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The gaps between importance and effectiveness have grown since 2005, demonstrating growing business pressures

Largest gaps between importance and effectiveness

58%

19%

46%

34%

42%

37%

27%33%37%

205%increase

35%increase

Drive integration of information

across the enterprise

Develop talentin the financeorganization

Optimize planning,budgeting and

forecasting

Execute Continuous

finance process improvements

Measure/monitorbusiness

performance

2005

2013

Source: Question CFO1--How important are each of the following areas of responsibility to your enterprise? CFO2: How effective is your organization in the following areas?

Source: “CFO insights from the Global C-Suite Study”, IBM Institute for Business Value, 2014

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Finance organizations continue to rely on spreadsheets and intuition two-thirds of the time

Intuition Spreadsheet ERP Analytic tool

14% 52% 19% 15%

50% 100%0%

Capabilities/tools used to support Finance

Source: Question CFO6--What capabilities / tools does your organization use for the following activities?Source: “CFO insights from the Global C-Suite Study”, IBM Institute for Business Value, 2014

We need to ensure we deliver value through changing technology versus being a slave to our systems

CFO, Insurance, United Kingdom

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Flashback: The 2010 Global CFO Study identified 4 Finance profiles, with one group, Value Integrators, outperforming the rest

Low

High

HighLow

Value Integrator

DisciplinedOperator

ScorekeeperConstrained

Advisor

Finance Efficiency

Enterprise-wide information standards

Standard financial chart of accounts

Common finance data definitions and data governance

Standard/common finance processes

Operational planning and forecasting capabilityFinance talent developmentCommon planning platform

Value IntegratorPerformance optimizationPredictive insightsEnterprise risk managementBusiness decision making

Disciplined OperatorFinance operations focusedInformation provisionPerformance interpretation

Constrained AdvisorAnalytics focusedSub-optimal executionFragmented data

ScorekeeperData recordingControllershipMultiple versions of the “truth”

Business Insight

Finance efficiency and business insight

Source: IBM Institute for Business Value, The Global CFO Study 2010, The Global C-suite Study 2013

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* Value Integrators are 30% and Performance Accelerators are 7% of the overall CFO population interviewed.

High

Business Insight

High

Finance Efficiency Value Integrator

Value Integrator *

Performance Accelerator

Source: “CFO insights from the Global C-Suite Study”, IBM Institute for Business Value, 2014

Performance AcceleratorProfitability and economic

analysisPricingDemand planning and

forecastingProduct and services

developmentMergers and acquisitions

Flash forward: Value Integrators are pushing the boundaries of efficiency and insight–a subset are emerging as Performance Accelerators

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IBM is the ultimate partner to drive a future-ready enterprise

Value

Analytic Data Management

Maturity

Aligninformation

Optimizeoutcomes

Best Practices

Strategy – Aligned Organization

Analyzepatterns

Span Finance and Operations

Process Automation

Enterprise-wideTransformation

ContinuousSteering

• Managing multi-dimensional performance information

• Financial Consolidation and Close

• Budgeting

• Incentive CompensationManagement

• Span Financial & Operations

• Leading & External Indicators

• Driver-based modeling

• Scenario Analytics

• Rolling Forecasts

• Metrics and Scorecarding

• Strategy Management

• Product and CustomerProfitability

• Predictive Analytics

• Big Data Analytics

• Planning, Analysis, and Forecasting

• Collaborative and Narrative Performance Reporting

• Disclosure Management

• Sales Performance Management

• Agile enterprise

• Risk-adjusted Value Management

Accelerate& LinkEngage

Frontlines

Value Integrators Performance Accelerators

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McCormick protects profit with detailed understanding of customer value and uncertain prices

Challenge

Significantly reduce the profit at risk due to volatile commodity input prices

Solution

Collect and analyze sales plan data by customer and across over 30,000 SKUs

Evaluate the resulting profit contribution of product inputin  the  “bill  of  material”

Results

Diagnosed profit improvement moves ahead of time; commodity price increases can be passed on to consumersor renegotiated with industrial customers

Conducted value engineering with operations to reformulate flavors using commodities from different regions and suppliers

TM1 and Cognos helped McCormick record $56 million in cost savings from their Comprehensive and Continuous Improvement program

McCormick is a global leader in flavor. With more than $4.0 billion in annual sales, the company manufactures, markets and distributes spices, seasoning mixes, condiments and other flavorful products to the entire food industry—retail outlets, food manufacturers and food service businesses in more than 110 countries.

CHALLENGE

SOLUTION

RESULTS

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Transform the system of

engagement

Span finance and operations, risk &

performance management

Infuse scenario and predictive

intelligence

Guided business processes, mobile, collaboration

Financial & Operational Performance Management

Narrative Reporting & Disclosure Management

Sales Performance Management

Governance, Risk and Compliance

Predictive intelligence and scenario analytics

Three analytics imperatives drive a future-ready enterprise

Big data platform

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Demonstration

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Build your agenda

Datacollection

New business modeling

Profitability and pricing

Performance scorecarding

Errorchecking

Decrease effort Increase focus

Processmonitoring

Increase in value from analytic initiatives

Transform the system of engagement

Infuse scenario and predictive intelligence

Span finance and operations risk &

performance management

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Join us at IBM Insight 2014.

the largest big data in the world

sessions and innovativeStreams on Business Analytics,Enterprise Content ManagementAnd Information Management

foundnetworkingopportunitiesinvaluable

business- and industry-focused sessions featuringtop experts from around the world

technical sessions, hands- on labs and developer activities that include cloud, mobile, security, social, Watson and more

exhibitors at the EXPOIncluding showcasesfrom 250+ Business Partners

in training, certification, hands-on labs,networking, executive one-on-one meetings,expert talks and food and entertainment

client andBusiness Partner speakers fromacross all industries

IBM, the IBM logo, and ibm.com are trademarks of IBM Corp., registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM  or  other  companies.  A  current  list  of  IBM  trademarks  is  available  on  the  web  at  “Copyright  and  trademark  information”  at  ibm.com/legal/copytrade.shtml.© Copyright IBM Corporation 2014.

attendees at the one-day Business Partner Summit

Attend IBM Insight to learn how big data and analytics can help you outperform your peers. With IBM business and technical solutions forbig data and analytics, you can turn cloud,mobile and social into competitive advantage.

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Next Steps

• Meet me in the Social Café to continue the conversation

• Find more information about Performance Management at https://ibm.biz/BdFzuE

• Please join us at Insight 2014, the conference for Big Data and Analytics, at Mandalay Bay in Las Vegas, October 26 – 30. More information is available in the Social Café or you can visit https://ibm.com/ibminsight

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