The Strategic CFO: Changing the Game for Finance

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#CFOD13#CFOD13The Strategic CFO — Using Cloud Computing to Change the Game for Finance

Marc Linden

CFO, Intacct

Jeff Haslow

CFO, The Knowland Group



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Today’s Agenda

Cloud basics

The strategic shift for CFOs

How the cloud enables the transformation

Takeaways



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The Cloud Impacts All of Us as Consumers



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Now Also for Your Business Applications



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Cloud Computing: Served Up 3 WaysSaaS: Software as a Service

• Delivery of business applications over the Internet; Mature feature set and world-class operations

PaaS: Platform as a Service

• Availability of a programming platform and tools as a service over the Internet

IaaS: Infrastructure as a Service

• Raw computing resources (processing power, storage, etc.) over the Internet



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Today’s Agenda

Cloud basics



Takeaways



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CFOs Have a Strong Desire to Change Their Organization’s Role…

Current Role Desired Role0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Score KeeperGate KeeperProvider of AnalysisBusiness Accelerator

CFO Role Expectations

Armanino McKenna, “The CFO Evolution – 2011 Benchmark Survey Results”, Dec 2011



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What Does a Business Accelerator Do?

Long term strategic planning

Evaluating new business models

Corporate development activities

Evaluating new market opportunities

Building support for new initiatives

Working with board or analyst



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And Expectations Have Increased…

STAGE Transaction Management

Controlling the Business

Planning and Analysis

Integrated Functional Excellence

KEY CAPABILITIES

• Financial accounting• Management

reporting• Tax and Audit• Treasury

• Performance management

• Analysis

• Superior decision support to invest wisely

• Business development• Enterprise risk mgmt.

ROLE “Bean Counters” “Process Managers” “Business Partners” “Value Managers”

CHALLENGE Number of transactionsConsistent process excellence

Talent and insight into value drivers

Leadership and performance management

Source: McKinsey & Company

1 2 3 4

• Focuses on processes and risk minimization

• Focused on decision support

• Provides sound financial analysis to management for making financial and operating decisions

• Integral part of management team to support value/wealth creation

• Identifies opportunities and provides critical information and analysis to make superior operating and strategic decisions

• Dominated by reporting and compliance functions



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Inefficiency in the Accounting Function Often Hinders Focus on Business Leadership

Source: Armanino McKenna, “The CFO EvolutionTM Benchmark Survey Results,” Dec 2010

Top Bottlenecks in Monthly Close ProcessTop Issues for CFO Organizations



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Today’s Agenda

Cloud basics



Takeaways



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How the Cloud Enables Transformation

Boosts Productivity of Financial Processes

Supplies Insight for Better & Faster

Decisions

Focuses Resources

on Core Business

Offers Scale for Growth



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Cloud Financial Management Boosts Productivity Through Automation

Focus on what matters/costs most to the business:

Quote-to-cash

Procure-to-pay

Revenue management

Budgeting and planning

Time and expense

Boosts Productivity



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Example: Software Quote-to-Cash Process Before Price ListPrice List

Order InvoiceContractQuote Collect Recognize Revenue

Sales Finance

Customer MasterContacts

Incon

sis

ten

td

ata

Man

ual

eff

ort

Re-e

ntr

y

Sales & Finance use different SKUs/prices = inaccurate fulfillment and invoicing

Inaccurate contact info = inability to book and invoice orders

Customer name on contract not in Master = creation of duplicate customer accounts and incomplete view of customer relationship

Revenue recognition not directly tied to events (e.g. fulfillment, collection status) = inaccurate revenue & restatements

Contract has non-standard terms or terms not captured in order = inaccurate finance order and invoice and revenue leakage

Contract often prepared manually from Quote = added sales operations effort

Order/Invoice information reentered into Excel for manual revenue recognition calculation = inaccurate revenue & restatement; lack of revenue predictability; significant manual effort

Order manually entered into financial system from signed contract with inevitable data entry errors = inaccurate fulfillment and invoicing; significant manual effort in order entry Invoicing requires manual effort

(e.g. manual creation; recurring billings) = delayed billing/collections; added finance operations effort

No status updates to Sales = large burden on Finance & Sales conveying simple information/correcting errors; slower collections

Sales lacks visibility into invoicing/collection status = added losses for orders taken from bad accounts

Customer complaints about order/invoice errors = slower collections

Data entry errors

Revenue leakage

Extended DSO

Customer invoicing issues

Boosts Productivity



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Example:

Software Quote-to-Cash Process After

Price List

Customer Master

Collect

Recognize Revenue

Sales Finance

Order InvoiceContractQuote

• Integrated quote-to-cash recognition

• Consistent data across entire company

• Entire process is visible and accurate

• Lower costs and greater efficiency

Boosts Productivity



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Supply InsightThe Cloud Enables Real-Time Access to Central Repository of Information

Real-time, consistent, secure information in the cloud—a single version of the truth

24x7 accessibility by all stakeholders

Instant feedback on performance to plan

Tighter alignment across the organization

Personalized reporting and dashboards



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The Cloud Lets You Access Your Data from Anywhere

A single source of data

Access from anywhere, anytime

Labor can be located anywhere in the world

Simultaneous users

17

HR SERVICES

MANUFACTURING

SALES

SUPPLY CHAIN

Supply Insight



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Cloud Financial Management Provides Analysis Needed for GrowthFrom:

Management by spreadsheet

Manually intensive, error prone

Trapped in silos on the desktop

To:

• Access to historical data and trends for planning, budgeting and forecasting

• Visibility into real performance vs. plan

• Visibility into sales and revenue (by customer, product, entity, & geography)

• Visibility into cash inflows and outflows

• Ability to combine financial and non-financial (“statistical”) metrics to create and monitor your own KPIs

• Create, save, and share multi-scenario analyses with others stakeholders

Supply Insight



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The Cloud Gets You Out of the “No Value Added” IT Business

Cloud vendors operate and maintain the system for you

Better infrastructure and operations than nearly all companies can afford

Fortune 100 class data centers

24x7x365 operations

Continuous backups and disaster recovery

SSAE 16 (previously SAS 70)

Possible because costs are amortized across thousands of companies

Focus Resources



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Tasks You No Longer Have to Worry About When Running Your Systems in the Cloud

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Ongoing IT Workload

Fixes and Patches

Maintenance and Upgrades

Downtime

Performance TuningRewrite Customizations

Rewrite Integrations Upgrade Dependent Applications

Disaster Recovery

Power

Air conditioning

Focus Resources



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Costs and Risk are Shifted to the Cloud Provider

Subscription-based pricing: pay only for what you need

Higher ROI and faster payback:

Provide real-time visibility:

Anytime, anywhere access

Better faster business decisions

Cut costs and speed up revenue:

Automate and streamline processes

Higher employee productivity

Minimal IT costs

Fast and low risk implementations

Superior revenue management

9% Software Licenses

43% Implementation

26% Hardware

14% IT Personnel

7% Maintenance

1% Training

68% Subscription

Fees

32% Implementation, Customizations,

and Training

On-Premises Cloud Computing

Ongoing Costs Ongoing CostsApply Fixes, Patches, Upgrade

DowntimePerformance tuning

Rewrite customizations Rewrite integrations

Upgrade dependent applicationsOngoing burden on IT

Maintain/upgrade hardwareMaintain/upgrade networkMaintain/upgrade security

Maintain/upgrade database

Subscription feeTraining

Configuration

Focus Resources



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The Cloud Brings You Closer to your Vendor

Customer Feedback

Continuous

Innovation

Rapid Access to

New Features

Focus Resources



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Your Business Will Grow in Size and Complexities

Increased complexity may include:

New business entities

Multiple currencies

New geographies

Acquisitions

New GMs that want their consolidated view

Tax optimization

Software International Inc.USD

Software Development

Israel(ILS)

Software Development

India(INR)

Software Sales

UK(GBP)

Software Sales Europe(EUR)

Software US

(USD)

Buddy Software

(USD)(acquisition)

SoftwareJapan KK

51% ownership(Yen)

Offer Scale for Growth



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When Running Your Business on SaaS, It Is Easy to Integrate Systems When Needed

Why SaaS is easier to integrate:

SaaS web services are widely accepted technologies

Many vendors support it

Availability of 3rd party intermediaries

Both self service or consultant-built options




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The Cloud Provides Scale to Support Growth

Easily and cost effectively scale and adapt to business needs:

Pay only for what you need

Simultaneous and distributed users with strict permissions, separation of duties and financial control

Support for large data files (customers, vendors, employees, etc)

Industry leading system performance and reliability

Add-on capabilities and integrations when you need them




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Example: Set Your Accounting System Up To Easily Manage AcquisitionsFrom:

Consolidating entities on spreadsheets

Multiple instances of QuickBooks

Merged entities on different systems

Manual journal entries for inter-entity transactions

To:

• Consolidate with built-in automation

• View multiple entities consolidated or separately

• Differing charts of accounts, calendars and accounting treatments

• Migrate complex accounting structures

• Single click consolidations

• Automated inter-entity transactions and eliminations




#CFOD13Jeff HaslowCFO, The Knowland Group



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About the Knowland Group

Founded in 2004 – high-growth mode for the past 9 years

SaaS, Data, Analytics and Services to more than 3,000 hotels and 25,000 users worldwide – billed monthly

150 employees in three locations

Bootstrap funded until first private investment last year.



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Today’s Agenda

Cloud basics



Takeaways



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ERP System Change Addresses the Top Issues for CFOs

Source: Armanino McKenna, “The CFO EvolutionTM Benchmark Survey Results,” Dec 2010

Top Bottlenecks in Monthly Close ProcessTop Issues for CFO Organizations



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Systems Change is a Strategic Opportunity

Systems Enable Transformation

Drive productivity via automation

Provide reporting and real-time business visibility

Integrate to other business systems

Scale to support growth

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Cloud Makes it a Reality

• Lower cost of entry

• Pay-as-you-go

• Buy only what you need

• No need for significant IT



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Starting the TransformationWhat You Should Be Asking Yourself

Boost productivity of financial processesWhere do you spend your time now?

What is being done in Excel?

Supply insight for better and faster decisionsHow old is the information from which you are making decisions?

What is the bottleneck in getting the data?

Focus resources on your core businessWhat other financial or related systems are critical to your business?

Where can you eliminate duplicate entry, entry errors etc?

Deliver scale for growthWhat are business needs 3-4 years from now?

Do you have a business systems map to meet those needs?



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Interested in Learning More?

Try Intacct with a free 30-day trialhttp://www.intacct.com/trial

Attend an upcoming webinarhttp://www.intacct.com/webinars

Follow us on Twitter@intacct_corp

Connect with us on Facebookhttp://www.facebook.com/Intacct

Contact us [email protected] | 877-437-7765



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Thank You!

FOR MORE INFORMATION:www.intacct.com | [email protected] | 877-437-7765



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The Strategic CFO: Changing the Game for Finance

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Transcript of The Strategic CFO: Changing the Game for Finance