Sections

The Speed Of Now Has Never Been Faster – And People Skills Never More Essential

Matthias Heiden

The new year always hits me like a hammer. Even though the rhythm is always the same, the pace of each year seems faster than ever.

The business doesn’t care too much about the year-end processes of CFOs; we have closing, audit, and review processes to complete, but we’re in immediate demand at the start of the year. For instance, since performance in 2015 impacts the 2016 budgets (as discussed in my last blog), CFOs need to refine the budgets so the business is focusing on the proper targets for the coming year. It’s striking how difficult it is every year to land in Q1, strike the right balance, and keep up the pace.

A number of factors drive this ceaselessly increasing speed, and I’m sure other parts of the business feel it as well. Expectations are higher and the demands harder to meet. With the increased transparency available, the capital markets are ever more anxious to get information more quickly and benchmark performance against other companies. It’s all happening in parallel to the responsibilities that come with the new year.

The region I work in, Middle and Eastern Europe, faces significant challenges – currency fluctuations, sanctions with Russia and political changes in Poland, the refugee crisis and its impact on the economy – and there are many more. All of these uncertainties increase the volatility that already exists.

The need for CFOs to support the team

This is making a major impact on the workforce – an emergence of the need for human interaction and human management at the same time. People say technology can do many things. I believe that’s certainly true, but technology can’t replace the need to be physical and visible, to provide the leadership to help people deal with change and its increasing velocity. This is why I’ve been on airplanes time and again since this year began.

People throughout organizations are voicing the need for personal exchange and guidance, to be reassured, to gain acknowledgment that they’re not alone in this experience. They know the changing role of finance, and they want to have a senior manager who can help them deal with the changes, on an emotional and operational level. They desire a strong leadership role from finance.

While you as CFO can’t do everything alone, you must be part of the change management. As CFO, you need to support the team and help lead the change processes in the direction you’re going, selling the vision and helping your team become involved at every stage. This is a growing leadership challenge.

As I conclude my first year as CFO for Middle and Eastern Europe at SAP, I’m discovering that my experiences have reinforced what I’d previously learned: that the CFO needs to stay as close to the business as possible, with the greatest business acumen possible, because there will always be challenges and surprises.

2015 turned out to be a terrific year. One result of our business performance is that we won “Region of the Year 2015,” an enormous honor at SAP. I learned about the enormous stamina and endurance required of the team, which remained committed to closing business opportunities to the very end. We stayed close to our customers and open to discussions about their concerns, and we did a really good job as a team addressing those concerns.

I learned that while not everything was perfect, that wasn’t really so important. If you were to ask colleagues in the other regions, they’d likely give the same answer. And they’d also agree: The velocity of business continues to grow, and each year eclipses the years before. Hang on – it’s quite a ride!

To learn more about how finance executives can empower themselves with the right tools and play a vital role in business innovation and value chain, review the SAP finance content hub, which offers additional research and valuable insights.

Comments

Matthias Heiden

About Matthias Heiden

Dr. Matthias Heiden, senior vice president, regional CFO, Middle and Eastern Europe (MEE), is responsible for the field finance organization of MEE. In this role, he supports the organization in managing P&L, continuously driving strategic finance transformation initiatives initiated by Corporate Finance together with the other regional CFOs. This team helps improve business-related processes and supports the Market Unit CFOs in their role as business facilitator and transformation agent.

The CFO Role In 2020

Estelle Lagorce

African American businessman looking out office window --- Image by © Mark Edward Atkinson/Blend Images/CorbisThe role of the CFO is undergoing a serious transformation, and CFOs can expect their role to continue to evolve, according to a recent CFO.com article by Deloitte COO and CFO Frank Friedman.

In the futurist article, Friedman says one of the biggest factors that will contribute to the CFO’s significant change over the next five years is technology.

Digital technology is obviously expected to drive change in high-tech companies, but Friedman says it’s industries outside of the tech sectors that are of particular interest, as they struggle to understand how to grasp and harness the digital capabilities available to them.

Working with high tech in low-tech industries

Five years from now, a finance team may be defined by how well it uses technology and innovative business tools, regardless of what industry it’s in. The article outlines some examples of ways that digital technology will increasingly be used by CFOs in “non-tech” sectors:

  • Predictive analytics: CFOs in manufacturing companies can forecast results and produce revenue predictions based on customer-experience profiles and current demand, instead of comparing to previous years as most companies still do today.
  • Social media and crowdsourcing: You may not think CFOs spend a lot of time on social media or crowdsourcing sites, but these methods can actually expedite finance processes, such as month-end responsibilities of the finance organization.
  • Big Data: CFOs already have a lot of data at their fingertips, but in 2020 they will have even more. CFOs in both tech and non-tech sectors who understand how to use that data to make valuable, informed decisions, can strategically guide their company and industry in a more digitally oriented world.

To do this, Friedman says CFOs can lead the way by addressing some critical areas:

  1. Know the issues: Gather the key questions that leaders expect Big Data analytics to answer.
  1. Make data easily accessible: Collect data that is manageable and easy to access.
  1. Broaden skills: The finance team needs people with the skills to understand and strategically interpret the data available to them.

The tech-savvy CFO

The role of today’s CFO has already expanded to include strategic corporate growth advice as well as managing the bottom line. In 2020, Friedman says expectations placed on the CFO are presumed to be even greater, and CFOs will likely need a much more diverse, multidisciplinary skill set to meet those demands.

The article details several traits and skills that CFOs will need in order to keep up with the pace of digital change in their role.

  1. Digital knowledge: CFOs must be tech-savvy in order to capitalize on technical innovations that will benefit their company and their industry as a whole.
  1. Data-driven execution: CFOs will need the ability to execute company strategy and operations decisions based on data-driven insights.
  1. Regulatory compliance: Regulations continue to be more stringent globally, so CFOs will need to be proficient at working closely with regulators and compliance systems.
  1. Risk management: With the growing global economy comes increased cyber and geopolitical risks worldwide. The CFOs of 2020, especially those in large multinational organizations, will need to have the expertise to monitor and manage risk in areas that may be unforeseen today.

The future CFO’s well-rounded resume

By 2020, the CFO role will require much more than just an accounting background. According to Deloitte’s Frank Friedman, “CFOs may need to bring a much more multidisciplinary skill set to the job as well as broader career experiences, from working overseas to holding positions in sales and marketing, and even running a business unit.”

So if you’re a current or aspiring CFO, you have five years to round out your resume with the necessary skills to be ready for the digitally driven role of the CFO in 2020.

The above information is based on the CFO.com article What Will the CFO Role Look Like In 2020?” by Deloitte COO & CFO, Frank Friedman – Copyright © 2015 CFO.com.

Want to learn more about best practices for transforming your finance organization? View the SAP/Deloitte Webinar, “Reshaping the Finance Function”.

For an in-depth look at digital technology’s role in business transformation, download the SAP eBook, The Digital Economy: Reinventing the Business World.

To learn more about the business and technology factors driving digital disruption, download the SAP eBook, Digital Disruption: How Digital Technology is Transforming Our World.

To read more CFO insights from a tech industry perspective, read the Wall Street Journal article with SAP CFO Luka Mucic: Driving Insight with In-memory Technology.

Discover 7 Questions CFOs Should Ask Themselves About Cyber Security.

Comments

Estelle Lagorce

About Estelle Lagorce

Estelle Lagorce is the Director, Global Partner Marketing, at SAP. She leads the global planning, successful implementation and business impact of integrated marketing programs with top global Strategic Partner across priority regions and countries (demand generation, thought leadership).

Get Your Payables House In Order

Chris Rauen

First of 8 blogs in the series

Too many organizations ignore the business potential from streamlining accounts payable operations. In a digital economy, however, this may represent one of the best opportunities to improve financial performance and boost the bottom line.

In its recent report, ePayables 2015: Higher Ground, the research and advisory firm Ardent Partners made a strong case for accounts payable transformation. “In 2015, more AP groups are accelerating their plans to transform their operations and scale to new heights,” states the report.

The digital makeover

From a payables perspective, how you go about fixing outdated procure-to-pay (P2P) practices is much like the decision to improve an aging home. Do you tear your house down and build a new one, or leverage as much of the existing structure as you can and begin a major home improvement project?

There is, of course, a third option. Take no action and make calls to plumbers, electricians, roofers, and other specialists as needed before the house falls apart altogether. While few organizations would consider a “triage” strategy the best option to address deficiencies in P2P operations, many still do. (Just don’t share that with your CFO.)

This blog post is the first in a series that will examine options for upgrading procure-to-pay processes from outclassed to best-in-class. Continuing to focus time and effort on managing transactions just doesn’t make sense. With today’s business networks, organizations have new ways to collaborate with suppliers and other partners to buy, sell, and manage cash.

Automation handles low-value activities, eliminating data entry, exception management, and payment status phone calls. That leaves more time for benchmarking operations, monitoring supplier performance, expanding early payment discounts, and improving management of working capital – the kinds of things that can dramatically improve business performance.

Where do you start?

To begin, you have to recognize that getting your payables house in order is much more than a process efficiency initiative. While cost savings from e-invoicing can be 60% to 80% lower than paper invoicing, there’s much more to the business case.

Improving contract compliance and expanding early payment discounts are other components of a business case for P2P transformation. According to various procure-to-pay research studies and Ariba customer results, the cost savings from getting your payables house in order are conservatively estimated to be $10 million per billion collars of spend. We’ll break down these ROI components in greater detail in future posts on this topic.

The value of alignment

Another important first step, validated by the Ardent Partners report, is getting procurement and finance-accounts payables in alignment. As this is a holistic process, you’ll need to make sure that both organizations are in sync, and you have support from upper management to make it happen.

Now, back to the question: Do you approach a payables makeover to support P2P transformation as a tear-down or a fixer-upper? If your procurement-accounts payable teams are out of alignment, your P2P processes are predominantly paper, and decentralized buying leaves little control over spend, you’re looking at a tear-down to lay the foundation for best practices payables. We’ll share a blueprint with you in the next post in this series.

Chris Rauen is a solution marketer for Ariba, an SAP company. He regularly contributes to topics including e-invoicing and dynamic discounting as well as the value of collaborating in a digital economy. 

Learn more about how to take your payables to the next level of performance in Ardent Partners’ research report “ ePayables 2015: Higher Ground.”

Comments

Chris Rauen

About Chris Rauen

Chris Rauen is a solution marketer for SAP Ariba. He regularly contributes to topics including e-invoicing and dynamic discounting as well as the value of collaborating in a digital economy.

The Future of Cybersecurity: Trust as Competitive Advantage

Justin Somaini and Dan Wellers

 

The cost of data breaches will reach US$2.1 trillion globally by 2019—nearly four times the cost in 2015.

Cyberattacks could cost up to $90 trillion in net global economic benefits by 2030 if cybersecurity doesn’t keep pace with growing threat levels.

Cyber insurance premiums could increase tenfold to $20 billion annually by 2025.

Cyberattacks are one of the top 10 global risks of highest concern for the next decade.


Companies are collaborating with a wider network of partners, embracing distributed systems, and meeting new demands for 24/7 operations.

But the bad guys are sharing intelligence, harnessing emerging technologies, and working round the clock as well—and companies are giving them plenty of weaknesses to exploit.

  • 33% of companies today are prepared to prevent a worst-case attack.
  • 25% treat cyber risk as a significant corporate risk.
  • 80% fail to assess their customers and suppliers for cyber risk.

The ROI of Zero Trust

Perimeter security will not be enough. As interconnectivity increases so will the adoption of zero-trust networks, which place controls around data assets and increases visibility into how they are used across the digital ecosystem.


A Layered Approach

Companies that embrace trust as a competitive advantage will build robust security on three core tenets:

  • Prevention: Evolving defensive strategies from security policies and educational approaches to access controls
  • Detection: Deploying effective systems for the timely detection and notification of intrusions
  • Reaction: Implementing incident response plans similar to those for other disaster recovery scenarios

They’ll build security into their digital ecosystems at three levels:

  1. Secure products. Security in all applications to protect data and transactions
  2. Secure operations. Hardened systems, patch management, security monitoring, end-to-end incident handling, and a comprehensive cloud-operations security framework
  3. Secure companies. A security-aware workforce, end-to-end physical security, and a thorough business continuity framework

Against Digital Armageddon

Experts warn that the worst-case scenario is a state of perpetual cybercrime and cyber warfare, vulnerable critical infrastructure, and trillions of dollars in losses. A collaborative approach will be critical to combatting this persistent global threat with implications not just for corporate and personal data but also strategy, supply chains, products, and physical operations.


Download the executive brief The Future of Cybersecurity: Trust as Competitive Advantage.


Comments

Tags:

How Digital Transformation Is Rewriting Business Models

Ginger Shimp

Everybody knows someone who has a stack of 3½-inch floppies in a desk drawer “just in case we may need them someday.” While that might be amusing, the truth is that relatively few people are confident that they’re making satisfactory progress on their digital journey. The boundaries between the digital and physical worlds continue to blur — with profound implications for the way we do business. Virtually every industry and every enterprise feels the effects of this ongoing digital transformation, whether from its own initiative or due to pressure from competitors.

What is digital transformation? It’s the wholesale reimagining and reinvention of how businesses operate, enabled by today’s advanced technology. Businesses have always changed with the times, but the confluence of technologies such as mobile, cloud, social, and Big Data analytics has accelerated the pace at which today’s businesses are evolving — and the degree to which they transform the way they innovate, operate, and serve customers.

The process of digital transformation began decades ago. Think back to how word processing fundamentally changed the way we write, or how email transformed the way we communicate. However, the scale of transformation currently underway is drastically more significant, with dramatically higher stakes. For some businesses, digital transformation is a disruptive force that leaves them playing catch-up. For others, it opens to door to unparalleled opportunities.

Upending traditional business models

To understand how the businesses that embrace digital transformation can ultimately benefit, it helps to look at the changes in business models currently in process.

Some of the more prominent examples include:

  • A focus on outcome-based models — Open the door to business value to customers as determined by the outcome or impact on the customer’s business.
  • Expansion into new industries and markets — Extend the business’ reach virtually anywhere — beyond strictly defined customer demographics, physical locations, and traditional market segments.
  • Pervasive digitization of products and services — Accelerate the way products and services are conceived, designed, and delivered with no barriers between customers and the businesses that serve them.
  • Ecosystem competition — Create a more compelling value proposition in new markets through connections with other companies to enhance the value available to the customer.
  • Access a shared economy — Realize more value from underutilized sources by extending access to other business entities and customers — with the ability to access the resources of others.
  • Realize value from digital platforms — Monetize the inherent, previously untapped value of customer relationships to improve customer experiences, collaborate more effectively with partners, and drive ongoing innovation in products and services,

In other words, the time-tested assumptions about how to identify customers, develop and market products and services, and manage organizations may no longer apply. Every aspect of business operations — from forecasting demand to sourcing materials to recruiting and training staff to balancing the books — is subject to this wave of reinvention.

The question is not if, but when

These new models aren’t predictions of what could happen. They’re already realities for innovative, fast-moving companies across the globe. In this environment, playing the role of late adopter can put a business at a serious disadvantage. Ready or not, digital transformation is coming — and it’s coming fast.

Is your company ready for this sea of change in business models? At SAP, we’ve helped thousands of organizations embrace digital transformation — and turn the threat of disruption into new opportunities for innovation and growth. We’d relish the opportunity to do the same for you. Our Digital Readiness Assessment can help you see where you are in the journey and map out the next steps you’ll need to take.

Up next I’ll discuss the impact of digital transformation on processes and work. Until then, you can read more on how digital transformation is impacting your industry.

Comments

Ginger Shimp

About Ginger Shimp

With more than 20 years’ experience in marketing, Ginger Shimp has been with SAP since 2004. She has won numerous awards and honors at SAP, including being designated “Top Talent” for two consecutive years. Not only is she a Professional Certified Marketer with the American Marketing Association, but she's also earned her Connoisseur's Certificate in California Reds from the Chicago Wine School. She holds a bachelor's degree in journalism from the University of San Francisco, and an MBA in marketing and managerial economics from the Kellogg Graduate School of Management at Northwestern University. Personally, Ginger is the proud mother of a precocious son and happy wife of one of YouTube's 10 EDU Gurus, Ed Shimp.