What Do GRC Reports And Plato Have In Common? It’s All An Impression

Thomas Frenehard

When designing the proof of concept for GRC in the SAP Digital Boardroom, I decided to go back to the basics and ask myself, What would executives expect to find in this type of dashboard to help steer their organization? My next thought was, What’s already available to them, and how do they use it?

Most executives tell me they use static reports they receive either online or even in a printed format. To some extent – and apologies to the true philosophers – this could be compared to Plato’s Allegory of the Cave.

In this metaphor, a group of prisoners are chained in a cave and forced to stare at a wall in front of them. Displayed on this wall are shadows of objects, puppets, and so on. Hence, they see only an image of the real world, but not the reality itself.

I might be pushing my reasoning here, but static reports are just that: an image – or worse, an interpretation – of the progress, performance, risk and control level, and so forth but not the event itself. If an executive wants more information about one risk event, he or she would have to get out of the proverbial cave and start looking for it.

And, very much like in the Allegory of the Cave, this executive would be at first blinded by the amount of information, and it would take some time to absorb it all. Since time is of the essence in all organizations, I don’t feel this is the right approach.

Executives today are asking for more, even if they don’t always formally express it. In my experience, executives don’t just want to be able to review the information that’s provided to them. They want to interact with it and analyze it in depth, to ensure that their operation or even strategic business decisions are properly informed versus just a guess.

I’m not saying that the people creating these reports wish to act as “puppet masters” at all, just that they have to make do with what’s at their disposal in terms of technology.

Innovation enables GRC to deliver information and insights

This is where we must be innovative. Technology has moved forward and in some cases is more advanced than what’s being used. Unfortunately, I don’t believe that most risk and compliance departments have truly embraced this change. Far from being disruptive, this change helps remove the manual consolidation and analysis steps that take so much time.

Instead of providing data, risk and compliance departments should focus on delivering information, which is much more valuable, as it means illuminating the potential issue in its full context and, when possible, with a recommended solution.

If they fully leverage technology, risk and compliance departments can then move away from quarterly meetings with executive-type engagements and start a continuous dialog, because the information is available to all, at any time, when necessary. However, let’s hope the story ends better for the teams who fully leverage the new options than for the characters in Plato’s cave,  and that other executives also decide that it’s far better to see real data than just an “impression.”

Do you already leverage technology to deliver continuous risk and compliance insights to your executives? If so, what has been their feedback?

I look forward to reading your thoughts and comments either on this blog or on Twitter: @TFrenehard

Learn more

For more on GRC-related topics, be sure to follow and read the GRC Tuesday series.

This article, GRC Tuesdays: What Do GRC Reports and Plato Have in Common? It’s All an Impression, originally appeared on the SAP BusinessObjects Analytics blog and has been republished with permission.

Follow SAP Finance online: @SAPFinance (Twitter)  | LinkedIn | FacebookYouTube

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The Finance Leadership Playbook Part 2: Stepping Up Automation To Drive Efficiency

Michael Diehl

Part 2 of the The Finance Leadership Playbook series

Finance teams are experiencing significant stress across their spectrum of responsibility. Customer expectations, channel proliferation, constant disruption, cost reduction, and volatile economic and political outlooks are adding more risk and uncertainty to an already high-volume, complex workload. With one decision or innovation, anyone from the CFO to the payables specialist can impact how the business navigates a fast-changing world while delivering on its commitments and operating competitively.

The spotlight on finance as the business’ top strategic partner shines brighter every day. However, the pressure to perform general activities—including budgeting, forecasting, planning and analysis, invoice processing, accounting of operating expenses, payroll administration, and internal and external reporting—continues to grow as available resources to execute them dwindle.

To refocus finance’s attention on strategic tasks without neglecting daily routines, activities need to be streamlined and organized more efficiently. The Oxford Economics study How Finance Leadership Pays Off – Efficiency Helps CFOs Stay Ahead of the Pack,” sponsored by SAP, recently revealed that automation is a key enabler of this shift. Nearly three-quarters (73%) of surveyed finance executives agree that automation is improving efficiency within their organization and throughout the company, freeing bandwidth for more strategic tasks.

The value of process automation

Although process automation is not a new concept, the potential for mechanizing the majority of finance’s work is gaining significant attention. The function is reaching a turning point where emerging automation technology offers an opportunity to improve efficiency and strengthen its reputation in the C-suite. For years, organizations have moved transactional tasks to shared service centers to increase scalability and take advantage of lower labor costs. Emerging technologies such as artificial intelligence are now opening the door for another quantum leap in efficiency gains.

Take, for example, Zalando. To complete its transformation into Europe’s leading online fashion platform for women, men, and children, the company created new products and services that allow all suppliers and buyers to interact with one another and benefit from high-performance billing and provisioning capabilities. With a smart data and automation strategy, Zalando is now equipped to process at least 10 times its previous maximum transaction volume. In turn, it has significantly accelerated all financial processes—from invoice processing and dunning to closing activities—with much more confidence.

The real-time actual-to-plan cash system

The ability to accurately predict cash and liquidity needs is certainly an important aspect of finance’s role. No other activity can have a greater influence on the efficiency of use of capital, reduction of expenditures, and mitigation of emerging risk in a world where globalization, financial complexity, and extensive regulations are a constant threat of disruption.

Bundesdruckerei GmbH, an electronic identity management solutions provider, is a prime example of how to automate financial forecasting. After establishing a single view of the truth with a secure unified data platform, the company accelerated processes, such as generation of profitability analysis reports, by 40%, on average. At the same time, it dramatically improved profitability analysis with reports delivered at unprecedented speed. This powerful solution for enabling future business models is providing decision-makers with the information they need instantly and eliminating the manual work to process and analyze data to derive real-time insights.

Management of evolving regulatory change and risk

If asked what keeps them up at night, most CFOs would say that risk mitigation and compliance are top of mind. In fact, the Oxford Economics study revealed that, for 68% of participating finance leaders, these two topics are prioritized higher than any other business objective. And nearly all respondents (93%) are given decision-making authority to enforce policies for adherence to regulatory requirements.

As demonstrated by Wheels India, this stressful aspect of every finance team’s day can be streamlined to the point where risk is minimal. The steel wheel manufacturer faced an ever-growing demand for improved flexibility and transparency. In response, the company invested in a solution for governance and reduced risk of improper user access.

This implementation transformed Wheels India into a more transparent environment with:

  • 60% fewer segregation of duties violations
  • 50% faster identification, categorization, mitigation, monitoring, and reporting of risks within business processes

Securing in-the-moment action with efficiency and flexible growth

Automation technology can not only liberate finance teams from straightforward, repetitive tasks, but also more complex activities such as collections and report-writing and analysis. Leading companies like these are connecting the dots between efficiency and performance with these forms of automation. They are the ones that can take immediate action on the latest market opportunities and risks by quickly reaching conclusions and developing context-sensitive behaviors.

Further explore the benefits of each of these pillars and the technologies that support them. Check for new installments to our blog series “The Finance Leadership Playbook” and read the Oxford Economics study “How Finance Leadership Pays Off: Efficiency Helps CFOs Stay Ahead of the Pack,” sponsored by SAP.

Learn how organizations are gaining instant financial insights and using them to make better decisions—both now and in the future. Register now for the 2017 Financial Excellence Forum, Oct. 10-11 in New York City.

Follow SAP Finance online: @SAPFinance (Twitter)  | LinkedIn | FacebookYouTube

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Michael Diehl

About Michael Diehl

Michael Diehl is the director of Global Finance Audience Marketing at SAP. His specialties include go-to-market strategy, thought leadership, demand generation, digital marketing, messaging, and positioning.

An Analytical Future Requires An Automated Approach

Les Smith

The emergence of real-time and predictive analytics technology gives finance an opportunity to reinvent itself as the analytics hub of the organization, enabling the entire organization to make fact-based decisions faster while taking finance out of day-to-day transactional activities to become a strategic partner to the business.

But how can finance adapt to provide these dynamic new capabilities without disrupting day-to-day operations?

While this future state might seem highly desirable, it must be achieved without degrading or endangering finance’s core activities. The solution may be in automation, which will allow finance to shift staff away from repetitive and low-level tasks to be deployed into those areas that truly add value to the business.

In 2017, Oxford Economics surveyed 1,701 finance professionals across multiple industries and four global regions, including 300 leaders from Australia & New Zealand, to uncover their attitudes towards their function’s changing requirements and challenges, and understand what it takes to become a finance Leader.

It found ANZ finance professionals are lagging their global counterparts in embracing the benefits of real-time and predictive analytics, although they are warming to the idea that automation might provide some benefit to driving efficiency and allowing finance to take on value-added tasks.

Analytic benefits are not being grasped

Despite significant industry buzz, the benefits of real-time and predictive analytics have yet to see result in their adoption into the mainstream of ANZ finance professionals—especially in New Zealand. Real-time analytics enable finance – and the business units it supports—to make decisions at much faster speeds, based on the most up-to-date data. But while 83% of global finance Leaders rated real-time analytics as important to the finance function’s successful performance today, this fell to 50% for Australia, and just 20% for New Zealand. For those respondents that rated real-time analytics as critically important, the key benefits were improving finance’s collaboration with the business, optimising risk management and compliance, and evaluating the financial viability of strategic growth initiatives.

If real-time analytics is all about speed, then predictive analytics is all about the future, and the potential for finance to stop just looking in the rear-view mirror and provide greater guidance on where the organization should be heading. Leaders understand this, and when questioned about the importance of predictive analytics, 80% saw its benefit today. But again, this dropped to just 42% for Australia and to an alarming 12% for New Zealand. Those who did see its benefits listed them as improving efficiency across the organization, optimizing procurement, optimizing risk management and compliance, and driving strategic growth initiatives.

The lack of regard for the importance of these two technologies may belie their future value. When asked about the importance of real-time analytics two years from now, both Australian and New Zealanders showed greater enthusiasm (72% and 48% respectively), while the importance of predictive analytics/modelling also increased (66% for Australia and 42% for New Zealand).

But while these forward-looking results brought Australia in line with the rest of the world, it is clear that New Zealand still has some way to go to embracing these emerging capabilities.

An automated future

If finance is ever to embrace the new world of analytics, it must first free itself up from the many of the lower-level and more manual tasks its currently finds itself handling. Indeed, if finance is to reach its full potential as a strategic business partner, automation will be critical, lest it be buried under the avalanche of requests it receives from other business functions.

Automation was determined as one of the key attributes of finance leaders, and is proving to be a key tool in the battle to free up capacity. Australian finance professionals are warming to the idea, with 68% indicating that it is improving the finance function’s efficiency and allowing it to take on value-added tasks. But just as with real-time and predictive analytics, only 42% New Zealand respondents have tapped into the benefits of automation.

Curiously, when asked whether improving efficiency across the organization was among the top three goals for the finance function, 60% of New Zealanders indicated as much—well ahead of respondents in Australia and the rest of the world (47% and 52% respectively). This could perhaps reflect the fact that the adoption of automation in Australia has already led to efficiency gains. But manual processes were not seen as a significant obstacle to achieving business goals, with only 26% of New Zealanders and 20% of Australians indicating so. This perhaps suggests that some respondents are simply not aware of the benefits that automation can bring.

Building the analytics hub

Market volatility means companies have to make fact-based decisions faster—possibly even in real-time—to compete effectively. Real-time and predictive analytics provide a toolset to enable responses that are both faster and take into account future scenarios, and deliver the added benefit of reducing risk in decision-making by ensuring that they are taken with the most up-to-date information available. For risk-averse organizations in ANZ, investment in these capabilities should be standard.

But the benefits of real-time and predictive analytics can only truly be realized if finance frees itself from manual processes using automation. Investment in analytics and automation must go hand-in-hand if finance is to achieve its true potential as the analytics hub of the organisation.

Explore the Oxford Economics CFO Global study and ANZ insights now. Download here.

Learn how organizations are gaining instant financial insights and using them to make better decisions—both now and in the future. Register now for the 2017 Financial Excellence Forum, Oct. 10-11 in New York City.

Follow SAP Finance online: @SAPFinance (Twitter)  | LinkedIn | FacebookYouTube

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Les Smith

About Les Smith

Working with organisations across the Asia Pacific region for over 20 years, Les holds a wealth of experience in Finance Transformation. As the Centre of Excellence lead for Finance & GRC in SAP, Les works with organisations to bring transformation theory up to reality with solutions from across the Office of the CFO (OoCFO) portfolio. Prior to SAP, Les specialised in performance management and Business Intelligence solutions, Health Checks, and Industry benchmarking on key performance indicators. During this time Les and his team delivered more than 50 strategic projects across 10 countries. With such a wide range of experience and strategic customer insight, Les understands how the Finance function can enable themselves to succeed in the Digital Economy.

Diving Deep Into Digital Experiences

Kai Goerlich

 

Google Cardboard VR goggles cost US$8
By 2019, immersive solutions
will be adopted in 20% of enterprise businesses
By 2025, the market for immersive hardware and software technology could be $182 billion
In 2017, Lowe’s launched
Holoroom How To VR DIY clinics

From Dipping a Toe to Fully Immersed

The first wave of virtual reality (VR) and augmented reality (AR) is here,

using smartphones, glasses, and goggles to place us in the middle of 360-degree digital environments or overlay digital artifacts on the physical world. Prototypes, pilot projects, and first movers have already emerged:

  • Guiding warehouse pickers, cargo loaders, and truck drivers with AR
  • Overlaying constantly updated blueprints, measurements, and other construction data on building sites in real time with AR
  • Building 3D machine prototypes in VR for virtual testing and maintenance planning
  • Exhibiting new appliances and fixtures in a VR mockup of the customer’s home
  • Teaching medicine with AR tools that overlay diagnostics and instructions on patients’ bodies

A Vast Sea of Possibilities

Immersive technologies leapt forward in spring 2017 with the introduction of three new products:

  • Nvidia’s Project Holodeck, which generates shared photorealistic VR environments
  • A cloud-based platform for industrial AR from Lenovo New Vision AR and Wikitude
  • A workspace and headset from Meta that lets users use their hands to interact with AR artifacts

The Truly Digital Workplace

New immersive experiences won’t simply be new tools for existing tasks. They promise to create entirely new ways of working.

VR avatars that look and sound like their owners will soon be able to meet in realistic virtual meeting spaces without requiring users to leave their desks or even their homes. With enough computing power and a smart-enough AI, we could soon let VR avatars act as our proxies while we’re doing other things—and (theoretically) do it well enough that no one can tell the difference.

We’ll need a way to signal when an avatar is being human driven in real time, when it’s on autopilot, and when it’s owned by a bot.


What Is Immersion?

A completely immersive experience that’s indistinguishable from real life is impossible given the current constraints on power, throughput, and battery life.

To make current digital experiences more convincing, we’ll need interactive sensors in objects and materials, more powerful infrastructure to create realistic images, and smarter interfaces to interpret and interact with data.

When everything around us is intelligent and interactive, every environment could have an AR overlay or VR presence, with use cases ranging from gaming to firefighting.

We could see a backlash touting the superiority of the unmediated physical world—but multisensory immersive experiences that we can navigate in 360-degree space will change what we consider “real.”


Download the executive brief Diving Deep Into Digital Experiences.


Read the full article Swimming in the Immersive Digital Experience.

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Kai Goerlich

About Kai Goerlich

Kai Goerlich is the Chief Futurist at SAP Innovation Center network His specialties include Competitive Intelligence, Market Intelligence, Corporate Foresight, Trends, Futuring and ideation. Share your thoughts with Kai on Twitter @KaiGoe.heif Futu

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Jenny Dearborn: Soft Skills Will Be Essential for Future Careers

Jenny Dearborn

The Japanese culture has always shown a special reverence for its elderly. That’s why, in 1963, the government began a tradition of giving a silver dish, called a sakazuki, to each citizen who reached the age of 100 by Keiro no Hi (Respect for the Elders Day), which is celebrated on the third Monday of each September.

That first year, there were 153 recipients, according to The Japan Times. By 2016, the number had swelled to more than 65,000, and the dishes cost the already cash-strapped government more than US$2 million, Business Insider reports. Despite the country’s continued devotion to its seniors, the article continues, the government felt obliged to downgrade the finish of the dishes to silver plating to save money.

What tends to get lost in discussions about automation taking over jobs and Millennials taking over the workplace is the impact of increased longevity. In the future, people will need to be in the workforce much longer than they are today. Half of the people born in Japan today, for example, are predicted to live to 107, making their ancestors seem fragile, according to Lynda Gratton and Andrew Scott, professors at the London Business School and authors of The 100-Year Life: Living and Working in an Age of Longevity.

The End of the Three-Stage Career

Assuming that advances in healthcare continue, future generations in wealthier societies could be looking at careers lasting 65 or more years, rather than at the roughly 40 years for today’s 70-year-olds, write Gratton and Scott. The three-stage model of employment that dominates the global economy today—education, work, and retirement—will be blown out of the water.

It will be replaced by a new model in which people continually learn new skills and shed old ones. Consider that today’s most in-demand occupations and specialties did not exist 10 years ago, according to The Future of Jobs, a report from the World Economic Forum.

And the pace of change is only going to accelerate. Sixty-five percent of children entering primary school today will ultimately end up working in jobs that don’t yet exist, the report notes.

Our current educational systems are not equipped to cope with this degree of change. For example, roughly half of the subject knowledge acquired during the first year of a four-year technical degree, such as computer science, is outdated by the time students graduate, the report continues.

Skills That Transcend the Job Market

Instead of treating post-secondary education as a jumping-off point for a specific career path, we may see a switch to a shorter school career that focuses more on skills that transcend a constantly shifting job market. Today, some of these skills, such as complex problem solving and critical thinking, are taught mostly in the context of broader disciplines, such as math or the humanities.

Other competencies that will become critically important in the future are currently treated as if they come naturally or over time with maturity or experience. We receive little, if any, formal training, for example, in creativity and innovation, empathy, emotional intelligence, cross-cultural awareness, persuasion, active listening, and acceptance of change. (No wonder the self-help marketplace continues to thrive!)

The three-stage model of employment that dominates the global economy today—education, work, and retirement—will be blown out of the water.

These skills, which today are heaped together under the dismissive “soft” rubric, are going to harden up to become indispensable. They will become more important, thanks to artificial intelligence and machine learning, which will usher in an era of infinite information, rendering the concept of an expert in most of today’s job disciplines a quaint relic. As our ability to know more than those around us decreases, our need to be able to collaborate well (with both humans and machines) will help define our success in the future.

Individuals and organizations alike will have to learn how to become more flexible and ready to give up set-in-stone ideas about how businesses and careers are supposed to operate. Given the rapid advances in knowledge and attendant skills that the future will bring, we must be willing to say, repeatedly, that whatever we’ve learned to that point doesn’t apply anymore.

Careers will become more like life itself: a series of unpredictable, fluid experiences rather than a tightly scripted narrative. We need to think about the way forward and be more willing to accept change at the individual and organizational levels.

Rethink Employee Training

One way that organizations can help employees manage this shift is by rethinking training. Today, overworked and overwhelmed employees devote just 1% of their workweek to learning, according to a study by consultancy Bersin by Deloitte. Meanwhile, top business leaders such as Bill Gates and Nike founder Phil Knight spend about five hours a week reading, thinking, and experimenting, according to an article in Inc. magazine.

If organizations are to avoid high turnover costs in a world where the need for new skills is shifting constantly, they must give employees more time for learning and make training courses more relevant to the future needs of organizations and individuals, not just to their current needs.

The amount of learning required will vary by role. That’s why at SAP we’re creating learning personas for specific roles in the company and determining how many hours will be required for each. We’re also dividing up training hours into distinct topics:

  • Law: 10%. This is training required by law, such as training to prevent sexual harassment in the workplace.

  • Company: 20%. Company training includes internal policies and systems.

  • Business: 30%. Employees learn skills required for their current roles in their business units.

  • Future: 40%. This is internal, external, and employee-driven training to close critical skill gaps for jobs of the future.

In the future, we will always need to learn, grow, read, seek out knowledge and truth, and better ourselves with new skills. With the support of employers and educators, we will transform our hardwired fear of change into excitement for change.

We must be able to say to ourselves, “I’m excited to learn something new that I never thought I could do or that never seemed possible before.” D!

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