Changing The Face Of Finance In Automotive Companies

William Newman

Automotive finance leaders are feeling the pressures of a new landscape of change. This is coming from two compelling waves. The first wave originates in market volatility and risks as the industry transforms to an Automotive 4.0 digital model. This means that operationally, finance leaders can’t manage the old ways of the early 2000s. They need to develop and hone new methods to meet a new digital organization.

The second wave is business model change across all industries. Automotive finance leaders are being asked to drive strategy in a whole new and different way – advising on investments, mergers and acquisitions, and business model transformation. New operating models involving core financial and fintech advancements have created the need to develop responses to new competitive forces.

The combination of the shifts in the market due to this volatility and risk, as well as the move to digital business models, has driven a need for finance leaders to think and behave differently. In short, new management methods are needed to respond to these competitive forces.

Finance at the heart of the digital car company

These new competitive forces are vast and different, compelling automotive finance leaders to look beyond the immediate functions of reporting, disclosure, accounting, and controlling. For example, real-time, 24/7 reporting requires a look toward “lights-out operation,” whereby general ledger and accounts are soft-reconciled and reported on a continual, daily operational basis. Finance is also being asked to look deeply into not only core manufacturing and supply chain functions to improve margin linearity though “build to margin” scheduling, but also examine new ancillary considerations in insurance and advanced payments fields. All while keeping a secured, controlled, and threat-mitigated operational environment company-wide.

Finance leaders therefore find themselves as active leaders – and even mentors – on a number of these topics, forcing their field of vision above the normal corporate finance landscape. As digital mentors as well, automotive finance leaders need to prepare for tomorrow while managing the activities of today in a nonstop, always-on environment. The ability of automotive finance leaders to mentor and coach other C-level leaders inside the company is proving to be a key success factor as companies modernize, digitize, and compete for the same market resources as their peers, not just in the automotive industry, but also in the high-tech, transportation, insurance, banking, and retail segments.

are you a digital mentor

James McQuivey of Forrester Research sums it up this way: ​“You always knew digital was going to change things, but you didn’t realize how close to home it would hit. In every industry, digital competitors are taking advantage of new platforms, tools, and relationships to undercut competitors, get closer to customers, and disrupt the usual ways of doing business. The only way to compete is to evolve.”

As automotive finance leaders work to change the face of finance and play a more significant role in other aspects of the automotive business, the ability to move to digital will prove to separate winners and losers in the coming years.

Want to learn more about how leading automotive companies are making the shift to digital operations? Join us in Detroit September 18-20 for the Best Practices for Automotive (#BP4Auto) event at the MGM Grand Hotel. Early registration extends to August 11. 

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William Newman

About William Newman

William Newman is a Strategic Industry Advisor, providing industry perspective, strategic solution advice, and thought leadership to support SAP automotive and discrete industry customers and their co-innovation programs. He helps build and maintain SAP's leadership position in the automotive industry and associated industry segments. He manages SAP’s annual digital aftermarket survey program and serves as the ASUG Point of Contact for the NA Automotive SIG. He is the author of two SAP Press books and a LinkedIn Editor’s Choice contributor.

The World For Finance Leaders Is Still A’Changing – Are You Keeping Up?

Judy Cubiss

Change really does seem to be the only constant at the moment, at work and at home, due to the current pace of innovation and technology. In fact, the rate of change is accelerating. There are a lot of stats about how much data is being created in every single moment – 2.5 quintillion bytes of data per day, according to DN Capital back in 2015, so that number already out of date. Trying to keep up with even a fraction of the information available is hard. Being able to use the vast amount of data that is available effectively is even harder.

As I was reminded recently in one episode of my favorite podcast series, Freakonomics, being productive is not the same as being efficient. Sometimes with all the tasks and all the data, it is easy to forget that it is more important to do the right things rather than to get faster at the wrong things.

Earlier this year, Oxford Economics set out to find out for finance leaders what are the “right” things. What traits do successful finance leaders have in common? I found it interesting that out of the six identified common traits identified, there was an even split between leadership/strategic skills and process/technology skills.

How some finance leaders are keeping pace

The finance leaders who are having success in this changing environment are becoming leaders in a much broader sense within their companies. They are associated with driving strategic growth for their companies. They collaborate regularly with the leaders of many different business units. And they exert influence beyond just the finance function. Technology has helped them be even more successful; for many companies, finance is now the analytics hub of the business, providing real-time insights, including comprehensive enterprise risk assessments to help every leader make better decisions.

These successful finance leaders still run all their core finance processes effectively and are continuously working to improve the efficiency of these processes through automation and self-learning. Blockchain and machine learning are just a couple of the technologies that these leaders are exploring because they are showing potential for increased automation and efficiency. Automating cash applications and simplifying bank transfers are good use cases for the technologies.

As data volume rises, we see these leaders embedding compliance in the financial operational processes. They realize compliance can no longer be just be a post-processing function.

How some are staying ahead of the curve

All these changes require a whole new way of using technology in finance. Finance platforms will replace ERP systems that have operated in silos. These finance platforms enable the transformation of financial management systems, and support the collaboration across all lines of business (LOBs) that is needed so that the business can run “live.”

We will be covering these topics and more at the SAP Finance Excellence Forum in New York City, Oct. 10–11. Leading companies such as Toyota will share how they used technology to accelerate their journey to bring different cultures and LOBs together. Vivant will share how finance boardroom influence is increasing, and how CFOs are helping lead business transformation. Colleagues from Exxon Mobile will discuss their finance transformation story with a new technology platform. There will also be more detailed sessions on how technology can help your organization become a leading finance organization and support your business to run live.

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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Judy Cubiss

About Judy Cubiss

Judy is director of content marketing for Finance at SAP. She has worked in the software industry for over 20 years in a variety of roles, including consulting, product management, solution management, and content marketing in both Europe and the United States.

How To Mitigate Foreign Corrupt Practice Act (FCPA) Risk In A Global Business Landscape

Payton Burger

The term “bribery” often conjures up thoughts of large sums of money being used to sway powerful officials one way or another. But when it comes to the rules and regulations set forth by the Foreign Corrupt Practice Act (FCPA), the terms “bribery” and “government officials” apply to a wide spectrum of actions and personnel. How can organizations ensure that they are not unintentionally breaking any rules and putting their business at risk of an FCPA-related audit?

In today’s fast-paced world, having a global presence is essential to stay competitive, but that leaves you exposed to more regulatory risks and fraud opportunities. Below, we’ll review the processes, procedures, and tools you should have in place to help mitigate these risks and ensure compliance with FCPA guidelines.

Understanding the ambiguity

Anti-bribery provisions state that an organization cannot give “anything of value” to a foreign official to obtain or retain business in their market. While this seems straightforward, enforcement actions are often based on allegations around leisure activities such as travel, meals, gifts, and entertainment, all of which are typically legal and socially acceptable. However, what might appear to be innocent exchanges are viewed as bribery to the FCPA.

And if that is not vague enough, the definition of a “government official” goes beyond someone who works directly for the government, and includes employees of government departments or agencies, state-owned enterprises (SOES), healthcare providers, and even third-party consultants helping with the planning of a hospitality event.

So how can your organization navigate this ambiguity—especially as you grow and expand globally and domestically —and implement the right checks and balances to mitigate risk related to the FCPA?

5 steps for FCPA compliance

  1. Understand your business network. The first step in protecting against the inadvertent bribery of a government official is ensuring that the employees engaging in cross-border business dealings have a firm understanding of all points of contact they will be directly or indirectly working with. In turn, leaders need to take a step back and consider how the organization works with various points of contact during the business process so they can more easily identify situations that may put them at risk of an FCPA violation.
  1. Implement the appropriate controls. The knowledge and expertise of your organization’s finance and compliance teams is imperative to successfully mitigating FCPA risk. Configuring expense systems with the appropriate workflows, attendee and expense types, conditional and custom fields, and requiring manager approval before “anything of value” is purchased is key to catching potential FCPA violations before they occur. Having these types of checks and balances in place also creates an audit trail with documentation that proves that your organization is doing its due diligence to prevent instances of bribery.
  1. Maintain clear and correct records. The FCPA also has provisions around financial books, record-keeping, and internal controls that put even more pressure on your financial teams. When it comes to your financial books and records, you must maintain reasonable detail that accurately and fairly reflects transactions surrounding foreign officials. Anything that is falsely represented or misleading can lead to an enforcement action. In addition, internal controls must be in place, meaning that you must be able to provide reasonable assurance that the transactions are properly authorized, recorded, and accounted for.
  1. Implement a comprehensive audit process. While these provisions are broad, creating an internal system that includes effective oversight and reporting capabilities will help maintain FCPA compliance. Build an audit process that has rules to account for regulatory violations. Consider these approaches:

– Audit receipt types and itemizations

– Audit cash expenses

– Conduct random checks

– Identify location and type of expense and where

– Verify employment and look for patterns of behavior

– Use a third-party auditor to maintain credibility and help your finance teams scale

  1. Proactively educate around clear policies. While preventative measures and audits are essential, don’t underestimate the importance of proactive education. Ensure that your finance team is properly trained and has a firm understanding of what constitutes both bribery and foreign officials. In addition, build clear, easy-to-understand organization-wide policies around what is and is not permitted when it comes to working with foreign officials to ensure that everyone is on the same page and maintains compliance.

Knowledge is key

Maintaining FCPA compliance boils down to having the proper knowledge surrounding what the FCPA considers bribery to a foreign official, and building the appropriate policies to combat that. Ensuring that you have the right knowledge, systems, and tools in place gives your finance team, and organization, what they need to be successful in reducing FCPA risk.

Learn about how the Concur can help your company monitor for compliance with the FCPA and other anti-corruption legislation 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 2017 Financial Excellence Forum, Oct. 10-11 in New York City.

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

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Payton Burger

About Payton Burger

Payton Burger is Client Marketing Manager for Concur.

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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