Technology, Transformation, And The CFO

Joel Bernstein

Part 3 in the 4-part “SAP Finance and EY Talk” series by Joel Bernstein of SAP and Tony Klimas of EY

Here at SAP, I often talk the three kinds of hats worn by CFOs and the finance function in general. These include:

  • Steward – where we act as a voice of conscience, ensure compliance, and execute prudent financial strategies with a high degree of professionalism
  • Business partner – where we provide operational and decision support to the business and best-in-class value-adding business-partnering services enabled by efficient processes
  • Transformation agent – where we proactively advocate for change throughout SAP and use our own experience as a template for how to succeed

I think this breakdown is common in other companies, as well. But truth be told, seldom are CFOs acting purely in one capacity or another. More often than not, we’re doing it all at once. This is particularly evident as companies pursue digital transformation with specific new technology implementations such as the Internet of Things (IoT).

Just for an idea of the kind of transformation that IoT can facilitate lead, take the example of Hilti, a manufacturer of high-end power tools for the construction industries. Hilti has used IoT technology to move from selling power tools like drills to, in a sense, sell the holes that the drills make. Hilti, in other words, has moved to a pay-per-use model: however long it takes you to drill holes, drive nails, or cut wood – that’s what you pay for. And it’s all monitored automatically via IoT technology.

The role of finance

As companies move toward x-as-a-service models, collecting and recognizing revenue and profit is dramatically different. As with Hilti, you may need to automate pricing according to usage. This will change how finance goes about the process of billing customers.

Facilitating such a move, finance acts as a partner to the business, helping the company to reshape itself for the digital economy. Of course, the move to consumption-based pricing might never happen unless finance is agile enough in the first place to facilitate the change. At SAP, as I’ve written before, the finance function has moved to a shared service model that does in fact give SAP the agility to innovate. In this sense, it can be said that we act as an agent of transformation.

The point is that sometimes it’s difficult to know exactly where the impetus for innovation initiates. In my experience, it’s often synergistic – with multiple roles and organizations coming together in ways that are difficult to tease apart.

The voice of reason

Having said all this, let me note that one traditional role for finance that can sometimes get deemphasized in the rush toward innovation is that of the stewardship. I recently participated in a joint interview with Tony Klimas, global performance improvement finance leader at EY. “One of the core roles of finance is the control function,” Tony reminds us. “The goal is to set up and maintain controls to detect and prevent fraud and other financial issues.”

The challenge in a digital economy characterized by constant innovation is to constantly examine how change might impact these controls. “Whether it’s the proliferation of devices to support a mobile workforce or the emergence of vast networks of IoT-enabled devices to enhance the customer experience,” Tony said, “finance is often the voice of reason pointing out control risks.”

As we’re all moving fast into the future, this role of stewardship should not be underestimated. Of course, the challenge for finance is to play this role in a way that doesn’t stifle innovation. “This can be a tough road to travel,” Tony said. “But it’s something every finance organization has to deal with. Because in a digital economy, innovation is a way of life.”

To learn more about how finance leaders are taking charge of innovation, take a look at this animated infographic and the Agile Finance 2.0 white paper.

The views reflected in this article are the views of the author and do not necessarily reflect the views of the global EY organization or its member firms.

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Joel Bernstein

About Joel Bernstein

Joel Bernstein is the CFO for SAP Global Field Finance, which includes responsibilities in the Cloud Business Group, Digital Business Services, and Global Customer Operations. In this role, he is responsible for leading the financial activities and profitable revenue growth for the company’s customer go-to-market organization and driving financial support for the Cloud and Professional Services organization. Joel’s direct Field Finance organization includes all finance functions in the multiple regions and market units worldwide for all SAP revenue-generating businesses. Prior to being promoted into this global position, Joel served as CFO for the SAP North America region. There he led all field finance-related activities for the United States and Canada. An accomplished finance professional, Joel earned his Bachelor of Science degree in Accounting at Wilkes University. He is also a member of the American Institute of Certified Public Accountants. Joel is an ardent supporter of SAP’s social corporate responsibility initiatives, often serving as the executive sponsor for programs that connect SAP employees in the communities where they live and work. Reflective of that commitment, Joel is a member of The Franklin Institute’s Board of Trustees, an esteemed organization founded in 1824 whose mission is to inspire a passion for learning about science and technology.