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FINANCIAL INTELLIGENCE 3.0 Unleashing the Full Potential of Your Finance Team and SAP® Investment

© 2015

Financial Intelligence 3.0 means escaping the old �nance commodity trap of spending

increasing amounts of time, talent and treasure on the basic output that is less and less

recognized by the business as adding value and making the di�erence. In a world where

success is determined by deep insight, rather than just numbers, �nance can no longer simply

be the company record keeper. The challenge is to create a more e�ective �nancially

intelligent organization that unleashes the underutilized, pent-up potential of �nance and

your SAP Business Planning and Consolidation, BW and SAP HANA investments to achieve

maximum business impact. That is Financial Intelligence 3.0

Summary

© 2015 CXO-Cockpit | Financial Intelligence 3.0 | Unleashing the Full Potential of Your Finance Team and SAP Investment

Old Finance Financial intelligence 3.0

• Static • Delivering / Presenting• Accounting data dump• High-labor intensive routine• Interpreted by �nance• Physical / low control and security• Distribution• Quantitative / Data only• Location-/time-dependent• “Financially dumb” BI and tools

• Dynamic • Storytelling• Relevance / guided• Automated / industrialized • Clear to all executives• Digital / control & security• Governance• Q2 insight / qualitative + quantitative• Mobile / anywhere / Anytime• Specialized Financially intelligent systems

Figure 1 - Di�erences between Old Finance & Financial Intelligence 3.0

Four key concepts de�ne Financial Intelligence 3.0:

1. Routine robotization

The �rst step is clearly to move to specialized planning and consolidation systems such as BPC

(and/or BW and SAP HANA). The second step is moving away from error-prone, ine�cient

manual 1980s spreadsheet technology and leveraging o�-the-shelf specialized,

�nance-owned �nancial reporting tools designed for BPC, BW and SAP HANA and prebuilt

with the rules of �nance.


2. Guided storytelling

100% more insight with 20% of the data. Once bandwidth has been created to start leveraging

�nance’s intelligence, rather than its manual labor, the scene is set for a radical shift from

presenting badly understood static data to guiding managers through a story that allows

them to rapidly “see things as they are” and identify the actions that need to be taken. This

implies intersecting reporting excellence with modern technology to deliver on the 4 pillars of

e�ective communication: relevance, optimal visualization, zero-ambiguity interpretation and

dynamic storyboarding.

3. Secure mobile governance

The nature of �nancial data means that governance and control over the data, its distribution,

its quality, its integrity, its security, its con�dentiality and its message is absolutely crucial and

the core mission of �nance. In reality this control has largely been an illusion and �nance - and

the business - have seldom had the tools to live up to this mission. Financial intelligence 3.0

provides accountability with control, with a focus on Access & security (and risk management)

and the Single point of truth.

4. Q2 insight

Financial Intelligence 3.0 means going a lot further than simply making the elusive concept of

a single point of truth a reality. It means creating a single point of Q2 insight, through the full

integration and central governance of what today are often two separately managed informa-

tion �ows to ensure complete insight and understanding: Quantitative (data) and Qualitative

(narrative).

Financial intelligence 3.0 is about escaping the old �nance trap. It is about turning the

organization into an optimally e�ective �nancially intelligent organization that executes

better than its competitors because it managers have a superior understanding of their

business. It is about the �nance team taking back control and unleashing its potential to

achieve this.

1 Escaping the old �nance commodity trap ..........Page1

2 Financial intelligence 3.0 ...............................................Page 3

2.1 Routine robotization .........................................Page 5

2.2 Guided storytelling ............................................Page 9

2.3 Secure mobile governance .........................Page 14

2.4 Q2 single point of insight .............................Page 17

3 Conclusion .............................................................................Page 18

Table of contents


What do we mean by �nancial intelligence 3.0? What it does

not mean is simply executing accounting rules and producing

the basics such as Balance Sheet and Pro�t and Loss (P&L)

statements. Do not get us wrong, these clearly remain a critical

foundations of corporate reporting. They simply are no longer

enough.

And herein lies the contradiction and frustration of old �nance.

While the �urry of new rules and regulations has made

producing this hygiene factor ever more complex, time-con-

suming and expensive (e.g. see also the investments in consoli-

dation and planning systems), the standard repertoire of

�nance is less and less recognized by the business as adding

value in an increasingly high-pace, technology-leveraged

competitive environment with zero tolerance for ine�ciency

and where success is determined by deep insight, rather than

just numbers. In one word, standard �nance reporting has

become a commodity.

By implication, it is no longer enough for �nance to just be the

company record keepers. Just as nobody is impressed with IT

because their e-mail works, this part of the �nance job has

become a hygiene factor. It is taken for granted and only

noticed negatively when things go wrong through errors,

missing data, security leaks and chaotic meetings where

everyone shows up with their own data and multiple versions

of the truth.

[1] Escaping the old �nance commodity trap

© 2015 CXO-Cockpit | Financial Intelligence 3.0 | Unleashing the Full Potential of Your Finance Team and SAP Investment 1

It is time to do things more intelligently. Finance in the second

decade of the 21st century is expected to be a business

advisor providing easily digestible true business insight: more

rapidly, more accurately, more e�ciently, at anytime and

anywhere. And perhaps most critically, ensure this is e�ective-

ly communicated to a non-expert internal audience. In other

words, the challenge is not having intelligent �nance teams.

The challenge is to translate and unleash this intelligence

within the wider business and create a more e�ective �nan-

cially intelligent organization.

That’s the theory and many studies have been published on

this topic in the last few years. But what is the reality we

encounter in many world-class multinational companies?

Teams of highly quali�ed professionals stuck in a low-

intelligence / low-added-value catch-22 status quo because

99% of their time is spent producing reports that a 1920s

entrepreneur would recognize both in form and output, using

1980s technology originally designed for personal computing

use. This is clearly an unforgivable waste of human talent,

employee engagement and the opportunities o�ered by

today’s technology.


“This is not an information age. It’s an age of networked intelligence”. Don Tapscott, the author of Wikinomics

2

Financial intelligence 3.0 is about escaping the vicious cycle by fully leveraging the latest

technology and the expanded skill-set of modern �nance to achieve maximum business

impact.

Financial intelligence 3.0 achieves its objective through a relentless

focus on automating, industrializing and eliminating all non-val-

ue-added, recurring activities to focus all energy, time and invest-

ment on high-impact, in-control sharing and communication of

�nancial information for maximum business impact.

The table below highlights some of the key di�erence in approach

between “old �nance” and �nancial intelligence 3.0.

[2] Financial intelligence 3.0It’s all about control and communication


Old Finance Financial intelligence 3.0

• Static • Delivering / Presenting• Accounting data dump• High-labor intensive routine• Interpreted by �nance• Physical / low control and security• Distribution• Quantitative / Data only• Location-/time-dependent• “Financially dumb” BI and tools

• Dynamic • Storytelling• Relevance / guided• Automated / industrialized • Clear to all executives• Digital / control & security• Governance• Q2 insight / qualitative + quantitative• Mobile / anywhere / Anytime• Specialized Financially intelligent systems

Figure 1 - Di�erences between Old Finance & Financial Intelligence 3.0

3

These can be summarized into the 4 key pillars of �nancial

intelligence 3.0:




4. Q2 insight


Figure 2 - The Financial Mind




4. Q2 insight

The prerequisite for successfully unleashing the power of

�nancial intelligence 3.0 is to escape the earlier described

catch-22. How? By plugging the leak through which valuable

time is �owing into non-value-added routine, repetitive

activities. This implies a focus on automation, industrialization

and process optimization with specialized planning and

consolidation systems (e.g. BPC, BW and SAP HANA) and

specialized �nancial reporting tools (e.g. CXO-Cockpit).

Amongst CXO-Cockpit customers this typically frees up at least

two months of time per year. Two months of extra time dedi-

cate to improving the business, your career and your work-life

balance.

Updating the daily, weekly or monthly standard reporting pack

should be a simple matter of refreshing data. As anyone using

spreadsheets for this task knows, this is unfortunately not the

case. Just producing these standard packs requires constant

re-inventing of the wheel in terms of data extraction, report

(re-)formatting, error-checking etc. Moreover, the many points

of potential failure and error in this process, as well as the total

loss of control over the reports once distributed, imply that

quality is never 100% under control of �nance. The result: a

breakdown in �nance team credibility, inability to create a

“single point of truth” and an immense hidden cost of top

executive time wasted in meetings that lose themselves in the

question “is the data right?” and “who has the right data?”,

rather than deciding on the right course of action.

[2.1]Routine robotization 2 months of extra time to add value


Most of these spreadsheet tools were invented in the 1980s at

the dawn of the computer age. This is 2015: the age of the

knowledge economy. There is simply no excuse to waste your

human talent and employee engagement on non-value-add-

ed, routine tasks which can be done more reliably, faster and

better by technology (e.g. report updating, distribution of

reports).

Moreover, as will be discussed in the next sections on guided

storytelling and secure mobile governance, the automation of

these routine tasks and creation of dynamic reports reduces

the amount of time spent by the �nance team on responding

to ad-hoc report requests from executive. This not only boosts

predictability and therefore greater optimization of �nance

team time, but, perhaps more importantly greatly improves

perceived service levels and actual user satisfaction by

enabling a greater degree of guided self-service analytics (i.e.

allowing drill-down) on the part of the executive user. Critical

in this context, is the term “guided”, however. A truly �nancially

intelligence 3.0 solution provides – and improves – the gover-

nance and control critical when it comes to �nancial reporting

by providing guided self-service analytics, as opposed to the

non-guided, just-do-what-you-like variety that de�nes most

generic business intelligence (BI) tools.


Higher productivity, higher internal user satisfaction

6

Which brings us to the last point. Do not accept generic

solutions for your speci�c reporting and �nance problems.

While, for their point of view, it is perfectly understandable

that your IT department comes with the ideal of pursuing a

single business intelligence (BI) platform for the whole organi-

zation, our experience at numerous customers shows that this

simply does not work. Generic BI is extremely powerful for

operational analytics. It simply is not a �nance-driven report-

ing tool, however, and will not �t the actual needs of the

company; the way the company actually works. As a �nancial

reporting consultant famously put it: “Generic BI gives you

everything you want, but nothing you need.”

Finance and reporting is a specialized discipline requiring

specialized �nancially intelligent tools. The �rst step towards

�nancial intelligence 3.0 is therefore to move to such a

professional “�nancially intelligent” reporting solution.

Typically this means they are:

Designed speci�cally for your �nance systems. In other words,

tools that are precon�gured for the main Financial Planning &

Consolidation and Enterprise Performance Management

systems (“EPM”, such as BPC ) and understand the dimensions,

hierarchies etc. contained in the EPM system, without the need

for additional work or expensive and protracted Data

Warehouse projects.


Finance is special. You deserve more than generic BI tools.

7

Understand (the logic of) �nance. This can be as simple as

understanding being able to di�erentiate between revenue

and cost accounts and recognizing automatically and without

the need of special programming that more is better, while

true for revenue accounts, does not apply to the variance of

actual to budget in case of a cost account.

Finance owned. Easy to use and maintain by the �nance team

itself, ensuring they have full control over their own

service-levels and destiny without depending on (and

burdening) already stretched IT colleagues or expensive

external consultants to unlock some black-box. To put it

simply, a tools should bring the same experience of control as

spreadsheets, but without any of its many downsides.

Ability to produce the boring stu� as well. While these tools

should of course produce powerful ways of graphically

representing key data and tell the story, this should not be the

only thing they do. Financially-intelligent reporting system are

just good at producing the highly-formatted, regulated

rows-and-columns output that is essential to �nance, as

generating funky graphs.


Once su�cient bandwidth has been created for the �nance

team to start optimally leveraging their intelligence, rather

than mainly their manual labor and spreadsheet massaging

skills, the scene is set for a shift from record keeper to business

advisor. Critical to achieving this is focused and clear

communication.

The key challenge facing most managers is seeing the forest

for the trees and uncovering the story hidden in the increasing

mountain of available data. Not surprising, this is also the key

challenge for modern �nancial intelligence 3.0 �nance teams

acting as the advisors to these manager.

Finance therefore needs to make a radical shift from simply

presenting static data according to badly understood (by the

business) accounting rules to guiding managers through a

story that allows them to rapidly and intuitively see things as

they are and identify the action that need to be taken.

[2.2] Guided storytelling 100% more insight with 20% of the data


“Intelligence is quickness in seeing things as they are.” George Santayana (he of “Those who cannot remember the past are condemned to repeat it” fame)

9

Financial intelligence 3.0 is about combining the rules of

reporting excellence as championed by individuals such as

Professor Hichert in Germany and seminal works such as

“Information Dashboard Design: The E�ective Visual Com-

munication of Data” by Stephen Few, with the possibilities of

new technology:

1. Relevance – less is more and guided analysis

2. Full-spectrum optimal visualization

3. Zero-ambiguity interpretation

4. Dynamic storyboarding

Perhaps the most important concept behind e�ective commu-

nication is relevance:

Less is more. What are the really critical business drivers? In

most companies 80% of reports contain interesting, but not

critical, data. As such they distract attention from the 20% that

is critical. An interesting experiment that has worked for other

companies is to put a price on each report that is produced.

You will be surprised how quickly business units and depart-

ments start asking for fewer reports and start focusing on what

they really need.


[2.2.1.] Relevance

“For more than 35 years I’ve found that, when I share meaningful information with the people who work with me, our performance as a company improves.”Josh Patrick

10

Guided. Financial intelligence 3.0 is all about doing things

intelligently. Unlike the typical generic BI approach of full-

freedom-to-the-analyst, all-possible-options, in�nite-path

self-service analytics, �nancial intelligent 3.0 reporting means

helping time-constrained executives rapidly zoom in on the

critical issues by suggesting only those analytical drill-down

paths and options that make sense and are relevant. In this

sense, a parallel can be drawn with the Google’s success as an

internet search engine, by providing its users with the more

relevant responses than its competitors and rather than a

randomly ordered list of all responses. Moreover, in e�ectively

telling the story and ensuring common understanding of the

message within the data, it provides an essential level of

control in guiding executives in a logical way through the

analysis.

E�ective communication to quickly show things as they are

requires a focus as much on form as on substance. Di�erent

types of reports provide di�erent degrees of freedom in

optimizing formats (e.g. a �xed format P&L statement versus a

company-speci�c sales break-down). Financial intelligence 3.0

means optimizing the intelligent presentation of the data

within any accounting and legal constraints to ensure that

everyone and anyone can understand what the data is trying

to say and that trends, exceptions, outliers and areas of


[2.2.2.] Full-spectrum visualization

11

attention can be spotted easily, rapidly and at a glance by the

human eye. Many experts and BI tools therefore argue for the

almost exclusive use of graphics. Financial intelligence 3.0 does

not have this luxury. The wide range of convention, regulation,

rules and constraints that it faces with regard to speci�c

reports and outputs mean �nancially intelligent 3.0 reporting

excellence is a combination of traditional row and column

charts with optimal use of conditional formatting and power-

ful complementary graphical representations that are easier

for the human eye to digest and interpret intuitively.

As with any process, garbage in is garbage out. If the data is

not, or wrongly, understood, it is likely that even the best-

intentioned actions based on this data will hurt, rather than

help, the business. As the magnitude of investment decisions

grow, the potential impact such failures grows. It is absolutely

critical that all de�nitions and assumptions are transparent,

clear and understood by all. Just as a good legal text should be

understandable by a layman, good reports should not require

a �nance background for correct interpretation. As shall be

discussed later, the concept of Q2 insight and the full inte-

gration of quantitative (data) and qualitative (commentary

etc.) greatly contributes to achieving this objective.


[2.2.3.] Zero-ambiguity interpretation

12

Financial intelligence 3.0 means moving away from the every-

thing-you-might-ever-want-to-know-about-the-business pdf,

Excel and paper data dump and towards a focused lean

management information storyboard composed of stream-

lined set of dynamic report. Comparable to a user-speci�c

interactive pdf pack, these allow organization to have their

cake and eat it too: keeping the core reporting pack and

meetings lean and focused, while still providing the full

�exibility to go down analytical paths on the spot and get to

the underlying causes. All this without the need to anticipate

all possible permutations and version of data and reports

required to do so, not to mention avoiding the risk doing in

one’s back lugging around the immense stacks of �les and

binders this implies.

As such, guided storytelling also represents a bridging of the

last mile with respect to optimizing the millions invested in

EPM / �nancial planning and consolidation systems; unleash-

ing its value (and making this visible) to executive users while,

as the next point makes clear, at the same time maintaining

strong governance and security.


[4.] Dynamic storyboarding

13

Critical to �nancial intelligence 3.0 is in control sharing and

communication. Perhaps the most signi�cant word in this

phrase is “control” or, phrased slightly di�erently: “governance”.

The nature of �nancial data means that governance and

control over the data, its distribution, its quality, its integrity, its

security, its con�dentiality and its message, internal and

external, is absolutely crucial and the core mission of �nance.

Ironically, or perhaps tragically, however, �nance has seldom

had the tools to actually live up to this mission and account-

ability. It’s always been an illusion and old �nance has never

been fully in control of the – perceived and real – quality of its

job. This gap between aspiration and reality is most obvious in

two areas:

Access and security. Ensuring the right data is accessible to the

right people and no one else.

Single point of truth. Providing a water-tight guarantee on the

integrity of the �nancial data and reports used in the company.

Financial intelligence 3.0 �nally provides �nance with account-

ability with control.

[2.3] Secure mobile governance Eliminate reputational and business risk


Financial data represents one of the most sensitive types of

data that a company possesses, particularly if it is publicly

traded. Intentional or unintentional security breaches, in-

appropriate di�usion or use can have major reputation,

stock-price and pro�t implications without even mentioning

the legal exposure of company directors for any errors. Every

single one of the companies we work with recognizes this.

But how is this data managed and distribution today in most

old �nance companies? We all know the answer: individual

�les sent by e-mail. Once sent, control is lost entirely over this

information:

1. It can be forwarded to anyone in the world at the press

of the “forward” button;

2. it is often printed and carelessly left on desks, at home

and in briefcases;

3. it is stored locally on personal devices prone to loss or

theft;

4. it can be copied, reproduced, changed, manipulated by

the receiver.


[2.3.1.] Security and access

15

Financial intelligence 3.0 means eliminating �le- and e-mail

based distribution of critical �nancial data in favor of a natively

mobile and web-based communication platform (e.g. respon-

sive / HTML5) Which is centrally-managed and secure with

2/3-factor authentication and/or via MDM/Mobile Device

Management and individual named user-access / authoriza-

tion. With zero local storage (e.g. on tablets, mobile phones).

Thus reducing risk and boosting productivity of on-the-go

executives.

Apart from security, such a full governance, centralized

�nancial intelligence 3.0 reporting platform is the only way

�nance team can really guarantee the single point of truth that

the CFO and management expect:

1. One single source of data from which all reports

dynamically pull their data;

2. central control of all reports and report packs at all time;

To complete the picture of perfect governance, most compa-

nies combine this with a strong governance process or gover-

nance board that protect the integrity and prevent

report-wild-growth by assessing and managing requests for

new reports and changes to existing reports or report packs.


[2.3.2.] Single point of truth

16

But �nancial intelligence 3.0 means going a lot further than

simply making the elusive concept of a single point of truth a

reality. It means creating a single point of Q2 insight, through

the full integration and central governance of what today are

often two separately managed information �ows to ensure

complete insight and understanding:

Quantitative: the data, the numbers.

Qualitative: the commentary, the narrative, the explanatory

information.

No more data in one place and business explanations and

comments in another place or another document.

Commentary is stored along with the reports it refers to in a

central database. This leads to much higher levels of:

E�ciency: A single, integrated, in-control, (time-)e�cient

process for consolidation of data and commentary, and;

E�ectiveness: the numbers are never separated from the

explanations provided by the experts (e.g. the relevant

business owner, department head etc.).

[2.4] Q2 single point of insight Beyond a single point of (data) truth


Incredibly amounts of time, investments, business and human

potential are needlessly wasted in most organizations. Given

that �nancial intelligence 3.0 provides a solution that is a

simple combination of common sense, e�ective com-

munication and readily available o�-the-shelf technology, it is

di�cult to understand why this situation continues to perpetu-

ate itself. We suspect that the culprit is a familiar one: Inertia.

As is the case so often, the status quo, while frustrating, imper-

fect and ine�cient is at least familiar and comfortable.

The problem with this argument, apart from the shocking lack

of healthy ambition, is that the price of inaction is rising each

day: ranging from the reputational, business and stock-price

damage from erroneous �nancial reporting or leaked data to

the critical dependency on employees managing your

black-box spreadsheet reporting model; not to mention the

frustration of simply not being in control of your job and your

success, and wasting time arguing about the data instead of

actually getting things done.

Financial intelligence 3.0 is about escaping this “old �nance”

trap. It is about turning the organization into an optimally

e�ective “�nancially intelligent” organization that executes

better than its competitors because it managers have a

superior understanding of their business. It is about the

�nance team taking back control and unleashing its

potential to achieve this.

[3] ConclusionKick-starting the �nancial intelligence 3.0 virtuous cycle


Financial intelligence 3.0

© 2015 CXO Solutions

Herculesplein 46NL 3584 AA UtrechtThe NetherlandsTel: + 31 (0) 88 238 08 [email protected]

“ Unleashing the Full Potential of Your Finance Team and SAP Investment ”

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