future of corporate management – digitization of the … better the question. the better the...

The better the question. The better the answer�.The better the world works.

Future of CorporateManagement –Digitization of the CFOagendaMarkus Heinen

25th November 2016

Markus HeinenPartner and Chief Innovation Officer EY GSA

Focus topicsØ Strategy & InnovationØ Purpose led TransformationØ Business Model Innovation

Contents

1 The New Reality

2 Today’s Responses

3 Future of Finance

The future enterprise is nota thing of tomorrow,

but the Reality of today.

More than 150,000,000 babies will be born this year.They will be born into a data economy.

Did you know?

Nearly 3.5 zettabytes (3.5x1021)

of new information will be created worldwide this year.

Just 1 zettabyte is equivalent to

250 billion DVDs

It’s estimated that by 2049, the computationalcapabilities of the entire human species may be exceeded

by a $1,000 computer

Did you know?

Smart machines willreplace 1 in 3 jobs

by 2025.

Source: Gartner

Did you know?

IdentityCapability

Tools andtechnology

Process andfunction

People andOrganization

structureBusiness

modelOperating

model

Spec

trum

Lens

esLe

nses

Obj

ecti

ves

Improveworkflow,

increase skillsand develop new

capabilities

Driveefficiency andeffectiveness

Streamlineorganizationand improve

accountability

Align modelwith priorities

and enablestrategy

execution

Promotegrowth,

innovation andprofitability

Define anddeliver on anew brandpurpose

Leading with purpose provides a differentiated approachfrom strategy to execution

Purpose

WHY ?WHAT ?HOW ?

123456

3x more The likelihood of employees stayingin a purpose-driven Organization

They are also 1.4times more engaged

89% of clients believe a purpose-driven company will deliverthe highest quality products& services

72% of global consumers wouldrecommend a company witha purpose, a 39% increasefrom 2008

Sources: The Energy Project, What Is Your Quality of Life at Work (2013); Edelman, The goodpurpose study (2013); Raj Sisodia, Firms of Endearment, 2007; Havas,Meaningful Brands Index (2013) , EY Beacon 2014

Purpose led companiesoutperformed the S&P 500by 10 times between 1996and 2014

10x

‘Meaningful brands’ connected to humanwell-being outperformed the stock market by120% in 2013

120%

INDICATORS OF CHANGE – on Purpose

Investments focused onactivating the company’spurpose generate higheraverage annualized returns by13% vs S&P 500 (4%)

13%

Companies with aclear sense of Purposeare the new leaders inCustomer Retention with75% retention rate

75%

Employees are twice asoptimistic about the future of theirorganization when they feelconnected to a higher purpose

2x

of Fortune 500companies in 2006no longer exist.

50%

INDICATORS OF CHANGE – on Business Models

By 2016, 89% ofcompanies expect tocompete mostly on the basisof customer experience.

62.5%Approximate increase ofinnovations from 1996 to 2012in Europe

81% of business leaders rank knowledge top,78% above products and 73% short-term financialtargets.

50 billionconnected things in 2050

84% of emerging marketconsumers make causerelated purchases at leastannually

5 mn + 1 mnBusiness Model Canvas booksdownloaded and sold

84 %of S&P 500 Market Value in 2015has been Intangible Assets

64 % of companies expectto change their businessmodel(s) in the next 5 years

Digital (Disruptive)Technologies enable newbusiness models at scale

“Platforms” rise all overthe place and scale newbusiness models withoutowning assets

Sources: Gartner (2015), World Economic Forum (2015), EY studies (2015) , Strategyzer (2015), Ocean Tomo, LLC, 2015 AnnualStudy of Intangible Asset Market Value

of Generation Z agree that business hasa responsibility to create a better world.74%

The sharing economy will grow by

3.000% from 2015 to 2030.

of the workforce in advancedeconomies could retire within a decade1/3

By 2019, approximately one quarter of theentire U.S. workforce will be independent workers (self-employed, independent contractor, freelancer, tempcontractor, etc.).

INDICATORS OF CHANGE – on People & Organization

By 2020 approx. 5 million jobs willbe lost as artificial intelligence, robotics andother socio-economic factors replace the needfor human workers or change their roles.

202%

Companies with engagedemployees outperform thosewithout by up to

Technology empowers employeesand makes flexibility, transparencyand immediacy at scale possible(‘Workforce of One’)

65% of all formal roles in2030 have not beendefined yet

Sources: World Economic Forum (2015); Raj Sisodia, Firms of Endearment, 2014; Havas, Meaningful Brands Index, 2015; The rise of the sharing economy 2015 by EY; Playing to win: thenew global competition for corporate profits (McKinsey 2015); The knowledge advantage (EY 2014)

Collectivepurpose

Mindclarity

Digitalleadership

Officespace

Technologyexperience

Incentives& Rewards

Companiesare workingaggressivelyto adapt tothese trendsin a variety ofways …

Team

Organization

Individual

1

2

Strategy, workforceplanning andleadershipdevelopment

Teamingability

TODAYS RESPONSES

Collectivepurpose

Mindclarity

Digitalleadership

Teamingability

Officespace


Incentives& Rewards


Team

Organization

Individual

1

2

3

Location andreal estate strategy

TODAYS RESPONSES

Collectivepurpose

Mindclarity

Digitalleadership

Teamingability

Officespace


Incentives& Rewards


Team

Organization

Individual

Developing andmeasuring newcompetencies

21

3

TODAYS RESPONSES

Old EnterpriseManagement

New EnterpriseManagement

Stringent, efficient +effective processes

Flexible processes, easy toadapt - Agilityà end-2-end

processes still needed?

Tangible assets, ONEbusiness model

Intangible assets, MANYbusiness model(s)

Purpose-driven operatingmodel

Profit-driven operatingmodel Operating Model

DB

Tran

sfor

mat

ion

Spec

trum

Networks, shared economyHierarchical / matrixorganization Organization

Processes

Business Model

Purpose???

Technology???

People???

Future of Finance – Finance Transformation

Increasing complexity

Need for digitization

Volatile marketconditions

Ad-hoc inquiries fromupper management

Organizationalchanges

Rigid data structuresrequire manual effortsto personalize

Finance will betransformedthanks tonew internaland externalchallenges

Future of Finance - OVERVIEW

Execute

Continuousoptimization ofprocesses and

structures

Using Roboticsand ArtificialIntelligence/

machinelearning

1 Develop

Consider andimplement

public valueKPIs

3Enable

Steering andcreation of

transparency

Enable strategicdecision-making

2

Future of Finance

Technology???

Future of Finance - EXECUTE Execute

Robotics andArtificial

Intelligence

1

Artificial IntelligenceBlockchain

Robotics

Wave upon wave of new disruptive technology…

Sm

art+

Con

nect

ed

Smart automationin Financebecomes realityby using RoboticsProcessAutomation,Machine Learning/ Problem solvingand AI Engines

Controllingexcellence nextgeneration (incl.

Fraudmanagement)

FinanceOperations,

including FSSC,Tax, HR (i.e. payroll

administration)

Treasury andEnterprise Asset

Management

Ultimate Objective is a light-out „Finance“ function

Technology???

Future of Finance - ENABLE Enable

Steering andcreation of

transparency

2

Enabling the Financefunction by creatinghigh transparency is keyto create visibility andaccessibility ofinformation acrossbusiness practices anddomains

“Life”Finance

…

Future of Finance - DEVELOP Develop

Consider andimplement

public valueKPIs

3

Public Value shows thecontribution oforganizations to society– as perceived by public.The credo “Perception isReality” offers anadditional view on socialvalue creation – beyondfinancial wealthindicators.

Technology???

PublicValue

Interaction

Perceptionby Society

Self-perception

Technology???

Future of Finance – Public Value Scorecard

Public Value Scorecardalludes to BalancedScorecard and is aholistic view on publicvalue creation byintegrating customer,shareholder, CSR andstakeholderperspectives

Financial-economicIs it profitable?

Control/OrientationIs it useful?

Self-enhancementIs it decent?

AttachmentIs it politically acceptable?

Pleasure/avoidance of painIs it a positive experience?

Opportunities Risks

Tomorrow

Today

The transition from simplysustaining business to creatinginspired employees, teams andorganizations is happening now

Innovate

IntegrateSustain

Future of Work

Inspiredemployeescreate inspiredresults

Exploit vs explore - Capability Ambidexterity

Inspire

The better the question. The better the answer�.The better the world works.

Will our today’s state-of-the-art Finance stillfulfill the needs oftomorrow’s futureenterprise ?

EY | Assurance | Tax | Transactions | Advisory

About the global EY organizationThe global EY organization is a leader in assurance, tax, transaction andadvisory services. We leverage our experience, knowledge and services to helpbuild trust and confidence in the capital markets and in economies the worldover. We are ideally equipped for this task – with well trained employees, strongteams, excellent services and outstanding client relations. Our global purpose isto drive progress and make a difference by building a better working world – forour people, for our clients and for our communities.

The global EY organization refers to all member firms of Ernst & Young GlobalLimited (EYG). Each EYG member firm is a separate legal entity and has noliability for another such entity’s acts or omissions. Ernst & Young Global Limited,a UK company limited by guarantee, does not provide services to clients. Formore information, please visit www.ey.com.

In Germany, EY has 21 locations. In this presentation, “EY” and “we” refer to allGerman member firms of Ernst & Young Global Limited.

© 2016 Ernst & Young GmbHWirtschaftsprüfungsgesellschaftAll Rights Reserved.

www.de.ey.com

future of corporate management – digitization of the … better the question. the better the...

Documents