ibm canada: driving a future-ready enterprise
TRANSCRIPT
1 #SmarterBiz
Driving a Future-Ready Enterprise
Paulo MonteIBM Performance Management
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19Middle East and Africa 51
Asia Pacific
Central and Eastern Europe
57Western Europe
155
Japan
98
North America
102
South America
94
CFO insights from the IBM Global C-suite Study: 576 CFO interviews from around the world
Source: Question E--Participant Country
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CFOs rank second only to CEOs in collaborative C-suite influenceC-Suite collaboration partners
Source: Question B6--Which of your C-suite peers do you work most closely with in support of the enterprise?
78%
65%
24%
CEO CFO All others
Source: “CFO insights from the Global C-Suite Study”, IBM Institute for Business Value, 2014
Finance has a role in bringing
balance to the funding of
innovation. We play a role in
challenging ideas and calling
out where they are not working.
Finance applies discipline to the
process
CFO, Life Sciences, Unites States
”
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Technology is of ever-increasing importance to CFOs–the key moving forward is capturing its potential
2010 2013
Macro-economic factors
Market factors
Technology factors
Regulatory concerns
People skills
Geopolitical factors
Socio-economic factors
Environmental issues
Globalization
We need to have the right
information on time and give
it the interpretation value.
There is a need to frame
information in a financial focus
CFOIndustrial Products company, Mexico
”
Source: Question E8--What are the most important external forces that will impact the enterprise over the next 3 to 5 years?Source: “CFO insights from the Global C-Suite Study”, IBM Institute for Business Value, 2014
Most important external forces
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The gaps between importance and effectiveness have grown since 2005, demonstrating growing business pressures
Largest gaps between importance and effectiveness
58%
19%
46%
34%
42%
37%
27%33%37%
205%increase
35%increase
Drive integration of information
across the enterprise
Develop talentin the financeorganization
Optimize planning,budgeting and
forecasting
Execute Continuous
finance process improvements
Measure/monitorbusiness
performance
2005
2013
Source: Question CFO1--How important are each of the following areas of responsibility to your enterprise? CFO2: How effective is your organization in the following areas?Source: “CFO insights from the Global C-Suite Study”, IBM Institute for Business Value, 2014
6 #SmarterBiz
Finance organizations continue to rely on spreadsheets and intuition two-thirds of the time
Intuition Spreadsheet ERP Analytic tool
14% 52% 19% 15%
50% 100%0%
Capabilities/tools used to support Finance
Source: Question CFO6--What capabilities / tools does your organization use for the following activities?Source: “CFO insights from the Global C-Suite Study”, IBM Institute for Business Value, 2014
We need to ensure we
deliver value through
changing technology
versus being a slave to
our systems
CFO, Insurance, United Kingdom
”
7 #SmarterBiz
Flashback: The Global CFO Study identified 4 Finance profiles, with one group, Value Integrators, outperforming the rest
Low
High
HighLow
Value Integrator
DisciplinedOperator
Scorekeeper
ConstrainedAdvisor
Finance Efficiency
Enterprise-wide information standards
Standard financial chart of accounts
Common finance data definitions and data governance
Standard/common finance processes
Operational planning and forecasting capability
Finance talent development
Common planning platform
Value IntegratorPerformance optimizationPredictive insightsEnterprise risk managementBusiness decision making
Disciplined OperatorFinance operations focusedInformation provisionPerformance interpretation
Constrained AdvisorAnalytics focusedSub-optimal executionFragmented data
ScorekeeperData recordingControllershipMultiple versions of the “truth”
Business Insight
Finance efficiency and business insight
Source: IBM Institute for Business Value, The Global CFO Study 2010, The Global C-suite Study 2013
8 #SmarterBiz
* Value Integrators are 30% and Performance Accelerators are 7% of the overall CFO population interviewed.
High
Business Insight
High
Finance Efficiency Value Integrator
Value Integrator *
Performance Accelerator
Source: “CFO insights from the Global C-Suite Study”, IBM Institute for Business Value, 2014
Flash forward: Value Integrators are pushing the boundaries of efficiency and insight–a subset are emerging as Performance Accelerators
Excel at:. Better by:.
Proftability/Economic Analysis 1.17x
Pricing effectively 1.80x
Demand Planning/Forecasting 2.28x
Product/Service Development 2.36x
M&A Success 3.23x
+38%
+70%
9 #SmarterBiz
IBM is the ultimate partner to drive a future-ready enterprise
Valu
e
Analytic Data Management
Maturity
Aligninformation
Optimizeoutcomes
Best Practices
Strategy – Aligned Organization
Analyzepatterns
Span Finance and Operations
Process Automation
Enterprise-wideTransformation
ContinuousSteering
• Managing multi-dimensional performance information
• Financial Consolidation and Close
• Budgeting
• Incentive CompensationManagement
• Span Financial & Operations
• Leading & External Indicators
• Driver-based modeling
• Scenario Analytics
• Rolling Forecasts
• Metrics and Scorecarding
• Strategy Management
• Product and CustomerProfitability
• Predictive Analytics
• Big Data Analytics
• Planning, Analysis, and Forecasting
• Collaborative and Narrative Performance Reporting
• Disclosure Management
• Sales Performance Management
• Agile enterprise
• Risk-adjusted Value Management
Accelerate& Link
EngageFrontlines
Value Integrators Performance Accelerators
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Manufacturing
Sales
Marketing
Finance
Logistics
Productdevelopment
HR
Scorecarding and strategy management
Forecasting and
corrective actions
Business and Op planning
Performance reporting
Budgeting
Strategic planning
Enterprise Span - System of engagement
Cloud, Scale &
Performance
Advanced Analytics
11 #SmarterBiz
Amazon: Financial Planning & AnalysisReal-Time Integrated Financial Modeling
Challenge
• Lack of Corporate Insight into Financial Plans
• Solution
• Capital Expenditure
• Headcount & Employee Expense
• Revenue / COGS
• P&L and Balance Sheet Forecast
• Hourly Variance Reporting with Actuals
• Results
• “TM1 underpins all of Amazon’s critical Financial Processes on behalf of the Office of the CFO on a 24 x7 basis providing Weekly Forecast Routines, Month End Close, and Annual Operating Plans” -Wade Diamanti, Director FP&A
Amazon, described by Forbes as the “Worlds most valuable Brand”, is the largest internet retailer in the United States with $90B in annual revenue. The company also produces consumer electronics and is a major provider of Cloud Computing Infrastructure and Services.
Challenge
Solution
Solution Benefit Statement
12 #SmarterBiz
McCormick protects profit with detailed understanding of customer value and uncertain prices
Challenge
� Significantly reduce the profit at risk due to volatile commodity input prices
Solution
� Collect and analyze sales plan data by customer and across over 30,000 SKUs
� Evaluate the resulting profit contribution of product inputin the “bill of material”
Results
� Diagnosed profit improvement moves ahead of time; commodity price increases can be passed on to consumersor renegotiated with industrial customers
� Conducted value engineering with operations to reformulate flavors using commodities from different regions and suppliers
� TM1 and Cognos helped McCormick record $56 million in cost savings from their Comprehensive and Continuous Improvement program
McCormick is a global leader in flavor. With more than $4.0 billion in annual sales, the company manufactures, markets and distributes spices, seasoning mixes, condiments and other flavorful products to the entire food industry—retail outlets, food manufacturers and food service businesses in more than 110 countries.
CHALLENGE
SOLUTION
RESULTS
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IBM Corporation 2014
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