Webinor Finance Analytics PDF

Transform Finance: Leveraging Analytics
& Technology
Featuring Allan Frank, Co-founder & Chief IT Strategist of The

Hackett Group
JUNE 17, 2015
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JUNE 17, 2015

Transform Finance: Leveraging Analytics &
Technology
Todays Speaker
Allan Frank, Co-founder & Chief IT Strategist

of The Hackett Group
JUNE 17, 2015
@HBRExchange | #HBRwebinar
Capitalizing on Technology
Innovations to Accelerate
Enterprise Performance
Allan Frank
June 17, 2015
Statement of Confidentiality and Usage Restrictions
This document contains trade secrets and other information that is company sensitive, proprietary, and confidential, the disclosure of
which would provide a competitive advantage to others. As a result, the reproduction, copying, or redistribution of this document or the
contents contained herein, in whole or in part, for any purpose is strictly prohibited without the prior written consent of The Hackett
Group.
Copyright 2015 The Hackett Group, World-Class Defined. All rights reserved.
2015 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. 8
This Year - 2015 Business strategy priorities
Innovation and product expansion in existing markets again tops the list
Primary business strategy Secondary business strategy

(% of companies ranking #1)
Innovate business Expand existing

Innovation-led model, product, 47% product/service portfolio
market entry and/or service 26% into new markets
offering
Expand Innovate business model,

Innovation-enabled product/service 39%
market expansion portfolio into existing 26% product, and/or service
offering
markets
Improve return on 28% Divest of non-core or

Portfolio existing assets / prior 19% under-performing assets /
optimization investments businesses
Expand existing
product/service Expand product/service
Market expansion portfolio into new 16% 56% portfolio into existing
markets markets
Source: Key Issues Study, The Hackett Group, 2015
Innovation has become a strategic differentiator
Are you ready?
1%
Innovation
The ability willis become
to innovate more
expected to important
become competitive
more important as a
competitive differentiator in ourdifferentiator
industry over theinnext 98%
ourfive years in
industry
next 5 years 1%
Creating disruptive innovation (of products / services / business model) is
Creating disruptive
an important partinnovation is anstrategy
of our business important part of our 62% 29% 8%
business strategy
The company has the right KPIs, processes, resources, incentives and
The company hasinthe
funding right
place KPIs,
to meet processes
its innovation and incentives
goals 34% 32% 35%
in place to meet its innovation goals
Source: Hackett 2014 Key Issues Study

Business Services including Finance are integral to a
companys innovative capability
Strongly Agree/Agree Neutral Disagree/Strongly Disagree
Business services (incl Finance) are

integral to supporting our companys 75% 15% 10%
innovative capability
Business services (incl Finance) need

structural transformation to 80% 13% 7%
adequately support
enterprise innovation
Innovative Service Delivery Enable Enterprise Delivery
Information
Governance
Service
&
Placement
Organization
Service
Delivery
Skills Components Process
&
Sourcing
Talent
Enabling
Process Design
Technology
Source: Hackett 2014 Innovation Study
What is Innovation anyway?
Finding a new or better way of doing something
EFFICIENCY
(reduce costs)
SUSTAINING
(improved replacement)
DISRUPTIVE
(change the way we live, work, play)
Finance under a continuing pressure to reduce costs
Implication Innovation requires self-funding
Function cost as % of revenue

we dont expect
the pace of
growth or cost
5.20% reduction to
PR 4.34% 4.48% continue
3.65% 3.35%
IT
HR
FN
2003 2007 2011 2015 2018F

FN HR IT PR
The Hackett Groups benchmark historical moving median Forecasted
results
Source: Hackett 2015 Benchmark Data
2015 Key Finance Issues
Business Partnership, Technology, Talent, Analytics, Data
High
Improving compliance / internal controls
Reducing cost and headcount

Improving planning alignment
between the strategic and
finance-specific processes
Ability to Meet Address
Taking advantage of new

Improving risk technologies Integrating planning processes
management and data between Finance and
capabilities Articulating the Finance other operational areas
value proposition
Improving analytical, modeling
Moving work to Global and reporting capabilities
Business Services (GBS)
and/or outsourcing
Developing better business
Transforming the partnership
Service
Delivery Model to align with Measuring and managing the
rapid change finance function's performance
Redeploying capacity to value creation Well supported
Maximizing return on existing Improvement
Aligning talent and skills to
technology opportunity
achieve the enterprise goals
Critical
development
Low area
Importance High
2015 Finance Improvement Priorities
Information, Analytics, Technology tops the list
Develop finance information / reporting

strategy
Develop and roll-out BI/analytics applications in

finance
Establish data stewardship / data governance / master

data
management in finance
Develop finance technology roadmap
Finance function performance management

process
Transition transactional, low value-added roles and

processes into Global Business Services/Shared Services
Functional reorganization
Succession planning for the finance

function None Moderate Major
Transformation Focus for 2015:
Business partnering roles
Technology & Information Organization & Process Design Sourcing & Placement Talent
End to end process integration within
finance
Information & Analytics is a top priority because its at the
heart of driving Enterprise Performance
EPM Performance and Financial

Why? (Net Margin) Performance How?
Impact on Value EPM effectiveness
drivers benefits
75%
Improved Margin More accurate forecasts
management Faster, deeper business
analysis
Improved Cost
Management 50% Increased % management
time on insight and
Improved Working Capital decision support
management
Tighter synchronisation
27%
Improved Capital between Operations and
23%
Expenditure management Finance
13% 13%
Improved Treasury and Better resource allocation
Cash Management Improved financial and
business control and risk
Reduced profit / cash management
Underperformance Industry Average Outperformance
volatility
Performance
Peer EPM Top Performer
Top EPM Performers are 50% more likely to outperform Industry than Peers
Unfortunately, many organizations have a long way to go
to achieve World class EPM capabilities
86%
Still use Excel for planning &
performance mgmt.
83%
Are dissatisfied citing lack of
flexibility, poor data quality, too
much time invested
Source:2014 Business Application Research

Center Study
Top Performers are investing in advanced analytics to
address the evolving needs of the business
Table Stakes Differentiating Capabilities
13%
19%
21% 26%
22% 37%
22%
32% 52%
55%
56%
50% 46% 43%
38% 207%
33%
580% 14%
5%
Peer Top Performer Peer Top Performer Peer Top Performer Peer Top Performer
Self-service analytics and reporting Scorecards / Performance dashboards Predictive modeling Multi-dimensional analysis ("slice and
dice")
TODAY IN 2-3 YEARS TODAY IN 2-3 YEARS
Effective analysis & reporting is moving beyond Finance
to a cross-functional analytics imperative
Human Service & Order Mgmt. Supply

Sales Marketing Financials
Resources Contact Center & Fulfillment Chain
Employee Pipeline Churn Campaign Order Supplier A/R & A/P

Productivity Analysis Propensity Scorecard Linearity Performance Analysis
Compensation Triangulated Customer Response Orders Spend GL / Balance

Analysis Forecasting Satisfaction Rates vs. Available Analysis Sheet Analysis
Inventory
HR Compliance Sales Team Resolution Product Procurement Customer
Cycle Time & Product
Reporting Effectiveness Rates Propensity Analysis Cycle Times Profitability
Workforce Up-sell / Service Rep Loyalty and Backlog Inventory
Profile Cross-sell Effectiveness Attrition Availability P&L Analysis
Analysis
Turnover Cycle Time Service Cost Market Basket Fulfillment Employee Expense
Trends Analysis Analysis Analysis Status Expenses Management
Return on Lead Service Campaign ROI Customer BOM Analysis Cash Flow
Human Capital Conversion Trends Receivables Analysis
Reporting strategy, data governance and integration are
pre-requisites to Insight
The EPM Technology Innovation Imperative
Need to redefine Business Intelligence in todays data-driven world
.with tomorrows reality around the corner..

Business users
demanding near real-
time reporting
EPM
Big data and the ever

growing new sources
of data
Technology
changing: Cloud,
Social, Mobile
Five key technologies driving business innovation
Value
Internet of
Platform 3.0: Analytics Everything
Value driver: Business model innovation and disruption (big data)
Interconnected Commoditization
Convergence of technology and business
virtual
Social
services Media We are here
Mobile
Innovation Commoditization
Value driver: business process improvement Cloud
Platform 2.0:
Pervasive technology adoption in business
Interconnected
computing
platforms
Internet
Innovation
Middle- Commoditization
ware
Platform 1.0: Client/ Value driver: Efficiency improvement

Computing Server Siloed technology support for business
Platform
centric Innovation OS 390
Time
Source: The Hackett Group
Digital Business Transformation: The intersection of
technology innovation and business innovation
Digital Business Transformation
The pervasive use of digital
technology in products, services and
Technology value chains, fundamentally Business
Innovation Innovation
transforming traditional business
outcomes
What Does Cloud Look Like?
Public Cloud
Service provider owned and
managed.
Access by subscription
Delivers select set of standardized
business process, application
and/or infrastructure services on
a flexible price per use basis.
Private Cloud
Privately owned and managed.
Access limited to client and its
partner network.
Drives efficiency, standardization and
best practices while retaining greater
customization and control
Hybrid Cloud
Access to customers, partners and third parties
Best of both worlds
Cloud Computing is part of a larger vision to provide IT
agility and flexibility to support business objectives
Strategic Impact
Faster response, more accurate
Business Strategic Objectives include planning, improved business
Continuous Improvement for all functions management
Less capital tied up; variable spending
based on usage and need; reduced
IT embraces this objective and further per-employee IT cost; shift in IT focus
defines it to be: Immediate/constant access to best
Enable strategic IT Management through Cloud technologies at no additional cost
based Computing and Managed Services Enable business transformation
In order to achieve this objective, IT is

transforming both their service delivery and
financial models
Future IT delivery will provide greater

flexibility and higher availability with an
overall reduced risk profile
Finance Cloud solutions have yet to become widely
adopted
Finance technologies used
E-Invoicing 100%
World-class 44% 33% 22%
Peer 57% 52% 4%

managementmanagementmanagement
and cash Receivables
World-class 56% 56%

tools
Peer 72% 28% 4%

Treasury
World-class 67% 33%

tools
Peer 50% 50% 6%

software
World-class 33% 33% 33%

Tax
Peer 36% 71%
Enabled through standard ERP Enabled through best-of-breed solution Enabled through cloud solution
(Note: multiple responses allowed, totals may exceed 100%)

Source: Annual Global Business Services (GBS) performance study, 2015
Recent IMA EPM Cloud Adoption Survey Only 7% using
cloud in some way but growing
Cloud risk drivers are anchored by data security and
performance management concerns
100%
92%
85%
81%
75% 75% 75%
67% 67%
59%
56% 56%
52% 50% 50% 52% 50%
48%
41%
30%
Data Security End to end Data integration Master data Relationship General lack of Cloud service Lack of upside Quality of service / Loss of control of
systems management management with maturity of cloud provider viability and downward availability / enterprise
performance cloud service technologies and business scalability of the performance of architecture as a
management providers and/or service continuity cloud service cloud services result of end user
offerings provisioning model driven initiatives
Early Adopter Early Majority
The Evolving Global Cloud The Internet of Everything
The Internet of Everything Driving a Flood of New Types
Of (BIG) Data Driving Data Management Complexity
Data is growing
exponentially and is
expected to increase to
32 ZB by 2020.
Zettabyte is 1,000 x 1,000 x 1,000
Terabytes
Evolving BI & Analytics Architecture
Answer to Swimming in Data - Requires new technologies, skills & governance
Enteprise
Data BI Applications
Structured BI Applications
Warehouse
Data RDMS
Sources
ERP
KPI Dashboards
Transaction
Std Reporting & Analysis
Visualization
BigData
Unstructured Internet Scale Analytical
Data Distributed Tools
Sources Data
Sensors & Streams
Environment
Visualization
Text & Docs Advanced Analytics
Multi Media Correlations
Internet Feeds
Open Data Data Lake

Pattern Detection
Text Mining
Dark Data Predictions
Realtime Analytics
The BI & Analytics Imperative Driving sustainable
competitive advantage
Separating the Signal from the Noise from all that Big Data
Front Line
Standardized Analytics
Knowledge
& Reporting Tools
Sensemaking Evidence-based
Worker Management1
Culture
CURRENT FUTURE
Nature of the
STATE STATE
User
Sensemaking Sensemaking
Traditional Balanced General Analytical Visualization
Internal Scorecard Intelligence Tools Tools
Corporate Core
- Expert Users
Continuous
Periodic Static Flow of Insights - Structured
and Unstructured
Nature of the Content
1. Jeffrey Pfeffer & Robert Sutton, Hard Facts, Dangerous Half Truths and Total Nonsense: Profiting from Evidence-based Management, HBS Press, 2006.
2. KSP = Knowledge Service Provider.
Intelligence on Demand IOD
We believe a new class of enterprise solution is needed to address how
knowledge work is actually performed today
1. Unifies information
2. Connects people with people
3. Connects people with information
Social Technology Can drive better collaboration &
enterprise performance
Moving towards a Mobile-First World
Giving us access to information anywhere at anytime.
Mobility also means 24/7 Different

devices, different times of day
Mobile personal device access has

exceeded PCs (People access their
smartphone about 150 times a day, really!)
Trend
Reporting will be delivered through tablets and other
smart deviceswith advanced data visualization
capabilities
Finance has the opportunity to lead the Digital Business
Transformation Charge
Digital Business Transformation
The pervasive use of digital
technology in products, services and
Technology value chains, fundamentally Business
Innovation Innovation
transforming traditional business
outcomes
Need for a Finance Technology Roadmap
ERP
Finance Ops
Fin ERP in the
Apps Cloud
Ops
Advanced Cross-
Bigdata Functional
Analytics Analytics
EPM
Traditional
Decision
Support
www.thehackettgroup.com
Statement of Confidentiality and Usage Restrictions

This document contains trade secrets and information that is sensitive, proprietary, and confidential to The Hackett Group the disclosure of
which would provide a competitive advantage to others. As a result, the information contained herein, including, information relating to
The Hackett Groups data, equipment, apparatus, programs, software, security keys, specifications, drawings, business information, pricing,
tools, taxonomy, questionnaires, deliverables, including without limitation any benchmark reports, and the data and calculations contained
therein, may not be duplicated or otherwise distributed without The Hackett Group Inc.s express written approval.
Questions?
Type your
question in the
chat box in the
lower left corner
of your screen
and click send
Thank you for joining us!
This presentation was made possible by the generous

support of Teradata.
Learn more at teradata.com.
JUNE 17, 2015
Sponsored by

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Transform Finance: Leveraging Analytics

Featuring Allan Frank, Co-founder & Chief IT Strategist of The

JUNE 17, 2015

JUNE 17, 2015

Allan Frank, Co-founder & Chief IT Strategist

JUNE 17, 2015

Primary business strategy Secondary business strategy

Innovate business Expand existing

Expand Innovate business model,

Improve return on 28% Divest of non-core or

Source: Key Issues Study, The Hackett Group, 2015

Source: Hackett 2014 Key Issues Study

Business services (incl Finance) are

Business services (incl Finance) need

Innovative Service Delivery Enable Enterprise Delivery

Source: Hackett 2014 Innovation Study

Function cost as % of revenue

2003 2007 2011 2015 2018F

Source: Hackett 2015 Benchmark Data

Improving compliance / internal controls

Reducing cost and headcount

Taking advantage of new

Develop finance information / reporting

Develop and roll-out BI/analytics applications in

Establish data stewardship / data governance / master

Develop finance technology roadmap

Finance function performance management

Transition transactional, low value-added roles and

Succession planning for the finance

EPM Performance and Financial

Peer EPM Top Performer

Source:2014 Business Application Research

Table Stakes Differentiating Capabilities

TODAY IN 2-3 YEARS TODAY IN 2-3 YEARS

Human Service & Order Mgmt. Supply

Employee Pipeline Churn Campaign Order Supplier A/R & A/P

Compensation Triangulated Customer Response Orders Spend GL / Balance

.with tomorrows reality around the corner..

Big data and the ever

Platform 1.0: Client/ Value driver: Efficiency improvement

Source: The Hackett Group

In order to achieve this objective, IT is

Future IT delivery will provide greater

World-class 44% 33% 22%

Peer 57% 52% 4%

World-class 56% 56%

Peer 72% 28% 4%

World-class 67% 33%

Peer 50% 50% 6%

World-class 33% 33% 33%

Peer 36% 71%

(Note: multiple responses allowed, totals may exceed 100%)

Early Adopter Early Majority

Mobility also means 24/7 Different

Mobile personal device access has

Statement of Confidentiality and Usage Restrictions

This presentation was made possible by the generous

Learn more at teradata.com.

JUNE 17, 2015

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