Business is like chess - you need to think ahead to win!

As a company, you have to be smarter than your competition in order to win. Depending on your company goals, winning could mean: gaining market share, improving margins or to increase revenue. 

For centuries chess was a human-only game. Garry Kasparov became the youngest ever World Chess Champion in 1985 at age 22. For years he held the world title. In May 1997 he became the first world champion to lose a match to a computer.

Given the rate of technological change even the best humans can be defeated. No industry is exempt: all industries can expect a game-changing experience. Things that seemed really far out there just a couple of years or even a month ago, will have a massive impact on how we re-assess every part of our business. Research of McKinsey shows that current technology can fully automate 42% of finance activities and almost entirely automate an additional 19 percent!

Make your move

When technology can do a specific task better & faster, you shouldn’t teach people to run that task. Instead, empower people and think ahead to meet shareholder expectations, such as “How can you address strategic goals like improve margins, decision making, and reducing risk?”

Many organisations are still spending the majority of their resources just keeping the lights on. A classic example is ‘we run the business this way for many years, so we do not have to change’. This is understandable as a move to a newer version of a financial system is not easy when you run a legacy system. However, with the speed of innovation, the gap between businesses that embrace innovation and those who do not is widening every single day.

It is not about the move itself, only about the timing as the move to a new system will in due time be unavoidable. In general, you have 2 flavours today:

  1. Applications that come with full service (SaaS), so you always gain from the latest developments.
  2. A legacy application that you can run yourself or via a hosted service.

Isn’t it quite obvious to go for number 1 as you don’t want to face a widening innovation gap again?

How RPA, AI, and ML impact your business

A few of the latest developments are robot process automation (RPA), artificial intelligence (AI) and machine learning (ML). Operational processes like capturing and processing all the transactions can run without human interventions. So you are able to free up time for value added tasks while technology ensures the reduction of human error as it autonomously unveils insights by creating reports and dashboards based on real-time data.

Implementing modern technology goes beyond refreshing systems as it is a strategic building block. It is similar to chess: think a few steps ahead to outperform your competitors. By being more operationally efficient, the finance team could drive and realize new implicit business models. Even driving the strategic agenda with unbiased intelligence! And this applies to not only the finance team, but also across the whole business. By fostering better interactions through technology, companies can connect segments up to now in isolation. 

Innovations, like RPA, AI/ML, were not common years ago, but are available today. Personally, I think technology minded CFO’s will benefit the most from the digital age. They just get it! 

How finance and IT can cooperate

The CFO cannot drive digital enablement on her/his own. Buy-in from the CIO is required. However, as I just mentioned the majority of IT resources is still on the maintenance side. An important mindshift on the side of the IT department has to take place: Less focus at infrastructure and more focus to support business innovation by embracing the latest technologies. 

In a changing world, technology is driving change in the way we do business faster than ever before. Companies that focus on old technologies or stick with the status quo will fall behind. As the value of autonomous systems increase, the C-suite has to take ownership: Use technology as an enabler and prepare your workforce as modern technology will definitely impact the required skills of your workforce. 

Go Radical

Around the world we have thousands of customers with an annual turnover of €100M+. Some of these businesses haven’t existed that long; others have been around for many years.

When you look at the history of these businesses, the majority of them haven’t changed that much. However, the world is totally different than when they were founded. I should say change seems inevitable, but it is still rare.

Companies don’t always see the impact of not changing, as I wrote in my latest article. Others would like to change but often CFOs are not able to provide correct information, with their presentations and spreadsheets, to their board members. One of the reasons is that technology from the past doesn’t provide the real time information that is necessary today. In fact, more than 60% of boards are worried about poor execution of strategy.

Act Like Silos or as a Machine

When I follow the news, more and more organisations are removing the ‘silos’ within the company. Silos are groups or departments within an organisation that work in a vacuum with little functional access to other groups, or little communication between them.

When companies have silos, people have little interest in understanding their part in the overall success of the organisation. Removing the silos improves horizontal information sharing and collaboration. For example: when finance has access to other departments they can leverage financial data and take action based on the analysis that they have done.

Data analysis provides:

  • Additional insights that could have impact at the decision making process 
  • Additional insights could change business process and models

On the one hand the analysis is focused on profit and costs (finance), on the other hand, quantities and timelines (sales & operations). The power of insights is the combination of both, because relational data says a lot more than a single number (Shron, M., Thinking with Data, New York: O'Reilly Media, 2014).

Empower Success

Company boards want to make decisions based on the right information to improve the success of the company. Modern applications can alleviate the silo structure and in this way enable finance to become a business partner of the company board. Then finance will be able to provide valuable data to the board. Together you will stay strong. 

Have no fear to make changes. Download the whitepaper.

 

This post is a copy of the article that I have written for the Oracle Modern Finance Essentials, published at September 2, 2016

https://blogs.oracle.com/modernfinance/go-radical-have-no-fear-to-make-changes

Finance & HR

The Impact of Not Changing

How the World is Evolving

As a consumer, we have acknowledged that we are living in the digital era. There are roughly 1 billion active websites and 2 billion smartphone users worldwide; meanwhile the number of fixed telephone lines has decreased over the last 9 years. 

Companies may not see today how they will enact change tomorrow. According to Forrester: ‘only 27% of today’s businesses have a coherent digital strategy, which determines how the firm will create customer value as a digital business.’ Instead, more focus is spent on keeping the lights on rather than innovation.

To stay relevant, organizations, business units, and individuals need to know where business technology is headed, and be sure to remain up to date with the ever shifting digital trend. It is time to take action: make digital transformation your key strategic thrust.

Yes, most of us are too limited in our thinking. By simply changing the processes, we can be more successful with disruptive transformation. The digital era is asking to widen our horizon and adapt modern technology and new business models. With ample possibilities today, there is no need to own the equipment to run your business. Lease it for the duration of a contract and put the responsibilities down to your suppliers, allows focus on your core business and respond effectively on chances.

We are all familiar with Uber and AirBnB, but startups have been making waves across all industries: temporary office spaces, self-service bikes and food box delivery services. Another shift that we are seeing is the introduction of Light as a Service from Philips to service Schiphol Airport in the Netherlands. The light as a service means that, Schiphol pays for the light it uses (pay-as-you go), while Philips remains the owner of all fixtures and installations.

Lighting fixtures were specially developed for Amsterdam Airport Schiphol that will last 75% longer, as the design of the fixtures improved the serviceability.

The Growing Use of Technology in the Finance Function

As business models change, the systems has to change alongside. Nowadays, Financial Controllers (FCs) prefer to have more insights and an increased focus on financial planning. Thus, better understanding of the income, cashflow and assets help determine the financial goals. Having real-time insights and adapting new business models are driving more and more financial departments to the cloud.

Similarly, Forrester states, systems are integrated and cloud-based to create a connected and dynamic ecosystem. The reasons for making the move are many, nonetheless the results are typically the same: faster innovation, greater scale, lower costs, and operational excellence.

If you are still concerned about the risks of changing finance, keep in mind the risks of not moving on.

To learn more about Oracle EPM Cloud, click here

Original post: https://blogs.oracle.com/epm/entry/the_impact_of_not_changing

Why do companies have to start with tech enablement?

Different rules

The rules of competition are changing due to digitalization. According to McKinsey, digital capabilities are now a prerequisite for long-term competitiveness. Modern technology; the change of the workforce and process improvement are important to gain competitive advantage in the fast-paced market.

Modern technology is mandatory equipment in the ever-changing digital era. But what are the odds of winning the fight when the troops do not know how to communicate with each other and the army is not able to use modern equipment?

Driving a successful business in the digital age is different than driving a business in a world without social networks, tablets, smartphones and smartwatches. People are more connected than ever before and customers have many tools in place to gain knowledge. If you are able to improve the management decision making process, you will improve your performance across the entire business. As a result, growth and profitability are increased; and additionally, by using advanced reporting operational risk is mitigated.

Priorities have shifted

One of the top business priorities during these past couple of years of this challenging economy was saving costs and therefore, many organizations reduced their IT budget and decreased their headcount in order to minimize financial losses.

According to Gartner, at present, growth and profitability are the top business priorities instead of cost-saving. About 40% of the companies consider growth as one of the top three priorities and IT applications play a pivotal role in making this happen.

Dare disruptive change

The upcoming new business models will disrupt the market, as it happened in previous industry revolutions. 89% of the companies listed in the Fortune 500 in 1955 are no longer in the current list as technology has been changing the fundamental structure of businesses.

By adopting modern technology like cloud- (Software as Service) and collaboration software, you are not only improving the business model, you also empower your business to go beyond efficiency; creating an army which works harder and smarter.

“If I had asked people what they wanted, they would have said faster horses” - Henry Ford

Intelligent and empowerment

I strongly believe in disruptive change, rather than changing single processes. By empowering the workforce, simplifying processes and using modern technologies you are able to react more quickly to changes in the market’s demands and therefore, improve long-term success.

Reducing the amount of man-hours spent on tasks which can easily be done by technology is key to be competitive. Many organizations are now automating their processes and starting to create real-time insights for this very reason as it allows them to concentrate more on the big picture; enabling the finance department to go back in the driver’s seat.

The smaller players in many industries are able to empower themselves with the same amount of computing power and data capacity that previously only the larger enterprises had access to.

An enterprise resource planning (ERP) application combined with advanced reporting, enables the organization to be more flexible and it will support the need for greater innovation.

Data has long been used for reporting purposes and for understanding the past. In the fast-paced and digital world, data has been used to trigger actions, making strategic decisions and forecast more accurate.

Because ERP contains a diversity of modules, including but not limited to finance, procurement and supply chain, it can grow along with the needs of the company. Thus it enables smooth and efficient functioning of businesses. These benefits lead to the adoption of ERP software among small and medium sized businesses.

Original post in Dutch at Oracle.com

 

How will IT change the future of your business?

Digital transformation

According to Gartner, the most disruptive change in the history of IT is imminent. Several years ago, Apple revolutionized the world with the iPhone transforming the phone to a simple, easy-to-use communication device. iPhone also ushers in an era of software power and sophistication that has never before been seen in a mobile device.

In order to increase customer satisfaction, a key focus area of many organizations is adopting a forward-looking view of expense management and the effective use of resources. How do you ensure your employees and IT gain a competitive advantage? If you have been running a successful business for many years, is changing your business necessarily a good idea?

Technology works for you

Similarly to the transformation of the iPhone, it is critical to shift your finance department’s strategy from being reactive to acting as a strategic internal business partner. This shift can be made by adopting innovative technology and attracting highly qualified employees to improve internal processes.

It is no surprise that technology is slowly replacing humans. Executing in a consequent way is possible when organization are seeking for process improvement via workflow automation. Taking advantage of this powerful capability allows organization for reallocation of resources to focus on strategy.

The secret of change is to focus all of your energy, not on fighting the old, but on building the new. 
- SOCRATES

The dual combination of robust technology and highly effective employees results in enhanced processes and expense saves. This becomes even more crucial as a result of the financial crisis.

This means real-time delivery of information, so you are able to make the best decisions for your organization. Technology enables 24/7 availability and accessibility which is now the standard.

If you can’t see without glasses, you should wear them

The volume of data flow is getting bigger and more complex. Big data is the new form of capital – like money, data has value. It’s a must have for organizations to deliver new products, services and ways of doing business. E.g. social media and the rapid development of the Internet of Things (IoT).

The timely delivery of correct information, by the correct person, in the correct format is key to organizations in order to create meaningful analysis and make the right business decisions. Each employee makes decisions everyday - collecting, filtering and sharing the data with the whole organization enables more effective decision-making across the company. Access to BI and analytics provides insights to further enhance these processes.

Start improving information leadership and vision

Corporate boardrooms will start talking about data capital, not big data anymore. Human beings, supported by IT, are getting smarter. A key success factor in the constantly evolving society is the availability of strategy-focused employees. The current business requires a motivated organization to make proper decisions within the right time frame.

The volume of data flow is getting bigger and more complex. Are you as organization able to make the right decisions?

Increase productivity and be more profitable

Avoid gaps in the information data flow. Previously, information was either unavailable or difficult to obtain. By deploying Enterprise Resource Planning (ERP), in combination with the right qualified employees, you're able to be successful as an organization in the rapidly changing environment. Many organizations have already invested in software, however, this configuration often does not reflect the current market demands. It works just fine, ‘we have been working for years like this’, is not a valid reason to continue on in the same manner. If you are aware of the changing environment and you ignore this by not being open to change, it could be fatal for the organization. It is all about the mindshift.

Oracle’s ERP vision is to deliver accelerated productivity to the finance team, serve business managers with streamlined processes, and provide all users with on-demand access to role-based information:

  • Operational excellence to have one single source of truth
  • Proactively resolve issues to expedite automated processing
  • Reduce transaction processing costs and data entry errors

From governance to guidance

To cross your t’s and dot your i’s, you need more then only the numerical understanding of the past period. Being able to make prognosis is as well essential. By deploying Enterprise Performance Planning (EPM) you are enabling the organization to use the past to interpenetrate the future in order to respond quickly in a rapidly changing environment.

Oracle’s EPM vision is to provide finance leaders with a new guidance system for organizations.

  • One that helps you engineering predictable performance by predicting future outcomes and having confidence in your close processes.
  • One that is responsive to change allowing you to choose the way you work.
  • One that helps you connect the enterprise and create a culture of accountability by providing visibility into past performance and clarity about the strategic goals.

You often hear that people are busy. Being busy can’t be an excuse for not being open to what happens in and around the company. apparently there were too busy as well at Nokia and look where that has led.

Everything is changing, except the change by itselves. Is your company prepared?

Empowering modern finance!

Original post: 
https://www.linkedin.com/pulse/how-change-future-your-business-richard-harsevoort-