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Impact of Digital Disruption on Finance and a Roadmap for Success
8th Annual San Antonio CPE Event June 28, 2018
Introductions
Dan Spaeth Business and Technology Practice Leader Former CIO, CFO, SVP Sales and Marketing CPA Aventine Hill Partners
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Agenda
• Discuss How Finance Has Transformed
• Define Digital Disruption
• Identify Key Enablers for Finance Roadmap
• Walk-Through Modern BI Tools
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In Business and Finance – Time is Money
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DIGITAL DISRUPTION
What is Digital Disruption?
What is Digital?• Social Media• Mobile• Cloud/Open Systems/Web/eCommerce• Better and Cheaper IT• Analytics/Big Data (Digital doesn’t work without data & analysis)
What is Digital Disruption?• Fundamental technology driven change of markets, consumer experience and
business models across industries (e.g. Uber, Electronic Books, Netflix…)
Digital Disruption is Accelerating Finance Transformation
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Select Trivia
1. 49% - 36% - 15%2. 13%3. Gummy bears, frozen pizza, ice cream4. 20 Million or 13.35. 2.5 Petabytes6. June 29 , 2007 – 4.5 billion – 52%7. 2011
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What is Big Data?
• Petabytes & Zettabytes
• Streaming• Real Time
Feeds
• Text• Audio• Photos• Video• Social Media• Sensors
• Do You Trust Your Data?
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BIGDATA
VOLUME
VARIETY
VERACITY
VELOCITY
Significant Volume
Numerous OptionsSpeed
Accuracy & Reliability
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FINANCE 20 YEARS AGO
Efficiency• Cost• Productivity
Effectiveness • History of big surprises/adjustments• Time to close books• Cust. sat. and status as strategic
partner• Adequacy of controls• Degree of system integration• Degree of self service/web
enablement• Quality of decision support
Goal
Majority of Companies
Cost of Finance as % of Revenue • 1% was a major goal • Driven by Shared Services,
System Consolidation, Automation
World Class Finance 20 Years Ago
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1 2 3 4
1
2
3
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World Class Finance 20 Years Ago Continued
• Cash Close• Accrual Entries (expense,
investment & reserves)• Balance Sheet &
Income Statements• Performance Indicators
Process daily accounting data, close the books & prepare reports for analysis
Annual planning & budgeting process & quarterly reforecast
Prepare reports & filings for external sources (e.g. SEC, NAIC, OSFI, analysts, other stakeholders)
Analyze operating results & identify & report drivers of key items impacting business results
• Annual Report• Press Release• Analyst Supplement • Statutory Statements
• Variance Analysis• Standard Analysis Package• Management Review
Scorecard• Senior Management Signoff
Plan
Analyze
• Strategic Business Plan
• Operational Plan• Detailed Budget• Reforecast
Outputs
Selected
Collect
Distribute
Manage/improve close process, maintain application infrastructure & develop human resources
Sequential Financial Management Life Cycle
Outputs
Selected
Outputs
Selected
Outputs
Selected
Maintain Infrastructure
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External Data
• Extract• Stage• Cleanse• Transform• LoadFA
COST
HR
AP/AR
G/L
• Business Area• Some Distribution• More Detail
OtherOperational
Sources
ETL Tools
Data Warehouse• Enterprise • Centralized• Most Detail
ConsolidationInvestment
Mgmt.
Budgeting ABC
• Application Specific • Distributed• Less Detail
OLAP Data Marts
Relational Data Marts
Integration Server
&ETL Tools
OperationalData Store
• Near Real-Time
Portal
• OLAP Analysis• Ad Hoc Query• Modeling• Spreadsheet• Web Reporting
APPLICATIONS
World Class Finance 20 Years Ago Continued
External
The Financial Information Infrastructure Vision
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ROADMAP TO THE FUTURE
Finance Today – Vision
Finance Operations Business Unit Finance Technical & Special Finance
Cloud Based Technology & Big Data Hadoop Information Infrastructure
• Shared Services/BPO• Automated Day to Day
Transactions• Continuous Close
• Integrated Planning• Analytics• Modeling
• Tax• Risk• Compliance• “Czars” – e.g., Cash,
Risk
Talent & People Development
Streamlined Factory Embedded in BU’s - Virtual & Collaborative
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Finance Roadmap
Finance Today Future Finance
Big data infrastructure and improved analytics capabilities is a great place to start!
2018 2018 2019 2019 2019 2019 2020 2020Initiatives Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Big DataPeopleSpecialty TechCloudOtherCore ERPAutomation
Illustrative Roadmap
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Organizations Have Always Collected/Analyzed Data
What’s Different Today?
• Hadoop distributed file system (speed & accuracyrunning in memory – move compute to data)
• Low cost hardware and storage
• Explosion of many forms of data
• Cloud and robust software and tools
• Internet/IOT, mobile and social media maturity
• Focus on data science and technical resources
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Big Data – Bottom Line
Use Data and Analytics To:
• Spot trends and patterns
• Predict customer behaviors/needs
• Personalize offers and products
• Delight customers – improve business
• Use it in real time to gain competitive advantages
$$$
Action
Insights
Foundation
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Marketing Analytics is Critical
Marketing Spend Analysis
• Traditional tactics have lower ROIs than digital, E.G.:• Digital Display Ads Have a 7:1 MROI
• Targeted Emails have a 4:1 MROI
• FSI’s (inserts) have a 1:1 or less MROI
• Finance can play a key role in measuring marketing ROI and optimizing marketing spend on the most valuable channels and campaigns
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High-Level Big Data Infrastructure
Data Lake/Hub
On-Premises/Cloud Computing Platform
Scalable Physical or Virtual Clusters/NodesData Feeds/Sources
Internal/External
CRMERPOTP
CDW/EDW
Social Media, Web, Mobile
IOT/Sensors
3rd Party
Batch/Stream
Flat Files/Data
Data Processing
Hadoop/HDFS
AI, Machine Learning, Data Science Tools
Apps+
ToolsCustomers
Developers
Users
Product and Service Recommendation Engines
Real Time Alerts – Supply Chain, Customer, Etc. Actionable Trends and
Patterns
Campaign Management
Queries
Visualization, Dashboards, Reporting
Predictive Analytics and BI
Statistical Analysis
Interactive Web/Mobile
Interfaces
ETL
Example Business Capabilities
Security/Encryption/Identity Management
People and Talent – Analytics Leaders, Data Scientists, Data Analysts, Data Engineers, System Admins, Business Analysts
Open Source and Interoperable Applications, Products and Tools
Technology Stack
Web Analytics
API’s
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Roadmap for Success Key Elements
Streamlined Factory1. Highly automated financial processes/transactions
• Artificial intelligence• Robotic process automation• Integrated cloud systems
2. Continuous close, budgeting and reporting leveraging business intelligence tools and big data infrastructure (with exceptions for quarterly and annual reporting)
3. Lean six sigma and continuous improvement around end-to end processes
4. Business process outsourcing20 Proprietary and Confidential Property of Aventine Hill Partners
Roadmap for Success Key Elements Continued
Business Unit Finance1. Finance collaborative model with key functions – Marketing, IT,
R&D, Operations, Analytics/Data Science
2. Big data, business intelligence and analytics capabilities• Modeling business scenarios and changes• Rapid/real time reporting• Finance as data analytics hub of the organizations
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Roadmap for Success Key Elements Continued
Specialty Finance1. Finance seen as business value creator
• Transfer pricing optimization• Working capital management• Tax optimization• Currency and commodity hedge management
2. Apply enabling technologies• AI, Robotic Process Automation in area such as tax• Blockchain in areas such as supply chain• ERP cloud platform with add-ons- Tax optimization, profitability analysis, specialty vendor IP
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Roadmap for Success Key Elements Continued
Specialty Finance3. Compliance as a strategic differentiator
• Highly automated compliance capabilities• Machine learning• Single source of compliance truth
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BI is a Great Early Roadmap Win
2018 2018 2019 2019 2019 2019 2020 2020Initiatives Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Big DataPeopleSpecialty TechCloudOtherCore ERPAutomation
As part of a big data analytics strategy, quick wins can be implemented with common BI tools.
Illustrative Roadmap
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POWER BI
Why PowerBI?
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Power BI Report Canvas for Sales Data
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Interact with Canvas by Pressing Action Button(s)
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Search by State
Multiple Visualizations on One Canvas
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Data Updated Based on Search Criteria
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Filter by Multiple Criteria
Select Anywhere on Canvas
Numerous Ways to Interact with Data
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• Define KPI’s/metrics• Mock-up POC/
wireframe• Determine roles &
technical infrastructure
• Identify data sources and mapping
• Define deliverables, timeline, plan, budget & security approach
• Connect to databases, files, websites
• Create formulas to connect data sources or extrapolate data
• Cleanup queries • Resolve issues and
questions
a
• Create canvases with visualizations
• Install Gateway • Schedule data
refresh• Validate data • Test functionality of
canvases & scheduled refreshes
• Create support manual
• QA & validate internally
• Demo final solution• Update solution with
final changes• Provide support
documentation • Perform additional
training as required
STEP
STA
SKS
PowerBI Implementation Framework
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VALIDATE & HAND OFFTo End Users
CREATE & TESTDashboards & Reports
CONNECTData Sources
DEFINEBusiness & Technical
Requirements
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A Final Thought…
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QUESTIONS?
CHANGE HAPPENS. We Can Help.
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