managing the evolving role of finance to empower enterprise growth
TRANSCRIPT
Managing the Evolving Role of Finance to Empower Enterprise Growth
Mike Forman
VP Finance & Corporate Controller, NetSuite
© 2014 Proformative
NetSuite: World’s #1 Cloud ERP
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Top 10 Cloud Companies to Watch
#1 Cloud ERP Suite Industry Recognition
Fastest Growing Top 10 FMS Vendor 3rd Year RunningBest Financial Management
Best Cloud Infrastructure
World’s most deployed cloud ERP
Used by 16,000+ organizations
Fastest growing top 10 ERP
Used across 100+ countries
1,000+ Software companies
Founded 1998
Publicly traded on NYSE: “N”
Offices in 10 countries
2,200+ employees
$400 M+ revenue FY13 (~33% Growth)
Background Performance
© 2014 Proformative
“It’s important for a company to determine which processes will
come under particular stress when it grows.
Unscalable processes are an area that companies often
overlook when they are growing.”
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McKinsey Quarterly: Preparing your organization for growth [May 2011]
Is Your Company Prepared for Growth?
© 2014 Proformative
The Controller Role Has Changed in the Past Three Years
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IMA: The Evolving Role of the Controller [January 2014]
How Controller Time Has Changed in the Past Three Years
Role is evolving to include:
• More higher value-added activities
• Support of more strategic outlook
• Driving productivity improvements
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But Financial Accounting Responsibilities Still Remain
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• Implementing Controls and Compliance• Changing regulations and the convergence of accounting principles requires
more time and increases operational costs to perform technical accounting and financial reporting
• Creating accurate financial and management reports and disclosure documents• Data for financial reports and disclosure documents are in disparate systems,
making this process error-prone and time-consuming
• Timely close and consolidation• With multiple versions of the truth, the process is inefficient and takes too
long
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Volume for Information Requests Is Also Increasing for Financial and Non-Financial Data
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IMA: The Evolving Role of the Controller [January 2014]
Change in Support Requested in the Past Three Years
But, increased access exposes new challenges:
• Limits on reporting capabilities
• Limits on ability to access data in real time
• Limits on information system capacity
© 2014 Proformative
“Things take longer to happen than you think it
will, and then they happen faster than you
thought they could.”
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Rudiger Dornbusch, Economist
The Difficulty in Managing Change with Scarce Resources
Click icon to add picture
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Growth Introduces Change and Complexity for Global Businesses
• Inability to customize systems and processes as the company grows
• Error-prone, inefficient, time-consuming manual processes
• Lack of confidence in financial data
• Significant resources, effort and attention just to keep current system running
• “Siloed” data; no 360o view of corporate performance
• Lengthy cycle to roll up financial results from subsidiaries
• Lack of current visibility into subsidiaries’ financials
• Challenge of scaling processes across geographies
• Lack of IT resources in distributed locations
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© 2014 Proformative
“We were running on about five different systems, and that led to a real inability to
connect records between two systems. We had no 360o view of our customers and
activities, and I was constantly starved for
information.”
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Customer Example – Pain Points
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A Typical Applications Journey….
• Started with on-premise ERP system (i.e. QuickBooks, MS Dynamics, etc.)
• Added Excel for analytics
• Added CRM system (i.e. Act!, GoldMine, Salesforce.com)
• Built a homegrown website
• Add more seats
Over time: more money, more resources, more integrations
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© 2014 Proformative
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…Ends Up Being an Application Hairball: Opaque Visibility & Slow, Error-Prone Reporting
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ECOMMERCE
PSA
ERP
CRMSINGLE DATA
SOURCE
ERP Company A GL
Subsidiary B
A Business Suite in the Cloud Helps Unlock Value
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Typical Way – Manual, Disconnected Mess After – Integrated, Dynamic Platform
• Disparate data
• Disparate processes
• Slow, reactive decision making
• One version of truth
• Streamlined, integrated processes
• Real time, proactive decision making
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“We sell multi-period engagements and have to
manage complicated revenue recognition schedules. Our business was growing and
NetSuite was able to render the scalability needed
without incurring incremental spend for IT-related resources
or headcount.”
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Customer Example - Solution
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Background of My Company
• More than 15 subsidiaries and about same number of functional currencies
• Maintain more than 35 currencies
• Revenue recognition• Amortize subscription, POC for Services
• Amortize revenue in accordance with EITF 08-1
• Global Finance Team
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© 2014 Proformative
Outcome of Using a Business Suite in the Cloud
• Monthly/Quarterly/Annual Financial Close• Same hard close each month
• Finalize financial results in 5 days
• Close/FP&A team spread between the US and Philippines
• Permits FP&A to share results in timely fashion with business partners
• Rolling monthly forecast based on timely updated actuals
• Order-to-Revenue Process• Lead → Estimate → Sales Order → Invoice → Revenue → Collect
• Respective steps between Sales and Finance can be performed anywhere with an internet connections
• Procure-to-Pay Process• Purchase Request → Purchase Order → Bill → Bill Payment
• Decentralized purchasing system coupled with a centralized disbursement group
• Quarterly Reviews and Annual Audit• Provide auditors with limited role to access system
• System notes provide an audit trail to support transaction history and the key controls that are tested as a part of SOX
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© 2014 Proformative
Dashboard Example
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© 2014 Proformative
Consolidated Financials Example
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© 2014 Proformative
A Suite in the Cloud Supports the Evolving Controller Function
• Manage the Entire Business in the Cloud• Lead → Estimate → Sales Order → Billing → Financial Reporting
• Single System, Single Database• No data warehouse
• Everyone Logs into the Same System / Global Finance Organization• Access to information from any location; control by role
• Real time Consolidated Data• Full drill-down from financial statements to individual transactions
• Multi-Dimensional Views• Worldwide, regional and country-based views
• Local Control, Global Roll-up• Localized UI and currency; regional and global visibility in context
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© 2014 Proformative
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Lightspeed Technologies – Tualatin, Oregon
Carl Cox
EVP of Operations & CFO, Lightspeed
© 2014 Proformative
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Why Lightspeed Exists – To Make a Difference
• ANSI classroom standard should not exceed 35dB
• Voice 15dB above ambient noise
• The standard classroom is like teaching on a noisy street corner (60dB)
• 70% of children with mild hearing loss will fall behind in at least one subject
• Our systems can help children hear 15,000 words instead of 10,000 EVERY DAY!
© 2014 Proformative
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Changing Our View
• But to make a difference in the classroom…we had to make a difference ourselves
• Why NetSuite?
• Changing our work from What to Why?
• How did NetSuite help us make a difference for our customers?
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We Had a Big Challenge!
• Growing at 25% annually
• Peachtree & FileMaker & Excel & Outlook…&
• All systems were separate
• The “What” and “Will it hold up”
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Who Me? Worry…
Will these systems make it another
night?
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So We Looked at Everything
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Traditional ERP solution NetSuite
The Final Two: The On-premise Solution or NetSuite
ERP
SINGLE DATASOURCE
3PL SFA
CRM
SINGLE DATASOURCE
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Final Phase – The Customer References
• The early slight favorite was the on-premise solution
• Do your work and research –
• Ask and find customer references
• This is a must!
• Don’t trust the sales person – go directly to the customers
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The Answers Were Like Comparing…
The on-premise solution…
• Difficult implementation
• Used outside consulting firm
• Talked with IT
NetSuite…
• Changed our company
• Access anywhere - insight
• Talked with business owners
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So We Took the Leap!
• We were live in 3 months from signing the license agreement
• Eliminated double-entry
• Finally connected with the sales force
• Access anywhere in the world
• No more servers
• Access to the latest updates
© 2014 Proformative
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In the Past, IT and Accounting Were Bean Counters
• Keep the servers up
• Close the books
• Always looking in the past
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Highly Skilled Workforce
Innovative
High Collaboratio
n
Knowledgeable
Multi-Skilled
- PROBLEM SOLVING
- COMMUNICATION
- EDUCATION
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Today, They Have Become Business Consultants…Literally!
Head in the Cloud Development
• IT were DBA’s, Case Managers
• As the need to ‘maintain’ was removed…
• We changed their job to value-add
• And they made a huge difference
• Writing over 200 scripts
• Continuous Improvement
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Are We Managing Through the Windshield?
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Or Through the Review Mirror?
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From Accounting Manager to Small Company Controller
• Issue monthly financials via e-mail to bankers and auditors
• Accounting and IT departments are smaller; although we are 2 ½ times larger
• Integration of systems and processes reduced order entry from 3 days to 1 hour
• Accuracy improved – last financial audit – zero findings
• Adaptive Planning budgets have decreased planning significantly
© 2014 Proformative
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Serving Our Customers
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Hearing From Our Customers
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Net Promoter Score
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The Net Promoter score for the first half of FY14. The results are as follows:
Promoters: 403Neutral: 44
Detractors: 16Total: 463
Percent Promoters: 87.04%Percent Detractors: 3.46%
Net Promoter Score: 83.59%
For reference, our NPS for FY13 Q4 was 82.67%
© 2014 Proformative
Customer Satisfaction (2013)
Google – 53%American Express – 41%Kaiser – 35%Verizon – 32%
NPS 30+
Costco - 78%Apple – Laptop 76%Nordstrom – 75%Amazon – 69%Southwest Airlines – 66%
NPS 60+
Lightspeed – 83.6%USAA – Insurance – 80%
NPS 80+
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© 2014 Proformative
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Upcoming Sessions
• Educational Session:• Delivering Value with Financial Performance: Leading FP&A Practices of High-Growth
Companies• 2:35PM-3:25PM, Veronese Room 2501
• Speakers: Eileen Tobias, Director of FP&A, NetSuite and Eric Zimmerman, Manager of FP&A, Infusionsoft
• Technical Demonstrations:• NetSuite Financial Planning: Integrated Budgeting, Planning and Forecasting in the
Cloud• 11:30AM-12:20PM, Veronese Room 2505
• Speakers: Robert Israch, VP of Global Marketing Programs, NetSuite Philip Adams, Solutions Consultant, NetSuite
• NetSuite ERP/Financials: The System of Choice for Over 16,000 Organizations• 1:30PM-2:20PM, Veronese Room 2505
• Speakers: Robert Israch, VP of Global Marketing Programs, NetSuite Philip Adams, Solutions Consultant, NetSuite
© 2014 Proformative
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Q&A
Managing the Evolving Role of Finance to Empower Enterprise Growth
Thank You For Attending