the future is here. disruption is happening. how must ... · stays ahead of technology and masters...

1 © 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International

Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

The future is here.

Disruption is happening.

How must finance react and evolve?

Rebecca McCaffry, Associate Technical Director, CIMA

Asif Akhtar, Head of Finance Transformation, KPMG

Rob Shaw, Finance Director, Innovate UK

The future is here. Disruption is happening. How must finance react & evolve?

July 2019



The CFO agenda for disruption

Leading finance organisations have developed an agenda to deal with disruption

Extreme

automation Integrating new technologies:

• Cloud ERPs

• Robotics

• Artificial intelligence

• Blockchain

• Mobile

Insights and

analysis New insights through:

• Automated descriptive and

diagnostic analytics

• New predictive and

prescriptive analytics

• Integrated business

planning

• Local decision support

Organisational

simplification

Changing work:

• Fewer people

• Less hierarchy

• Fewer offshore locations

Skills and

talent Changing requirements:

• Both strategy and finance

skills

• Process and control leaders

• Relationship and

collaboration

Leading strategy and

capital allocation Increasing role in innovation

• Trends and economics behind disruption

• Approaching disruption at the organizational level

• Maintaining an innovation portfolio

• Disciplined portfolio process and structure

Risk management: Response to disruption impacts how risks and controls are managed in an organization and the need to continuously evolve.



Automation is disruputing the way finance is being performed

Rules Knowledge / Learning Reasoning

Transactional acceleration Intelligence augmentation to support right decisions faster

Basic process

automation

Enhanced process

automation

Cognitive

automation

Automation Anywhere UI Path

OpenSpan (Pega)

Kofax Kapow

NICE Systems

Blue Prism

Automation Now Arago

IPsoft IPcenter Redwood

TCS Ignio

IPsoft Amelia Google DeepMind

IBM Watson Wipro HOLMES

Representative Tools: Representative Tools: Representative Tools:

AntWorks WorkFusion



The skill shift also applies to the CFO – The Renaissance CFO

Drives Finance to optimize global

business strategy

Align and drive

Strategy

Impact performance and

growth (M&A, Partnering, Strategy, Talent)

Think and

act globally

Stays ahead of technology and masters

the complexities of data analytics

Leverage new

technology

(cloud/digital)

Apply financial data

and analysis to identify

new opportunities

(e.g., Profitable

Growth)

Finds the right model for the Finance

function

Implement the optimal

operating model

Have an operational

mind set

Has a deep knowledge of the business and

its customers

Deal with an ecosystem

of expanding complexity

Partner and

collaborate across

business functions

Turns the regulatory environment into a

competitive advantage

View the regulatory

burden as an

opportunity

Play an active role in

developing sensible

policy

Leverage data &

analytics to meet new

requirements

Invests in and motivates talent, promotes

key skills and collaborates

Showcase strong

leadership qualities

Define a strategic

workforce planning

model

Rethink the employee

value proposition

Six defining characteristics of a

high performing CFO: A CFO needs to be able to…

The Strategist

The

Predictive

Analyst

The Talent

Champion

The

Operationalis

t Realise efficiencies with

RPA and Automation

Be the steward of data

as it relates to enterprise

performance



Analytics, Technology and Data

‒ Analytics and insights

‒ Visualisation

‒ Data modeling

‒ Robotic quotient (RQ)

‒ Programming expertise

Strategic

‒ Strategic thinking

‒ Research capabilities

‒ Program management

‒ Ambiguity and white-space

Finance Technical

‒ Business modeling

‒ Core financial driver

analysis

‒ Process design and

navigation

Behavioral

‒ Relationship management

‒ Impactful storytelling

‒ Feedback, communication,

and negotiation

‒ Influencing and inspiring

New capabilities will be required to support the new finance organisation

An evolving performance-centric and technology-enabled finance workforce will cause a shift in skillsets required.

In a rapidly

changing

environment, finance

organisations must

continually assess the

nature of the work to

be done, and how this

translates to the skill

sets of their

workforce.



New roles will emerge

Different finance

processes will be

automated, leveraging

various levels of smart

automation.

Has high RQ, experience managing digital

workforce, and overall knowledge of the systems

landscape; able to identify required F&A process

changes and implement new business solutions

incorporating relevant technologies.

Handles interactions between different

business groups and communicates

information effectively (has extensive

business knowledge and deep technical

F&A expertise). Executes complex financial models and

advises the business on the financial and

business impacts of different scenarios

(STEM/D&A background necessary).

Focused on delivering core reporting and analytics to the

business (Deep Finance and Accounting background

(e.g., CPA, CFA)).

Takes an “outside-in” approach to develop

insights from trend signals and identifies

changes in customer and competitor behavior

and possible business implications.

Business Solutions

Architect

Innovation and

Investment

Strategist

Business Planning

Analyst

Financial and

Regulatory

Accountant

Intelligent

Automation

Financial

Data Modeler/

Scientist

R

CFO

Business

Partner

Critical role for driving value and

overall business performance

Has strong understanding of external markets to examine and

leverage threats and opportunities into strategic direction for the

business; has the ability to navigate ambiguity and influence a

potential shift in the business model.



How do you react?

Attracting, building, and retaining talent will look different in the future, so having a holistic approach for addressing the

critical aspects of managing talent, tailored to your organisation’s specific needs, will be essential.

Develop rotational programs

to retain and develop high

performers and future leaders

Understand critical roles and

single source dependency of

institutional knowledge

Incorporate a flexible

workforce into the

organisational structure

Develop a multifaceted

workplace ecosystem

(e.g., onshore, nearshore)

Partner to build

capabilities that feed into

an environment of high-

performing talent

Invest in career path design,

learning, and development

Reskill workforce to deliver

more business-centric services

Redefine role definitions and

core competencies

Develop succession plan to

address the retiring and

incoming workforce

BUILD

BORROW

SAVE

BUY

Foster relationships with

key universities

Source nontraditional

backgrounds (e.g., STEM)

Redesign talent

acquisition strategy for

digital natives

Redefine employee value

proposition to retain

millennial generation Sources: Forrester, “Business Agility: The Contingent Workforce Paradox”

Forrester, “The Future Of White Collar Work”

KPMG International, "The view from the top,"

© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent

member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

NDPPS 692663

The KPMG name and logo are registered trademarks or trademarks of KPMG International.

The information contained herein is of a general nature and is not intended to address the circumstances of any particular

individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such

information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon

such information without appropriate professional advice after a thorough examination of the particular situation.

kpmg.co.uk

Some or all of the services described herein may not be permissible for KPMG audit clients and

their affiliates or related entities.

The future is here. Disruption is happening. How must finance react and evolve?

Rob Shaw

Finance Director

Innovate UK drives productivity and economic growth by supporting businesses to develop new ideas.

We connect businesses to the people that can help them, and fund businesses and research collaborations in all economic sectors, value chains and UK regions to accelerate innovation.

- we are at the heart of delivering government’s Industrial Strategy and target of UK R&D expenditure reaching 2.4% of GDP

- we act as a transformative agent for change in the UK economy by accelerating productivity and driving disruptive innovation

- we support innovation, from spin-outs and start-ups to companies with the ambition to scale and grow in the UK and through global markets

- we help companies of all sizes in all sectors access the research, partners, investors and markets they need to innovate and grow

11

The UK’s innovation agency

8,500 unique

organisations

involved

Up to

£6-7 for every

£1 we’ve

invested

£2.5bn since 2007-16

We’ve funded around

11,000 projects

Up to

£18bn in added value

to the economy

Investment of Industry match funding

taking

the total value of

projects above

£4.3bn

70,000 jobs created in total

9 jobs for each

organisation

involved

12

Delivering finance transformation

13

Improving Financial

Management

Funding changes

Organisational Change – The

creation of UKRI

UKRI Finance Function

integration

Legacy systems and the

transfer to new systems

Staff skills, capability &

turnover Challenges

The creation of UKRI

14

UK Research and Innovation brings together the 7 Research Councils, Innovate UK and Research England. As part of UK Research and Innovation, Innovate UK drives productivity and economic growth by supporting businesses to develop and realise the potential of new ideas including those from the UK’s world-class research base. - New Group Chief Financial

Officer - Finance Function

integration - system integration

Arts and Humanities Research Council

Biotechnology and Biological

Sciences Research Council

Economic and Social Research Council

Engineering and Physical

Sciences Research Council

Medical Research Council

Natural Environment

Research Council

Science and Technology

Facilities Council

Innovate UK

Research England

2.4% & the funding changes

15

Since 2017/18 Innovate UK has helped deliver new funding

programmes as part of the Industrial Strategy. This took

annual spending above £1bn in 2018/19.

These new programmes and the volume of activity has

necessitated a different approach to financial management

Industrial Strategy Challenge Fund (ISCF) – Over £1.4bn

committed to 1,820 organisations since its

inception in 2016, with a 3rd wave investing a further

£1.1bn from 2019/20

Part of the UKRI international fund, worth approximately £110 million over 3 years supporting global missions and the continued delivery of Newton Fund programmes

Innovation Loan Pilot - Up to £50 million available since

2018 for business innovation projects near to market

New Investment accelerator funding models with private equity investors as a new approach to financing innovation, to drive the potential to scale up businesses.

Digital Transformation in Innovate UK - The initial plan

CONTRACTS

SUN SYSTEMS (Ledger)

Legacy Systems

_CONNECT COMPETITIONS DB

OCTOPUS COMPLEAT

SUN SYSTEMS (EREMIT)

IFS ACC WORKDAY

New Systems

GBM

Digital Transformation – Process complexities

CONTRACTS

SUN SYSTEMS (Ledger)

Legacy Systems

_CONNECT COMPETITIONS DB

OCTOPUS COMPLEAT

SUN SYSTEMS (EREMIT)

Innovation Funding Service

Awards Compliance & Commercialisation (ACC)

WORKDAY & PredictX

New Systems

GBM

Processes affected by each system

Process using

system data

Process using

system data

Process using

system data

Process using

system data

Process using

system data

Process using

system data

Process using

system data

Process using

system data

Process using

system data

Process using

system data

Process using

system data Process

using system

data

Process using

system data

Process using

system data

Process using

system data

Process using

system data

Innovate UK Finance Systems changes Objectives:

- Integrate

- Stabilise and Improve financial control

- Automation and simplification as finance function transitions to Business Partnering

- Data analytics to enhance decision-making

August 2018 Go-Live - what we have learnt about systems: - Business Process Design – Mapping Old to New - Demonstration Vs UAT balance - Volume of activity - System Integration & Agile working - Support Model structure – Product Owners & Business

Champions. - Communication of successes

and what we have learnt about people: - Internal Vs External Project Managers - Concentration of system understanding - Resourcing Business as Usual and System Transformation - Training - Cultural Change - Communication of successes

Post Go-Live - Finance process improvement

19

To kick-start the optimization of new systems for key financial processes, three key phases of activity have been undertaken, to improve process efficiency, reduce risk and enhance staff capability.

Phase 1: Quick wins and essential activities

Prioritised activities fundamental to reducing IUK’s exposure to risk, and efficiency through ‘quick wins’ . These recommendations are easy to implement, and require little disruption to the service. Implementing them will maintain momentum, and enable: • Making a better use of Workday (including correction of Workday

mapping, effective use of Period Close functionality, use it as a single version of the truth , and control, and Uploading contract T&Cs to automating invoicing

• Streamlining of spreadsheets • Standardise processes, starting with those that involving the FBPs

These are cornerstone activities which are more intensive than the ‘quick wins’, but from which significant improvements can be generated. For example: • Designing reports in Workday to assist with data extraction and reporting • Agreement of process ownership and hand-offs between FBPs and

Management Accountants

Phase 2: Foundation activities to drive efficiencies

These are changes which will require a more fundamental change in staff culture, or take longer to embed due to the nature of the change. Whereas phases 1 and 2 focus internally on the finance function, phase 3 will enable the finance function to deliver a more effective service to the business. For example: • Use of self-serve functionality in budget forecasting across IUK • Upskilling staff (both internal and external to finance), embedding

culture of process adherence and standardisation

Phase 3: – Cultural change and embedding the processes

• There will be greater confidence across the team and organisation about how to use Workday,

• Finance processes will be streamlined and efficient, with staff able to focus effort on value-adding activities rather than manual processing.

• Strategic insights to the business will be supported through enhanced business partnering capabilities.

• Forecasting will be accurate, with variances, risks and opportunities well understood and reported on effectively. This will provide assurance to BEIS and UKRI on forecast accuracy.

• The business will own/be accountable for the figures, assisted by self-serve capability.

End state:

Thank you

the future is here. disruption is happening. how must ... · stays ahead of technology and masters...

Documents