The technologies needed to reimagine finance are here and they will only get better. SINGAPORE, Nov. 27, 2020 — SYSPRO has today announced new research, which reveals that the role of CFO 4.0 within the manufacturing sector will be crucial as the industry shifts towards increased digital transformation in the ‘new normal’. Michael Bender: When we started talking with a lot of companies about digital transformations three or four years ago, we used to say, “OK. Now Qualcomm’s chief financial officer, Palkhiwala points to one move during that time that’s often overlooked in the San Diego company’s recent, 5G-led resurgence — the decision to buy back $30 billion of its own stock at an average price of $65 per share after its proposed acquisition of NXP Semiconductors fell apart. Number five is getting the investor story right. Qualcomm won an appeal in an antitrust case brought by U.S. Federal Trade Commission. CFO 3.0: Beyond finance To fully understand this shift from CFO 1.0 to CFO 3.0, Sage commissioned a study, CFO 3.0 – Digital transformation beyond financial management, that helped … While continuing to serve as the financial face of their organization, CFOs are evolving to become digital transformation leaders within their companies, leaders that can bring an international perspective, a strong understanding of operations, and the ability to … You have to figure out how to do that scaling. That would then give the suppliers the ability to better predict their own inventories and manufacturing so all along the chain you get savings that are able to offset what the consumer wants. They embrace new techniques, such as predictive analytics, to drive digital transformation to new frontiers of its capabilities. Michael Bender: I think that digital and now analytics are like twins. A: As you know during that process, we did reduce our operating expenses significantly. There are several reasons why CFOs must strive to play a leading role in their company’s digital transformation. According to Sage’s recently commissioned CFO 3.0 research, based on a survey of more than 300 South African financial decision-makers and CFOs, the role of the CFO has changed dramatically in recent years.Almost all the … Fortunately, what has happened through COVID is a lot of the products and technology that we make have become even more important. You see that most classically in the retail world with the emergence of Amazon dislocating on multiple categories relative to the bricks-and-mortar retailers, and the bricks-and-mortar retailers trying to find ways to fight back. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more, Learn what it means for you, and meet the people who create it, Inspire, empower, and sustain action that leads to the economic development of Black communities across the globe, In this episode of the Inside the Strategy Room podcast, senior partner Michael Bender sits down with Sean Brown to tease out the real meaning of digital-analytics transformations. I think we were able to do that. 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So, some of the benefits that we would have had through the NXP acquisition, we were able to achieve through organic growth. Over the many years I have been writing this column, the clear No. Executive Programme in Digital Transformation Associate for Technical and Student Support: Times Professional Learning, A Division of Bennett, Coleman & Co. Ltd. ServiceNow CEO says digital transformation is the 'opportunity of this generation' Published Mon, Dec 7 2020 8:09 PM EST Updated Tue, Dec 8 2020 1:19 PM EST. That is the fourth of the four horsemen, death, and it’s all about getting real value capture for your company. I had a discussion earlier today with a CFO working in a major oil-and-gas company. Something went wrong. Michael Bender is a senior partner in McKinsey’s Chicago office, and Sean Brown is McKinsey’s global director of communications for strategy and corporate finance and is based in the Boston office. We also know that individual companies are getting radically reshaped by those changes and disruptions in the industries. This is something new. Use minimal essential Fostering a culture of innovation. While in school, however, Palkhiwala discovered he enjoyed finance and business more. Read more. What we’re seeing is the need for a much more rapid organizational methodology. McKinsey Insights - Get our latest thinking on your iPhone, iPad, or Android device. The first and most important one that we talked about earlier is to make sure the corporate strategy is heavily infused with the digital-analytics strategy, and that the digital-analytics strategy is central to the corporate or business strategy. Q: How do you view the inability to get approval for the NXP acquisition? Michael Bender: The first failure mode is “famine.” What we mean by that is poor resource allocation. Sean Brown: How does this impact a CFO? The study, CFO 3.0 – Digital transformation beyond financial management, spoke to over 300 South Africa-based senior financial decision-makers to gain insight into these trends. We obviously have a lot of our customers in that part of the world, and we have significant development centers as well. A lot of the technology for big companies was built decades ago in an old legacy-system model that’s very hard to adjust. (Subscribe to the series on Apple Podcasts or GooglePlay.). It also means figuring out whether there are new business models that you’re going to want to introduce. So there was a lot of time spent on planning cash flow and making sure that if things got really bad, we could sustain the company and support the customers and employees through the process. The second is getting the 200 pilots organized into maybe ten bigger themes—so there’s a big theme on predictive maintenance, there’s a big theme on direct consumer marketing, there’s a big theme on using predictive analytics in the supply chain, and there’s a big theme on inventory transparency across the supply chain. The second strategy was focusing on adjacent markets that were demanding technology from mobile. ... John Murphy, the company’s still-new chief financial officer, joined Adobe in … Executives must know how to make the right moves to develop the modern workforce their organization needs to achieve strategic objectives and gain competitive advantage in the evolving digital … It’s good to suspect they need a different direct consumer model. It’s crunch time. Digital is the radical reshaping of industries, companies, and society through the use of advanced technologies and advanced data analytics. Sean Brown: You’ve talked about these four horsemen of digital failure. Learn more from our series of client case studies on digital finance transformation in action. Four or five years ago, before the rapid evolution in advanced analytics that has occurred over the last two to three years, we spent a lot of time in certain industries focusing on digitizing processes. Get U-T Business in your inbox on Mondays. It looks like “war” is the one around organization. Q: How did the company manage through the turmoil of the past couple of years? “[…] more progressive CFOs are asking more provocative … The CFO used to keep a tight rein over the CIO but now – in the age of digital transformation – there's now a more nuanced view of … And it inked a new patent license with Huawei after more than a year of tricky negotiations amid trade tensions between the U.S. and China. Finally, there’s the pesky little question of, “Do you get any money out of this?” What a lot of organizations have done is, they’ve piloted a bunch of activities, they’ve introduced some digital, they’ve got a new website, and it’s all kind of feeling more digital, but they’re not actually getting any dollars, they’re not getting that much more sales, and they’re not reducing costs. It could be all of those things. That could be creating more stage-gated funding processes, so if you think this is going to be a good idea, you get it going; if the pilot works, you then fund it to scale; if the pilot doesn’t work, you defund it. Subscribe to email newsletters from the Union-Tribune about news, sports, business, opinion and more. What is the full potential in my company from digital analytics? Digital transformation in finance is reshaping the role of the CFO like never before. One percent of the company was working on those big issues that were obviously foundational. Finally, six, there’s a lead-by-example issue here. The typical organization has a very linear process: I set a strategy, I set some incentives, I use the incentives to figure out how I might use technology, I come up with the business requirements and specs, and then the technology delivers something. Tyler Clifford @_TylerTheTyler_. Read about the importance of digital transformation, connecting to third party systems and the role of the CFO in our whitepaper on digital transformation. BearingPoint conducted a study to understand where European companies stand in the digital transformation of the CFO … These are all roles the CFO is central to in most big companies that I’ve seen working on digital analytics. And then finally on the organizational side, there’s a whole set of adjustments to the finance process—again, stage-gating, keeping track of big technology projects, funding the best things going forward, knowing where the true north in value is. Tom Relihan Nov 26, 2018. The stock is up 72 percent so far this year as past controversies fade and the adoption of 5G wireless technologies heats up. Sean Brown: From McKinsey’s Strategy and Corporate Finance Practice, I’m Sean Brown. For an organization to move forward on digital analytics, you’ve got to have very technology-savvy senior leaders, and you’ve got to have incredibly business-savvy technologists, and that becomes a blockage in many organizations. Download this important research for original insight into the evolution of the CFO. Because we all love a pilot—doesn’t have much commitment, you go and do some stuff, you put a team together, they pilot away. Qualcomm’s shares ended trading Friday at $147.42. Here in Europe, there’s a lot of discussion around whether or not there needs to be more data privacy or control over the big internet giants; these things are all important. “We invested in ourselves,” said Palkhiwala. He intends to be careful about what things get transformed, though. All the cars became connected. The Internet of Things is a great example. Why CFOs must drive digital transformation. By the time you’d gotten all that done, you’d be two-and-a-half years in, and then you’d start getting tired because the coding took too long. In your presentation, you highlighted “four horsemen” of failing digital and analytics transformations. There’s some critical ones here that we’ve talked about before. Some have done the reverse; they spend too much time building business models but aren’t reinventing the core. Sean Brown: Michael, thanks for joining us today. In addition, the CFO designs the governance for the transformation, aiming to provide insight into the development and maturity of projects and promote accountability. Digital upends old models. hereLearn more about cookies, Opens in new Digital transformation and the 4 th Industrial Revolution are substantially changing the CFO role within an organization. The role of today’s CFO is changing. ServiceNow CEO says digital transformation is the 'opportunity of this generation' Published Mon, Dec 7 2020 8:09 PM EST Updated Tue, Dec 8 2020 1:19 PM EST. The CFO used to keep a tight rein over the CIO but now – in the age of digital transformation – there's now a more nuanced view of who controls IT spending. There’s a fourth topic that CFOs are increasingly playing a role in. How do you know you’re spending the right amount on technology or new talent? What that leads to is two main pieces. I know of one great example where a major retailer had this very nice data store that gave their consumer-goods suppliers good visibility into what was selling in which places. 1 ranked dispute between homeowners and their associations regards records and information access. Driving Digital Transformation of Finance Function In close collaboration with I.T., finance can drive digital transformation. The CFO function faces changing requirements created by digitalization. For many CFOs, COVID-19 has heightened the importance of agility and has proven that digital transformation is more than a nice to have—it’s necessary. Privacy PolicyTerms of ServiceSign Up For Our Newsletters, Copyright © 2020, The San Diego Union-Tribune |, Akash Palkhiwala, CFO of Qualcomm, says COVID-19 has accelerated the adoption of digital technology. Whether that buzzword is robotic process automation, shared service, self-service in the finance function, ubiquitous business information, automation at scale, somehow the CFO needs to lead by example and think through how digital analytics is going to change the finance function. We also covered the nature of digital transformations more generally, how digital and analytics go hand in hand, and the challenges companies can face when working to adopt both. They also talk through the role CFOs can take on to drive successful change efforts. Or can you augment online channels with physical pickup in ways that change the consumer experience and make it easier for the consumers and make it cheaper for the retailer to provide their services? In the original form of company management, you’d have a strategic plan which you’d set each year. But they did an incredible job of focusing the remaining 99 percent on executing on the technology and the roadmap. Q: Qualcomm’s employment increased from 37,000 globally to 41,000 this year. So those are the six things we see that CFOs need to do. Please try again later. In fact, the power of analytics and the volume of data available has really accelerated over the last two to four years, and so many organizations are two or three years behind on their analytics journey than they are in their digital journey. Automotive is a great example. You need all of these things to make this work, and even if you get the strategy right, you’ve got two major blockers: technology modernization and the agile organization that’s going to support digital change. We’re looking towards the future with eight predictions for the finance function of 2025. When we did analysts day last year, we set targets across our businesses, both financial and operational. Press enter to select and open the results on a new page. Palkhiwala, 45, joined Qualcomm in 2001 after stints in private equity and as an analyst with KeyBank. We’re increasingly convinced that the digital-and-analytics-transformation plan has to be owned by the full executive team. Why It Matters. When asked about areas of … The study, CFO 3.0 – Digital transformation beyond financial management, spoke to over 300 South Africa-based senior financial decision-makers to gain insight into these trends. This allows the CFO and their team to “invest” in and encourage the right digital business models and transformation initiatives. I was part of the 99 percent. Today, we’re joined by Michael Bender, a senior partner in our Chicago office and the global coleader of McKinsey Digital and Analytics. That gives him an insider’s perspective of how the company maneuvered through a tumultuous three-year stretch where it fought off antitrust lawsuits, a hostile takeover attempt and the collapse of a major acquisition. By that I mean, in order to do this well, one of the organizational challenges is moving away from the very rigid year-on-year planning cycle and everyone trying to move opex up by a nickel and not getting clear on how the capex/opex trade-off and the technology spend versus operational spend is going to change. A digital strategy is understanding how technology is going to change your business, thinking about big disruptions, thinking about new businesses you might build, and thinking about how technology or analytics is going to change your business processes. Because technology in ops and digital and analytics is becoming so important to the future of most organizations, it turns out that this is not just the CIO keeping track of the projects, and it’s not just the CFO keeps track of the dollars. Finally, how do you engage the front line? According to McKinsey leaders and senior partners Tanguy Catlin and Kate Smaje, CFOs can help operations, marketing, and other divisions get on the same page, and be better aligned when it comes to their definition of digital transformation. “CIOs have a natural advantage today because ‘digital’ is at the core of any transformation,” says Daniel Sanchez Reina , Senior Director Analyst, Gartner. Select topics and stay current with our latest insights. Citizens Bank is in the “early innings” of a digital transformation, says CFO John Woods. A lot of governments are trying to think through how technology changes the way they serve their citizenry. Read our latest thinking on CFO digital transformations. In B2B, a lot of companies are thinking about backward integration into other parts of the supply chain in order to continue to reduce their costs. Do a digital strategy.” What’s a digital strategy? “We bet big, and if you look at our stock price today, that turned out to be an incredible investment, probably better than any acquisition we could have done.”. BearingPoint’s CFO 4.0 Study finds that CFO functions in Finnish companies are still halfway from the ideal in terms of digital maturity, but they are keen to invest more in digital development in the upcoming years. We delivered on all of them. Apply Now Programme Overview Executive Programme in Digital Transformation provides you with the complete understanding of the key elements that need to be build and transformed to undergo the digital transformation … Michael Bender: It’s increasingly clear that digital and analytics are complementary. Digital caught everyone’s attention in a very dramatic way four or five years ago, and most organizations have done a pretty dang good job at working through the digital opportunities. And honestly that is what makes the job fun for me.”. It will show you how technology such as artificial … Our report CFO 3.0: Digital transformation beyond financial management, preparing the finance function in the wake of COVID-19, based on a survey of over 300 South African senior financial decision makers, provides unique insight into the CFO’s evolving role in driving digital transformation. In this strategic-planning model, the CFO has a real role in incorporating the digital-analytics thinking into the corporate strategy. That doesn’t work anymore, because a lot of these digital business-building efforts, and a lot of the digital change efforts, require an entirely different cadence of change and entirely different skill sets. A: Qualcomm is one of those places where you can make your role stretch in multiple directions based on what you like and where you can contribute. Digital transformation in finance is reshaping the role of the CFO like never before. Exploiting Disruption in a Digital World (LBS) This programme is for senior executives with at least … The digital finance organization remains an emerging concept in many organizations, and CFOs are still at one remove from the center of digital-transformation efforts, even though they own and manage … Firstly, the CFO has the best visibility of many critical data flows — not just finance information, but also sales, supply chain, marketing and business … You may occasionally receive promotional content from the San Diego Union-Tribune. He spoke with the Union-Tribune last week about the company’s rebound, emerging opportunities with 5G, managing through COVID-19 and hiring plans in San Diego and beyond. Don’t be alarmed, San Diego scientists say, So far, reinfections have been rare and mostly mild. 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