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IBM Financial Management Consulting Services

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As organizations grow increasingly complex, CFOs are having difficulty delivering information they don’t have.

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IBM Financial Management Consulting Services

  1. 1. IBM Global Business Services Financial Management Financial Management Consulting Services
  2. 2. Confronting globalization, complexity and risk Chief financial officers (CFOs) are in a highly visible, highly and siloed information. The difficulty in aggregating data and influential position. They’re not just keeping the books — leveraging it successfully, in turn, inhibits CFOs from adequately they’re architecting change, influencing strategy and driving estimating strategic and operational risks, leaving many unpre- business value for the larger enterprise. CFOs have always pared to address rapidly changing regulatory, geopolitical and been the stewards of financial and business data for the economic factors. In addition to fragmentation-related chal- enterprise, but now they’ve got to do more — they must lenges, CFOs also struggle to find and retain professionals who leverage this critical data to deliver insight into business have a balance of the advanced business and technical skills performance, risk and growth. And it’s not easy. (transactional knowledge and the ability to drive efficiency) as well as soft skills (critical thinking skills for driving growth, for Organizations are increasingly complex, with different geog- example) that today’s finance organizations demand. raphies, technologies and lines of business to navigate. And fragmented processes, systems and data make it difficult to Plus, CFOs have to balance newer demands with their more gather the business information that CFOs are tasked with traditional responsibilities. Most finance organizations still need delivering. Many of the challenges stem from business changes, to devote almost half of their time to transaction processing. such as inadequately integrated acquisitions, rapid expan- And the continued focus on regulatory issues requires the sion into new marketplaces and business model innovation, investment of significant resources to remain compliant. that leave companies with disjointed, localized processes 2
  3. 3. It’s no wonder that the majority of finance organizations haven’t The IBM FInanCe organIzaTIon been able to successfully transform from a transactionally TranSForMaTIon SuCCeSS focused model to a strategic model that is globally integrated and capable of flexing based on changing business drivers. In 1994, the IBM finance organization, which consisted According to the IBM Global CFO Study 2008, today’s most of a decentralized structure with individual offices using successful finance organizations have an enterprisewide disparate financial systems, was inefficient and not seen as common data definition, a standard chart of accounts (COA), a significant source of value to the company. But by trans- standard common processes and globally mandated standards. forming into an IFO over the years, the organization has In fact, finance organizations built around these four criteria realized incremental quantitative and qualitative results: typically experience revenue growth rates double those of • Consolidated from 67 to 6 data centers industry peers.1 • Reduced the number of key applications from 145 to 44 By adopting enterprisewide process and data standards, finance organizations can begin to simplify enabling systems • Cut the days for accounting to close by 62 percent and delivery models, and establish governance to create an • Established a common chart of accounts integrated finance organization (IFO) for greater efficiency. An IFO, equipped with the right enabling technologies and • Increased data consistency, integrity and reliability delivery models, can deploy and execute finance activities • Improved ability to accommodate changes through more quickly. Moreover, enhanced flexibility makes it easier greater business flexibility to adjust the business to marketplace drivers.2 • Gained the ability to provide data more quickly to those who need it “When everything is connected … • Enabled finance to focus on analysis and business work flows to the places where it issues by integrating financial and nonfinancial data can be done best.”3 — Sam Palmisano, CEO, IBM Corporation The IBM Global CFO Study 2008 reveals that moving toward the development of an IFO is a critical step for companies that want to transform passive data into business insight that can be used to respond quickly to business needs. To create highly effective IFOs, organizations need to start by establishing global stan- dards through process ownership and by simplifying enabling systems and organizational structures to facilitate faster deployment and execution of financial activities. 3
  4. 4. Financial management consulting from IBM It’s a tall order. CFOs have to drive efficiency and effectiveness a valued business partner within the enterprise. The specific in delivering insight while maintaining regulatory compliance and services IBM offers include finance function and blueprint, remaining as stringent as ever in their traditional bookkeeping finance diagnostic, strategic profit improvement/cost effective- activities. But they don’t have to struggle to do so alone. IBM ness and rationalization, and finance process benchmarking/ offers comprehensive financial consulting services to help CFOs APQC alliance. face these challenges and deliver business value. A trusted ally Finance operations improvement services — Designed to to CFOs worldwide, IBM has the capabilities needed to trans- help finance organizations execute their strategic plans. IBM form fragmented finance organizations into flexible, agile IFOs can help redesign key business and financial processes, that are better prepared for helping businesses thrive in the restructure organizations to improve overall efficiency and unpredictable global marketplace. IBM delivers comprehensive responsiveness, and more efficiently manage tasks that don’t solutions— including strategy, process, applications, infrastruc- add value through outsourcing and shared services. Some of ture and technology — through its offerings in critical financial the services offered include finance process design and reen- management focus areas. Solutions that help CFOs address gineering, finance organization design, skills and competency new risks and challenges, drive enterprisewide profit improve- rationalization, shared services design and implementation, ment and increase shareholder value. and financial process outsourcing implementation. Finance transformation Business performance management In addition to managing risks, increasing organizational agility, Our business performance management services are focused and tackling organizational skill and leadership deficiencies, on helping finance organizations leverage their information CFOs must focus on cost cutting and profit improvement. assets to support and enhance business planning and per- Finance transformation services, which include finance strategy formance. IBM can help CFOs unleash the power of their and finance operations improvement, are at the core of the IBM financial and enterprise information and business intelligence financial management solution set. These services combine by implementing the processes and systems needed to inte- expertise, process transformation approaches and technology grate information across the entire value chain. innovation to help hasten the journey to becoming an IFO, while Using our holistic strategy for design and implementation delivering cost savings and helping to reduce risks. that encompasses people, process, information content and Finance strategy services — Designed to help develop a technology transformation, IBM can help link performance vision, strategy and blueprint to support the changing busi- measures with strategy and apply these measures in a timely, ness needs of the enterprise. Using diagnostic and strategic cost-effective manner, while delivering role-based intelligence tools, IBM can identify process gaps versus leading industry to executives, managers and information consumers. For practices. We can then readily identify business components example, IBM can implement business performance manage- that can be standardized, centralized or even outsourced. Our ment solutions that provide access to real-time information approach helps CFOs define the optimum finance operating to improve decision making. We can also help organizations model and identify potential improvement. Drawing upon its integrate information to gain further insight into operational financial management expertise, industry-specific knowledge profitability and return on capital based on product, customer and practical implementation know-how, IBM can help trans- and region. And IBM can leverage tools and applications to form a finance organization’s capabilities so that it becomes perform a “what if” analysis and scenario planning to derive forward-looking information to support plans and forecasts. 4
  5. 5. Business risk management risk management; Sarbanes-Oxley process design and tools; IBM can help CFOs identify, assess, manage and optimize Basel II gap analysis and enablement; governance, risk and business risks, taking a comprehensive approach that compliance (GRC); enterprise risk management strategy integrates risk and compliance management into the overall execution; and risk-driven performance management. business strategy and execution. Our framework is designed Finance enterprise applications to help finance organizations evolve from baseline compliance Our finance enterprise applications services are designed to to an optimized risk management model in which the value of help finance organizations design, architect, select, imple- risk management far outweighs the costs. Effective risk man- ment, integrate, manage and realize the benefits of technology agement leads to numerous benefits, including lower cost of solutions across the enterprise. IBM maintains strong vendor compliance, improved stakeholder confidence, lower cost of relationships — in fact, we’re a repeated recipient of the SAP capital and loss avoidance. Plus, optimized risk management Award of Excellence and the Oracle Partner Award. Working provides increased transparency into business operations, closely with alliance partners, IBM can meet an organization’s which can result in enhanced decision-making capabilities core financial systems needs, including the implementation of and proactive risk mitigation; faster, more robust processes; new enterprise resource planning (ERP) applications as well and streamlined reporting. as shared services and outsourcing solutions to improve the IBM offers comprehensive services across the risk manage- effectiveness and lower the cost of operations. ment maturity continuum. Services include marketplace risk analysis and modeling; credit risk management; operational 5
  6. 6. Client success stories Large equipment manufacturer A leading manufacturer of construction equipment was strug- gling with an inefficient supply chain. Costs were increasing as fast as revenues, limiting business growth. The company was running multiple financial reporting systems that required the administration of more than 11,000 controls companywide. The chances of miscalculations were high, and the existing approach created significant hurdles for managing GRC. The company sought a way to improve supply chain processes and reduce risks. It created a long-term vision for its finance department with critical success factors that included faster, more accurate reporting. IBM Global Business Services used a combination of IBM solutions and methods, including the IBM Ascendant® meth- odology, to implement SAP applications, including the SAP solution for GRC. To ensure that the company’s Six Sigma methodology was aligned with the Ascendant methodology, IBM conducted several workshops. The project involved a combination of onshore and offshore resources. With IBM’s help, the company reduced its number of general ledger systems from more than 30 to just one and reduced 300 feeder systems to approximately 50. It also expects to lessen the number of controls to approximately 500. Now the company can obtain a single version of the truth for both internal and external reporting. The ability to forecast more accurately resulted in less product allocation, and the com- pany has achieved significant cost savings through greater process efficiencies. 6
  7. 7. Aerospace company Financial institution A leading aerospace company had a vision to make finance Wrestling with poor overall bank efficiency and a high cost and accounting a true partner in the business by shifting focus of finance, a North American financial institution needed to to value-added activities. Recognizing that existing financial transform its finance organization. The institution used applica- processes and systems did not support the strategic objectives, tions from multiple vendors, and report production required the company turned to IBM for help with the transformation. labor-intensive manual processing and restatement process- ing. Overall, the company’s approach and inefficient systems IBM worked with the company to identify the strategic capabili- architecture inhibited it from adapting to changing market- ties of its finance organization and examined how to streamline, place drivers quickly and provided multiple versions of the simplify or standardize supporting processes for key capabili- “financial truth.” ties. IBM compared the company’s practices and capabilities with best practices in accounting, transaction processing, close IBM Global Business Services used the IBM finance transfor- and consolidation, reporting and analytics, and other key areas. mation strategy methodology and finance component business Based on the results, IBM identified and prioritized improve- modeling techniques to develop a vision for a first-class finance ment opportunities and developed a business case for moving organization with a flexible architecture, efficient processes forward. It also guided the development and implementation and strong governance. IBM provided the institution with a of new processes and systems to reduce the time and risk three-year roadmap to achieve an enterprisewide target-state involved in solution deployment. Overall, the company simpli- financial system architecture, as well as a business case sup- fied and standardized six work streams, making it easier to porting roadmap investments with detailed cost and resource partner with the business: estimates. The project identified millions of dollars in potential finance savings. • Rationalized its chart of accounts, reducing it from more than 15,000 to less than 1,000 Major United States government department • Moved from five consolidation systems to a single level Lacking a centralized financial system, a large U.S. govern- of consolidation ment department was relying on disparate legacy solutions to manage, process and track more than 150 programs and • Reduced close time from 12 days to 5 by standardizing 100,000 individual grants. As the systems became increas- and monitoring compliance and close procedures ingly difficult and costly to maintain, the department sought an • Reduced the use of spreadsheets for statutory data updated and integrated solution. gathering by 75 percent by implementing common tools for data capture • Consolidated more than 30 discrete general ledgers into one across the enterprise 7
  8. 8. IBM Global Business Services integrated virtually all administrative and program © Copyright IBM Corporation 2008 processes and systems within the department, implementing a new financial man- IBM Global Services Route 100 agement systems software (FMSS) Oracle Financials solution to provide centralized Somers, NY 10589 management of all programs and grants. Over the course of the project, the IBM U.S.A. team provided project management, process analysis, fit-gap analysis, application Produced in the United States of America June 2008 configuration, interface design and development, data cleanup, data conversion, All Rights Reserved testing, training, cutover planning and postimplementation support. IBM, the IBM logo, and ibm.com are trademarks of International Business Machines Corporation in the The IBM solution has enabled the client to significantly reduce its maintenance and United States, other countries, or both. If these and operational costs, leverage timely and more accurate financial information, and other IBM trademarked terms are marked on their first occurrence in this information with a trademark sym- enhance its data collection and reporting capabilities. Plus, the integrated solution bol (® or ™), these symbols indicate U.S. registered or strengthens and enforces the department’s internal controls and policies for administer- common law trademarks owned by IBM at the time this information was published. Such trademarks ing billions of dollars in government funds. may also be registered or common law trademarks in other countries. A current list of IBM trademarks is available on the Web at “Copyright and trademark Why IBM? information” at ibm.com/legal/copytrade.shtml Whether a finance organization needs guidance in planning its business strategy, Other company, product, or service names may be acquiring the tools to measure performance more accurately or becoming an IFO to trademarks or service marks of others. transform its operations, IBM can help. IBM Global Business Services is one of the References in this publication to IBM products or services do not imply that IBM intends to make them world’s largest consulting services organizations, with expertise spanning a full range available in all countries in which IBM operates. of key business issues in virtually every country. And with more than 4,100 financial management resources located around the globe, IBM has a strong record of serving 1, 2 Balancing Risk and Performance with an Integrated as a trusted adviser to CFOs and finance leaders. Finance Organization: The Global CFO Study 2008, IBM Global Business Services, October 2007. Our financial management services experience is vast. But our approach truly sets 3 Palmisano, Samuel J., “Leadership, Trust and the us apart. IBM has a real commitment to collaborating closely with CFOs to help them Globally Integrated Enterprise,” Executives’ Club of Chicago, April 12, 2007, http://www.ibm.com/ibm/ manage complexity, balance risk and drive profitable growth. We bring custom-tailored sjp/04_12_2007.html. multidisciplinary teams to each engagement, offering a future-oriented perspective combined with here-and-now practicality. When it comes to unlocking value across the enterprise, we’re the experts. For more information To learn more about IBM Global Business Services financial management consulting, contact your IBM representative or visit: ibm.com/gbs/finmgmt GBB03022-USEN-01

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