A presentation by IBM on the topic of "The Future Of Finance" examining emerging trends, and how accountants can to prepare for the transition from "running the numbers" to being value-adding partners to the business.

1. 1
Emerging Technologies
The Future of Finance
Mike Sadler
February 2019

2. 2
Mike Sadler, an Offering Manager for IBM, has worked in
the Enterprise Performance Management industry for
nearly 2 decades, helping customers worldwide understand
how
IBM Planning Analytics can reduce costs, improve
accuracy and drive performance by implementing proven
practices that deliver speed, agility and foresight.
With a lens on today's digital-savvy buyers, Mike is working
to deliver the frictionless discover-try-buy-adopt experience
that customers have come to expect.
www.linkedin.com/in/michael-k-sadler/
twitter.com/analytics_mike
Mike Sadler

3. Setting The Scene
Emerging Technologies - The Future Of Finance

4. 4
The future of Finance and Accounting…
… is linked to the increasing pace of change brought about by technology. Much of what
has been done manually for 100’s of years has been eroded in the last century.
Alongside this was the growth of accounting
software and enterprise reporting systems
Now we see some significant enablers which
will further disrupt the mechanics of the
accounting profession.

5. 5
New challenges are driving change
Performance
pressures and
acquisitions
Geopolitical
factor
Digital
disruption
Amazon is a very real example of the impact of digital
disruption on consumers and our clients in this sector,
increasing awareness at senior levels that “digital”
can be a sword that cuts both ways.
Many clients are experiencing political and social
pressure related to types and numbers of jobs
onshore. This at a time when performance pressure is
intense for senior leaders.
The impact of 3G Capital, Pershing Square, Carl Icahn
(and others) illustrates performance pressure facing
our clients. Lower growth is leading to increased
interest in “pay as you go” options.
Carl
Icahn

6. 6
Why is this important?
Benefits
Reducing
Costs1 Better
Information2 Better
Outcomes3
Tangible benefits for your organisation

7. 7
Why is this important?
Benefits
Tangible benefits for your YOU

8. The Challenges
Emerging Technologies - The Future Of Finance

9. 9
The changing role of the CFO
The CFO mission to uncover the unknown
Applying analytics and cognitive computing for efficiency and insight
https://www-01.ibm.com/common/ssi/cgi-bin/ssialias?htmlfid=GBE03781USEN&
Tempestuous times. Disruption of the status
quo. Huge turbulence. Industry convergence.
New competitors.
These trends highlighted in IBM’s latest C-suite
Study continue to challenge enterprises worldwide.
Over 80% of Finance teams expect to use analytics
to drive performance, manage risk/compliance and
optimize processes within two years
About half of Finance organizations plan to
implement cognitive computing within the next two
years and nearly two-thirds within five years

10. 10
Many CFOs feel their organizations are not sufficiently ready for the
disruptive market trends of the cognitive era
Largest gaps between importance and effectiveness
Drive integration of information across enterprise
Develop talent in the finance organization
Identify and track new revenue growth
opportunities
Provide input into enterprise strategy
Optimize planning, budgeting and forecasting
75%47%
86%60%
63%38%
86%67%
81%62%
Effectiveness Importance
19%
gap
19%
gap
25%
gap
26%
gap
28%
gap
Source: IBM Redefining CFO Performance

11. 11
Will pressurize companies to add more finance jobs
in market. Finance roles will continue to evolve
rapidly and skills shortages will increase
There are 5 key challenges Finance teams face:
Geo political reality and risk
mitigation1
For finance functions i.e. collections and credit
management.These functions will find it increasingly
difficult to attract/retain human talent
Transactions processing
standardization increases2
Trusted partnerships become a defining part of a
company’s ecosystem. All involved need to solve this
to make the ecosystem more efficient
Trust and Visibility3
Driving deeper insights from across all data sources,
(structured or unstructured) gives a competitive
advantage for companies
Deeper insights for Finance
Organizations will demand more, and the Finance
function needs to adjust, for the leap forward that
technology enables
Business outcomes5
4

12. Outlook
Emerging Technologies - The Future Of Finance

13. 13
1. Blockchain will drive the complete re-invention of all finance processes and
and eliminate manual intervention in corporate owned ERPs and silo systems
Prediction for 2025: Finance megatrends
Finance Digital Reinvention – the new enablers

14. 14
Business terms
embedded in transaction
database & executed with
transactions
Smart
contract
All parties agree to
network verified
transaction
Shared
ledger
Ensuring appropriate
visibility; transactions are
secure, authenticated &
verifiable
Permissions
Consensus
Append-only distributed
system of record shared
across business network
Blockchain for business reduces process friction
“What the internet did for communications…blockchain will do for trusted transactions.” – Ginny Rometty, IBM CEO
Saves
Time
Transaction
time from
days to near
instantaneous
Removes
Cost
Overheads
and cost
intermediaries
Reduces
Risk
Tampering,
fraud & cyber
crime
Blockchain for Accounts Payable
Leverages Hyperledger technology
to link ecosystem of buyers and
sellers and create Smart Contracts
to process transactions with one
version of the truth

15. 15
1. Blockchain will drive the complete re-invention of all finance processes and
and eliminate manual intervention in corporate owned ERPs and silo systems
2. Robotic automation will be the norm, replacing most repetitive work in finance,
finance, which can be largely automated with cognitive technologies, like
Watson.
Prediction for 2025: Finance megatrends
Finance Digital Reinvention – the new enablers

16. 16
Robotic Cognitive
Among the most effective Finance organizations, over 80 percent said it
will play an important role
Transformation through cognitive technologies
Programmed
Rule-based, logic-driven
and dependent on
organized information
Probabilistic
They learn systematically,
not dependent on rules,
and handle disparate and
varied data.
Watson Order to Cash Apps
Provides guided assistance, using
natural language processing and
next best action
recommendations, to offer
superior customer engagement,
enhance expertise and drive
improved working capital
Understand
Reason
Learn
Interact
Map
Model
Automate

17. 17
1. Blockchain will drive the complete re-invention of all finance processes and
and eliminate manual intervention in corporate owned ERPs and silo systems
2. Robotic automation will be the norm, replacing most repetitive work in finance,
finance, which can be largely automated with cognitive technologies, like
Watson.
3. Transactional offshore delivery centres will decline and outsourcers will move
to a Finance as a Service commercial model as automated services replace the
people based delivery model
4. Data will increasingly be a competitive differentiator – the new black gold.
5. Role of finance is enhanced as it moves to trusted advisor and analyst
Prediction for 2025: Finance megatrends
Finance Digital Reinvention – the new enablers

18. 18
Increased focus on ‘Insights to Outcomes’ with
Analytics and Cognitive services
Scenario Modeling
& Simulation
Prescriptive Modeling
Descriptive Reporting
& Contribution
Predictive Modeling
Data Foundations
Cognitive Computing
 Integrating data sources
 Master Data Management
 Data quality
 Data governance
 Agree management
dashboards and key
performance indicators (KPIs)
 Facilitating access to
insights
 A data driven culture
 Forecasting and
Optimization
 Examples
-Spend Analytics
-Payment Terms
Optimization
 Actionable insights
 Testing hypotheses
 Gaining business
stakeholder support
and adoption
-Fraud analytics
-Forecasting
 Embedding analytics into
decision-making processes
 Tracking ROI of data driven
programs.
-Collection Optimization
-Disputes Management
 Elevating experience
for maximal business
benefits
 Serving up real-time
insight at key points of
engagement
-Cognitive agent
assist
-Translation assist
 Single source of ‘the
truth’
 Managed contribution
 Structured KPIs
 Compliance analytics
 Process analytics –
AR, AP, Customer
metrics
-AR ageing reports
-LOB key metrics
Optimizing Costs
Accelerating Sales
Transforming the
Business Model
Innovation for
Differentiation
Managing Risk
Enhancing Customer
Experience
Time 1 to 5+ years depending on organizational maturity and culture

19. Getting Started
Emerging Technologies - The Future Of Finance

20. 20
The trusty spreadsheet

21. 21
We love Spreadsheets
o We live our lives in Excel
o Everyone knows how to use a spreadsheet
o They make perfect sense… (to the creator)
o Spreadsheets are a blank canvas of safety and
creativity
o Custom formatting, Charts, Formulas, Pivot Tables,
Reports, the list is endless!
Powerful, Flexible, Simple, Quick, “Free”, and Email-able

22. 22
Demo

23. 23

24. 24
Spreadsheets can catch you out!

25. 25
West Coast Mainline Franchise Bid (2012)
o Department of Transport deployed a new
financial model to assess bids
o The Laidlaw Report found mistakes had been
made in the model, which led to inconsistent
bids and incorrect comparisons / decisions
o Award to First Group removed
o Virgin Trains maintained the franchise whilst
the tender process was re-run
o Cost of mistake… £50M+
Sources:
http://blogs.mazars.com/the-model-auditor/files/2014/01/12-Modelling-Horror-Stories-and-Spreadsheet-Disasters-Mazars-UK.pdf
https://www.bbc.co.uk/news/uk-politics-21577826

26. 26
What are the danger signs for a spreadsheet
o Data, logic, and presentation are one in spreadsheets
• Unnecessary logic and data replication for the sake of presentation
• Data and formula do not live harmoniously side-by-side without protection
o Multi-dimensional problems expressed in a two dimensional space
becomes challenging
• Especially when people want their own way of viewing and manipulating the
o Cell references are not identifiable items…
• =C5*C6
o Importing data can be hard
o Sharing spreadsheets causes headaches

27. 27
Tools for multi-dimensional problems
o OLAP – Online Analytical Processing
• Dimensions, Cubes, Measures, Hierarchies
o Separates the data, logic, and presentation
o Analysis
• Slice, dice, and pivot
o Planning
• A Pivot Table with write-back!
o Building business rules
• Reference identifiable items and names in logic
IBM Planning Analytics (other options are available!)

28. 28
Demo

29. 29

30. 30

31. 31

32. 32

33. 33
Spreadsheets vs OLAP
Spreadsheet OLAP model
Data, logic, and
presentation
All in one, redundant, error
prone
Separate layers, flexible,
resilient to change
Viewing and manipulating
multi-dimensional data
Multiple sheets and blocks of
data (possibly multiple files!)
Dimensions and Cubes
Formulae =C5*C6 =‘Revenue’ * ‘Discount %’
Data import Difficult to go from columnar
to crosstab
Flexible, automatable, single
version of the truth
Sharing Evolved from an individual
productivity tool
Built with multi-user and
multi-role in mind

34. 34
What are the benefits
o Power users
o End users
o Infrastructure
o Relevant
o Accurate
o Fast
o Transparent
o Alignment
o Better Decisions
o Commitment
These benefits drive you towards best practices.
Reducing
Costs1 Better
Information2 Better
Outcomes3

35. Summary
Emerging Technologies - The Future Of Finance

36. 36
Impact on Accountants
o Increased automation / path to cognitive leads to
a lower demand for some finance activities.
o Partner with other business leaders and expand
roles outside traditional accounting to become
valued and trusted advisors.
CFO’s are increasingly moving outside of traditional ‘Finance’ roles
o Other accounting specialists remain in high
demand providing higher value / lower cost.
o Focus on data / analytics / enabling technologies /
adding value.

37. 37
Key Takeaways and Links
o Beginners guide to OLAP
• http://ibm.biz/Guide-To-OLAP
o IBM Planning AnalyticsTrial
• http://ibm.biz/CIMA-Future-Of-Finance
o The changing role of the CFO
• https://www-01.ibm.com/common/ssi/cgi-
bin/ssialias?htmlfid=GBE03781USEN&
o The Cognitive CFO
• https://www-01.ibm.com/common/ssi/cgi-
bin/ssialias?htmlfid=GBE03837USEN
o Blockchain
• https://www.ibm.com/blockchain
o Future of Finance – CIMA
• https://www.cimaglobal.com/future
o CIMAWhitepaper – Reinventing Finance
• https://www.cimaglobal.com/Documents/Future%20of%20Finance/f
uture-re-inventing-finance-for-a-digital-world.pdf
o Other CIMA reports:
• https://www.cgma.org/resources/reports/changing-competencies-
and-mindsets.html
• https://www.cgma.org/resources/reports/changing-shape-of-the-
finance-function.html
• https://www.cgma.org/resources/reports/changing-technology-and-
finance.html
• https://www.cgma.org/resources/reports/changing-role-and-
mandate-of-finance.html

38. Thank you!

39. 39
Acknowledgments, disclaimers and trademarks
© Copyright IBM Corporation 2019. All rights reserved.
The information contained in this publication is provided for informational purposes only. While efforts were made to verify the completeness and accuracy of the information contained in
this publication, it is provided AS IS without warranty of any kind, express or implied. In addition, this information is based on IBM’s current product plans and strategy, which are subject
to change by IBM without notice. IBM shall not be responsible for any damages arising out of the use of, or otherwise related to, this publication or any other materials. Nothing contained
in this publication is intended to, nor shall have the effect of, creating any warranties or representations from IBM or its suppliers or licensors, or altering the terms and conditions of the
applicable license agreement governing the use of IBM software.
References in this publication to IBM products, programs or services do not imply that they will be made available in all countries in which IBM operates. Product release dates and/or
capabilities referenced in this presentation may change at any time at IBM’s sole discretion based on market opportunities or other factors, and are not intended to be a commitment to
future product or feature availability in any way. Nothing contained in these materials is intended to, nor shall have the effect of, stating or implying that any activities undertaken by you
will result in any specific sales, revenue growth, savings or other results. All statements regarding IBM future direction and intent are subject to change or withdrawal without notice,
and represent goals and objectives only.
Information concerning non-IBM products and services was obtained from a supplier of those products and services. IBM has not tested these products or services and cannot confirm
the accuracy of performance, compatibility, or any other claims related to non-IBM products and services. Questions on the capabilities of non-IBM products and services should be
addressed to the supplier of those products and services.
All customer examples cited or described are presented as illustrations of the manner in which some customers have used IBM products and the results they may have achieved.
Actual environmental costs and performance characteristics may vary by customer and will vary depending on individual customer configurations and conditions. Nothing contained
in these materials is intended to, nor shall have the effect of, stating or implying that any activities undertaken by you will result in any specific sales, revenue growth or other results.
Prices are suggested U.S. list prices and are subject to change without notice. Starting price may not include a hard drive, operating system or other features. Contact your IBM
representative or Business Partner for the most current pricing in your geography.
IBM, the IBM logo, ibm.com, and other IBM products and services are trademarks or registered trademarks of International Business Machines Corporation in the United States, other
countries, or both. If these and other IBM trademarked terms are marked on their first occurrence in this information with a trademark symbol (® or ™), these symbols indicate U.S.
registered or common law trademarks owned by IBM at the time this information was published. Such trademarks 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 information" at ibm.com/legal/copytrade.shtml

40. 40
Notices and Disclaimers
Copyright © 2019 by International Business Machines Corporation (IBM). No part of this document may be reproduced or transmitted in any form without written permission
from IBM.
U.S. Government Users Restricted Rights - Use, duplication or disclosure restricted by GSA ADP Schedule Contract with IBM.
Information in these presentations (including information relating to products that have not yet been announced by IBM) has been reviewed for accuracy as of the date of
initial publication and could include unintentional technical or typographical errors. IBM shall have no responsibility to update this information. THIS DOCUMENT IS
DISTRIBUTED "AS IS" WITHOUT ANY WARRANTY, EITHER EXPRESS OR IMPLIED. IN NO EVENT SHALL IBM BE LIABLE FOR ANY DAMAGE ARISING FROM THE
USE OF THIS INFORMATION, INCLUDING BUT NOT LIMITED TO, LOSS OF DATA, BUSINESS INTERRUPTION, LOSS OF PROFIT OR LOSS OF OPPORTUNITY.
IBM products and services are warranted according to the terms and conditions of the agreements under which they are provided.
Any statements regarding IBM's future direction, intent or product plans are subject to change or withdrawal without notice.
Performance data contained herein was generally obtained in a controlled, isolated environments. Customer examples are presented as illustrations of how those customers
have used IBM products and the results they may have achieved. Actual performance, cost, savings or other results in other operating environments may vary.
References in this document to IBM products, programs, or services does not imply that IBM intends to make such products, programs or services available in all countries in
which IBM operates or does business.
Workshops, sessions and associated materials may have been prepared by independent session speakers, and do not necessarily reflect the views of IBM. All materials
and discussions are provided for informational purposes only, and are neither intended to, nor shall constitute legal or other guidance or advice to any individual participant or
their specific situation.
It is the customer’s responsibility to insure its own compliance with legal requirements and to obtain advice of competent legal counsel as to the identification and
interpretation of any relevant laws and regulatory requirements that may affect the customer’s business and any actions the customer may need to take to comply with such
laws. IBM does not provide legal advice or represent or warrant that its services or products will ensure that the customer is in compliance with any law

41. 41
Notices and Disclaimers Con’t.
Information concerning non-IBM products was obtained from the suppliers of those products, their published announcements or other publicly available sources. IBM has not
tested those products in connection with this publication and cannot confirm the accuracy of performance, compatibility or any other claims related to non-IBM products.
Questions on the capabilities of non-IBM products should be addressed to the suppliers of those products. IBM does not warrant the quality of any third-party products, or the
ability of any such third-party products to interoperate with IBM’s products. IBM EXPRESSLY DISCLAIMS ALL WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING BUT
NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
The provision of the information contained herein is not intended to, and does not, grant any right or license under any IBM patents, copyrights, trademarks or other intellectual
property right.
IBM, the IBM logo, ibm.com, Aspera®, Bluemix, Blueworks Live, CICS, Clearcase, Cognos®, DOORS®, Emptoris®, Enterprise Document Management System™, FASP®,
FileNet®, Global Business Services ®, Global Technology Services ®, IBM ExperienceOne™, IBM SmartCloud®, IBM Social Business®, Information on Demand, ILOG,
Maximo®, MQIntegrator®, MQSeries®, Netcool®, OMEGAMON, OpenPower, PureAnalytics™, PureApplication®, pureCluster™, PureCoverage®, PureData®,
PureExperience®, PureFlex®, pureQuery®, pureScale®, PureSystems®, QRadar®, Rational®, Rhapsody®, Smarter Commerce®, SoDA, SPSS, Sterling Commerce®,
StoredIQ, Tealeaf®, Tivoli®, Trusteer®, Unica®, urban{code}®, Watson, WebSphere®, Worklight®, X-Force® and System z® Z/OS, are trademarks of International Business
Machines Corporation, registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or other companies. A current list of IBM
trademarks is available on the Web at "Copyright and trademark information" at: www.ibm.com/legal/copytrade.shtml.

42. 42
What happened?
Descriptive
Get in touch with reality, a
single source of the truth, visibility
What will happen next?
Predictive
Understand the most likely future
scenario and its business implications
What is our plan?
Planning
Planning, budgeting, and
forecasting
Understanding why something
happened is a critical step
What should we do?
Prescriptive
Collaborate for maximum business
value, informed by advanced analytics
Governance & Trusted Data
IBM Data Science and Business Analytics Platform
Why did it happen?
Diagnostic
Data Augmentation and
Contextualization
Unstructured Data
Structured Data

43. 43
JP Morgan Chase (2013)
- Value at risk for Basel II valuation
misstated
- Reliance on one over-worked
spreadsheet modeler
- Complex model only understood by
one person
- Cost of mistake… circa. £250M
Sources:
http://files.shareholder.com/downloads/ONE/2261602328x0x628656/4cb574a0-0bf5-4728-9582-625e4519b5ab/Task_Force_Report.pdf
http://blogs.mazars.com/the-model-auditor/files/2014/01/12-Modelling-Horror-Stories-and-Spreadsheet-Disasters-Mazars-UK.pdf

44. 44
Fidelity Magellan Fund (1995)
- A missing minus sign led to an over
statement of capital gains
- President of the fund had to write to
shareholders explaining the
expected distribution was incorrect
following spreadsheet errors
- Cost of mistake…. £1.6B
Sources:
https://www.washingtonpost.com/news/wonk/wp/2013/04/16/is-the-best-evidence-for-austerity-based-on-an-excel-spreadsheet-error/?noredirect=on&utm_term=.4bce1378684d
http://blogs.mazars.com/the-model-auditor/files/2014/01/12-Modelling-Horror-Stories-and-Spreadsheet-Disasters-Mazars-UK.pdf

45. 45
Harvard University (2013)
- A spreadsheet error was discovered in an
influential research paper of international
government debt to GDP ratios
- Research paper quoted as a base for UK
and EU austerity measures
- Embarrassing for the academics involved
- Cost of mistake… unknown, but UK
government cuts are worth tens of
Billions of pounds
Sources:
http://catless.ncl.ac.uk/Risks/16.72.html#subj1
http://blogs.mazars.com/the-model-auditor/files/2014/01/12-Modelling-Horror-Stories-and-Spreadsheet-Disasters-Mazars-UK.pdf

46. 46
Reason
They can reason, grasp
underlying concepts, form
hypotheses, and infer and
extract ideas.
Understand
Cognitive systems
understand imagery,
language and other
unstructured data like
humans do.
Learn
With each data point,
interaction and outcome,
they develop and sharpen
expertise, so they never stop
learning.
Interact
With abilities to see,
talk and hear, cognitive
systems interact with
humans in a natural way.
What is Cognitive computing?
Cognitive systems understand, reason, learn and interact

47. 47
Why is cognitive computing important now?
Data
The volume, variety and
veracity of data – 80% of it
unstructured – is growing at a
rate impossible to keep
up with.
Choice
Companies have a wider range of
choices than ever before and are
expecting innovative, relevant
and personalized engagement.
Capabilities
Gaps in organizational capability
are emerging as cognitive
computing fundamentally
changes the way companies
leverage technology to conduct
business.

48. 48
What is possible with cognitive computing?
Deeper human engagement Elevated expertise Cognitive products and services
Cognitive processes and
operations
Intelligent exploration and
discovery
Cognitive infrastructure