Managing the Evolving Role of Finance to Empower Enterprise Growth

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The role of Finance continues to rapidly evolve and is becoming increasingly strategic. Senior finance professionals are being asked to increase value-added services across the entire organization, and are taking on a greater role in facilitating growth-related initiatives across the enterprise. Attend this session to understand the shift in how finance leaders are spending their time and the implications of that change. Learn how they align strategy, scorecards and systems to be more effective in driving growth initiatives within and beyond the finance function. Hear how finance executives in leading-edge organizations are approaching this transformational shift in their roles and functions, and successfully elevating the view of the Finance function, while empowering growth across the enterprise.

Speakers: Mike Forman, VP Finance & Corporate Controller, NetSuite
Carl Cox, CFO and EVP of Operations, LightSpeed Technologies

Presentation delivered at ProformaTECH 2014 - http://www.proformatech.com
Track: Managing Change | Session: 1

Published in: Business
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Managing the Evolving Role of Finance to Empower Enterprise Growth

  1. 1. Managing the Evolving Role of Finance to Empower Enterprise Growth Mike Forman VP Finance & Corporate Controller, NetSuite
  2. 2. NetSuite: World‟s #1 Cloud ERP Background Performance Founded 1998 World’s most deployed cloud ERP Publicly traded on NYSE: “N” Used by 16,000+ organizations Offices in 10 countries Fastest growing top 10 ERP 2,200+ employees Used across 100+ countries $400 M+ revenue FY13 (~33% Growth) 1,000+ Software companies #1 Cloud ERP Suite Industry Recognition Best Financial Management Best Cloud Infrastructure 2 © 2014 Proformative Fastest Growing Top 10 FMS Vendor 3rd Year Running Top 10 Cloud Companies to Watch
  3. 3. Is Your Company Prepared for Growth? “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.” McKinsey Quarterly: Preparing your organization for growth [May 2011] 3 © 2014 Proformative
  4. 4. The Controller Role Has Changed in the Past Three Years 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 IMA: The Evolving Role of the Controller [January 2014] 4 © 2014 Proformative
  5. 5. But Financial Accounting Responsibilities Still Remain • 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 5 © 2014 Proformative
  6. 6. Volume for Information Requests Is Also Increasing for Financial and Non-Financial Data 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 IMA: The Evolving Role of the Controller [January 2014] 6 © 2014 Proformative
  7. 7. The Difficulty in Managing Change with Scarce Resources “Things take longer to happen than you think it will, and then they happen faster than you thought they could.” Rudiger Dornbusch, Economist 7 © 2014 Proformative
  8. 8. 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 8 © 2014 Proformative
  9. 9. Customer Example – Pain Points “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.” 9 © 2014 Proformative
  10. 10. 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 10 © 2014 Proformative
  11. 11. …Ends Up Being an Application Hairball: Opaque Visibility & Slow, Error-Prone Reporting 11 © 2014 Proformative
  12. 12. A Business Suite in the Cloud Helps Unlock Value Typical Way – Manual, Disconnected Mess After – Integrated, Dynamic Platform PSA ECOMMERCE SINGLE DATA SOURCE CRM ERP ERP Company A • Disparate data • One version of truth • Disparate processes • Streamlined, integrated processes • Slow, reactive decision making • Real time, proactive decision making 12 © 2014 Proformative
  13. 13. Customer Example - Solution “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.” 13 © 2014 Proformative
  14. 14. 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 14 © 2014 Proformative
  15. 15. Outcome of Using a Business Suite in the Cloud • Monthly/Quarterly/Annual Financial Close • • 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 • • Same hard close each month 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 • • 15 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 © 2014 Proformative
  16. 16. Dashboard Example 16 © 2014 Proformative
  17. 17. Consolidated Financials Example 17 © 2014 Proformative
  18. 18. 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 18 © 2014 Proformative
  19. 19. Lightspeed Technologies – Tualatin, Oregon Carl Cox EVP of Operations & CFO, Lightspeed 19 © 2014 Proformative
  20. 20. 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! 20 © 2014 Proformative
  21. 21. 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? 21 © 2014 Proformative
  22. 22. We Had a Big Challenge! • Growing at 25% annually • Peachtree & FileMaker & Excel & Outlook…& • All systems were separate • The “What” and “Will it hold up” 22 © 2014 Proformative
  23. 23. Who Me? Worry… Will these systems make it another night? 23 © 2014 Proformative
  24. 24. So We Looked at Everything 24 © 2014 Proformative
  25. 25. The Final Two: The On-premise Solution or NetSuite SINGLE DATA SOURCE CRM 3PL SINGLE DATA SOURCE ERP Traditional ERP solution 25 © 2014 Proformative NetSuite SFA
  26. 26. 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 26 © 2014 Proformative
  27. 27. 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 27 © 2014 Proformative
  28. 28. 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 28 © 2014 Proformative
  29. 29. In the Past, IT and Accounting Were Bean Counters • Keep the servers up • Close the books • Always looking in the past 29 © 2014 Proformative
  30. 30. Highly Skilled Workforce - PROBLEM SOLVING - COMMUNICATION - EDUCATION 30 © 2014 Proformative
  31. 31. 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 31 © 2014 Proformative
  32. 32. Are We Managing Through the Windshield? 32 © 2014 Proformative
  33. 33. Or Through the Review Mirror? 33 © 2014 Proformative
  34. 34. 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 34 © 2014 Proformative
  35. 35. Serving Our Customers 35 © 2014 Proformative
  36. 36. Hearing From Our Customers 36 © 2014 Proformative
  37. 37. Net Promoter Score The Net Promoter score for the first half of FY14. The results are as follows: Promoters: 403 Neutral: 44 Detractors: 16 Total: 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 37
  38. 38. Customer Satisfaction (2013) NPS 30+ NPS 60+ Google – 53% Costco - 78% American Express – 41% Apple – Laptop 76% Kaiser – 35% Lightspeed – 83.6% Nordstrom – 75% Verizon – 32% NPS 80+ Amazon – 69% USAA – Insurance – 80% Southwest Airlines – 66% © 2014 Proformative 38
  39. 39. 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 • • 39 1:30PM-2:20PM, Veronese Room 2505 Speakers: Robert Israch, VP of Global Marketing Programs, NetSuite Philip Adams, Solutions Consultant, NetSuite © 2014 Proformative
  40. 40. & 40 © 2014 Proformative
  41. 41. Thank You For Attending Managing the Evolving Role of Finance to Empower Enterprise Growth

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