Take Charge of Your System Implementation

August 2015

Contents

1. Why Do Companies Even Make the Investment? 3

2. Beating the Odds: Your Successful Implementation 6

3. Risk & Controls Considerations 14

4. Thought Leadership 17

Slide 2

Why Do Companies Even Make the Investment?

Slide 3

Technology

Today’s environment is demanding the adoption of technologies to support insight generation across the business

Almost 50% have reporting processes that rely on manual spreadsheets

Only 17% of companies have a self-service reporting application

50% Have data warehousing in place

Only 11% have applied a standard data taxonomybut

“In the coming years, some form of SaaS or cloud technology will play an important part in the finance organisation of many companies” - Carol Sawdye, PwC US CFO

Source: 2013 Finance Effectiveness Benchmark StudySlide 4

What Sets Top Performers Apart?

• 40% more FTEs in business insight roles than median performers

• Commitment to attracting and developing talent, paying premium for business insight (over 20% higher pay for insight roles)

• Budgets prepared in <2 months and forecasts in <7 days with integrated planning tools and rolling forecasts

• Standardization of data and processes with integrated finance systems

• High levels of automation (for example, 37% of cash remittances automated and 72% of PO match rate automated)

• Month-end close cycles <4 days

• Effective use of shared services / outsourcing

• Finance cost as a percentage of revenue <0.6%

High performing finance organizations focus on adding insight to the business while continually increasing compliance, control and efficiency

Slide 5Source: 2013 Finance Effectiveness Benchmark Study

Beating the Odds: Your Successful Implementation

Slide 6

The Six Habits of Successful ImplementationsTo ensure proper business ownership and a successful implementation, we believe companies should address the following matters in advance of the actual project.

Slide 7

•Define the mission, roles and goals of the implementation•Align the implementation to the overall business strategy

Strategy

•Identify and empower decision makers•Define escalation and levels of authority to make design decisions

Governance

•Clarify Finance’s identity within the organization

Service Delivery

•Build capacity within the Finance team to support the project

People

•Define the future state systems of record•Make all modifications and “clean up”

Data Governance

•Understand the vision for process maturity and incorporate controls into the design

Process and Controls

Strategy: Define Mission, Roles and GoalsAlthough the rationale for process improvement may seem obvious, without “over communication” we have observed that the organization’s change agents are confronted with unknown expectations, hidden agendas and lackluster motivation to change.

One MessageIs the goal to standardize processes? Reduce transactional costs, improve controls or improve management reporting and decision making? Although not necessarily mutually exclusive, without clear prioritization of the benefits to be derived from the project, the initiative team may make decisions that are contrary to one goal while supporting another.

Executive Leadership must be the ChampionAgreement among the executive leadership team as to the purpose and outcomes expected from enriching the Finance function.

What Gets Measured Gets DoneOrganizations that do not determine the metrics and goals upfront will find it complicated to generate an approach of tracking the value of a process change after the fact.

Slide 8

Governance: Empower Your Team

Why implementations struggle:

• Inability of the project team to make decisions.

• Lack of monitoring and oversight.

• Prolonged discussions between business, IT and the project team over system functionality and enhancements to be delivered at go-live.

• Scope creep and consistently missed deadlines.

• Implementation is over budget and does not meet pre-defined objectives, or milestones.

How to address these issues:

• Clearly define business and project objectives

• Set realistic timelines / expectations – allow for contingency in both your project plan and budget

• Executive sponsorship from both the business and IT is key to success

• Empower the project team to make decisions – 95% of the project decisions should be made by the core team

• Ensure the project team has representation from key business units / stakeholders

• Define risk identification, issue management, change request and escalation processes at the start of the project

Slide 9

Service Delivery: Clarify Finance’s IdentityFinance’s identity should align with the needs of the stakeholders and demonstrated through the Service Delivery model. Each type of service has unique infrastructure needs around people, process and technology.

Needs Service Delivery

Service Process Technology People Organization Structure

Operational Excellence •Low cost•High quality•Timeliness

e.g., AP, AR

Transaction Processing

•Highlystandardized

•Highly automated

•Continuous improvement program

•Leveraged to process high volume of transactions

• Includes automated,built-in controls

• Includes self-service functionality

•Non-automated activities performed by lower-skilled employees

• Increased span of control

•Effective cross-training

“By Activity” •Centralizationprovides control and economies of scale

•Management is focused on efficiency and continuous improvement

Specialty Knowledge•Value added advice

•Regulatory compliance

e.g., Accounting, Tax, Treasury

Specialty Services

•Structured recurring complianceactivities

•Flexibility in other value-added activities

•High degree of analysis

•Aids and supports analysis performed

•Used to perform scenario planning

• Integrated with financial & customer service systems

•Provides analytics and decision support

•Deep functional knowledge and skills

•On-going training to stay current in area of specialization

“By Product” •Senior reporting relationship

•Small group sizes result in flat span of control

•Structure aligned by product to reinforce deep functional knowledge

Customer Intimacy•Customized service

•Proactive assistance

•Insightful advice

e.g., FP&A

DecisionSupport & Analysis

•Standardizedrecurring planning activities

•Customized analysis to meet customer needs

•Aids and supports analysis performed

•Used to perform scenario planning

• Integrated with financial & customer service systems

•Provides analytics and decision support

•Highly skilled in financial analysis

•Deep business knowledge

•Strong interpersonal & teaming skills

• Intra-company rotation•On-going industry & analysis tool training

“By Customer” •Direct line drawn to finance, dotted to Business Unit

•Structure aligned with that of customer

•Strong integration with specialty services forms single contact for customer

1 2 3 4

1 2 3 4

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Slide 10

People: Build Capacity Within the Finance TeamDuring future Transformation initiatives (such as system implementations) companies need to commit at least 30% of the total project resources. With such a critically important initiative, you will need your “A-Team” committed to the project.

Slide 11

Standardizing, reducing cycle times and improving operational performance of key financial process will (a) allow the A-Team to spend less time maintaining status quo and (b) allow them to delegate responsibilities to more junior staff or to contract labor.

Data GovernanceOptimizing Finance Applications creates an integrated platform that maximizes automation, enhances data quality and improves controls, leading to sustainable performance in budgeting, planning, consolidation, reporting and analytical processes.

Data Model

• Inconsistent dimension hierarchies are used across the organization

• Non-standard definitions and usage persist along with varying levels of summarized hierarchies

• Multiple Chart of Accounts

• No documented data management procedures

Finance Applications

• Automated functionalities not efficiently or fully leveraged

• No inventory of key reports

• No established process to review system access / permission rights

• Comprehensive change management procedures are not implemented and auditing mechanisms are not enabled

Current Challenges PwC Point of View & Leading Practices

A consistent and meaningful master data model feeding finance applications is essential to the overall financial management process.Data Model

• Optimized use of dimension hierarchies and harmonized account hierarchies

• Consistent level of detail and account structure• Stable and consistent data feeding into Financial

Applications• Clear definitions and usage (i.e. no gaps or overlaps)• Global Chart of Accounts and optimized usageFinance Applications

• Single source for management and legal entity reporting

• Automated data capture and integration • Accelerated access to data allowing more time for

analysis and decision support• Delivered Financial Applications at the Enterprise

(Oracle, SAP, PeopleSoft), Consolidation (Essbase, FDM, BPC, Hyperion) and Analytical (OBIEE, BW) level

Slide 12

Process: Understand the Vision for Process MaturityAn accurate understanding of Finance’s maturity will enable a realistic calculation of the effort required to improve to the envisioned state. Striving for full “Aspirational” standing is not always the right answer.

Slide 13

Risk and Controls Considerations

Slide 14

Controls: Not Just a Documentation Exercise

• Oftentimes “controls” is viewed as a documentation exercise to be completed at the end of the project

• Early identification of financial and regulatory requirements and considerations prevents delays due from rework, additional customizations and reports

• Leading industry practice is to have a dedicated security and controls team that will focus on security and controls throughout the course of the implementation.

Slide 15

Level of Maturity

Leve

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n

3

21

4

5

MANAGED

OPTIMIZED

DEFINED

REPEATABLE

INITIAL

Governance and Compliance Cost with

Progression

• Proactive involvement with regulators, external auditors and internal auditors help to prevent last minute “surprises” which can lead to project delays

• Identify Financial, Operational and Regulatory Controls & Requirements

• Define Business Processes and Controls

• Provide input into Configuration, Report, Interface, Enhancement and Procedure Development

• Perform Testing of controls as incorporated into Reports, Interfaces, Enhancements and Configuration

• Review Financial Balancing and Other Cutover Tasks

• Perform Month, Quarter and Year-End Closing

• Operate Future State Business Processes

• Engage Stakeholders from Compliance Organizations

• Understand Current State of Financial, Regulatory and Operational Controls

Continued Knowledge Transfer and Education

Blueprint Implementation

Assess Design Construct Implement Operate

What’s our target?

Designing our future state solution Building our future state solution

Are we ready? Realize benefits

Controls Integration – Example Timeline

Slide 16

Thought LeadershipContact Holly McGail to request specific content

Slide 17

Thought Leadership

Page 18

Getting it right with growth: How to be a great CFO in the new growth economy

The role of CFO has evolved to that of a strategic partner to the broader executive team, providing real insight to the company’s growth plans. Whether companies choose to grow through M&A, emerging markets, digital or innovation, the CFO can play a unique and critical role—providing insight, managing risk, and ensuring that companies fully realize the potential value of a given strategy.

Finance matters: Finance function of the future

In this paper we explore the potential future direction of finance - not through predictions or setting out what we believe the vision to be but by revisiting some of the key principles upon which finance and accounting were founded and looking at how these principles may shape the future of finance.

Finance Point of View (POV): Intercompany Transformation Series -Historical Balance Cleanup and Process Redesign

Intercompany transactions are consistently a pain point for Accounting, Corporate Reporting and Tax departments in order to comply with multiple transaction processing, reporting and filing responsibilities.

Growing intercompany balances may distort the financial results and require manual effort to reclassify these balances for presentation purposes.

How much time do your teams spend dealing with the intercompany process? How accurate are their intercompany balances at the Consolidated, Business Segment, and Legal Entity levels?

Thought Leadership

Page 19

How Can a CFO Get Timely, Clean Financial Data?

Rooting out rework and inefficiency in finance is difficult when effective coordination and collaboration across entire accounting processes are lacking.

Operational Controllership - The Quiet Revolution

An open discussion of the challenges, changes and future direction of operational controllership

On the Horizon: Insights into the Cloud for finance and accounting professionals

In today’s changing world, CFOs need to understand the financial risks and rewards of the Cloud. By educating themselves on service models, cost structures, and governance issues, they can engage in meaningful discussions with the CIO and other C-suite executives about how Cloud computing can advance the business.

Thought Leadership

Page 20

Unlocking Potential - 2013 Finance Benchmark Report

Top performing finance organizations are different from the rest. PwC benchmark data confirm that the leading finance teams are achieving results that are very different from the norm. In our 5th annual report, we focus on organizations that are achieving significant change and improvement vs. their peers.

Innovation Champions: How CFOs Can Keep Companies Vital

Growth-minded CFOs make innovation a priority everywhere in the company. They align their organizations with new innovation models and forge partnerships with strategic business units where innovations typically begin. PwC and faculty at Wharton offer insights on how CFOs are uniquely positioned to foster and drive innovation.

Finance Transformation: A Lean Approach to Increase Value

Lean is an alternative approach that changes the way work is performed. Learn how Lean can help transform your back office to achieve and sustain process excellence.

Thought Leadership

Page 21

The High Performance CFO

What does it take for CFOs to excel today? With the global economy struggling to regain its footing, finance chiefs face very different challenges from the ones they confronted just a few years ago. PwC and faculty at Wharton team up to look at what it means to be a high performing CFO today.

People Performance: How CFOs can build the bench strength they need today . . . and tomorrow

Top CFOs know they are only as strong as their teams. From treasury to financial planning and analysis, their finance managers have a shared vision of being valued contributors in strategic discussions – adding insight and analysis at critical junctures of decision-making. How can CFOs attract, retain, and motivate finance talent to be much more than number-crunchers?

PwC and faculty at Wharton share insight on how top finance organizations can rise to the challenge.

Re-energizing Finance: The Organization Challenge

In this series of white papers, PwC and faculty at Wharton focus on how CFOs can build top performing finance teams. Topics include attracting and motivating the right talent; leveraging all parts of the finance organization; and what it means to be a high-performance CFO today.

Thought Leadership

Page 22

The Revenue is Not Coming Back: It's Time to Manage Costs Differently

There is widespread agreement in the financial services industry that a “new normal” exists,providing a wake-up call to financial institutions. The current economic environment, both in theUnited States and globally, continues to prove challenging. Given the macroeconomic forecast,financial institutions can no longer grow their way out of their problems. Business areas thattraditionally provided revenue growth for financial institutions are not growing sufficiently toovercome increased regulation and capital requirements as well as limited revenue leverage. Webelieve that significant business-model changes will be needed to boost profitability.

Institutions benefit when cost-reduction, expense management, and control processes are put inplace to support transformational activities. PwC’s organizational-change processes, tools, andconcepts help financial institutions to identify and remediate areas for improvement and positionthemselves to effect sustainable change. Our approach helps institutions realize benefits across keyareas—cost-reduction, strategic expense management and controls, transformation, cost-captureand allocation methodology design, and financial systems implementation.

Journal Entries: Taming the 800lb Gorilla in your Close

How instilling challenge and discipline around journal entries can significantly accelerate your close and release value in your Finance team.

Account Reconciliations: Building a Foundation for “No Surprises”

• Reconciliations should give peace of mind; however, they continue to be a source of pain to most clients.

• Our proven approach to optimize reconciliations focuses on switching staff’s mindset from mechanical to analytical.

• We bring an active learning approach to both manage change and educate at the same time.

Thought Leadership

Page 23

Financial Planning- Realizing Value of Budgeting and Forecasting

The need for increased value and accuracy from financial planning led us to commission this thorough research study that not only focuses on the current challenges but also on the practices organizations are deploying to improve financial budgeting and forecasting activities.

Achieving More Timely, Accurate and Transparent Reporting

This paper takes a look at characteristics of successful close-to-report cycles across industries and suggest some viable solutions built around improving processes, more effectively leveraging resources and, where appropriate, optimizing the use of enabling technologies.

Drifting or Driving?: Finance Effectiveness Benchmark Study 2011

PwC’s third annual finance benchmark report, which outlines the latest findings from our benchmark analysis of 130 participating companies. In this year’s study we note that the cost of finance rose for most organizations in 2010, reversing a long-term downward trend. Meanwhile, over the same period, top performers have kept their costs steady and at much lower levels while delivering better service.

Thought Leadership

Page 24

Making Sourcing Decisions in an economic downturn

Difficult economic conditions around the world have encouraged many executives to look at alternative service delivery models like outsourcing and offshoring as a means of addressing various short- and long-term business concerns. We believe that these models provide significant opportunities, but recommend taking additional care to assess and understand the complexities of an increasingly volatile market. Only then can executives make effective decisions that will stand the test of time.

Finance Effectiveness Benchmark Study 2010: Is Finance Rising to the Challenge?

CEOs are looking to the finance function to provide more insight and advice, yet only 11% of finance personnel are engaged in true business partner roles. What comes through clearly from the findings of this report is that while considerably more finance functions now regard themselves as true business partners compared to a year ago, many organizations still lack the necessary capacity and capabilities to fulfill this role.