Agile Finance Revealed

AGILE
FINANCE
REVEALED
The New Operating Model for Modern Finance
About American Institute of CPAs
The American Institute of CPAs (AICPA) is the world’s largest member association representing
the CPA profession, with more than 418,000 members in 143 countries, and a history of serving
the public interest since 1887. AICPA members represent many areas of practice, including
business and industry, public practice, government, education and consulting.
The AICPA sets ethical standards for the profession and U.S. auditing standards for private
companies, nonprofit organizations, federal, state and local governments. It develops
and grades the Uniform CPA Examination, and offers specialized credentials for qualified
professionals who concentrate on personal financial planning; forensic accounting; business
valuation; and information management and technology assurance. With The Chartered
Institute of Management Accountants (CIMA), it offers the Chartered Global Management
Accountant® (CGMA®) designation, which sets the global benchmark for quality and
recognition in management accounting.
The AICPA and CIMA also make up the Association of International Certified Professional
Accountants (the Association), which represents public and management accounting globally,
advocating on behalf of the public interest and advancing the quality, competency and
employability of CPAs, CGMAs and other accounting and finance professionals worldwide.
CGMA and Chartered Global Management Accountant are trademarks of the Association of
International Certified Professional Accountants. These trademarks are registered in the United
States and in other countries.
The AICPA maintains offices in New York, Washington, DC, Durham, NC, and Ewing, NJ.
Media representatives are invited to visit the AICPA Press Center at aicpa.org/press
About Oracle
Oracle offers a comprehensive and fully integrated stack of cloud applications, platform
services, and engineered systems. With more than 420,000 customers in more than 145
countries, Oracle provides a complete technology stack both in the cloud and in the data
center. Oracle’s industry-leading cloud-based and on-premises solutions give customers
complete deployment flexibility and unmatched benefits including application integration,
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visit oracle.com
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2 Agile Finance Revealed: The New Operating Model for Modern Finance
Contents
FOREWORD 4
1 EXECUTIVE SUMMARY 6
2 INTRODUCTION 11
Business Agility 12
3 THE NEW OPERATING MODEL FOR MODERN FINANCE 14

Modern Finance: The Chief Characteristics 17
Accounting Operations 17
Subject Matter Expertise 18
Financial Planning & Analysis/Analytics 18
Decision Support/Performance Management 19
Management and Development 19
Finance Transformation 20
Measuring the Progress of Transformation 20
The Obstacles to Agile Finance 22
The Obstacles: Sectoral Differences 23
4 AGILE FINANCE LEADERS: ATTRIBUTES REVEALED 26

The Traits of Agile Finance Leaders 27
Analysis by Age and Sector 27
Implementation Progress: Outstripping the Competition 28
Leading the Way on Centralization 29
Key Skills: Ahead of the Pack 30
Recognizing the Challenges Ahead 31
Supporting Improvement Through KPIs 32
5 REVEALING AGILITY IN FINANCE 34

The Attributes of Agility 35
Measuring the Key Intangible Drivers of Value 38
The Key Measures of Business Agility 40
6 CONCLUSION 42
7 APPENDICES 46
I. Research Methodology 47
II. References 48
III. Authors 48
Foreword
For most businesses these days, change is not

an option—it’s an imperative driven by customer
expectations and the pace of innovation.
For the past two years, Oracle has partnered with the American Institute of CPAs (AICPA)
and the Chartered Institute of Management Accountants (CIMA) to conduct research on
how finance can navigate successfully through today’s economic uncertainty and create
value in the digital age.
Our latest study, Agile Finance Revealed, looks to identify the traits of agile finance leaders
and benchmark their success in creating a dynamic new operating model that is resilient,
responsive, and predictive – enabling finance to lead digital transformation – not just react to
it. At Oracle, we believe that digital transformation brings companies into the future, and it
enables them to be more competitive.
The wonderful benefit of an enlightened digital enterprise is, aside from making better
decisions and optimizing all your assets, you are also spending less on things that don’t
advance the agenda of the company or empower employees or customers, and spending
more on your core strengths. There has never been a more important time to be in finance,
using your data-driven insights and enterprise-wide view into operations to guide your
organization through today’s uncertain times. I hope you find Agile Finance Revealed useful
as you look to optimize your own operating model for modern finance, and strengthen your
strategic role as co-pilot to the business.
Safra Catz
Chief Executive Officer
Oracle
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Foreword
The AICPA welcomes working together with

Oracle on our latest report Agile Finance Revealed.
The digital age and turbulent market conditions present opportunities and threats to many
current business models – to survive and to thrive, organizations have to be increasingly agile.
Companies need to be able to take informed decisions swiftly about how to adapt to rapid and
constant changes and to then implement new strategies. In addition, they need to be able to
manage performance nimbly, constantly monitoring what is working and what is not working
and redeploying resources to where the returns or opportunities are best.
The digital age has already changed the nature of work, and will continue to do so. Finance
professionals are not immune: we need to adapt and transform too. By embracing a new
operating model for modern finance we can become exactly the kind of “agile finance
leaders” business requires. This includes using cloud and digital technologies effectively. But it
also requires finance professionals to develop a broader skill set.
Agile Finance Revealed is about this new breed of finance function. Equally, it gets to the
heart of what management accounting is about. Chartered Global Management Accountants
(CGMAs) and CPAs in corporate finance roles are equipped to shape the transformation to
a new finance operating model as described in this report, and participate in and lead agile
finance functions.
Today’s changing business environments need finance professionals such as CGMAs and
CPAs to act as transformation leaders. We therefore strongly encourage CFOs to read this
report to find out about how to develop their people for the future and to ensure an agile
finance function that is fit for purpose in the digital age. We hope that they consider our
CGMA designation as part of their and their company’s future.
John Windle, FCMA, CGMA

Chief Financial Officer
Association of International Certified Professional Accountants
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1. EXECUTIVE
SUMMARY
Take an online tour Are your Financial

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Modern Finance
A new modern finance delivery model is emerging, equipped for high performance and success in
the digital age. Modern finance teams have fully embraced a new operating model for finance that
is responsive and change-ready, embracing digital technologies to proactively automate traditional
transactional work, while investing in new skill sets to provide the analytical insights and strategic
guidance management needs to adopt new digital business models and ways of working.
In this report, we reveal what exemplifies these high-performing teams: what sets them apart from
their traditional peers, what benefits they bring to their organizations, and what attributes others can
grasp and replicate for their own advantage.
“Agile Finance Revealed: The New Operating Model for Modern Finance” contains the blueprint for the
new operating model for modern finance. It shows what organizations can expect to gain from this
fast-evolving and highly-effective source of competitive advantage.
Enabling Business Agility

Everybody agrees that organizations need to be agile in the digital age.
But how can finance professionals adapt and survive when new digital technologies are threatening the
future of knowledge work? And what does finance have to do to remain relevant, to empower the CFO,
and to enable a business to become agile?
In our efforts to find answers to these questions, we’ve identified a new operating model for modern
finance consisting of the following attributes that enable CFOs and their teams to drive greater
business agility:
• Cross-functional,
integrated teams that are centralized in shared services or centers of
excellence. Empowered by cloud and digital technologies like robotic process automation and
machine learning, the ever-improving accounting services and efficiency delivered by these
teams are driving highly significant business improvement.
• The
ability to unleash the full potential in big data analytics and artificial intelligence. Doing so
stretches the Financial Planning & Analysis (FP&A) role beyond recognition, into a powerhouse
that generates the insights organizations need to develop innovative strategies and achieve
performance levels that eclipse the competition.
• New
skill sets in statistics, data analysis, data visualization, and business partnering, to
support rapid decision making and performance management. States GE Digital CFO Khozema
Shipchandler, one of the CFOs interviewed for this report: “While it is important to have people
with strong commercial awareness, you cannot replace all the hardcore data scientists and data
analysts with training in statistics who are the true data masters.”
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Agile Finance Leaders Revealed
These are some of the reasons why Oracle and the AICPA came together to research and reveal
the key attributes of these “agile finance leaders”: those teams that are most advanced in their
transformation towards this new operating model.
To do so, we commissioned an extensive survey of 483 senior finance executives in large businesses
or other organizations across the USA and Canada, in five key industries: financial services,
manufacturing, retail, healthcare and life sciences, and higher education. We also interviewed CFOs
who have embraced the new operating model and are investing in finance modernization to excel in
their respective industries.
In this report, we identify how agile finance leaders differ from those who are less advanced in their
transformation journey in terms of structure, systems and skills. And we show how they’re more likely
than others to possess the attributes that enable a business to be agile.
Achieving Profitable Growth

In one of the most important outcomes, we found that the businesses supported by such leaders are
more likely than others to demonstrate agility and achieve profitable growth:
• Agile finance leaders are far more likely than others to have fully implemented cloud-based
enterprise performance management (51% vs 17%) and emerging technologies like robotic
process automation (44% vs 12%). They’re also far more likely to have fully implemented
cloud ERP for standardizing their accounting processes (45% vs 17%). (This 51
%is tovs 17
be expected,
however, as we used a high level of implementation as a criterion to segment the leaders.)
%
51% vs 17% 45% vs 17% 44% vs 12%

51% vs 17%
Cloud Based EPM Cloud Based ERP Emerging Technologies (eg RPA)
44% vs 12% 81% vs 56%

• 44%alsovsfar more
They’re 12%likely to have set up centers for Financial Planning & Analysis (FP&A), the
area of expertise that’s most important for modern finance (81% vs 56%).
81% vs 56% 89% vs 63%

81% vs 56%
89FP&A
% vs 63 %
95% vs 70%
Centers
89% vs 63%
• 95more
Far % agile 70%leaders (48% vs
vs finance
95 % vs 70%
18%) are rated highly effective at delivering
48%
forward-looking analysis that identifies new
opportunities for revenue growth.
48% 18%
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51% vs 17%
• 56%
of businesses with agile finance leader
56
51% vs 17 56
teams have demonstrated their agility by
%
% successfully launching
44
a new product or %
service. (Just 43% of others have done so.)
vs 12%
Agility in New
44%
Product Releases
vs 12% 81% vs 56%
• Businesses
supported by agile finance leaders are considerably more likely to report positive
81%
revenue growth
56%
vs (89% vs 63%) and increasing profitability (95% vs 70%).
89% vs 63%
89% vs 63% 95% vs 70%

Positive Revenue Growth Increasing Profitability
95% vs 70%
Modern CFOs realize that finance transformation is a continuous journey, and new skill sets are
needed to lead the way through today’s disruptive economy. The new operating model for modern
finance gives genuine clarity about the next destination – but getting there requires leadership
and the creation of a culture of change within finance. Clarity of direction, sponsorship by senior
management, and buy-in from business users are all essential. And, as in any change management
project, changes in structure, systems, and skills must all be fully aligned.
The research also points out a danger of complacency within finance. More than 80% of
respondents reported that their finance function has a leading role to play in driving business
agility, but only 30% agreed or strongly agreed that their finance function is actually providing
the forms of support that businesses need to become agile.
Determining the Role of Finance

Business leaders will need to determine the role of finance in their organization. The new operating
model for modern finance is an essential step towards establishing an agile foundation for success in
the digital age. It provides a framework to help companies prioritize their investments in modernizing
the finance function to better support new digital business models and ways of working.
Agile finance leaders provide management with the insights and support they need to execute
against their digital strategies. And the cloud can provide the systems and technologies they need
to enable this. But developing and recruiting talent with the right skills will be the biggest challenge
businesses face.
And it is high time for them to make a start on meeting this challenge: their competitors certainly
include agile finance leaders who have already invested in the new operating model and skill sets
needed to drive profitable growth.
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Determining the Role of Technology
Modern CFOs are strong advocates
for the use of advanced analytics and “You’re not only seeing more finance
modern mobile, social, and cloud
executives rotating into IT, but the two
technologies to help their teams
execute on their responsibilities.i functions are starting to merge. Being
Increasingly, CFOs are deploying staff an expert in debits and credits isn’t enough
into IT to gain deeper knowledge of anymore. Finance has to know IT, and
the role of technology in operations IT has to know finance.”
and how to manage IT more
effectively for competitive advantage. BRETT SWEET, CFO, VANDERBILT UNIVERSITY
When North Carolina-based Wake

Forest Baptist Medical Center was
looking for a CFO to drive its transformation, deep experience with both IT and finance was
an essential trait. “I was hired in 2014 to specifically focus on creating a financially sustainable
organization, starting with the IT function,” said Chad A. Eckes, executive vice president of corporate
services and CFO at Wake Forest Baptist Medical Center. “Having a strong understanding of IT in
the CFO seat was viewed as critical and fundamental to our transformation success. There’s not
one function that gets done within the medical center that doesn’t have an element of IT wrapped
around it.”
Becoming Powered Up for Success

“An organization that has a robust management accounting function is one that is powered up
for success,” notes John Windle FCMA, CGMA, Chief Financial Officer at the Association of
International Certified Professional Accountants. “We are investing in the finance skills and cloud-
based technologies required to modernize our own operations, and get the information we need to
confidently drive our organization forward in a volatile, uncertain, complex, and ambiguous
(VUCA) world.”
The message is clear: ensure your finance function is fully fit for purpose in the digital age.
To help with the transformation to a new finance operating model, the Association is already
elevating the profession of management accounting. This is through the provision of the CPA
credential and the CGMA designation, which recognize those accountants with the rare combination
of accounting, analysis, and business skills.
These, we believe, are the professionals best positioned to participate in and lead the agile finance
teams of today and tomorrow.
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2. INTRODUCTION
BUSINESS AGILITY AND THE ROLE OF MODERN FINANCE

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Business Agility
This research exercise aims to answer one central question.
30%
How can the finance function support business agility?
One thing is clear: internet-enabled business models and disruptive

technologies will continue to radically alter the basis of competition
in many sectors. Businesses must grasp these developments
in technology and drive the agility they need to develop and
then implement new strategies promptly whenever threats or
opportunities arise. Only 30% of respondents
agreed or strongly agreed that
That’s not all. They must also be nimble in how they manage their their finance function provides
on-going performance, constantly able to adapt or innovate to the support that businesses
increase their value to stakeholders. need to become agile.
Rethinking the Finance Mission

Increasingly, the CFO has a demanding role to play as the corporate strategist or “co-pilot” to the CEO in
ensuring the business adapts for the digital age. These new demands on CFOs and their finance teams
are often driving finance to rethink their mission and operating model – and the pace is accelerating.
According to new research from

McKinsey, CEOs increasingly expect “We’re trying to create a new business
their CFOs to have a seat at the strategy
(GE Digital). We’re trying to do it within
table. This is largely because the CFO is
often “first among equals” on the board the context and construct of an existing
and can help engage colleagues more industrial company, leveraging all of the
productively on strategy.ii great domain capabilities that we have
within it, while at the same time trying
Second, and just as important, the hard,
to bring in great talent and capabilities
data-based and factual mindset that the
CFO brings to the table can be invaluable from the external market. Then, also at
in setting and executing the company’s the same time, we’re trying to create a
game plan. This is especially true when horizontal organization that runs across the
it comes to forecasting trends or
entirety of GE. And we’re trying to do it at
managing all-important government and
regulatory relationships.
a speed that’s much quicker than any other
markets and the consumer landscape have
developed. That’s a heavy lift.”
KHOZEMA SHIPCHANDLER, CFO, GE DIGITAL
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But how must finance’s operating model change to better support the CFO and enable business
agility? With the context of CFO as corporate strategist in mind, Oracle has sponsored this new AICPA
research to explore how far CFOs have progressed towards a new operating model empowered by
digital technologies.
During this process, we identified an emerging new operating model for modern finance. Naturally, we
then wanted to explore if this can drive better business agility, revenue growth, and profitability.
If so, we would want to devise measures of “finance agility”; in other words, to reveal what
differentiates agile finance leaders so that others can replicate their success.
Please see Appendix I. for a description of the project methodology.
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3. THE NEW
OPERATING
MODEL FOR
MODERN FINANCE

through ERP Cloud Practices Best or
In his thought-provoking article Finance 2020:
Death by digital, industry analyst David Axson “You leverage the scale of a shared
writes that, in just three short years, finance
service but at some point, you
won’t look anything like it does today. Complex
legacy systems will be gone, replaced by should also be able to have a very,
cloud-based platforms for reporting, planning, very high degree of automation.
forecasting, and analytics that will deliver And to me, what that really means
self-service data to decision-makers across for the finance team is that they
the enterprise. Machine-learning and robotic
can spend all of their time on
systems will ruthlessly automate many routine
businesses, freeing up your finance team to forward-leading activities like
spend 75% of its time on decision support and strategy, like making our products
predictive analysis, guided by artificial more competitive price or cost
intelligence and input from statisticians, data wise, helping the operating team
scientists, behavioral economists, and
even anthropologists.iii
win in the marketplace. And so
the whole nature of what a
In investigating how the finance functions of finance team tends to focus on
a number of leading organizations enable is change.”
business agility, we’ve identified that the
high performers share a number of attributes.
KHOZEMA SHIPCHANDLER, CFO, GE DIGITAL
We have adopted these as the operating
model for what we call ‘modern finance’.
Improving Quality and Efficiency

“Finance is doing things that it

never could before thanks to digital Many companies already manage their
technologies. End-to-end multi- accounting operations in shared service
centers to improve efficiency and service
dimensional data access is enabling
quality. And now the most advanced players
total visibility into both enterprise are using modern, cloud-based applications
and customer data. The result? The and digital accelerators such as machine
finance organization will evolve from learning, artificial intelligence, and robotic
an expense control, spreadsheet- process automation to ruthlessly automate
transactional processes, accelerate finance
driven accounting and reporting
modernization, and provide a high degree of
center, into a predictive analytics scalability and agility.
powerhouse that creates
business value.”
DAVID A.J. AXSON,

FINANCE 2020: DEATH BY DIGITAL
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“Historically, HSBC has built its own applications, or bought and customized them to the extent
that actually keeping our technology current was incredibly expensive and just difficult to do,”
notes Joanna Fielding, FCMA, CGMA and CFO, HSBC Global Services Limited. HSBC Global
Services was set up to respond to new banking regulations in the United Kingdom, and recently
adopted cloud-based ERP and EPM solutions to manage its global back-office operations.
“Moving to the cloud was essentially part of our new technology strategy,” adds Fielding. “While
it started as a program to increase control and transparency around our costs, it’s also enabled
us to respond to changes in the regulatory environment. We couldn’t have responded to that
regulation as quickly as we’ve been able to do if we’d gone with an on-premises solution.”
In addition to cloud, other digital technologies being adopted by modern finance organizations
include robotic process automation (RPA), machine learning, and artificial intelligence. RPA lets
employees configure computer software “bots” to interact with applications and perform high-
volume, repetitive tasks, such as account reconciliation and other processes performed in shared
service centers. Machine learning gives computers the ability to learn without being explicitly
programmed, and is already being used in the financial services industry to optimize business
processes such as internal audit and fraud detection, based on patterns and historical trends. And
artificial intelligence is finding its way into finance processes that require in-depth analysis, such
as analyzing sales across online competitors to determine inventory needs, or forecasting and
recommending pricing strategies to boost revenue and profit.
“For us, machine learning, robotic process systems, and automation are critical and really tied to
our business processes,” notes Vanderbilt CFO Brett Sweet. “These aren’t so much the functions
of software providers, as the means of giving us the discipline we need to not make everything
an exception.”
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Modern Finance: The Chief Characteristics
Figure 1 The New Operating Model for Modern Finance

How Management Accounting Supports Business Agility
Management & Development
Subject Matter FP&A Analytics Decision Support

Expertise BI (self-service) & Performance Management
Accounting Operations
Process management, Standard Reports, Management Information & Analysis
End-to-end processed spanning disciplines
Figure 1 illustrates a simple framework in which we’ve brought together the main characteristics
of the new operating model: accounting operations, subject matter expertise, FP&A, decision
support and performance management, and management and development. This is an important
step towards revealing the key attributes of agile finance leaders.
Accounting Operations
• End-to-end
processes (such as procure-to-pay or hire-to-fire) are being migrated to global
service centers spanning traditional business disciplines, where they are continuously
streamlined or automated to reduce costs and raise standards.
• Robotic
process automation (RPA) is being applied to high-volume, repetitive tasks,
including so-called “swivel chair processes”, where information is routinely selected from
one system and re-entered on another.
• Organizations are increasingly applying machine learning or embedded controls to further

improve process efficiency and strengthen the management of risk and compliance.
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Subject Matter Expertise
• Companies
are centralizing subject matter
expertise in integrated business services, “We are data geeks here – we
shared services, and centers of excellence. The
have a maniacal focus on cost
main candidates for centralization are external
reporting, tax, and Financial Planning & Analysis containment. In addition to that,
(FP&A), but businesses might also centralize we look at many financial and non-
those areas of expertise that are most important financial KPIs to measure how we
to them. A particularly acquisitive business, for are doing against our peers and
example, might build a Mergers & Acquisitions
even against other industries.”
team to manage its acquisitions more
efficiently and with less risk, while an advanced
engineering aerospace or defense business BRETT SWEET, CFO, VANDERBILT UNIVERSITY
might centralize project accounting.
• Accountants’
areas of expertise cover a wide range, from the preservation of value in the
core external reporting role (and related activities such as control, compliance, tax, and risk
management) to more commercial roles focused on supporting value generation. These can
include FP&A, project management, and decision support roles.
Financial Planning & Analysis/Analytics

• The
use of continuous planning and driver-based forecasting is already improving
performance management – but technology is constantly advancing. Business Intelligence
(BI) applications, for example, can use dashboards to communicate measures of
performance and analysis in a timely and user-friendly manner. And management
information is becoming increasingly self-service, enabling users to drill down to answer
their own queries.
• FP&A
teams can now focus on informing decisions. They’re constantly improving
the shared understanding of how the business model generates value. For example,
analyzing performance by dimensions, by product, by channel, or by segment can identify
opportunities to innovate, reduce cost, or generate additional revenues. The benefits can be
valuable – sub-optimal performance can be tackled promptly and resources redeployed to
focus on where returns or prospects are better.
• Recent
developments in big data analytics are allowing FP&A teams to access and analyze
the data generated by business processes. Companies can now analyze and leverage
digital data to improve the products or services they offer to customers, to automate
routine decisions, and to enable better ad hoc decision making. And they can use predictive
analytics and artificial intelligence to generate new insights.
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• Organizations
must make sure their KPIs are aligned with their strategic and operational
objectives. They must also remember that having the wrong KPIs can lead to
“dysfunctional” behavior, when performance targets are met or exceeded but the intended
outcomes are not achieved. In such cases, the FP&A team must review the KPIs being
used, and ensure that financial KPIs are complemented by non-financial KPIs in the way
that’s best for the business. “As you would expect, our financial KPIs are broadly the
same as any university’s and slightly different from those in the corporate world,” notes
Vanderbilt’s Sweet. “But when it comes to non-financial measures, we have to look at
trends in applications, in yield, in the SAT, ACT scores. We look at our overall win-loss rate
against other universities.”
• Many
organizations are now using new non-financial KPIs to address the challenge of
managing intangibles, such as the measurement of the customer’s brand experience. Such
KPIs are helping them to focus capital better on those intangibles that generate value and
ensure long-term success.
“We use a digital command center to monitor our new KPIs in real time,” notes GE Digital’s
Shipchandler. “In addition to monitoring traditional KPIs, we started incorporating with some
non-financial metrics that immediately reflect on the financials. Things like product engineering,
completion rates, cycle times, and product engineering quality. And we are starting to pull on
some external social measures – whether our developer count is relevant, our partner count
is relevant.”
Shipchandler’s team also monitors the impact of GE’s “foundries” – similar to customer design
centers – on customer sales. “We look at the number of visits and then the cycle time between
a visit, then when that turns into a lead, and then when that lead turns into an actual bookable
outcome. So there is actually a customer connection to ROI; that’s not just a museum, there’s
an actual ROI that is connected to these foundries.”
Decision Support / Performance Management

• In
this new world, business partnering or decision support must now be provided by
cross-functional, uniquely skilled teams. This is simply because the required analytical
skills and range of subject-matter expertise are broader than the technical skill set alone.
• Partnering
between finance and the business cascades the CFO’s influence through the
business to ensure two things: that the decisions taken are based on the proper analysis
of relevant information; and that performance is managed in the interests of stakeholders.
Management and Development

• The
business invests in developing the skills of its finance professionals and
talent management to improve the finance function’s strategic influence and
management guidance.
• Finance
transformation is actually business as usual; transformation has to be
measured and managed to ensure that progressive finance functions get measures
of how agile they are.
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Finance Transformation
Some major businesses have already transformed their finance functions to the new operating
model. Most, however, are still moving in this direction. In fact, what we’re calling the “new
operating model for modern finance” is a digitally-enabled extension of the same journey that
finance functions have been following for a couple of decades.
Of course, digital is already changing the face of finance. As you’d expect, the emergence of the
new operating model is consistent with the findings of other studies. For example, Accenture
analysis suggests that cross-functional integrated teams will be delivering 80% of traditional
finance services by 2020. Not only will staff productivity increase by two to three times – in an
important additional bonus, costs will decline by 40%.iv
CIMA enables the continual development of the syllabus underpinning CGMA designation
through constantly researching the future of finance and the competencies that employers expect
management accountants to have.
The new operating model for modern finance discussed here reflects the key trends identified
in this way. Under it, we can consider finance transformation as a journey in three “dimensions”,
which lead us towards (a) greater efficiency, (b) better information, and (c) more influence.
Measuring the Progress of Transformation
Figure 2 Finance Transformation: The Extent of Implementation
Greater Efficiency (and Consistency)

Integrated business services, shared services, centers of excellence 24% 40% 31%
Cloud technologies to accelerate finance modernization 23% 35% 32%
Artificial intelligence or embedded controls for risk/compliance 24% 32% 28%
Machine learning and robotic process automation for efficiency 20% 32% 29%
Better Information
Continuous planning and driver-based forecasting 24% 34% 39%
Non-financial KPIs orient capital allocation towards value 31% 33% 28%
Predictive analytics and artificial intelligence to generate insights 22% 40% 28%
More Influence
Finance skills development to improve influence 24% 40% 31%
Cross-functional teams support decision-makers 21% 40% 33%
0% 20% 40% 60% 80% 100%
Some Implementation More than Some Implementation Full Implementation
As figure 2 shows, over 80% of respondents tell us their businesses are implementing initiatives
that can be seen as aspects of the new operating model for modern finance. These fall under the
key headings of greater efficiency, better information, and more influence.
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Greater Efficiency: Organizations are relentlessly seeking to improve the efficiency of their accounting
operations. To do so, they’re standardizing systems and migrating core processes to in-house and
outsourced shared service centers. They’re widely using cloud-based software as well, to standardize
systems and allow scalability. Other, less widely implemented technologies are also gaining ground,
including artificial intelligence, machine learning, and robotic process automation.
One example of a company that has leveraged cloud ERP to scale more efficiently is Indiana-based
Irving Materials, Inc. (IMI), a leading manufacturer of construction materials in the Midwest. IMI has
a relentless focus on process optimization that has led to the development of a number of industry
innovations, such as a front-discharge concrete mixer that is now a staple of the industry, and specialty
batch mixes that make pouring and finishing concrete quicker and easier.
Since 2015, the company has completed five acquisitions and doubled its revenues, while reducing
accounts payable headcount by 35%. “We’re in growth mode, and the fact that we’ve been able to
integrate these acquisitions seamlessly without extra costs to my finance function is fantastic,” notes
Chad Kelley, controller at Irving Materials. “Our cloud ERP system really enables us to expand regardless
of location.” Today, Kelley and his team handle complex reporting requirements in 240 different locations
across multiple states, with the ability to refresh financial statements in just minutes.
Better Information: Naturally, the integrity of accounting information is utterly paramount. But to
manage performance, we also need robust analysis of non-financial information about what drives
performance. For this reason, organizations are widely using continuous planning and driver-based
forecasting. And, because it needs to be grounded in commercial reality and reconcilable with the
financial “truth”, accountants are well placed to prepare this information. Despite this, the use of non-
financial KPIs and predictive analytics is less well established. And with the FP&A function now needing
to assess a wide range of complex, non-financial data, new skills are clearly required.
“We have gobs and gobs of data in higher education,” comments J. Michael Gower, EVP for Finance and
Administration and University Treasurer, Rutgers, The State University of New Jersey. “We don’t have
enough management information. The analytics that are now available to us in the underlying systems
are going to revolutionize how we manage these institutions. As a result, we can start to get at costs.
We can start to get at efficiencies. We can start to get real benchmark data and feedback, not only to the
people doing the job but to our boards as well, to help them understand that we’re doing the best we
can to satisfy the missions and keep higher education as affordable as possible.”
More Influence: Once finance transformation has substantially driven down the cost of the accounting
and finance function, there’s limited scope for taking out more cost. Instead, there’s far more potential
to get value out of finance as a discipline. The ability to do so depends on one or both of the following
options: to develop the skills of finance professionals; or to implement cross-functional teams with
complementary skills.
David Pipes, EVP and CFO at Arby’s, has structured his finance organization to help influence the right
kinds of business outcomes for the fast-food leader. “We set targets for what we’re trying to achieve
and then we also work very closely with the business in marketing and operations primarily as we lay
out opportunities for where we might see our future growth coming from,” he notes. “We also have
a project management office that the finance organization leads, and in that we quickly analyze and
approve new initiatives. We’re there to make sure that we’re doing the best thing for the business, and
other departments recognize we’re doing everything that we can to drive the business forward and help
them in their initiatives.”
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The Obstacles to Finance Transformation
Although the findings in figure 2 confirm the overall direction of adoption, they also show that
only about 30% of respondents have fully implemented any of the initiatives listed. (The sole
exception is the use of continuous planning and driver-based forecasting, for which 39% claimed
full implementation.) The lack of widespread
adoption of the new operating model for
finance is a cause for concern, as the vast
majority of respondents agree that all these “It’s important for people to feel
attributes are important. We evidently need to comfortable with what we’re doing,
address the obstacles in the way of finance why we’re doing it, and how we’re
transformation.
doing it. If you can do that, your
And these aren’t likely to be straightforward. team feels like they are involved in
Finance transformation requires major change the change and that the change is
management. Clarity of direction, sponsorship
working for them.”
by senior management, and buy-in from
business users are all essential. And, as in any
change project, changes in structure, systems DAVID PIPES, EVP AND CFO, ARBY’S
and skills must be aligned.
Figure 3 Finance Transformation: The Obstacles
Structure
Our organizational structure is too complex 33%
Finance is uanable to get the information it needs in the format 26%

required in a timely fashion
Systems
Our technology systems are too outdated or complex 33%
Our processes are too customized and/or complex 32%
Skills
We need more analytic skills in order to deliver forward-looking analysis 42%
We need more multi-disciplinary skills 36%
Finance is not recognized as having the business skills needed 23%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Figure 3 illustrates the main obstacles to finance transformation as identified by respondents to

our survey. They fall under the headings of structure, systems, and skills:
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Structure: Systems: Skills:
33%
33% said their 3% believe that
3 6% told us the
3
organizational old or complex IT current skill set of
33% structure is too
33% systems are a barrier
36% the finance function
complex and to becoming more is too narrow; 42%
identified a structural agile, while 32% said said they need more
36% problem in which
36% their processes are data analytics skills
data is held in silos; too customized and/ if they are to deliver
26% told us the or complex. more forward-looking
finance function has analysis for the
difficulty in getting the business.
information it needs
in a timely fashion.
Addressing this skills gap is the biggest challenge organizations face. As in many forms of business
change, it is the “soft” elements – especially analytical ability and communications skills – that are often
the hardest to get right. “Business leaders want finance professionals to interpret data within their
unique business context,” notes Ivgen Guner, Senior Vice President of Global Business Finance at Oracle.
“They are asking us to come with recommendations tailored to their business issues, so it’s critical that
business partners understand the strategy of the business, what metrics are most significant, what the
competitive landscape looks like, and then advise leaders accordingly. As one of our SVPs put it, ‘There
are 50 numbers on this page. Tell me the three that I need to pay attention to.’ I would go even further
and say, ‘and what I should do about it.’”
The Obstacles: Sectoral Differences
Figure 4 Finance Transformation: Obstacles by Sector

We need more analytic 42%
skills in order to deliver 40%
forward-looking analysis 41%
40%
36%
We need more 29%

multi-disciplinary skills 38%
40%
36%
34%
Our orginization structure 28%

is too complex 28%
43%
35%
31%
Our processes are too 34%

customized and/or complex 31%
25%
37%
33%
0% 10% 20% 30% 40% 50%
Retail HE Manufacturing Healthcare FS
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When you analyze the obstacles to agile
finance by sector (as in figure 4), you see “Too often in universities, we think that
some interesting variations. In general, our
respondents see analytical and more general
too many things and business processes
business or multidisciplinary skills as the we do are unique when in fact they’re
biggest obstacles they face, but there are not and should be common. What goes
differences. For example, analytical skills on in the classroom between teacher
are slightly less of a concern in the financial
and student and in the lab is unique.
services sector (36%), possibly because this
is a highly regulated area where players are How you pay employees, how you book
prepared to invest in artificial intelligence travel, how you pay vendors, how you
to ensure compliance. General business report taxes, how you do your financial
understanding, meanwhile, is a bigger concern reporting should not be unique. We
for manufacturing (40%) than retail businesses
have far too many layers and too much
(29%), possibly because manufacturers require
more specialist knowledge of their processes. organizational complexity. That’s a barrier
Despite this, manufacturers appear to be to change, a barrier to capability and
the most concerned about organizational recruiting the best talent.”
complexity but least concerned about the
complexity of their business processes. BRETT SWEET, CFO, VANDERBILT UNIVERSITY
Figure 5 New Technology: Higher Levels of Adoption by Sector
Use of Cloud ERP

Financial Services 34% 27%
Healthcare & Life Sciences 29% 29%
Higher Education 40% 41%
Manufacturing 39% 28%
Retail 42% 28%
Use of Predictive Analytics

Retail 43% 24%
Use of Machine Learning and RPA

Retail 29% 30%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
More than Some Implementation Full Implementation
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Figure 5 shows how the higher levels of implementation reported for representative new
technologies differ by sector. Respondents rated the extent of implementation of attributes of the
new operating model for modern finance on a scale of 1 to 5, where 1 meant none, 3 indicates
some, and 5 equals full implementation.
Cloud ERP is a well-established technology in the sense that is already widely used. The use of
big data and predictive analytics might still be considered leading edge because of the advanced
analytical skills required, while machine learning and RPA are just getting off the ground. One
might predict that cloud ERP adoption would be higher than the others.
Actually, analysis of survey responses in aggregate suggests the levels of adoption of cloud ERP
and predictive analytics are on a par and the use of machine learning and RPA is not far behind.
Analysis by sector shows some interesting differences:
• The
higher education sector leads adoption of cloud ERP. The financial services and
healthcare and life sciences sectors are relative laggards.
• The
higher education and manufacturing sectors share the lead on the adoption of
predictive analytics and machine learning/RPA. Again, the healthcare and life sciences
sector is some way behind.
These differences in the rate of adoption of new technologies and data analytics suggest that
finance teams in the higher education sector are more likely to be able to drive agility than finance
teams in other sectors as they are further advanced along their finance transformation journeys.
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4. AGILE FINANCE
LEADERS:
ATTRIBUTES
REVEALED

As we’ve already seen, some finance functions are significantly further along the transformation
journey than others towards the new operating model for modern finance. In our study, we found
that 182 respondents (38%) could be termed “agile finance leaders” based on their higher levels of
implementation of:
• Cloud technologies to accelerate the modernization of finance.

• Integrated business services, shared services and/or centers of excellence.
• Cross-functional, uniquely skilled teams to support business decision-makers.
• Non-financial KPIs to orient capital allocation towards creating value for customers and
other stakeholders.
The Traits of Agile Finance Leaders
Analysis by Age and Sector

As figure 6 shows, marginally
more organizations whose finance Figure 6 Agile Finance Leaders Profiled by Age of
functions are agile finance leaders Organization and Sector
are at the younger end of the
spectrum: 24% (vs 17%) are 10
years old or younger, and 61% (vs 15%
24%
11%
20%
47%) are between 11 and 50 Agile

15%
13%
years old. Finance Leaders
61% 22%
FS
19%
Healthcare
Agile finance leaders are also slightly 0-10 years
Age of Manufacturing
skewed toward higher education 11-50 years
organization
Sector
HE
(22% vs 15%) and the financial Over 50 years
Retail
services (20% vs 16%) sectors, and
17% 14% 16%
Other
skewed against the healthcare and Others 36%
18% 20%
life sciences sector (13% vs 20%).
47% 15% 17%
In fact, we found that 47% of

the sampled higher education
organizations were agile finance Agile Finance Leaders as % of Sample
leaders, as were 44% of
Higher Education 47%
respondents from the financial
services sector. The equivalent Financial Services 44%
figure for the healthcare and life

Manufacturing 40%
science sector was just 27%.
Retail 34%
But while these differences are quite Healthcare and 27%

interesting, the findings suggest that Life Sciences
0% 10% 20% 30% 40% 50%
neither the age of an organization
nor its sector are barriers to its
finance function becoming an agile
finance leader. And that’s a reassuring
message for all organizations.
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Implementation Progress: Outstripping the Competition
Figure 7 Agile Finance Leaders: Full Implementation of Key Attributes of Modern Finance
Structure
49%
Centralized finance-related subject matter expertise in global centers
20%
41%
Migrated our end-to-end accounting processes to SSCs
13%
Systems / Technology
51%
Implemented cloud-based enterprise performance management (EPM)
17%
45%
Standardized our accounting and related processes on cloud ERP 17%
44%
Implemented robotic process automation for routine processes
12%
0% 10% 20% 30% 40% 50% 60%
Agile Finance Leaders Others
As figure 7 shows, agile finance leaders significantly outstrip

others in fully implementing the structural and systems “We’re actually one of the
elements of the new operating model for modern finance. For
first universities to deploy
example, they’re far more likely to have fully centralized subject
matter expertise (49% vs 20%) and to have migrated end-to-
a cloud ERP. The cloud
end processes to shared service centers (41% vs 13%). gives us an opportunity to
really leap-frog that whole
Migrated Processes to Shared ‘on-premises’ era. I don’t
41% vs 13% Service Centers
want to be one of the
They’re also far more likely to have fully implemented last people in the United
cloud ERPvsfor standardizing their accounting processes States to implement a
45 % %17
(45% vs 17%). (This is to be expected, however, as we behemoth on-site ERP. ”
41 vslevel of%
used%a high 13
implementation as a criterion to
segment the leaders.) BRETT SWEET, CFO,
44% vs 12% Cloud ERP Implementation to

VANDERBILT UNIVERSITY
45% vs 17% Standardize Processes
41% vs 13%
Agile finance leaders are also far more likely to have
fully implemented cloud-based enterprise performance
44
45
management
% vs (51%%
% 12
17
vs 17%) and emerging technologies
%
such as robotic process automation for automating routine
processes (44% vs 12%).
44% vs 12% Implementation of Cloud EPM
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“Any time you can free up people from manual repetitive tasks to do something that’s more brain
work as opposed to just pulling together information, that’s a big win,” observes Arby’s CFO David
Pipes. Pipes and his team implemented a cloud-based enterprise performance management
system to automate the budgeting process, and shaved 30% off the annual planning and
budgeting cycle time by eliminating manual spreadsheets.
“People like the fact that they can plug the information in and see the results immediately and
as a planning team we can see the roll up right away as opposed to getting all the information in
spreadsheets and downloading those spreadsheets,” Pipes adds. “It’s so much more efficient
from that standpoint. Our cloud-based EPM system has helped eliminate much of the back and
forth spread sheet calisthenics, and I think we have even more opportunities for efficiencies using
the system going forward.”
Leading the Way on Centralization
Figure 8 Agile Finance Leaders: Ahead on Centralization
Financial planning and analysis (FP&A) 81%

56%
Financial skills development 54%

32%
Reporting 50%
43%
Strategic planning 45%

39%
Tax 41%
32%
M&A 29%
18%
Treasury 19%
23%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Agile finance leaders are more likely to have fully centralized services. As figure 8 shows, a
further significant difference is that they’re much more likely to have set up centers of excellence
to handle those areas of expertise that are most important for modern finance: areas like FP&A
(81% vs 56%) and financial skills development (54% vs 32%).
“We are very centralized in all of finance,” notes Arby’s CFO David Pipes. “Our FP&A function is
split between a corporate team and a field finance team. Most of these team members are also
business support partners, which we call finance buddies. Our line of business executives know
that they can always go to these finance partners for whatever they might need, whether it’s just
help in analyzing something that they think they might be doing or questions on their budget or
help with their forecast or whatever it might be. They know they have a finance buddy, and I’ve
found that this works really well.”
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Key Skills: Ahead of the Pack
Agile finance leaders are also more likely than others to rate the skills level of their finance
function as “excellent”. This relative advantage is greatest when it comes to newer, less traditional
finance skills like data visualization (60% excellent vs 24%), big data expertise (60% vs 21%),
and influencing skills (55% vs 23%).
Figure 9 Agile Finance Leaders: Excellence in Key Skills

Big data and
analytics expertise
Data
visualization Business acumen
skills and commercial
awareness
10%
20%
30%
30%
40%
50%
60%
Financial
Influencing
planning and
skills
analysis skills
Agile Finance Leaders

Others
The area of least strength for agile finance leaders is that of business acumen and commercial
awareness, with just 36% rating their level of competence as “excellent”. Rotation through
different roles to gain a breadth of experience is a proven way of developing these skills. “People
are hungrier to do different things in a faster-paced environment,” notes Oracle’s Guner. “Any
finance person I hire today can go into business operations, product marketing, accounting,
business market analysis, investment banking, and so on. I love to see folks go from one
discipline to another because it makes them more valuable to the company in the long run.”
“We really test for open-mindedness among our new hires,” adds GE Digital’s Shipchandler.
“When I ran Corporate Audit, the average age of an auditor was around 27; these are very,
very capable individuals. We press them on being open to new ways of doing things, and
challenging new paradigms. That’s an important trait to have, as they will turn out to be our
future CEOs and CFOs.”
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Recognizing the Challenges Ahead
Figure 10 Agile Finance Leaders: Greater Recognition of Challenges
Structure
34%
Our organizational structure is too complex 33%
Finance is uanable to get the information it needs in the format 27%

required in a timely fashion 25%
Systems / Technology
34%
Our technology systems are too outdated or complex
33%
34%
Our processes are too customized and/or complex
31%
Skills
46%
We need more analytic skills in order to deliver forward-looking analysis
40%
40%
We need more multi-disciplinary skills
33%
27%
Finance is not recognized as having the business skills needed
21%
0% 10% 20% 30% 40% 50%
Figure 10 shows that agile finance leaders share broadly the same views as others about the obstacles
to finance transformation. Again, skills is the area of greatest concern.
Although they have stronger skills than others, agile finance leaders are more concerned about the
need for analytics skills (46% vs 40%), multi-disciplinary skills (40% vs 33%), and receiving recognition
for their business skills (27% vs 21%). This may reflect a higher level of ambition.
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Supporting Improvement Through KPIs
Figure 11 KPIs to Improve FP&A and Business Partnering
Managers’ use of BI
applications (self-service)
Talent pipeline
Response times
measures
for Subject
for business
Matter Expertise
partnering roles
10%
20%
30%
40%
40%
50%
60%
Head count Head count
of people with specialized of people in FP&A roles
data or IT skills

Others
Figure 11 shows that agile finance leaders are more likely than others to track a range of KPIs that
support improvements in FP&A and business partnering. These include measuring response times for
subject matter expertise requests (58% vs 44%) and the talent pipeline for business partnering roles
(50% vs 40%).
Business managers’ self-service use of BI applications is the area where agile finance leaders are least
likely to have introduced KPIs. Nonetheless, this is also where the relative difference is greatest (38%
vs 24%), suggesting that it is an area of relative weakness for both groups.
Two key activities enable agile finance leader teams to focus more of their
time on supporting the wider business: using cloud technology to automate
routine finance processes; and creating centralized shared services centers
and centers of excellence. We found that 67% of agile finance leader teams
spend more than half of their time on forward-looking analysis/driving new
insight, as compared with just 45% of others.
This difference in focus implies that modern finance teams should have
more capacity to support the business and enable it to become more agile.
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Oracle’s Pivot to the Cloud and the Need for New KPIs
“How does a finance team measure value in the digital age?
At Oracle, we faced exactly this challenge when we first began the shift from a vendor of on-
premises, perpetual license software to a subscription-based, cloud model. Oracle’s finance
team played a critical role in this transition, partnering with the business to develop new KPIs to
measure value in the digital age.
In the traditional on-premises model, we would typically have first looked at the sales pipeline.
Then we would have run predictive analysis on that data, combined it with other internal and
external data points, and tracked the estimates accordingly.
However, everything changes when you move to a cloud model. Take predictive KPIs. When you
move to the cloud, you go from a few deals in the pipeline to many – which can sometimes be
overwhelming. Bookings, provisioning, lead times, renewals, contract base, contract length, churn
rates, in-time capital requirements (i.e., demand predictions), billing requirements and schedules,
and waterfall schedules were just some of the KPIs we examined. In this new world, ‘bookings’ is
the most critical predictive KPI, which was not the case in our old world.
Another example is capital expenditure requirements. Suddenly we were dealing with new data
centers, provisioning, capital needs, and demand predictions. It took us a few months of trial and
error to establish our most meaningful KPIs for the cloud business. We then presented our findings
and recommendations to our C-suite.
This is where perseverance plays a huge role. The C-suite is demanding and intimidating, and asks
the toughest questions you will ever face. Don’t worry if you don’t hit a home run on your first try.
The key is to provide information that is as meaningful and insightful as possible.
After multiple iterations we implemented the new KPIs. There were just a handful to begin with,
but we have established many more as our business has evolved.”
IVGEN GUNER, SENIOR VICE PRESIDENT, GLOBAL BUSINESS FINANCE, ORACLE
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5. REVEALING HOW
AGILE FINANCE
SUPPORTS AGILE
BUSINESS

The Attributes of Agility
To be agile, a business needs a number of important attributes: it has to be constantly strategically
alert; it must have the capacity and flexibility to implement change; and it has to be adaptive in the
means it uses to continually improve its performance.
We believe that a finance function might be considered agile if it supports business agility in a number
of corresponding ways. Examples might include how it:
Informs strategic thinking: e.g. how it leads the business/organization on:
• Measuring and understanding the intangible drivers of value.
• Horizon-scanning
to identify new business/organizational opportunities and threats (e.g. in
different geographies or sectors).
Supports agile implementation: e.g. how it:
• Provides a planning framework and measures of progress to help ensure that strategic
objectives are achieved.
• Enables the business to get new products and services rapidly to market
Informs agile performance management: e.g. how it:
• Delivers forward-looking analysis that identifies opportunities to innovate or grow revenues.
• Improves
resource allocation by delivering real-time understanding of what is and what isn’t
generating value.
A healthy 81% of respondents told us their finance function has a leading role to play in driving
business and organizational agility. But only 30% agreed or strongly agreed that their finance function
provides all the forms of support listed above. Tellingly, however, a full 70% of the finance functions that
do provide all these forms of support were agile finance leaders. Clearly, part of their ability to do so is
thanks to their being well advanced towards the modern finance operating model.
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Highly Rated for Effectiveness
Figure 12 Finance’s Contribution Rated “Highly Effective” by the Business:
Informs Strategy
49%
Leads on intangible drivers of value
18%
48%
Leads on horizon scanning
18%
Supports Agile Implementation

43%
Planning and measures of strategic progress
19%
48%
Enabling going to market rapidly 22%
Informs Agile Performance Management

48%
Analyzing opportunities to innovate or grow
18%
53%
Analyzing opportunities to mitigate risks or reduce costs
22%
41%
Improving resource allocation
17%
0% 20% 20% 30% 40% 50% 60%
As figure 12 shows, the business is far more likely to rate agile finance leader teams as “highly
effective” for all the important contributions made by an agile finance team. In fact, such teams are
clearly helping to drive agility for their organizations, giving them a competitive edge over their peers in
areas including strategy formulation, implementation and performance management. For example, the
business views agile finance leaders’ teams as being highly effective at:
• Analyzing opportunities to mitigate risks (53% vs 22%).
• Leading
the business/organization on measuring and understanding the intangible drivers of
value (49% vs just 18% of others).
• Accelerating their organizations’ ability to take new products to market (48% vs 22%).
• Delivering
forward-looking analysis that identifies new revenue growth opportunities for the
business (48% vs 18%).
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Mitigating Risk and Maximizing Compliance at CREDO Mobile
San Francisco-based CREDO Mobile is faced with a dilemma that affects many small companies
struggling to comply with new accounting rules that were often crafted with large companies in
mind; in this case, the looming ASC606 protocol, which regulates how companies must report
revenue from customer contracts. The new reporting procedures will be mandatory for private
businesses beginning in December 2018, and will affect how CREDO Mobile services the
smartphone needs of its hundreds of thousands of customers across the United States.
“A 606 implementation depends on an easy-to-access, comprehensive database that

encompasses enterprise resource planning (ERP) and supply chain management (SCM),” says
CREDO Controller Brian McHugh. Updating equivalent on-premises technology would require
costly and time-consuming manual intervention. In contrast, with its implementation of a revenue
management cloud system, CREDO will become fully compliant with the new legislation more
than a year ahead of schedule, he says.
The revenue management cloud will allow CREDO to “keep track of a very large number of
contracts and manage the changes to those contracts and accounting on the back end, which will
almost seamlessly change our revenue reporting,” McHugh says. The solution McHugh chose is
built to automate revenue reporting to conform to the new standards, and it will ensure CREDO’s
sales fall into the proper accounting buckets and still tie out to billing.
BRIAN McHUGH, CONTROLLER, CREDO
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Measuring the Key Intangible Drivers of Value
Research by AICPA and CIMA, commissioned by Oracle in late 2015, identified intangibles as the most
important drivers of value in the digital age. In most cases, however, the KPIs that the finance function
measures or monitors are not directly aligned with these important intangibles. That’s why the digital
imperative for finance is to measure and manage what matters next.ix
In a survey conducted as part of that research, respondents were asked to rank first to fifth what they
consider to be the most important drivers of value in their business. The top five (ranked in their top
five by more than 50% of the 744 respondents) were all intangibles: customer satisfaction, quality of
business processes, customer relationships, quality of people (human capital), and the reputation
of brands.
While technology can generate data for organizations to use to measure these intangibles, this data
tends to belong to the owner of the process. The finance function, however, has a key potential role
as a broker of information, ensuring that salient information is not only validated but also made more
widely available to decision makers.
“There’s a suite of financial metrics obviously, but also a suite of commercial metrics and other leading
indicators. But how do you know whether they turn into a financial result that’s desirable?” asks GE
Digital’s Shipchandler. “I think a lot of companies can’t orchestrate that or can’t figure it out. And it’s
up to finance to do that. We often find ourselves very much playing a connector role, driving financial
discipline, execution, accountability, and strategy, and then serving as the connective tissue across the
entire enterprise.”
When carrying out this research into agility, we asked respondents which of the following types of
non-financial metrics their finance organization measures and monitors to help generate insights for the
business/organization:
• Customer/student experience and customer/student satisfaction.
• Brand reputation.
• Competitive intelligence — market disruptions and challenges.
• Efficiency of business/organizational processes.
• Talent pool (i.e. data about talent pipeline, talent analytics etc.).
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Figure 13 Measuring Intangibles:
Customer
experience
Talent Brand
pool reputation
30%
40%
50%
50%
60%
60%
70%
80%
Efficiency of Competitive
business processes intelligence

Others
As shown in figure 13, we found that agile finance leaders are considerably more likely than others
to measure intangible non-financial KPIs like competitive intelligence (65% vs 53%), brand reputation
(69% vs 59%), and talent analytics (81% vs 58%).
“The five most important KPIs that we measure are quality and safety, employee engagement and
satisfaction, customer engagement and satisfaction, profitability, and top line revenue growth,” notes
Eckes from Wake Forest Baptist Medical Center. “The first three of those are predictive indicators of
financial results. If you manage those five key areas at the enterprise-wide level, the rest of the sub
measures can be managed on a department by department basis.”
Lack of talent or skills has been identified as the biggest obstacle in the way of transforming the finance
function towards the new operating model for modern finance. It’s therefore particularly interesting that
the lead was widest when it came to talent analytics.
Agile finance leaders use digital technologies to analyze talent needs and attract the new skill sets
required to guide the business forward. “Using the latest technology helps attract and retain the best
talent – especially among millennials, who expect to work using social and mobile technologies,” notes
Oracle’s Guner. “The talent out there is very socially, digitally aware; for example, potential candidates
do a lot of online research about Oracle. The new digital technologies have given them a window into
our organization, and it also allows us to comb through candidates very easily. They find us, and we
find them.”
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The Key Measures of Business Agility
Businesses that wish to measure their agility can choose from a number of ways of doing so, including
their recent record of:
• Identifying significant changes in market demand or emerging risks, and taking action before
these start to impact on profitability.
• Entering a new market.
• Responding to a market opportunity by launching a new product or service.

• Responding to a new opportunity or threat by transforming the business model (i.e. fundamentally
changing the way the business makes, delivers, and/or sells its products and services).
• Launching a new digital initiative to enhance the customer experience.
• Rolling out a new business unit.
• Acquiring another business.
Figure 14 Evidence of Business Agility over the Last Three Years
Saw opportunity; launched new product 56%

43%
Identified change and took action 55%

45%
Entered a new market 51%

35%
Launched a new digital initiative 51%

44%
Transformed the business model 49%

41%
Rolled out a new business unit 44%

32%
Acquired another business 38%

34%
0% 20% 20% 30% 40% 50% 60%
We indicate the benefit of modern finance to a business 56

%in figure 14. This shows how businesses
whose finance teams are further advanced towards the new operating model for modern finance have
demonstrated their agility over the last three years. For example, they have been more active than
those without the benefit of progress towards the modern finance operating model in the search for
new growth.
Have successfully launched a new Entered a new market, vs only
56% product or service in response to a

new market opportunity; only 43% of
51% 35% of others.
others have done the same.
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40 51%
Agile Finance Revealed: The New Operating Model for Modern Finance
For Arby’s Pipes, the role of finance is to actively participate in the process of finding new growth areas,
especially in ways that can improve the customer experience. “Ultimately, we are trying to move the
whole system into the 21st century, in terms of letting the customer interact with us the way they want
to interact with us, whether that’s on their mobile device, on their computer, or in person,” notes Pipes.
“Finance is very active in this process, using a multi-discipline, cross-functional team to make decisions
on capital investments to support this digital initiative.”
Figure 15 Evidence of Business Success
Revenue Performance EBITDA Performance

95%
89%
70%
63%
33%
25%
11%
5% 5% 4%
0% 0%
Positive Stayed Declined Positive Stayed Declined
growth flat growth flat
Agile Finance Leaders Others Agile Finance Leaders Others
As you can see in figure 15, agile finance leaders were more likely to report positive growth in revenues
(89% vs 63%) and profitability (95% vs 70%) when asked about trends in their business’s performance
over the past three years. (EBITDA = Earnings Before Interest, Tax, Depreciation and Amortization.)
This is a highly meaningful finding. Critically, it also meets our expectation that finance teams adopting
the new operating model for modern finance are better able than others to support their business to
become agile.
“We have achieved an

approximately $142 million
bottom line improvement from
2014 to 2016. It has taken great
agility to make the right business
decisions in order to achieve that
level of improvement.”
CHAD A. ECKES,
EVP OF CORPORATE SERVICES AND CFO,
WAKE FOREST BAPTIST MEDICAL CENTER
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6. CONCLUSION

The finance function has to transform for the digital age if it is to enable business to be agile. And
businesses increasingly need to be agile, just to survive: consumers’ demands are unpredictable and
digital technologies and internet-enabled new business models will disrupt many sectors. To flourish in
this environment, businesses must be highly adaptable and capable of rapid, constant change. Just as
an agile business must be ahead of the curve in taking advantage of developments in technology, so
too must finance.
“Agile Finance Revealed: The New Operating Model for Modern Finance” identifies and describes the
emergence of a new operating model for modern finance. This is empowering businesses to achieve
that all-important agility that’s utterly essential to success in today’s rapidly-changing economy.
Boosting the Analytical Powers of Finance

This new operating model for modern finance is the latest stage in finance’s long-running journey of
transformation into the digital age. In it, finance departments harness cloud and digital technologies to
improve – and often to revolutionize – the efficiency and responsiveness of their accounting operations.
The leaders also place an important emphasis on automating more of the financial planning and analysis
process, using predictive analytics, artificial intelligence, and machine learning to boost the analytical
powers of finance. This frees and enables skilled finance professionals to partner more effectively with
business managers and colleagues with other expertise.
Digital is already having a massive impact on the face of finance, but this is just the start. As our
report highlights, Accenture analysis suggests that by 2020, cross-functional integrated teams will be
delivering 80% of traditional finance services. This will multiply staff productivity by some two to three
times. And, in an additional bonus, costs will be slashed by 40%.vi
Driving Business Improvement

Statistical analysis of survey data and insights from interviews confirm the evidence that a number of
major progressive businesses gave us: that the new operating model for modern finance can enable a
finance team to drive a business more efficiently and effectively. In short, helping it to become more
agile and more successful.
One of the most important aspects of this research was to identify the attributes of these agile finance
leaders. In doing so, we found that they are further advanced in their transformation journey in terms of
structure, systems and skills.
We also measured their agility, and found that they are more likely to possess the attributes that
businesses need to become agile. In addition, the businesses that agile finance leaders support are
more likely than others to have demonstrated agility and to be achieving profitable growth.
Learning from the Leaders

Fortunately, others can learn from the attributes we have revealed of those who are further along
the finance transformation journey. And, as in many forms of business change, it is the soft things,
especially skills and culture, which are hardest to get right.
Addressing this skills gap is the biggest challenge, and the new operating model for modern finance
requires finance teams to assemble a range of new skills. The need for analytical skills is clear, but it’s in
the area of business acumen and commercial awareness that the greatest weakness exists. Here, only
36% of agile finance leaders rate their level of competence as “excellent”.
While agile finance leaders recognize that this skills gap is their greatest challenge, being more
ambitious than their less advanced peers they also have plans and performance measures to help
them to close that gap. As well as developing the skills of their existing finance teams, these plans
include recruiting experts from other business disciplines, including those with analytical or commercial
expertise, to complement the traditional accounting skill set.
Next Steps for Businesses

While factors like leadership and having a mandate are
undoubtedly important, technology is overwhelmingly “Never waste a good crisis. For
the most important enabler of finance transformation.
us, a crisis was an opportunity
And because appropriate cloud-based solutions are
available, technology is not the biggest challenge. and the dissolution of what
Far from it – cloud technologies put the new wasn’t working.”
operating model for modern finance within the
reach of most businesses. J. MICHAEL GOWER, EVP FOR FINANCE
AND ADMINISTRATION AND UNIVERSITY
The challenge then is to implement a change program
TREASURER, RUTGERS, THE STATE
and to develop or recruit the talent that’s needed to do
so. The following key considerations must always be UNIVERSITY OF NEW JERSEY
borne in mind:
• F
inance transformation is a major change project. The starting point is to have three important
properties: a clear understanding of the new role for finance; sponsorship from the leaders of the
business; and buy-in from those going on the journey. In addition, success stories that provide proof
of concept by showing what finance can contribute may improve finance’s credibility.
• A
gap analysis should also be carried out. Where are we now relative to where we want to get to?
What resources will we need? What capabilities do we need to develop? Have we the capacity and
culture to be flexible and implement change?
• The
CFO must agree to a map for the journey, the milestones to be achieved, and the measures of
performance. The software-as-a-service cloud-computing model limits the level of capital expenditure
required. But, as this will inevitably be a major project, sign-off will be required on the business case.
• Partners
with experience of similar projects and expertise in technology must be selected on merit,
based on their track record and reference clients.
• Project and change management disciplines must always be applied.
• To
manage the transformation, organizations will need measures of their progress towards the new
operating model for modern finance.
• To
build credibility and maintain buy-in from internal customers across the business, organizations
will need measures or evidence of how finance supports business agility.
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• The greatest challenge is to develop a finance team with the range of complementary skills that are
needed. The first step is to identify the skills required and the gap to be closed through recruiting or
developing talent.
• Buying
in scarce talent is expensive so leading organizations put an emphasis on developing talent
in-house. They will often have training academies and career planning programs that include rotation
to gain a broad range of experience because they recognize that 80% of learning is gained on the job
when theory is put into practice.
Next Steps for Management Accountants:
Computerization has long threatened the traditional roles of the accountant and auditorvii. And that
threat is being compounded further by the gathering wave of digital technologies that can automate
knowledge work.
Accountants must be alert to how their world of work may change and develop a personalized
continuing professional education (CPE) plan that’s in line with their own potential and ambitions.
Fortunately, as competition erodes margins and intangibles increasingly become the drivers of value,
the discipline of management accounting is becoming ever more important. That’s because it’s about
providing accounting and management information, and facilitating an objective, rational and measured
commercial approach to improve decision making and performance management.
Critically, the quality of these decisions is the first intangible on which others are built.
The Strength of the Management Accountant
Management accountants are deployed to work alongside business managers in business-partnering

roles to bring professional rigor to performance management. Recent AICPA and CIMA researchviii
has found that the objectivity they bring and the questions they ask can prompt the collaborative
conversations needed to generate insights and improve performance. However, this collaboration
requires strong business understanding and influencing skills. A good knowledge of data sources and
the potential in analytics will be needed too.
In short, above all other finance professionals, management accountants stand to gain most in the
digital era – provided they follow personalized CPE strategies that reflect the changing needs of their
organization, their sector, and their own career aspirations.
Where are you in your journey

to agile finance?
Go to the Agile Finance Revealed feature page and
find out more:
oracle.com/agile-finance-revealed
7. APPENDICES
Appendix I. Sample and Methodology
To create this report, the AIPCA engaged Longitude Research to carry out a survey of senior finance
professionals in major businesses across a range of sectors in the USA and Canada.
We wanted the research to focus on businesses with total revenues of over $200 million. In addition,
we wanted to take an industry-based approach to our analysis, surveying organizations in five key
industries (financial services, healthcare and life sciences, manufacturing, retail, and higher education).
This would enable us to understand which sectors are most advanced in adopting the new operating
model for modern finance, and allow us to benchmark their performance against their peers.
Figure 16 Survey Sample
Total Revenue Sector
Financial Services 85%
31% 31
23%% 23% Higher Education 85%
31 31
23%% $1-5
23billion
Healthcare and life sciences 84%
% -
$200 million %
Manufacturing 83%
$1 billion
Retail 83%
26% 26
20%% 20% Technology, media and
telecommunications (TMT)
22%
26% 26
20%% 20% Energy and natural resources 21%
Professional services 20%
$5-20 billion $20 billion

10 20 30 40 50 60 70 80 90
The survey was completed by 483 senior finance professionals, 76% of whom were from the USA and
24% from Canada. These respondents all represented organizations with revenue of over $200 million.
A satisfactory spread across the turnover bands ($200 million - $1 billion, $1 billion - $5 billion,
$5 billion - $20 billion and $20 billion plus) was achieved.
The financial services, higher education, healthcare and life sciences, manufacturing, and retail sectors
were each represented by robust samples of over 80 respondents. This has allowed us to present
findings by sector.
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Appendix II. References
i
The CFO as Technology Evangelist, Oracle and Accenture, 2015
ii
Agrawal, Ankur, Emma Gibbs, and John Hughes Monier, “Who’s Better at Strategy: CFOs or CSOs?” January 11, 2016,
Harvard Business Review
iii
Axson, David A.J., “Finance 2020: Death by digital”, Accenture Strategy, 2016
iv
Finance 2020; Death by digital, David A.J. Axson, Accenture Strategy, 2015
v
CGMA Oracle Digital Imperative report, 2015-6
vi
Finance 2020; Death by digital, David A.J. Axson, Accenture Strategy, 2015
vii
The future of work, how susceptible are jobs to computerisation, M Frey and C Osborne, 2013
viii
CGMA Business Partnering report, 2015
ix
The Digital Finance Imperative, CIMA, 2015
Appendix III. Authors
Peter Simons FCMA, CGMA. Associate Technical Director - Management Accounting. Association of
International Certified Professional Accountants
Lori A. Sexton CPA, CGMA. Senior Technical Manager - Management Accounting. Association of
International Certified Professional Accountants
CGMA and Chartered Global Management Accountant are trademarks of the Association of International Certified Professional
Accountants. These trademarks are registered in the United States and in other countries. The AICPA logo is a trademark of the
American Institute of Certified Public Accountants and is registered in the United States and in other countries.
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Where are you in your journey
to agile finance?
Go to the Agile Finance Revealed feature page
and find out more:
oracle.com/agile-finance-revealed
Talk to an Oracle applications specialist: +44 207 562 6822 - CHAT NOW -

Copyright © 2017, Oracle and/or its affiliates. All rights reserved. This document is provided for
information purposes only, and the contents hereof are subject to change without notice. This document
is not warranted to be error-free, nor subject to any other warranties or conditions, whether expressed
orally or implied in law, including implied warranties and conditions of merchantability or fitness for
a particular purpose. We specifically disclaim any liability with respect to this document, and no
contractual obligations are formed either directly or indirectly by this document. This document may not
be reproduced or transmitted in any form or by any means, electronic or mechanical, for any purpose,
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AGILE

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3 THE NEW OPERATING MODEL FOR MODERN FINANCE 14

4 AGILE FINANCE LEADERS: ATTRIBUTES REVEALED 26

5 REVEALING AGILITY IN FINANCE 34

For most businesses these days, change is not

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The AICPA welcomes working together with

John Windle, FCMA, CGMA

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Take an online tour Are your Financial

Enabling Business Agility

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Achieving Profitable Growth

51% vs 17% 45% vs 17% 44% vs 12%

44% vs 12% 81% vs 56%

81% vs 56% 89% vs 63%

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89% vs 63% 95% vs 70%

Determining the Role of Finance

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When North Carolina-based Wake

Becoming Powered Up for Success

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Take an online tour Are your Financial

One thing is clear: internet-enabled business models and disruptive

Rethinking the Finance Mission

According to new research from

KHOZEMA SHIPCHANDLER, CFO, GE DIGITAL

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Please see Appendix I. for a description of the project methodology.

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Take an online tour Are your Financial

Improving Quality and Efficiency

DAVID A.J. AXSON,

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Figure 1 The New Operating Model for Modern Finance

Management & Development

Subject Matter FP&A Analytics Decision Support

• Organizations are increasingly applying machine learning or embedded controls to further

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Financial Planning & Analysis/Analytics

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Decision Support / Performance Management

Management and Development

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Measuring the Progress of Transformation

Figure 2 Finance Transformation: The Extent of Implementation

Greater Efficiency (and Consistency)

Cloud technologies to accelerate finance modernization 23% 35% 32%

Artificial intelligence or embedded controls for risk/compliance 24% 32% 28%

Cross-functional teams support decision-makers 21% 40% 33%

0% 20% 40% 60% 80% 100%

Some Implementation More than Some Implementation Full Implementation

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and skills must be aligned.

Figure 3 Finance Transformation: The Obstacles

Finance is uanable to get the information it needs in the format 26%

3 THE NEW OPERATING MODEL FOR MODERN FINANCE 14

• Organizations are increasingly applying machine learning or embedded controls to further