Arun Roy is the Chief Financial Officer of CHERVON North America Inc. CHERVON is one of the world’s top 10 manufacturers of power tools, outdoor power equipment and related products. Although the company’s Global headquarters is in Nanjing, China, it has locations across USA, Canada, Europe, and Australia too. Here Arun talks to Finance Monthly about the company’s North American branch, his role as a CFO and the current business climate.
Can you tell us a bit more about CHERVON?
The company has always been committed to helping build a better world by building better tools. We focus on hand-held portable power tools, stationary bench tools, laser and electronic equipment and outdoor power equipment. With world-class R&D, testing and manufacturing capabilities; collaborating sales & marketing groups; industrial design professionals and service teams throughout the world, we are able to provide satisfying solutions that meet or surpass our customers’ expectations. Over more than 20 years, CHERVON has earned its reputation for continuous innovation and dedicated pursuit of professionalism. Today, CHERVON-built products are sold by more than 30,000 stores in 65 countries. We pride ourselves on being a TOP 10 player in the global power tool industry.
Tell us a bit about your career path prior to becoming the CFO of CHERVON North America?
I started as a Management Trainee with the German Automotive Parts Manufacturer Robert Bosch in India, 26 years ago. Over the years, I worked in different functional areas, such as Corporate Finance, Internal Audit, Human Resources, Supply Chain and Manufacturing operations in India, China, Europe and USA. My last role was Chief Operating Officer for the SKIL/SKILSAW Brands. My journey at Bosch was an interesting one, as it broadened my perspective and taught me to be a better “people person” through the various teams I led in different parts of the world.
What goals did you arrive with as a CFO of CHERVON North America?
As I joined CHERVON NA through an acquisition, it was important for me to ensure that the acquired brands stabilized themselves within the CHERVON Network and be a key strategic player in redefining the overall organization to support the desired growth, as well as developing the new roles that we were taking on. It was also important for us to invest in people and processes to help us come to terms with the growing needs of our North American Business.
What is your opinion of the current Business climate?
The business climate is currently cautiously optimistic but at the same time, as a Company, we need to ensure we leverage our market position through continuous and cost effective innovation. The sweeping policy changes in the USA are impactful but need to be studied further to determine the interim impact. Currency and Commodities are back on the radar and will impact procurement strategies, especially for companies with supply chains overseas.
In your opinion, what might the future of financial directors look like in the upcoming years?
The world of Finance and the pace at which business decisions are taken are changing rapidly. Finance Directors are seen as strategic partners of the business and play an important role in the overall strategy of the company. The role also requires a proactive approach versus a reactive one to ensure that risk is mitigated before the fact. They need to think of their feet and it is all about speed.
Mid-size companies are becoming global players and forces to reckon with. The expectations of the CFO role are also changing to align with this trend. We need to be strategic and ensure we partner with the CEO to drive a common vision. It is not all about cutting cost, but about being rational and real, while keeping the long-term vision and objectives of the organization in mind.
Website: http://www.chervon.com.cn/
Budgeting is a highly necessary and mandated task for any business, with an extremely structured process in most cases. But as budgeting expands to include a broader scope within companies, how can we work towards a collaborative budget? Chris Howard, Vice President of Customer Experience, Centage, explains for Finance Monthly.
I’ve yet to speak to anyone involved in the budget modeling process who didn’t wish for an Excel feature that somehow made budget collaboration easier. And I speak to a lot of people.
The folks responsible for creating the ‘master’ budget models, often CFOs, don’t have an easy time of it. They need to gather input from numerous people within their organizations (most of whom have no background in corporate finance) and then validate the data they receive. All too often, they rely on managers to put together entire budgets based on higher level numbers, guidelines and goals they provide.
Once that’s done, they need to piece together a myriad of spreadsheets and apply complex formulas and macros to arrive at projections. This last bit typically occurs late into the night.
But here’s the thing: Excel was never meant to be a collaborative tool. It simply wasn’t designed to farm out files and to collect and manage the input of multiple users. That means even the most advanced power user can’t deliver the level of collaboration finance teams need.
Beyond input consolidation, the CFO’s I speak to say they have an urgent need for automated rigor in their budget models to ensure accuracy. It’s not uncommon for a CFO (or another budget contributor) to find that an error – such as a broken link or formula – which causes a costly displacement in the budget. The result is a lot of discomfort.
Given needs and constraints of budget modeling, what does a truly collaborative budget look like? How does it work? Based on what I’ve heard from CFOs in the mid-market, here’s what I think are the requirements of a collaborative budget model:
Bottom-Up vs. Top-Down Management
Although it’s the finance team’s responsibility to manage a budget, the budget itself belongs to every department within the organization. It’s the CMO who determines how to spend the marketing budget, and the CTO how to best manage IT investments. This means that budgets must be managed from the bottom up, rather than top down, and that buy-in is essential. But when a CFO is forced to control the budget model via a master spreadsheet, those models are, by definition, managed from the top down. This results in a disconnect between the model and the day-to-day activities of an organization. Monitoring performance vs. plan becomes impossible.
Role-Based Security
Budgets are filled with highly sensitive information, personnel data, salaries and the like. A collaborative budget should prevent the wrong users from accessing data that’s not directly related to their roles in the organization. For this reason, a collaborative budget model should have role-based security with an interface that’s customized to the user’s function. What the VP of Marketing sees should be very different from what the CFO sees. Needless to say, this is far outside the realm of Excel’s capabilities.
Financial Integrity Safeguards
In a true bottom-up collaborative budget, most of the contributors will have no background in corporate finance, and little understanding of the differences between a balance sheet, cash flow or P&L statement. How do you ensure that input from these contributors is correctly tied to the right outputs, and is fully compliant with US GAAP accounting rules?
Collaborative budgets need some kind of built-in rigor that protects the financial integrity of the outputs, allowing non-finance team members to enter data without breaking things. In other words, data entered by facilities management is automatically tied to the correct outputs without that user even realizing it.
Self-Serve Reporting
Finally, a collaborative budget must promote self-sufficiency, especially when it comes to reporting. Every CFO I speak to tells me his or her goal is to create reports once – with financial rigor firmly in place to ensure integrity – and then hand over the reins to the CEO or Board. This is the only way a CEO is free to monitor performance vs. plan, cash flow or P&L on a monthly or even a weekly basis on their own, and without the CFO’s constant involvement.
In order to turn over the reins, the entire budget needs access to the data in real-time, otherwise the CFO will be forced to update the reports manually (hardly the level of self-sufficiency they’re looking for).
Why a Truly Collaborative Budget is Worth Working Towards
A truly collaborative budget model will, by definition, require finance departments to jettison their budgeting spreadsheets – a painful exercise given that most of them have been working with Excel since their pre-college days. But the payoff will be huge.
A budget model that combines historical information with real-time data is the only way to spot trends, threats and business opportunities. And it will be “board ready,” meaning it will allow teams to respond with accuracy to the Board of Directors when they ask about ramifications of any number of business changes on the P&L, balance sheet and cash flow statement.
Put another way, it’s time to say goodbye to that monster spreadsheet your team just finished creating. Instead, implement a budget that lets you combine data from multiple sources to present a single version of the truth. You’ll get a living, evolving document that significantly improves the quality of information you deliver throughout the year.
By Daniel Mason, Managing Director UK, Prophix Software
Headquartered just outside Toronto in Canada, Prophix Software is a leading developer of innovative performance management solutions, designed to automate financial and operational processes. Thousands of finance leaders in nearly one hundred countries use Prophix to empower their organisations and gain valuable insight into business performance. Prophix and its partners deliver superior value by combining high-end functionality with low cost-of ownership and fast implementation. Daniel Mason has been with the Prophix organization for just over 7 years, having spent a total of 17 years working within the corporate performance management sector. He is currently responsible for Prophix’s UK operations, including sales, marketing and professional services.
Here Daniel explores the modern finance function, the skills finance leaders need to recruit and offers his views on how organisations can prepare for the future by investing in their finance teams.
You can’t handle the truth
The truth of business comes out in the numbers. Not just revenues and profits, but headcount and staff turnover, customer churn and marketing reach.
Finance has historically been the natural home for numbers in an organisation. But recent reports show that finance teams are struggling to keep up with the growing demands of modern business. A lack of data literacy, continuing reliance on manual tools, and poor collaborative skills, are seeing the finance function side-lined as business transforms in this data-driven age.
The challenge is more acute now, highlighted by the capabilities brought by global connectivity and new technology. But issues of skills development and technology investment in finance are not new.
I’ve been working in the finance world for the last 17 years and the same issues were apparent when I first moved over. Prophix was founded on the recognition of some of these issues 30 years ago. Yet still, many – perhaps most – finance teams have not changed their practices. Why?
Barriers to progress
In my experience there are three things that hold the finance function back.
The first is a lack of resources. Even though IT was born out of the finance function in many organisations, investment in IT for finance has long been hard to secure. Because it doesn’t have a visible ‘front line’ effect on sales, it’s often overlooked.
The second is the knowledge base. Too few finance professionals have been on a mission to grow their skill base and expand their knowledge beyond its current bounds. The reasons for this are sound: the realities of operating a modern finance function haven’t left much room for personal development. But breaking the cycle of all-hands-to-the-pumps manual processing requires that time to step back and analyse the current processes.
The third reason is a lack of soft skills across the function - particularly communication. This isn’t about lazy stereotypes of finance professionals. It’s about formalised training in building collaborative relationships and releasing staff to have the time to go and build them. While other functions have moved on in this regard, finance has all-too-often remained static.
Building maturity
It’s possible to begin to quantify the problem, or at least recognise just how widespread it is amongst finance teams. The global analyst firm Gartner created a ‘Maturity Model’ to map the transition from historical finance practices to new. That means moving from a messy world of manual data manipulation, isolated in its own silo, to being truly smart about data, and providing strategic insight across the business.
In this Maturity Model, Level One represents those unaware of corporate performance management (CPM) tools – the term for technologies that enable more automated and integrated data handling in finance and beyond into business operations. Level Five represents companies making best use of data – connecting across departments and driving business strategy.
What’s interesting about Gartner’s analysis is that in the most recent update of its research, no companies were found to have reached Level Five. That’s no companies, of any size.
At Prophix, we work primarily with mid-market companies. We, and they, often expect that the largest global organisations will be significantly more sophisticated. But it seems not. It seems all finance teams in every size of organisation might be facing the same barriers to progress.
The ideal modern finance function
These barriers aren’t just bad for the finance function. They’re bad for the business. Finance’s requirement to look backwards as well as forwards puts it in the strongest position to drive strategy within the organisation. By underinvesting in skills, development and infrastructure to advance the finance function, the business is missing out on better insight, evidence-based strategy and enhanced day-to-day decision making.
There are three core areas where investment can unlock a transition of huge value to the organisation.
The first is what might be called ‘Smart Compliance’. Finance teams invest untold time – and sweat – in the production of mandated reports of one form or another. Still today, most organisations produce these reports through manual manipulation of spreadsheets with very poor repeat-ability and little robustness. The skills of manipulation required for a particular task are often locked in the head of a single individual, and audit trails are incredibly hard to produce.
Technology can remove the burden and often manual process of compliance through “Smart Automation”, which not only frees up human resource, but dramatically increases transparency and reduces risk. With time freed, finance teams can start to address more forward-looking issues of strategy and operational readiness.
This operational readiness forms the basis of the second major step. In an accelerated world, getting good information at speed is critical to good decision-making. Given the resources, finance can be the home of “Operational Intelligence”, giving leaders and departments the insight they need to improve decision-making. Analysis can be made available in near-real time against external events.
Of course, sometimes organisations need to look well beyond today and it is improved “Foresight” that forms the third pillar of improved service from finance that can be unlocked with investment. Planning stops being an annual trudge through budgets and likely expenditure, and becomes a process of acquiring and qualifying strategically valuable foresight. This delivers increased accuracy of forecasting, multi-dimensional modeling, resource correctly allocated to sales expectations and much better reconciliation of cross-functional planning. Imagine being able to quickly realise multiple future scenarios and explore the impact of different factors and decisions on the organisation’s success.
Partnering across the business
The ideal finance team should be seen as finance partners, having the trust and understanding of all departmental managers. It’s not enough to simply have the skills and collect data, analyze and report it as required. Since almost everything a company does is ultimately routed through finance, finance leaders need to be able to cooperate, partner and work efficiently with the teams and departments that report to them.
This highlights the importance of investment well beyond technology and systems. Skills remains a big gap in the finance function, both technical and more general.
The technical skills gap is in systems thinking, and financial planning and analysis. With so much effort devoted to manual processing, teams have lacked the opportunity to go beyond the immediate challenge and start to look to the future. There has been little opportunity below the most senior levels to examine operations – both in finance and the wider business - and consider improvements. Freeing time through automation creates this opportunity and the skills gap rapidly becomes apparent: even when the tools are available, teams don’t have the skills to apply them to their maximum potential. For this reason, investment in CPM should be paired with investment in up-skilling to maximise the benefit.
The softer skills gap is in communication, though perhaps calling it a ‘soft’ skill underplays its importance. To deliver the most value to the business, finance teams need to get well beyond the borders of their function and learn to communicate effectively, gain mind-share within departments, and socialise ideas. Building trust across the business will allow finance to enhance every department’s capability with better insight and support for improved foresight and operational decision making.
The truly modern finance function features a mix of skilled individuals who understand new technology, and who are able to interpret data, come up with a solution, point it in the right direction, and then are able to take that information and communicate it effectively through the organisation. Finance leaders need to look at training the people they have, but also at recruiting individuals who bring this mix of skills. People who have the financial intelligence and commercial acumen to understand the data, and see what’s going on within an organisation, and who are confident interacting with their colleagues and communicating information and ideas.
Preparing better for the future
At Prophix, we see lots of finance leaders who are happy with a large team dedicated to manually processing data. They don’t want to grow their role. They don’t want to embrace change. Until a risk is realised, or competitive advantage is lost. By then it can be too late – for the finance function, which has lost its role as the arbiter of truth. Or in the worst cases, for the business.
Finance leaders with ambition need to get closer to the CEO and push the business case for change. They shouldn’t just be signing off big-ticket investments in all the other areas of the business going through rapid transformation, it should be part of that transformation. Performance management may be thought of as a low priority because it’s a ‘back office system’. But extensive research shows that companies that invest in performance management generally outperform their peers 2:1 within the marketplace. The business case for change is strong.
Investment is just the start though. As Gartner’s Maturity Model shows, building a truly modern finance function is a journey, and one that all organisations are still on. 70% of organisations are still only at Level One, not even aware of how much better things could be.
Delivering the business benefits of a modern finance function requires continuous evolution, review, and investment. It's not a one-off project and it certainly can’t be addressed purely with technology. Skills and talent are absolutely crucial, both developing existing talent and recruiting the right new people into the organisation. People who blend technical skills with systems thinking and the confidence to deliver that value across the organisation.
As with any journey, the starting point is to assess where your company is right now. At future-of-finance.com we have developed a comprehensive audit tool that will give you an immediate idea of your position and provide you with a 17-page report with practical guidance on what to do next. So get going today.
Read more at www.future-of-finance.com
Helene Bouteleau began her career in 1997 and has since then held a number of Management positions. In August 2000, she joined the PSA Group and its three world-renowned brands - Peugeot, Citroën and DS. Her first role was in the finance department in Portugal but she then moved to Paris to become a Key Account Manager and expand her business experience and knowledge. In the following years, Helene held a number of Senior Management positions with the PSA Group around Europe, including Director of Finance for Peugeot Croatia and then Peugeot Portugal, Head of B2B coordination and Used Vehicle Sales for Peugeot and Citroën in Iberia and finally, Peugeot Brand Director in Portugal.
Since February 2016, she’s been Director of Finance for the PSA Group in the UK’s Headquarters in Coventry. Here Helene spoke to Finance Monthly about her career, the impact she’s had on PSA Group’s performance and tells us how CFOs can create value through their Finance strategy.
Could you tell us a bit about your career path prior to becoming the CFO of PSA Group? What brought you to your current position?
Before becoming CFO of PSA Group in the UK, I had held several finance positions and I had already had CFO experience within the group (in Croatia and Portugal). Having this previous experience gave me the capacity to adapt and deal with difficult situations. To reinforce and develop further my experience, I had also held positions within other areas of sales, such as Key Account Manager for a B2B in Paris, which allowed me to have direct contact with customers, Operations Director in Portugal, which allowed me to experience all the other back office areas like Network Development, Programming and Logistics, Aftersales and Quality, B2B and Used Cars Activity. Before joining the UK office, as a Brand Director of the Peugeot Brand, I had a wider vision of the business. The fact that it was in a smaller market provided me with an excellent overview of the business and how as an organization, we constantly have to adapt to changes and be flexible. Evolving and growing the business further come with constant challenges for all of us in PSA Group.
PSA Group’s sales and revenue in 2016 reached €54 billion. How would you say has your role impacted the company’s performance last year?
All of my roles as a CFO have always been paired with working in difficult and challenging situations and the latest one is no exception – we were faced with Brexit a few months after my arrival. With the UK’s decision to leave the EU, the company faced some issues and dealt with a new context of uncertainty, as well as the foreign exchange impact. All the business decisions had to involve the Finance department, as the goal was to find the right balance for volume and profitability. The Partnership with the Business Areas had to be continuous last year and still carries on in 2017. The closer we are to the Business and the Field areas, the better we can react.
What motivates you about your role? Has being a CFO of a multinational company always been your ultimate goal?
What motivates me about my role is the fact that I am an added value for the company and the business. The whole organization must be focused in creating value. With my previous experiences, I managed to have an overview of the business – something that is very important in the decision-making process and gives me a different approach towards the Businesses areas. I really enjoy working within this business and being a CFO represents a key position and above all in a market with the maturity that exists in UK. I take this challenge as an important step in my career but not ultimate.
What lies ahead of you and PSA Group? What are your aspirations for the future?
Although I’ve been with the PSA Group for 17 years, the organization has allowed me to experience a lot – I’ve worked in 5 countries in 9 different roles. This flexibility and constant change mean that we are constantly evolving and moving forward. I hope my time with the PSA Group continues to be that exciting in the future.
You spoke at the CFO Agenda conference in London on 1st of June. Could you give us a brief synopsis of your talk?
This session explored the key strategic drivers for strategic thinking and planning within an organization, as well as ways of creating value through your Finance strategy. In fact, this is fully in line with my business vision and how I manage my team. Naturally, the Finance Department has a cost controlling function, but what I find to be more important is to be part of the team, in order to drive the business and increase the volume and profitability. Thus, I believe that all Finance Departments must work as a partner with the rest of the teams. The Finance function must understand that it is our job to satisfy our customers – internal customers - and we must work in a proactive way. Once we manage to achieve this, the credibility and the confidence allow us to develop a global team focus on the business and the important growth factors. Of course, in the meantime, the Finance Department must remain objective and act in the best interests of the company.
How could CFOs create value through their Finance strategy?
It is my belief that the CFO is in the best position within an organization to foresee the potential issues that can arise in the future. Therefore, the CFO is the one who must drive the strategy changes, along with the business areas and the rest of the Management Board. Once the business areas have the right understanding, they will be able to design actions, adapt the business strategy to the context and then tackle the possible difficulties. This will then result in an innovative and proactive company – a leader instead of a follower.
What is the best advice you would share with fledging CFOs and Finance Directors?
The best advice that I can give to a CFO is to be genuinely interested and passionate about the business, while sharing this passion with the whole team. A CFO must really understand the story behind the figures and this is fully achievable only when you’re close to the field teams. This background knowledge will then enable you to add real value for the company.
Finance Monthly’s May CFO Insight section looks at the work of Dr Stephan Hardt – the Financial Director of one of Deutsche Telekom's subsidiaries and one of the largest IT service companies in Europe – T-Systems. Here Stephan, who’s been the company’s director of finance since 2012, talks about the finance function at the company, his own role, challenges that ICT providers are faced with and the future of T-Systems and its parent company.
What have been your major achievements since becoming T-Systems’ Director of Finance in 2012? How have your role impacted the company’s performance in the past 4 years?
After my first 100 days, the Finance team began focusing on two major topics: Making sure that the company is profitable and that this profitability is sustainable. Secondly, the Finance team itself required a transformation process to become a high-performing business team, as well as the provisioning of proper finance tools.
The turnaround was achieved by various measures, e.g. restructuring the company to increase its productivity and increasing the transparency on customer projects. Furthermore, we started with a rigor cost management approach, which included the operative business units and the cross-function units like Finance, Human Resources and internal IT. In addition to those measures, the Finance team developed and implemented two tools which were essential for the productivity increase of the business units: A forecast and an order-to-cash tool. Both tools enabled the business units to have access to accurate data to manage their business properly.
Early in 2013, the Finance management team developed and established a performance improvement programme for the Finance team: the HIP (HIgh Performing) team. The main intention of this programme was a mind change throughout the entire team. It was all about collaboration inside and outside of Finance and transforming the team to business partners for the operative business units.
Overall the turnaround for T-Systems has been achieved and the Finance team has been transformed into a lean and efficient cross-function unit which acts as a business partner for the business.
The finance function at T-Systems has spent the last three years investing in a forecasting tool – could you tell us a bit about it?
In 2013 the Finance team implemented a forecast tool that was redesigned accordingly to meet the business requirements of the UK senior management team. The forecast tool is designed in a way that it can be used as a planning tool, as well as a forecasting tool. Its design is based on a data cube which allows business owners to review their business units from various perspectives: It provides a view on the level of the business unit and its cost centres and projects as well as its services/products and finally its customers. In addition, the tool provides a country specific breakdown for international customers. Since the forecast tool was implemented, we recognised a strong reinforcement of the entrepreneurial ownership of the business. Due to the fact that the business owners are responsible for populating the planning and forecast data into the forecast too, the quality of the data has increased significantly. The managers are thinking and acting more and more as entrepreneurs. Finance has moved away from the classic role and common understanding of populating data into reporting tools - it is now acting as a business partner, providing management consultancy to the business by reviewing data. To strengthen and foster the knowledge and financial understanding of the business, the Finance team has built up a Finance Academy which offers the management appropriate training sessions to develop their entrepreneurial ownership.
Currently, the Finance team is working on extending the forecast tool to a rolling 18-month view. This is a further step towards a more anticipating management style. The business owners have to think in mid-term views, instead of being focused strictly on the year-end. We need to move away from being reactive to a more pro-active thinking and acting.
Given the dynamic nature of the sector, what would you say are the biggest challenges that ICT providers are facing in 2017? How are you and T-Systems working towards overcoming them?
ICT providers will be facing various challenges over the next years; not only in 2017. On the one hand, the ICT market is a highly competitive market. The number of competitors has increased significantly the last 5 to 7 years. The picture of the typical classic competitor has changed as well: Who would have thought 10 years ago that companies like Amazon, Microsoft or Google will become new competitors in the ICT market? Furthermore, you see a huge number of start-up companies with a highly specialised service or product portfolio bringing new advanced solutions around cyber security and artificial intelligence to the ICT market.
Secondly, the so-called classic business of an ICT provider is going to change. The number of classic outsourcing deals is diminishing. Companies have started to in-source their former IT departments, rather than outsourcing them. To overcome those challenges, T-Systems has started to invest in new technologies like SAP HANA Cloud, Software-as-a-Service (SaaS), Infrastructure-as-a-service (IaaS), Internet of Things (IoT) and Managed Security Services.
The Finance team itself underwent a reshaping programme which focused on topics like lean and efficient finance processes, near-shoring certain finance and controlling tasks, modern and advanced reporting system and new qualification requirements for the Finance team. Another aspect is moving the Finance team into the new era of digitisation: Using artificial intelligence for the treatment of supplier invoices (accounts payables) and a state-of-the-art dashboard for the (senior) management available on multiple devices like notebooks, tablets or smart phones.
What differentiates T-Systems from its competitors?
In comparison to other ICT providers T-Systems’ big advantage is its capability to provide global ICT services out of one hand: As the IT business unit of Deutsche Telekom Group T-Systems can offer telecommunication services as well as IT services around the globe.
T-Systems’ legacy is based on a strong salient DNA which is made of Telecommunication, Transportation & Logistic and Automotive.
During the last few years, Deutsche Telekom and T-Systems have established global strategic partnerships with numerous leading companies, either in the Telecommunication sector or in the IT sector. One of those strategic partnerships enables T-Systems to provide mobile services or network services around the globe: ngena – the Next Generation Enterprise Network Alliance formed by leading international telecommunication companies offer global network services on shared partner networks; and Freemove – an alliance of top mobile telecommunication providers delivering high-quality international mobile services to multinational customers by synchronising the know-how and capabilities of its members.
Additionally, Deutsche Telekom is paving the way for the next communications standard by building up the next-generation communications standard - 5G.
T-Systems is one of the leading Cloud providers by using new IT factories which meet the highest security standard. That’s why Deutsche Telekom and T-Systems are seen as the most trusted company when it comes to the handling of personal information in comparison to other big IT and TC companies. With its Telecommunication and IT services, T-Systems is also supporting the development of sustainable profitable growth not only for large enterprises, but also for the typical German Mittelstand (mid-market), which represents internationally operating small and medium enterprises.
Last but not least, according to recent research, T-Systems has top marks in multiple categories like SAP HANA Cloud, Software-as-a-Service (SaaS), Infrastructure-as-a-service (IaaS), Internet of Things (IoT) and Managed Security Services.
What lies on the horizon for you and T-Systems in the near future?
For Deutsche Telekom and T-Systems, it’s important to have a strong footprint in the UK. Therefore, one of T-Systems highest priorities is to improve its brand awareness in the British market. Deutsche Telekom has already a good position in the UK, as being the biggest shareholder of BT. Having said that, T-Systems has established several Sales Push Programmes to continuously enlarge its market position in the UK by providing excellent, leading services with Zero Outage. As a Finance Director, it’s part of my responsibility to ensure that the operative business units get the best financial support to enable them to achieve this overarching business target. Therefore, I have taken the personal sponsorship for two Sales Push Programmes: Pushing the Automotive Business and the Data Migration Business in the UK.
Adaptive Insights recently released its global CFO Indicator report, which explores the pace of finance, its impact on agility, and what CFOs need to do to shorten their organisations’ time to decisions. Alarmingly, 77% of CFOs admit that major business decisions have been delayed due to stakeholders not having timely access to data and report significant delays with respect to tasks like reporting and ad hoc analysis.
“Corporate agility requires that organisations plan for multiple outcomes, particularly as economic conditions become increasingly uncertain, turbulent, and competitive,” said Robert. S. Hull, founder and chairman at Adaptive Insights. “CFOs can improve their organisations’ agility by accelerating the speed of scenario planning and analysis. By giving key stakeholders more immediate access to data, finance can dramatically improve decision-making—the key to maximising corporate performance.”
The report warns CFOs that the current pace of finance could threaten corporate agility and provides views on the practices that should be adopted to create a more forward-looking, agile environment.
Key findings in the report show that:
- The finance team is spending over half (53%) of its time on reporting and data gathering alone. This leaves many organisations looking back at history, rather than forecasting forward
- CFOs would like their teams to spend less time on report preparation and data collection (36%) and more time on forecasting and scenario analysis (40%). More and better analysis will lead to improved agility
- CFOs (49%) believe predictive analytics will most contribute to agility, followed closely by dashboards and analytics (45%). CFOs desire to transition away from historical reporting, and toward a more forward-looking approach
The need for speed…in reporting and ad hoc analysis
This quarter’s report reveals that key decisions around such things as capital expenditures, resource allocations, and investments have been delayed because stakeholders don’t have timely access to data. With shrinking product and innovation cycles—not to mention ever-increasing global competition—these delays can mean the difference between the success or failure of the business.
CFOs (47%) report that it is taking 11+ days to get reports into the hands of stakeholders, yet they (56%) would like it to take no more than five days. Ad hoc analysis is also taking longer than desired, as CFOs (60%) say this task takes up to 5 days, yet they would like it to take no more than a day. Reporting and ad hoc analysis represent two key areas that can be improved to enable better agility.
The impact of technology on agility
The desire to move toward a more analytics-driven organisation appears to be impacting CFOs’ decisions when it comes to implementing technology. Dashboards and analytics top the list of future purchases, with 45% of CFOs saying they will invest in this type of solution by 2020, followed closely by budgeting and forecasting tools (40%).
Discouragingly, it appears that most organisations continue to depend on point solutions that do not provide the integrated access to data that SaaS solutions can provide. CFOs report that, on average, only 33% of their organisations’ infrastructure is SaaS today with a desire to get to 60% by 2020.
(Source: Adaptive Insights)
Finance Monthly’s May CFO Insight section looks at the work of Dr Stephan Hardt – the Financial Director of one of Deutsche Telekom's subsidiaries and one of the largest IT service companies in Europe – T-Systems. Here Stephan, who’s been the company’s director of finance since 2012, talks about the finance function at the company, his own role, challenges that ICT providers are faced with and the future of T-Systems and its parent company.
What have been your major achievements since becoming T-Systems’ Director of Finance in 2012? How have your role impacted the company’s performance in the past 4 years?
After my first 100 days, the Finance team began focusing on two major topics: Making sure that the company is profitable and that this profitability is sustainable. Secondly, the Finance team itself required a transformation process to become a high-performing business team, as well as the provisioning of proper finance tools.
The turnaround was achieved by various measures, e.g. restructuring the company to increase its productivity and increasing the transparency on customer projects. Furthermore, we started with a rigor cost management approach, which included the operative business units and the cross-function units like Finance, Human Resources and internal IT. In addition to those measures, the Finance team developed and implemented two tools which were essential for the productivity increase of the business units: A forecast and an order-to-cash tool. Both tools enabled the business units to have access to accurate data to manage their business properly.
Early in 2013, the Finance management team developed and established a performance improvement programme for the Finance team: the HIP (HIgh Performing) team. The main intention of this programme was a mind change throughout the entire team. It was all about collaboration inside and outside of Finance and transforming the team to business partners for the operative business units.
Overall the turnaround for T-Systems has been achieved and the Finance team has been transformed into a lean and efficient cross-function unit which acts as a business partner for the business.
The finance function at T-Systems has spent the last three years investing in a forecasting tool – could you tell us a bit about it?
In 2013 the Finance team implemented a forecast tool that was redesigned accordingly to meet the business requirements of the UK senior management team. The forecast tool is designed in a way that it can be used as a planning tool, as well as a forecasting tool. Its design is based on a data cube which allows business owners to review their business units from various perspectives: It provides a view on the level of the business unit and its cost centres and projects as well as its services/products and finally its customers. In addition, the tool provides a country specific breakdown for international customers. Since the forecast tool was implemented, we recognised a strong reinforcement of the entrepreneurial ownership of the business. Due to the fact that the business owners are responsible for populating the planning and forecast data into the forecast too, the quality of the data has increased significantly. The managers are thinking and acting more and more as entrepreneurs. Finance has moved away from the classic role and common understanding of populating data into reporting tools - it is now acting as a business partner, providing management consultancy to the business by reviewing data. To strengthen and foster the knowledge and financial understanding of the business, the Finance team has built up a Finance Academy which offers the management appropriate training sessions to develop their entrepreneurial ownership.
Currently, the Finance team is working on extending the forecast tool to a rolling 18-month view. This is a further step towards a more anticipating management style. The business owners have to think in mid-term views, instead of being focused strictly on the year-end. We need to move away from being reactive to a more pro-active thinking and acting.
Given the dynamic nature of the sector, what would you say are the biggest challenges that ICT providers are facing in 2017? How are you and T-Systems working towards overcoming them?
ICT providers will be facing various challenges throughout the next years; not only in 2017. On the one hand, the ICT market is a highly competitive market. The number of competitors has increased significantly the last 5 to 7 years. The picture of the typical classic competitor has changed as well: Who would have thought 10 years ago that companies like Amazon, Microsoft or Google will become new competitors in the ICT market? Furthermore, you see a huge number of start-up companies with a highly specialised service or product portfolio bringing new advanced solutions around cyber security and artificial intelligence to the ICT market.
Secondly, the so-called classic business of an ICT provider is going to change. The number of classic outsourcing deals is diminishing. Companies have started to in-source their former IT departments, rather than outsourcing them. To overcome those challenges, T-Systems has started to invest in new technologies like SAP HANA Cloud, Software-as-a-Service (SaaS), Infrastructure-as-a-service (IaaS), Internet of Things (IoT) and Managed Security Services.
The Finance team itself underwent a reshaping programme which focused on topics like lean and efficient finance processes, near-shoring certain finance and controlling tasks, modern and advanced reporting system and new qualification requirements for the Finance team. Another aspect is moving the Finance team into the new era of digitisation: Using artificial intelligence for the treatment of supplier invoices (accounts payables) and a state-of-the-art dashboard for the (senior) management available on multiple devices like notebooks, tablets or smart phones.
What differentiates T-Systems from its competitors?
In comparison to other ICT providers T-Systems’ big advantage is its capability to provide global ICT services out of one hand: As the IT business unit of Deutsche Telekom Group T-Systems can offer telecommunication services as well as IT services around the globe.
T-Systems’ legacy is based on a strong salient DNA which is made of Telecommunication, Transportation & Logistic and Automotive.
During the last few years, Deutsche Telekom and T-Systems have established global strategic partnerships with numerous leading companies, either in the Telecommunication sector or in the IT sector. One of those strategic partnerships enables T-Systems to provide mobile services or network services around the globe: ngena – the Next Generation Enterprise Network Alliance formed by leading international telecommunication companies offer global network services on shared partner networks; and Freemove – an alliance of top mobile telecommunication providers delivering high-quality international mobile services to multinational customers by synchronising the know-how and capabilities of its members.
Additionally, Deutsche Telekom is paving the way for the next communications standard by building up the next-generation communications standard - 5G.
T-Systems is one of the leading Cloud providers by using new IT factories which meet the highest security standard. That’s why Deutsche Telekom and T-Systems are seen as the most trusted company when it comes to the handling of personal information in comparison to other big IT and TC companies. With its Telecommunication and IT services, T-Systems is also supporting the development of sustainable profitable growth not only for large enterprises, but also for the typical German Mittelstand (mid-market), which represents internationally operating small and medium enterprises.
Last but not least, according to recent research, T-Systems has top marks in multiple categories like SAP HANA Cloud, Software-as-a-Service (SaaS), Infrastructure-as-a-service (IaaS), Internet of Things (IoT) and Managed Security Services.
What lies on the horizon for you and T-Systems in the near future?
For Deutsche Telekom and T-Systems, it’s important to have a strong footprint in the UK. Therefore, one of T-Systems highest priorities is to improve its brand awareness in the British market. Deutsche Telekom has already a good position in the UK, as being the biggest shareholder of BT. Having said that, T-Systems has established several Sales Push Programmes to continuously enlarge its market position in the UK by providing excellent, leading services with Zero Outage. As a Finance Director, it’s part of my responsibility to ensure that the operative business units get the best financial support to enable them to achieve this overarching business target. Therefore, I have taken the personal sponsorship for two Sales Push Programmes: Pushing the Automotive Business and the Data Migration Business in the UK.
The C-Suite landscape is changing. With the introduction of several new C-level executives to manage HR (CHRO), Marketing (CMO) and Strategy (CSO), it is not easy for each of these individuals to have a prominent, influential seat at the table. Here Robert Gothan, CEO and founder of Accountagility, talks to Finance Monthly about the importance of the working rapport between C-level executives, for any business.
After the Chief Executive Officer, the secondary ‘leader’ of the business has historically been the CFO. Once responsible for departments such as HR and IT, as well as keeping the business financially stable, the CFO held an undeniably strategic role within the business.
The introduction of advanced technology has changed this however. Businesses across the globe now hold a CIO or CTO amongst their most trusted boardroom members, with influence and budget behind them. Our increasing reliance on technology has led to the rise of the CIO, who not only fulfils the ‘technical director’ role, but also acts as a key strategist, marketer and adviser to the wider organisation.
With different executives vying for boardroom prominence, offering high level strategy to benefit the growth of the business is vital. As such, the CFO and CIO must consider how they can form a partnership and add maximum value to their individual departments, and the business as a whole.
The focus on finance
The CFO’s role has now returned to its original focus – finance – but CFOs are also contending with mounting pressure to be a strategic presence within the boardroom. Today’s CFOs are not only expected to make recommendations on the future of the firm’s growth and profitability, but also to ensure the very existence of the firm itself. However, the main focus needs to remain on the finance function within a business.
For the financial services sector in particular, frustration with the IT function is not uncommon for CFOs – delays in projects, insufficient resources and constant restrictions can lead to discernible tension between the CFO and CIO. Further still, CIOs are often given budgetary freedom that has led to the rise of the ‘vanity project’ phenomenon, where senior IT directors use up capital and resource on highly technical projects which add questionable value to the business.
At the same time, IT departments often fail to meet the needs of the finance function. As a result, these employees are often left to rely on ineffective, quasi-manual tools such as Microsoft Excel. These solutions not only add to the increasing resource pressure on the finance department, but can also bring with them significant corporate risk.
That is only one side of the story, however. EY’s recent report ‘The CFO Agenda’ has highlighted a key setback in the CFO-CIO relationship – CFOs’ lack of understanding when it comes to IT issues. With clear collaboration needed between these two roles, a more productive relationship must be fostered.
Mutual understanding
In most organisations, these two boardroom heavyweights ensure that current business operations run efficiently and effectively. Alongside this, they also shape the strategy for future business growth.
EY’s report also shows an increased desire for these two roles to collaborate more often, with 61% of CFOs reporting increased collaboration over the past three years. The areas most improved in terms of collaboration were CFOs involving themselves in the IT agenda and adding value to the CIO by managing costs and profitability across the business, both of which are undeniably a positive step forward.
Despite this progress, the convergence of technology, investment strategy and risk in today’s digital business world has elevated the collaboration required between these two roles to new heights. As such, any disconnect will have a ripple effect throughout the organisation, and consequently put a spanner in a business’ technical advancement. For organisations to maintain their competitive edge, it is clear that the productive relationship needs to be kicked up a notch.
The future relationship
To date, the relationship between the CFO and CIO has historically been focused on cost, with the IT department’s budget a constant sore point. In fact, many CIOs have found themselves reporting to the CFO to keep an eye on hidden costs during the management of IT projects.
Nevertheless, technology is crucial to operational excellence and business growth in today’s business landscape. CFOs are already becoming far more aware of the strategic value that IT brings to an organisation, but need to see it as an essential tool for achieving broader efficiency goals and driving future innovation.
There are potential roadblocks ahead, however. Effective communication between these two roles is often prevented by the difference in language – another finance vs technology battle. There are also personality differences to contend with – CIOs are typically big-picture thinkers, whereas CFOs value logic and results. Being aware of these differences and barriers to communication will be a crucial part of creating a business partnership between these executives.
To achieve this goal, CFOs should consider employing a ‘Business Partnering’ approach in order to provide more technical, commercial business insights. To provide a higher level of strategic thinking, the CFO must utilise data which has been extensively analysed. The analysis itself will sit under the CIO’s remit, and demonstrates just one small area where these two roles can overlap and work together in modern businesses.
Ultimately, the relationship between the CIO and CFO can directly affect a company’s success, so both must come together to provide the strategic ideas which will propel the business forward. With some bold technology decisions coming up in the future, these two roles must work together to not only increase the CFO’s involvement in the IT agenda, but also to push data-driven decision making into the heart of an organisation’s future business strategy.
CFOs and their teams have long been dedicated to supplying and analysing the data their companies need to make solid, fact-based decisions. However, finance departments have historically been constrained by basic forecasting techniques. Here Jean-Cyril Schütterlé, VP Product & Data science at Sidetrade, explains to Finance Monthly that CFO decision making, spending and innovating is more of an art that we’re led to believe.
The underlying data collection process is often time consuming and error-prone, and the result frequently lacks depth, scope and quality. Not only is the underlying data unsatisfactory, but its processing is suboptimal. All of these approximate figures end up being copied from spreadsheet to spreadsheet and undergo many manual transformations.
This approach has many shortcomings:
- Regardless of the quality of the forecasting process, if the data is not detailed, sufficient, relevant and up-to-date, the result will be inadequate.
- Making the assumption that “all other things will remain equal” is an over-simplification. No lessons are learned from previous errors
Digitisation now gives access to more granular and diverse data about present conditions or past situations and their outcomes. Any data set that may help describe, explain, predict or even determine a company’s positioning can now be stored, updated and processed.
This 360° view provides an opportunity to discover correlations between the collected data and the figures tracked by finance executives in their modelling activity. But this trend line methodology is insufficient in itself to derive valuable knowledge from data diversity.
For the process of discovery to take place, this newly-found data trove needs to be mined with Machine Learning technology.
To put it simply, Machine Learning is the automated search for correlations or patterns within vast amounts of data. Once a statistically significant correlation is identified with a high degree of certainty, it may be applied to new data to predict an outcome.
Let’s take a simple example. Assume you are the CFO of a company selling goods to other businesses and you want to anticipate customer payment behaviour to prevent delays and accelerate total inbound cash flow.
The traditional approach would be to look at past transactions and payment experiences with every significant customer and infer a probable payment date for each.
But if you look closer at your data, you may find that your customer payment behaviours are not consistent across time, that your historical view is missing essential explanatory information about the customer’s behaviour that may or may not be specific to their relationship with your company. You end up shooting in the dark.
Wouldn’t your cash-in forecasts be much better if you had also correlated the actual time your customers took to pay you in the past, with detailed information about those transactions?
In theory, you cannot be sure that this model will perform well until you have run a Machine Learning algorithm on your own data, looking for predictive rules that relate each payment behaviour to the detailed information of the corresponding transaction or you have tested the predictive power of those rules on a set of examples.
In fact, the forecast is likely to be much more accurate than with the traditional methodology, provided that the data you fed the algorithm with were representative of your entire customer base.
That leads us to another question: can I find all this information about my past transactions while making sure they are representative?
Unfortunately, most of this information may not be readily available internally, either because you’ve never collected it or it is not flowing through your existing Order-to-Cash process. For instance, it is unlikely you know whether your customers pay their other suppliers late or not.
But SaaS platforms can capture most of this information for you and Machine Learning software will then be able to discover the predictive rules and apply them to your own invoices to forecast their likely payment dates.
But this is just a start. If inbound cash flows can be accurately deduced, so can other key metrics, such as revenue, provided the data is available. CFOs are the ultimate source of truth in an organisation. They manage skilled resources who translate facts into numbers and confer them credibility. They are therefore the best equipped to tap from as many diverse data sources as available, leveraging the power of Data Science to accurately forecast what comes next and thus gain marketing insight and competitive advantage for their company.
Thus, with their augmented capabilities, CFOs are now poised to be the digital pilots of today’s new data-driven organisations.
Right from the beginning decision makers in business played a vital part in progressing revenue, whether in ancient Greece or today, but they weren’t always the same guy that took care of the books. Here Tim Vine, Head of European Trade Credit at Dun & Bradstreet delves with Finance Monthly into the history of the CFO, and the prospects of financial management for the future.
Corporate structures have changed dramatically over the last 150 years – and so too have executive roles. Even in the last few decades, we’ve seen CIOs go from being a rarity to a mainstay in the board room, and now we’re even seeing the growth of new positions like the Chief Digital Officer and Chief Information Security Officer. The CFO role has changed dramatically, as well. From financial guardian to strategic partner and key adviser on the future direction of the business: the role of the CFO has come a long way in a short space of time. So, how is the current business environment shaping the role of the CFO and what will financial directors need to focus on in the future to secure business success?
The history of the CFO
How has the CFO role shifted over the years? For most of the twentieth century, the CFO position didn’t actually exist. Instead, financial managers oversaw bookkeeping and were responsible for annual budgets. They were, for the most part, removed from the decision-making process, and only became more influential when financial regulations became more complex. The position of CFO first emerged in the 1960s and became much more common in the decades that followed. Financial leaders now occupy a key role at the heart of most organisations, and are expected to keep tabs on the big picture as well as the minutiae of every department. No other senior position offers quite the same degree and breadth of strategic insight.
Over the past decade, much has been said about the changing role of CFOs. Long gone are the days in which CFOs were tasked solely with financial management and reporting; instead, the responsibilities of today’s financial officers can stretch from investor relations to strategic growth.
The evolution of the CFO
The drivers for the increase in scope of the CFO role are as plentiful as they are diverse. From increasingly stringent regulations and the impact of globalisation to the transformation of business and industry, the evolution of the CFO role has been a necessary response to the growing demands of a rapidly changing world.
A natural consequence of this evolution has been the need for CFOs to expand their scope. They have had to step up and bear the burden of increased responsibility. Although their role may have become more integral to the success of the business, expectations and pressures to deliver have also multiplied.
More recently– over the past three years, to be precise – CFOs say they have experienced a “significant” (53%) or “some degree” (44%) of change to their roles according to our latest research. Many (59%) respondents reported an increased array of duties, noting that their role now necessitates greater prediction and management of risk and compliance issues, or that they are increasingly being asked to drive the bottom line as well as the top.
As a result of this increased pressure to take on a larger breadth of responsibility, the plethora of the CFOs’ responsibilities now includes everything from taking a more strategic role in their business and working in a multidisciplinary function to analysing customer data and leading strategic mergers and investments.
The current state of play
As CFOs’ roles continue to expand, they cannot to neglect the day-to-day responsibilities that have previously defined their function. When asked to make a like-for-like comparison between their primary obligations now and three years ago, CFOs provided little evidence that they are under any less pressure to perform their ‘core’ tasks, despite growing expectations about what else they can deliver. Our research found that when listing what CFOs see as their main responsibilities both three years ago and today, they identified only slight changes between the two. The usual daily accounting and treasury tasks are just as relevant today as they were a few years ago, but compliance rising in rank to occupy third place and controllership falling to eighth.
While organisations seem to be increasingly reliant on the expanding skillset of the CFO to help them deal with external pressures, many respondents suggest that they aren’t being provided with the requisite level of support to conquer those challenges. Our research highlighted that resource issues are one of the biggest struggles facing CFOs. They do not have a large enough team to carry out all of the work, and time pressures inhibit them from completing the tasks effectively. Moreover, more than a third feel that they are struggling under the pressure to find new growth and revenue opportunities, with 31% noting that they are asked to be experts in too many fields. CFOs suggest that an increasingly broad remit is making it difficult to focus and ensure the direction of the finance function. In fact for many (56%) feel that their employees don’t have access to the tools and technologies that could help them, in spite the fact that a significant majority (84%) say technology solutions are vital to their data analysis and smart decision-making.
What is also evident from the research is that CFOs are concerned with having to meet the seemingly unrealistic expectations which the board has on the finance team. This is further compounded by a trend in team size reduction, with almost two-thirds of respondents sharing that their team size has decreased in recent years. Essentially CFOs are being asked to do more than ever before, all while seeing their resource levels shrink.
Looking into the crystal ball
Looking ahead, data is going to play an integral part of the CFOs’ role in years to come. It is true that the importance of data has already been established; more than a quarter of respondents say that data analysis has become an increasingly vital part of their responsibilities. Many suggest that analysing data it is now one of their day-to-day tasks – and this is only going to increase.
As it stands, over 90% of CFOs state that data is either “extremely” or “somewhat” important in helping them make smart decisions and forecasts.
But data isn’t just about forecasting. It can help finance leaders to better understand customers, gain a better understanding of the market in a globalised world, and improve the organisation’s operational efficiency. Data is also essential in helping identify new revenue opportunities.
Setting the scene for success
The role of the CFO is undoubtedly in a state of change. As it continues to evolve, conflicting priorities, growing expectations and shortfalls in essential resources are creating a high-pressure, high-risk environment: one in which the consequences of poor decision making are becoming ever more significant, such as was the case with General Motors and Enron for instance. In fact, over half of CFOs surveyed feel that it is just a matter of time before a serious mistake is made due to a lack of staff and resources. Providing finance leaders with the data, tools, time and technology to do the job to the best of their ability should be a boardroom-wide concern, given the critical role they play in an organisation’s success.
Cyber security is a real and current threat to businesses in all sectors and sizes. Below, Stefano Capaldo, Managing Director of Firebrand talks to Finance Monthly about the opportunities available to the cyber savvy CFOs out there, from employee training to cyber security apprenticeships.
Just a few weeks ago, Government revealed half of UK firms were hacked in the past year. The long-lasting effects of these breaches cost businesses reputations, time and money, with the global cost predicted to reach £4.9 trillion annually by 2021.
Hackers are the biggest threat to modern day businesses, but who’s responsible for implementing a strategy to fight them?
The responsibility of protecting the business spreads across all departments, and finance teams undoubtedly have a big part to play. In control of assigning budgets, CFOs need to ensure they put the right amount of spend behind initiatives that will protect the business. So where do you begin?
Training
A key area for CFOs to concentrate their spend is on employee training; but they need to avoid the common pitfalls of investing in the wrong type of training. As cyber security breaches are an ever-increasing threat, it makes sense for training budgets to be assigned to safeguard this always vulnerable area of the business. With the majority of employees now able to access connected devices and sensitive data, it’s essential all employees are confident and competent in basic cyber security skills. In addition to this, businesses need to hire and train professionals who understand hacking, so they can not only react quickly in the event of a breach, but can implement solutions to prevent a breach in the first instance. So what is the most cost-effective and efficient way to train new and current employees in these skills?
Cyber Security Apprenticeships
Apprenticeships schemes are a great avenue for businesses to upskill and train employees in the skills required for each individual business. Apprenticeships are understood to bring benefits for businesses and employees by combining, learning and earning. Through an apprenticeship, businesses can bring in fresh, loyal staff who can boost productivity. Data from the National Apprenticeship Service reveals that apprenticeships boost productivity to businesses by on average £214 per week. Yet, apprenticeships aren’t just for new staff. Businesses have already found that cyber security apprenticeships enable businesses to grow their existing skills base resulting in increased profits, lower prices and better products.
The new Apprenticeship Levy means firms of all sizes can overhaul how they recruit and train staff, as Government is set to contribute up to 90% of the cost of an apprentice for all non-Levy payers, including training and recruitment costs. The Levy means that now UK-based employers with a salary bill of over £3 million must invest 0.5 percent of this figure in hiring apprentices or developing existing staff. This cash will be transferred to an Apprenticeships Service account, but if it's not used it will be permanently lost. This is a huge opportunity that shouldn’t be wasted by employers. Yet, according to recent City and Skills Group research, a third of employers liable to pay the new Apprenticeship Levy aren’t even aware of its existence. Are you at risk of losing out on investing this money wisely? Or are you one of the smaller businesses that will now find apprenticeships more affordable? For companies of all sizes how you make the most of this opportunity is vital.
Apprenticeships are a great way for businesses to ensure they are training employees in the IT skills required for your specific company. With training schemes becoming more affordable with the Levy introduction, it is expected that the popularity of apprentices will only increase. Therefore, CFOs should be considering the value of cyber security apprentices now and looking for the most effective training available in the industry.
There are cyber-security apprenticeship programmes available, ready to fill crucial roles left vacant by the skills gap. By using the Levy in this way UK firms can leverage apprenticeships to overhaul how they recruit and train their existing teams to become IT security professionals.
How does it work?
Firebrand is the first UK training provider to deliver the new Cyber Security Apprenticeship Standards. Apprenticeships offer both entry-level and established IT professionals the opportunity to build their IT knowledge and enhance their skills through accelerated training in a real-world job.
Unlike other programmes, Firebrand apprentices aren't on day release - they're a full-time employee. The programme includes residential training throughout the year. Between these training weeks, the employer can focus on giving their apprentice the best work experience possible.
For businesses the training ensures their level of preparedness in case of a cyber-attack is increased, with the right staff sharing the right skills whatever your sector or workforce size.
With the launch of the Levy, huge businesses opportunities exist – now all you have to decide is how will you accelerate your apprenticeship journey?
To find out more about accelerated apprenticeship schemes, click here or follow Firebrand on @BeAFirebrand
Your company made the obvious move and migrated to the cloud – Amazon Web Services, Microsoft Azure, or Google Cloud Platform. Months later, the attractive glow of the move from CapEx to OpEx spend has been dimmed by the reality of increasing monthly cloud bills. As the CFO, you want to know what’s up.
This is a real challenge, according to the head of infrastructure at a mid-sized software company we spoke with recently. Let’s call him Steve.
“I need to reduce my AWS costs as quickly as possible,” Steve told us. “My CFO saw that our AWS spend started at $20k per month when we migrated last year. Now it’s over $100k per month, which makes it one of our biggest IT-related line item expenses. We’re under a direct mandate: We have to bring it down.”
The problem is clear. But how did it get so bad, so quickly?
Your infrastructure is probably exploding
“As we started to dive into it, we found that a large part of our cloud spend is wasted on idle compute services,” Steve said. “With the rapid growth in our AWS use, we didn’t have visibility and policies in place to govern and control costs. Our developers aren’t properly cleaning up after themselves, and resources aren’t being tracked, so it’s easy for them to be left running. It’s something we want to change, but it takes time and energy to do that.”
This is a familiar story for many enterprises, large and small, as they migrate to the public cloud for increased agility and to speed up product innovation. But sometimes, the other side of the “agility” coin is a lack of defined processes and controls, which leads to waste.
As Steve put it, “AWS built this awesome playground – everyone can play, but everything costs money.”
To that end, AWS is now a $14 billion dollar per year run rate business, according to GeekWire. This is partly from their rapid gain in customers – and partly due to each of their customers spending more and more each month in their massive playground. And Azure and GCP are growing triple digits year-on-year (neither Microsoft nor Google break out revenue from their cloud revenue).
Enter the problem of cloud waste – servers left running when people are not using them, such as at night and on weekends, oversized databases and servers not optimized for the applications they support, and storage volumes not being used or “lost” in the cloud. These are just a couple examples – there are many more.
Let’s break down the numbers to see how big the cloud waste problem really is. In 2016, the total IaaS market was $23B:
So, we calculate that enterprises can save up to $6 billion by optimizing their public cloud spend. By 2020, that number grows to $17 billion.
Get Costs in Control
There’s no need to wait if you’re the CFO. Go talk to your IT and Infrastructure teams and get tools and policies in place to control your cloud costs now:
- Visibility – start by taking a look at your existing environments. If your environment is large, a single dashboard view that shows multiple accounts, regions and cloud providers can be very helpful.
- Governance – set clear guidelines around who has access to your cloud services, provision appropriately sized instances, and stop non-production instances when they are not needed.
- Automation – start taking action on these guidelines to optimize your cloud costs by leveraging single purpose SaaS tools built to optimize cloud spend.
For non-production servers, the simplest way to do this is with a scheduling tool that allows you to set automatic on/off schedules, like ParkMyCloud. It’s an immediate win: you can save 20% or more on your next cloud bill.
Talk to your Development and Operations teams today about getting cloud costs optimized and in control. It’s time.
For more information, please go to: http://www.parkmycloud.com/
