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FINANCIAL INTELLIGENCE 3.0 Unleashing the Full Potential of Your Finance Team and SAP® Investment
© 2015
Financial Intelligence 3.0 means escaping the old �nance commodity trap of spending
increasing amounts of time, talent and treasure on the basic output that is less and less
recognized by the business as adding value and making the di�erence. In a world where
success is determined by deep insight, rather than just numbers, �nance can no longer simply
be the company record keeper. The challenge is to create a more e�ective �nancially
intelligent organization that unleashes the underutilized, pent-up potential of �nance and
your SAP Business Planning and Consolidation, BW and SAP HANA investments to achieve
maximum business impact. That is Financial Intelligence 3.0
Summary
© 2015 CXO-Cockpit | Financial Intelligence 3.0 | Unleashing the Full Potential of Your Finance Team and SAP Investment
Old Finance Financial intelligence 3.0
• Static • Delivering / Presenting• Accounting data dump• High-labor intensive routine• Interpreted by �nance• Physical / low control and security• Distribution• Quantitative / Data only• Location-/time-dependent• “Financially dumb” BI and tools
• Dynamic • Storytelling• Relevance / guided• Automated / industrialized • Clear to all executives• Digital / control & security• Governance• Q2 insight / qualitative + quantitative• Mobile / anywhere / Anytime• Specialized Financially intelligent systems
Figure 1 - Di�erences between Old Finance & Financial Intelligence 3.0
Four key concepts de�ne Financial Intelligence 3.0:
1. Routine robotization
The �rst step is clearly to move to specialized planning and consolidation systems such as BPC
(and/or BW and SAP HANA). The second step is moving away from error-prone, ine�cient
manual 1980s spreadsheet technology and leveraging o�-the-shelf specialized,
�nance-owned �nancial reporting tools designed for BPC, BW and SAP HANA and prebuilt
with the rules of �nance.
© 2015 CXO-Cockpit | Financial Intelligence 3.0 | Unleashing the Full Potential of Your Finance Team and SAP Investment
2. Guided storytelling
100% more insight with 20% of the data. Once bandwidth has been created to start leveraging
�nance’s intelligence, rather than its manual labor, the scene is set for a radical shift from
presenting badly understood static data to guiding managers through a story that allows
them to rapidly “see things as they are” and identify the actions that need to be taken. This
implies intersecting reporting excellence with modern technology to deliver on the 4 pillars of
e�ective communication: relevance, optimal visualization, zero-ambiguity interpretation and
dynamic storyboarding.
3. Secure mobile governance
The nature of �nancial data means that governance and control over the data, its distribution,
its quality, its integrity, its security, its con�dentiality and its message is absolutely crucial and
the core mission of �nance. In reality this control has largely been an illusion and �nance - and
the business - have seldom had the tools to live up to this mission. Financial intelligence 3.0
provides accountability with control, with a focus on Access & security (and risk management)
and the Single point of truth.
4. Q2 insight
Financial Intelligence 3.0 means going a lot further than simply making the elusive concept of
a single point of truth a reality. It means creating a single point of Q2 insight, through the full
integration and central governance of what today are often two separately managed informa-
tion �ows to ensure complete insight and understanding: Quantitative (data) and Qualitative
(narrative).
Financial intelligence 3.0 is about escaping the old �nance trap. It is about turning the
organization into an optimally e�ective �nancially intelligent organization that executes
better than its competitors because it managers have a superior understanding of their
business. It is about the �nance team taking back control and unleashing its potential to
achieve this.
1 Escaping the old �nance commodity trap ..........Page1
2 Financial intelligence 3.0 ...............................................Page 3
2.1 Routine robotization .........................................Page 5
2.2 Guided storytelling ............................................Page 9
2.3 Secure mobile governance .........................Page 14
2.4 Q2 single point of insight .............................Page 17
3 Conclusion .............................................................................Page 18
Table of contents
© 2015 CXO-Cockpit | Financial Intelligence 3.0 | Unleashing the Full Potential of Your Finance Team and SAP Investment
What do we mean by �nancial intelligence 3.0? What it does
not mean is simply executing accounting rules and producing
the basics such as Balance Sheet and Pro�t and Loss (P&L)
statements. Do not get us wrong, these clearly remain a critical
foundations of corporate reporting. They simply are no longer
enough.
And herein lies the contradiction and frustration of old �nance.
While the �urry of new rules and regulations has made
producing this hygiene factor ever more complex, time-con-
suming and expensive (e.g. see also the investments in consoli-
dation and planning systems), the standard repertoire of
�nance is less and less recognized by the business as adding
value in an increasingly high-pace, technology-leveraged
competitive environment with zero tolerance for ine�ciency
and where success is determined by deep insight, rather than
just numbers. In one word, standard �nance reporting has
become a commodity.
By implication, it is no longer enough for �nance to just be the
company record keepers. Just as nobody is impressed with IT
because their e-mail works, this part of the �nance job has
become a hygiene factor. It is taken for granted and only
noticed negatively when things go wrong through errors,
missing data, security leaks and chaotic meetings where
everyone shows up with their own data and multiple versions
of the truth.
[1] Escaping the old �nance commodity trap
© 2015 CXO-Cockpit | Financial Intelligence 3.0 | Unleashing the Full Potential of Your Finance Team and SAP Investment 1
It is time to do things more intelligently. Finance in the second
decade of the 21st century is expected to be a business
advisor providing easily digestible true business insight: more
rapidly, more accurately, more e�ciently, at anytime and
anywhere. And perhaps most critically, ensure this is e�ective-
ly communicated to a non-expert internal audience. In other
words, the challenge is not having intelligent �nance teams.
The challenge is to translate and unleash this intelligence
within the wider business and create a more e�ective �nan-
cially intelligent organization.
That’s the theory and many studies have been published on
this topic in the last few years. But what is the reality we
encounter in many world-class multinational companies?
Teams of highly quali�ed professionals stuck in a low-
intelligence / low-added-value catch-22 status quo because
99% of their time is spent producing reports that a 1920s
entrepreneur would recognize both in form and output, using
1980s technology originally designed for personal computing
use. This is clearly an unforgivable waste of human talent,
employee engagement and the opportunities o�ered by
today’s technology.
© 2015 CXO-Cockpit | Financial Intelligence 3.0 | Unleashing the Full Potential of Your Finance Team and SAP Investment
“This is not an information age. It’s an age of networked intelligence”. Don Tapscott, the author of Wikinomics
2
Financial intelligence 3.0 is about escaping the vicious cycle by fully leveraging the latest
technology and the expanded skill-set of modern �nance to achieve maximum business
impact.
Financial intelligence 3.0 achieves its objective through a relentless
focus on automating, industrializing and eliminating all non-val-
ue-added, recurring activities to focus all energy, time and invest-
ment on high-impact, in-control sharing and communication of
�nancial information for maximum business impact.
The table below highlights some of the key di�erence in approach
between “old �nance” and �nancial intelligence 3.0.
[2] Financial intelligence 3.0It’s all about control and communication
© 2015 CXO-Cockpit | Financial Intelligence 3.0 | Unleashing the Full Potential of Your Finance Team and SAP Investment
Old Finance Financial intelligence 3.0
• Static • Delivering / Presenting• Accounting data dump• High-labor intensive routine• Interpreted by �nance• Physical / low control and security• Distribution• Quantitative / Data only• Location-/time-dependent• “Financially dumb” BI and tools
• Dynamic • Storytelling• Relevance / guided• Automated / industrialized • Clear to all executives• Digital / control & security• Governance• Q2 insight / qualitative + quantitative• Mobile / anywhere / Anytime• Specialized Financially intelligent systems
Figure 1 - Di�erences between Old Finance & Financial Intelligence 3.0
3
These can be summarized into the 4 key pillars of �nancial
intelligence 3.0:
1. Routine robotization
2. Guided storytelling
3. Secure mobile governance
4. Q2 insight
© 2015 CXO-Cockpit | Financial Intelligence 3.0 | Unleashing the Full Potential of Your Finance Team and SAP Investment 4
Figure 2 - The Financial Mind
1. Routine robotization
2. Guided storytelling
3. Secure mobile governance
4. Q2 insight
The prerequisite for successfully unleashing the power of
�nancial intelligence 3.0 is to escape the earlier described
catch-22. How? By plugging the leak through which valuable
time is �owing into non-value-added routine, repetitive
activities. This implies a focus on automation, industrialization
and process optimization with specialized planning and
consolidation systems (e.g. BPC, BW and SAP HANA) and
specialized �nancial reporting tools (e.g. CXO-Cockpit).
Amongst CXO-Cockpit customers this typically frees up at least
two months of time per year. Two months of extra time dedi-
cate to improving the business, your career and your work-life
balance.
Updating the daily, weekly or monthly standard reporting pack
should be a simple matter of refreshing data. As anyone using
spreadsheets for this task knows, this is unfortunately not the
case. Just producing these standard packs requires constant
re-inventing of the wheel in terms of data extraction, report
(re-)formatting, error-checking etc. Moreover, the many points
of potential failure and error in this process, as well as the total
loss of control over the reports once distributed, imply that
quality is never 100% under control of �nance. The result: a
breakdown in �nance team credibility, inability to create a
“single point of truth” and an immense hidden cost of top
executive time wasted in meetings that lose themselves in the
question “is the data right?” and “who has the right data?”,
rather than deciding on the right course of action.
[2.1]Routine robotization 2 months of extra time to add value
© 2015 CXO-Cockpit | Financial Intelligence 3.0 | Unleashing the Full Potential of Your Finance Team and SAP Investment 5
Most of these spreadsheet tools were invented in the 1980s at
the dawn of the computer age. This is 2015: the age of the
knowledge economy. There is simply no excuse to waste your
human talent and employee engagement on non-value-add-
ed, routine tasks which can be done more reliably, faster and
better by technology (e.g. report updating, distribution of
reports).
Moreover, as will be discussed in the next sections on guided
storytelling and secure mobile governance, the automation of
these routine tasks and creation of dynamic reports reduces
the amount of time spent by the �nance team on responding
to ad-hoc report requests from executive. This not only boosts
predictability and therefore greater optimization of �nance
team time, but, perhaps more importantly greatly improves
perceived service levels and actual user satisfaction by
enabling a greater degree of guided self-service analytics (i.e.
allowing drill-down) on the part of the executive user. Critical
in this context, is the term “guided”, however. A truly �nancially
intelligence 3.0 solution provides – and improves – the gover-
nance and control critical when it comes to �nancial reporting
by providing guided self-service analytics, as opposed to the
non-guided, just-do-what-you-like variety that de�nes most
generic business intelligence (BI) tools.
© 2015 CXO-Cockpit | Financial Intelligence 3.0 | Unleashing the Full Potential of Your Finance Team and SAP Investment
Higher productivity, higher internal user satisfaction
6
Which brings us to the last point. Do not accept generic
solutions for your speci�c reporting and �nance problems.
While, for their point of view, it is perfectly understandable
that your IT department comes with the ideal of pursuing a
single business intelligence (BI) platform for the whole organi-
zation, our experience at numerous customers shows that this
simply does not work. Generic BI is extremely powerful for
operational analytics. It simply is not a �nance-driven report-
ing tool, however, and will not �t the actual needs of the
company; the way the company actually works. As a �nancial
reporting consultant famously put it: “Generic BI gives you
everything you want, but nothing you need.”
Finance and reporting is a specialized discipline requiring
specialized �nancially intelligent tools. The �rst step towards
�nancial intelligence 3.0 is therefore to move to such a
professional “�nancially intelligent” reporting solution.
Typically this means they are:
Designed speci�cally for your �nance systems. In other words,
tools that are precon�gured for the main Financial Planning &
Consolidation and Enterprise Performance Management
systems (“EPM”, such as BPC ) and understand the dimensions,
hierarchies etc. contained in the EPM system, without the need
for additional work or expensive and protracted Data
Warehouse projects.
© 2015 CXO-Cockpit | Financial Intelligence 3.0 | Unleashing the Full Potential of Your Finance Team and SAP Investment
Finance is special. You deserve more than generic BI tools.
7
Understand (the logic of) �nance. This can be as simple as
understanding being able to di�erentiate between revenue
and cost accounts and recognizing automatically and without
the need of special programming that more is better, while
true for revenue accounts, does not apply to the variance of
actual to budget in case of a cost account.
Finance owned. Easy to use and maintain by the �nance team
itself, ensuring they have full control over their own
service-levels and destiny without depending on (and
burdening) already stretched IT colleagues or expensive
external consultants to unlock some black-box. To put it
simply, a tools should bring the same experience of control as
spreadsheets, but without any of its many downsides.
Ability to produce the boring stu� as well. While these tools
should of course produce powerful ways of graphically
representing key data and tell the story, this should not be the
only thing they do. Financially-intelligent reporting system are
just good at producing the highly-formatted, regulated
rows-and-columns output that is essential to �nance, as
generating funky graphs.
© 2015 CXO-Cockpit | Financial Intelligence 3.0 | Unleashing the Full Potential of Your Finance Team and SAP Investment 8
Once su�cient bandwidth has been created for the �nance
team to start optimally leveraging their intelligence, rather
than mainly their manual labor and spreadsheet massaging
skills, the scene is set for a shift from record keeper to business
advisor. Critical to achieving this is focused and clear
communication.
The key challenge facing most managers is seeing the forest
for the trees and uncovering the story hidden in the increasing
mountain of available data. Not surprising, this is also the key
challenge for modern �nancial intelligence 3.0 �nance teams
acting as the advisors to these manager.
Finance therefore needs to make a radical shift from simply
presenting static data according to badly understood (by the
business) accounting rules to guiding managers through a
story that allows them to rapidly and intuitively see things as
they are and identify the action that need to be taken.
[2.2] Guided storytelling 100% more insight with 20% of the data
© 2015 CXO-Cockpit | Financial Intelligence 3.0 | Unleashing the Full Potential of Your Finance Team and SAP Investment
“Intelligence is quickness in seeing things as they are.” George Santayana (he of “Those who cannot remember the past are condemned to repeat it” fame)
9
Financial intelligence 3.0 is about combining the rules of
reporting excellence as championed by individuals such as
Professor Hichert in Germany and seminal works such as
“Information Dashboard Design: The E�ective Visual Com-
munication of Data” by Stephen Few, with the possibilities of
new technology:
1. Relevance – less is more and guided analysis
2. Full-spectrum optimal visualization
3. Zero-ambiguity interpretation
4. Dynamic storyboarding
Perhaps the most important concept behind e�ective commu-
nication is relevance:
Less is more. What are the really critical business drivers? In
most companies 80% of reports contain interesting, but not
critical, data. As such they distract attention from the 20% that
is critical. An interesting experiment that has worked for other
companies is to put a price on each report that is produced.
You will be surprised how quickly business units and depart-
ments start asking for fewer reports and start focusing on what
they really need.
© 2015 CXO-Cockpit | Financial Intelligence 3.0 | Unleashing the Full Potential of Your Finance Team and SAP Investment
[2.2.1.] Relevance
“For more than 35 years I’ve found that, when I share meaningful information with the people who work with me, our performance as a company improves.”Josh Patrick
10
Guided. Financial intelligence 3.0 is all about doing things
intelligently. Unlike the typical generic BI approach of full-
freedom-to-the-analyst, all-possible-options, in�nite-path
self-service analytics, �nancial intelligent 3.0 reporting means
helping time-constrained executives rapidly zoom in on the
critical issues by suggesting only those analytical drill-down
paths and options that make sense and are relevant. In this
sense, a parallel can be drawn with the Google’s success as an
internet search engine, by providing its users with the more
relevant responses than its competitors and rather than a
randomly ordered list of all responses. Moreover, in e�ectively
telling the story and ensuring common understanding of the
message within the data, it provides an essential level of
control in guiding executives in a logical way through the
analysis.
E�ective communication to quickly show things as they are
requires a focus as much on form as on substance. Di�erent
types of reports provide di�erent degrees of freedom in
optimizing formats (e.g. a �xed format P&L statement versus a
company-speci�c sales break-down). Financial intelligence 3.0
means optimizing the intelligent presentation of the data
within any accounting and legal constraints to ensure that
everyone and anyone can understand what the data is trying
to say and that trends, exceptions, outliers and areas of
© 2015 CXO-Cockpit | Financial Intelligence 3.0 | Unleashing the Full Potential of Your Finance Team and SAP Investment
[2.2.2.] Full-spectrum visualization
11
attention can be spotted easily, rapidly and at a glance by the
human eye. Many experts and BI tools therefore argue for the
almost exclusive use of graphics. Financial intelligence 3.0 does
not have this luxury. The wide range of convention, regulation,
rules and constraints that it faces with regard to speci�c
reports and outputs mean �nancially intelligent 3.0 reporting
excellence is a combination of traditional row and column
charts with optimal use of conditional formatting and power-
ful complementary graphical representations that are easier
for the human eye to digest and interpret intuitively.
As with any process, garbage in is garbage out. If the data is
not, or wrongly, understood, it is likely that even the best-
intentioned actions based on this data will hurt, rather than
help, the business. As the magnitude of investment decisions
grow, the potential impact such failures grows. It is absolutely
critical that all de�nitions and assumptions are transparent,
clear and understood by all. Just as a good legal text should be
understandable by a layman, good reports should not require
a �nance background for correct interpretation. As shall be
discussed later, the concept of Q2 insight and the full inte-
gration of quantitative (data) and qualitative (commentary
etc.) greatly contributes to achieving this objective.
© 2015 CXO-Cockpit | Financial Intelligence 3.0 | Unleashing the Full Potential of Your Finance Team and SAP Investment
[2.2.3.] Zero-ambiguity interpretation
12
Financial intelligence 3.0 means moving away from the every-
thing-you-might-ever-want-to-know-about-the-business pdf,
Excel and paper data dump and towards a focused lean
management information storyboard composed of stream-
lined set of dynamic report. Comparable to a user-speci�c
interactive pdf pack, these allow organization to have their
cake and eat it too: keeping the core reporting pack and
meetings lean and focused, while still providing the full
�exibility to go down analytical paths on the spot and get to
the underlying causes. All this without the need to anticipate
all possible permutations and version of data and reports
required to do so, not to mention avoiding the risk doing in
one’s back lugging around the immense stacks of �les and
binders this implies.
As such, guided storytelling also represents a bridging of the
last mile with respect to optimizing the millions invested in
EPM / �nancial planning and consolidation systems; unleash-
ing its value (and making this visible) to executive users while,
as the next point makes clear, at the same time maintaining
strong governance and security.
© 2015 CXO-Cockpit | Financial Intelligence 3.0 | Unleashing the Full Potential of Your Finance Team and SAP Investment
[4.] Dynamic storyboarding
13
Critical to �nancial intelligence 3.0 is in control sharing and
communication. Perhaps the most signi�cant word in this
phrase is “control” or, phrased slightly di�erently: “governance”.
The nature of �nancial data means that governance and
control over the data, its distribution, its quality, its integrity, its
security, its con�dentiality and its message, internal and
external, is absolutely crucial and the core mission of �nance.
Ironically, or perhaps tragically, however, �nance has seldom
had the tools to actually live up to this mission and account-
ability. It’s always been an illusion and old �nance has never
been fully in control of the – perceived and real – quality of its
job. This gap between aspiration and reality is most obvious in
two areas:
Access and security. Ensuring the right data is accessible to the
right people and no one else.
Single point of truth. Providing a water-tight guarantee on the
integrity of the �nancial data and reports used in the company.
Financial intelligence 3.0 �nally provides �nance with account-
ability with control.
[2.3] Secure mobile governance Eliminate reputational and business risk
© 2015 CXO-Cockpit | Financial Intelligence 3.0 | Unleashing the Full Potential of Your Finance Team and SAP Investment 14
Financial data represents one of the most sensitive types of
data that a company possesses, particularly if it is publicly
traded. Intentional or unintentional security breaches, in-
appropriate di�usion or use can have major reputation,
stock-price and pro�t implications without even mentioning
the legal exposure of company directors for any errors. Every
single one of the companies we work with recognizes this.
But how is this data managed and distribution today in most
old �nance companies? We all know the answer: individual
�les sent by e-mail. Once sent, control is lost entirely over this
information:
1. It can be forwarded to anyone in the world at the press
of the “forward” button;
2. it is often printed and carelessly left on desks, at home
and in briefcases;
3. it is stored locally on personal devices prone to loss or
theft;
4. it can be copied, reproduced, changed, manipulated by
the receiver.
© 2015 CXO-Cockpit | Financial Intelligence 3.0 | Unleashing the Full Potential of Your Finance Team and SAP Investment
[2.3.1.] Security and access
15
Financial intelligence 3.0 means eliminating �le- and e-mail
based distribution of critical �nancial data in favor of a natively
mobile and web-based communication platform (e.g. respon-
sive / HTML5) Which is centrally-managed and secure with
2/3-factor authentication and/or via MDM/Mobile Device
Management and individual named user-access / authoriza-
tion. With zero local storage (e.g. on tablets, mobile phones).
Thus reducing risk and boosting productivity of on-the-go
executives.
Apart from security, such a full governance, centralized
�nancial intelligence 3.0 reporting platform is the only way
�nance team can really guarantee the single point of truth that
the CFO and management expect:
1. One single source of data from which all reports
dynamically pull their data;
2. central control of all reports and report packs at all time;
To complete the picture of perfect governance, most compa-
nies combine this with a strong governance process or gover-
nance board that protect the integrity and prevent
report-wild-growth by assessing and managing requests for
new reports and changes to existing reports or report packs.
© 2015 CXO-Cockpit | Financial Intelligence 3.0 | Unleashing the Full Potential of Your Finance Team and SAP Investment
[2.3.2.] Single point of truth
16
But �nancial intelligence 3.0 means going a lot further than
simply making the elusive concept of a single point of truth a
reality. It means creating a single point of Q2 insight, through
the full integration and central governance of what today are
often two separately managed information �ows to ensure
complete insight and understanding:
Quantitative: the data, the numbers.
Qualitative: the commentary, the narrative, the explanatory
information.
No more data in one place and business explanations and
comments in another place or another document.
Commentary is stored along with the reports it refers to in a
central database. This leads to much higher levels of:
E�ciency: A single, integrated, in-control, (time-)e�cient
process for consolidation of data and commentary, and;
E�ectiveness: the numbers are never separated from the
explanations provided by the experts (e.g. the relevant
business owner, department head etc.).
[2.4] Q2 single point of insight Beyond a single point of (data) truth
© 2015 CXO-Cockpit | Financial Intelligence 3.0 | Unleashing the Full Potential of Your Finance Team and SAP Investment 17
Incredibly amounts of time, investments, business and human
potential are needlessly wasted in most organizations. Given
that �nancial intelligence 3.0 provides a solution that is a
simple combination of common sense, e�ective com-
munication and readily available o�-the-shelf technology, it is
di�cult to understand why this situation continues to perpetu-
ate itself. We suspect that the culprit is a familiar one: Inertia.
As is the case so often, the status quo, while frustrating, imper-
fect and ine�cient is at least familiar and comfortable.
The problem with this argument, apart from the shocking lack
of healthy ambition, is that the price of inaction is rising each
day: ranging from the reputational, business and stock-price
damage from erroneous �nancial reporting or leaked data to
the critical dependency on employees managing your
black-box spreadsheet reporting model; not to mention the
frustration of simply not being in control of your job and your
success, and wasting time arguing about the data instead of
actually getting things done.
Financial intelligence 3.0 is about escaping this “old �nance”
trap. It is about turning the organization into an optimally
e�ective “�nancially intelligent” organization that executes
better than its competitors because it managers have a
superior understanding of their business. It is about the
�nance team taking back control and unleashing its
potential to achieve this.
[3] ConclusionKick-starting the �nancial intelligence 3.0 virtuous cycle
© 2015 CXO-Cockpit | Financial Intelligence 3.0 | Unleashing the Full Potential of Your Finance Team and SAP Investment 18
Financial intelligence 3.0
© 2015 CXO Solutions
Herculesplein 46NL 3584 AA UtrechtThe NetherlandsTel: + 31 (0) 88 238 08 42info@cxo-cockpit.com
“ Unleashing the Full Potential of Your Finance Team and SAP Investment ”
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