Pandell Leadership Series

How to Win Buy-In for Finance Innovation

Energy finance professionals’ best practices to drive investment for technology.

How to Win Buy-In for Finance Innovation

With Adrian Wilkinson, Product Marketing Manager at Prophix

Duration: 22mins, Released Jul 14, 2022

Video Summary

In this one-hour session, Adrian Wilkinson of Prophix will lay out a roadmap that helps finance professionals obtain buy-in from key stakeholders for investment in technology for Finance. As a Product Marketing Manager at Prophix, Adrian helps spread the benefits of Corporate Performance Management (CPM) to financial leaders.

Like most energy companies, your organization has invested in technology that supports its core operations. But with the world's landscape rapidly evolving and shifting, there's a strong need to implement newer and complementary tools to existing systems that meet the demands of today's challenges.

If you want your business to evolve, the way you plan and report on your business should evolve too. However, managers often face obstacles when trying to secure the support they need to implement new solutions. How do you go about getting buy-in from business stakeholders?

About The Pandell Leadership Series

The Pandell Leadership Series is a collection of free webinars featuring presentations by energy industry experts in a variety of specialized fields. Topics range from global business issues to recommended best practices in oil and gas; pipelines; mining; utilities; and the renewable energy industry (including wind, solar, hydrogen, geothermal, marine & hydrokinetic, nuclear and biomass power).

Please Note: Views and opinions expressed by the PLS presenter(s) do not necessarily represent the views of Pandell and its representatives.

Full Transcript

ELIZA WITH PANDELL Good afternoon, everybody. Thank you for joining us. Many of you may already know but I'm Eliza, I'm the Customer Engagement Specialist here at Pandell. And welcome to our leadership series webinar. This time we are talking about How to Win Buy-In for Finance Innovation.

Without further ado, I'd like to introduce Adrian Wilkinson, he's our speaker today. With over 25 years in the B2B [Business to Business] space Adrian has spent most of his career in product marketing with experience in sales, and pre and post sales support. His approach is to understand what customers want to achieve in obtaining their business goals and provide relatable experiences gained by engaging with customers.

As a Product Marketing Manager at Prophix, Adrian helps spread the benefits of corporate performance management to financial leaders. So, we're very lucky to have Adrian here with us today and I will just switch over to your presentation Adrian and give you the floor.

ADRIAN Great thanks a lot Eliza for that introduction and thank you to all of you for joining today's session on How to Win Buy-In for Financial Innovation.

So, I'm going to start off with a little scary fact. Anyone care to take a guess at what this stat is referring to, $7.8 billion dollars a year is the cost of this? Just going to pause for dramatic effect here. But according to, the financial toll of inefficient FP&A or financial planning and analysis, so data processes cost US companies about $7.8 billion dollars a year. This number was calculated by research that calculates $6.1 billion dollars was from hours of low value data management. Things like looking for, pulling and exporting, formatting, manipulating, correcting errors, and more being performed by highly skilled and high value employees. Another $1.7 billion dollars is attributed to the lost innovation by having those same skilled assets busy doing low value work that totals $7.8 billion dollars a year.

The example they like to use for innovation is the Amazon model. About 15 years ago the FP&A team at Amazon spent some time working on innovative models to determine which would be a more powerful business lever. First, they thought about you know giving customers 10 percent off. Then they thought maybe free shipping on purchases. The winner of course was the free shipping. This modeling innovation led to the birth of Amazon Prime, a subscription service with more than 200 million customers paying $13 a month. Making it one of the chief drivers of Amazon's success.

I think the most interesting point here is the innovation didn't come from the product team or the marketing team it came out of the finance team. That kind of FP&A driven innovation isn't happening nearly enough in companies. Some companies cite the reason to be related to the fact that data processes are too siloed, manual, error-prone, time-consuming, and costly. That's consistent with other research that shows FP&A staff spend more than 70 percent of their time gathering and managing data. Leaving fewer than 25 percent of their time for the kind of value-added work that leads to innovation out of finance, like the Amazon Prime example I just presented.

First, let's talk about some of the current challenges. You know over the last two years it's really amazing how different things are now compared to you know a couple years ago. Obviously the first one is the ongoing market uncertainties associated with the pandemic. How long will this current situation last? Are we transitioning to an endemic period? Will there be new variants that drive further restrictions or shutdowns? Let's hope not. And I think there are a few of us keeping our eye on the spread of monkey pox. Also, there will be a return to normal. Or is normal a thing of the past? Therefore, moving forward in a world of uncertain uncertainty it is the new normal.

Then there are other factors outside the pandemic which includes the tragic situation in the Ukraine. Which has impacts to our markets in the form of further market uncertainty due to the impact of various sanctions being issued.

Next is the uncertainty around our most expensive asset, labor. Finding, retaining, and accommodating the increasing cost of skilled labor in today's market is daunting due to the whole slew of factors including inflation.

And I'm sure that we've seen you know inflation is being fought back by the rise in interest rates. You know Bank of Canada just introduced another raise just the other day. The Federal Reserve I'm sure is going to be doing the same thing again soon in the US.

That you know employee safety some being overworked like in healthcare or retail. Not only is keeping our employees harder, but the markets are also seems to be dictating higher wages. In addition, some industries are struggling to bring their employee counts back to pre-pandemic levels. If they can't, in some cases this will require a rethink on production or revenue expectations.

And we have the continued disruption in the supply chain whether it's product or raw material delays, dynamic pricing of materials, and even dramatic increases to shipping costs. All these in manufacturing setting would affect an organization's ability to procure, build, ship, and price their goods.

These few points and a myriad of other factors have resulted in many CFOs finding themselves being called on by management to be increasingly responsible for the success of the company. You could say CFOs stepped up to the challenge by navigating their business through a complex economic environment beset by multiple uncertainties. Of course, right.

Since the onset of the pandemic there has been greater focus on the data. And as finance is the only team with access to all the numbers regardless if they're top or bottom line, to identify risk or even spot opportunities. For some CFOs this has been an uncomfortable change as it pushes the status quo. What I mean is what you did yesterday, might not be relevant tomorrow.

To be able to respond to changing times this normally requires changes across people, processes, and technology. The need to upskill people on new systems and advanced accounting techniques to meet new demands is critical now more than ever. But I see this as a good thing as finance has typically never been the number one priority when it comes to increasing training budgets or acquiring new technology. But for all the reasons I just mentioned, finally due to the increased pressure on finance to act more strategically, the CFO now has the voice in driving digital transformation within the organization. This is new technologies and architectures to meet current and future challenges while helping to ensure the future success of the department and the company.

Not to take the word for it we also did our own CFO survey. With CFO Dive where we surveyed over 200 senior finance leaders in North America. We asked CFOs and other finance leaders how the pandemic altered their priorities and plans? We wanted to see how they adopt it or adapt it when they when the crisis hit and how they are mapping out a path forward? The survey is available for free by visiting our website, but I want to share with you some high-level results.

Now on your screen you should see a polling section and if I could ask you to take a moment and answer the top two questions there. And we'll just see how they compare to some of the results that we obtained through our survey. So, one is during the pandemic did you put more focus on modeling different scenarios? And the other question is, during the pandemic did you increase the frequency of your forecasting?

So, what we were able to see from our survey results were during the pandemic almost 75 percent of the respondees said they increased the frequency. And if I look at the result here, I actually have a couple people saying no they didn't increase the increase their frequency of forecasting. But you know small sample size here so we'll sort of go on to the next question.

Which is you know, did you put more focus on modeling different scenarios? And there same thing. So, our results showed that you know again about 75 percent of the respondees had to increase the focusing on different scenarios. And that was a trend that you know we've felt but we wanted to put some you know actual concrete numbers behind that.

So, what does all this mean? You know the research is pointing towards saying the strategic CFO needs to be agile. And you know the agility to be, you know have better collaboration across the company; accelerate and automate traditional FP&A processes, such as budgeting planning; and adopt more advanced techniques. You know rolling forecasts, maybe doing forecasts more frequently, improved budget accuracy, upskill the team especially. You know both on technologies and systems and enable a hybrid workforce out there. So, how does technology come into play in helping this out?

Thing is you get it and so does your team. And you and your team are tired of being overworked, undervalued, and number crunchers tediously moving data around in slow error-prone spreadsheets. With the right investment in software and services tools you could put your expertise to work creating real value for the business. But how do you pitch and sell this investment to other key stakeholders within the organization? How do you overcome in the inevitable objections? Such as we don't have the time and the budget; it's not the right time; we don't have you know the skill set in place so now we need to train; aren't we getting by okay right now with our current systems, right; and there's multiple other ones.

So, if you've ever been in this situation, it's always a unique situation. Some of you might have an organization that is quite open to making new investments, some might require decision by committee. How can you position your investment ask against the other departments all vying for budget and resource?

And let's be totally honest. Here I believe finance in many organizations is undervalued. What I mean by this, is when sales need new sales tools like a CRM, as it will help them optimize sales; or when marketing needs a new marketing automation system increase inbound leads; they tend to get it. Let's just say they seem to do much better getting the attention of the stakeholders when it comes to investment because revenue is involved.

Finance on the other hand, in many cases, just isn't that attractive to the organization and quite often struggles to get investment to innovate, unless the train totally derails then that they can involve money usually gets their attention. However, it's foolish to let it get to that point and it doesn't need to be that way.

So, what I'm going to do today is take you through what we call a 10-step road map to get management buy-in for finance innovation. It should help you increase your chance of getting your investment ask approved, by helping it gain the attention it deserves and then demonstrating the value it will bring.

Don't try to do this by pulling it out of the air, or by focusing solely on the benefits you understand, or even by using the vendor's promotional material. That's right I work for a vendor, Prophix, and I just said that.

Try to identify and engage others in your organization to understand their pain points and opportunities. What could sales, marketing, HR, operations, distribution, manufacturing, supply chain management, and other critical departments do better? Look for ways that your new solution just might help to benefit them too. Work with them to establish their priorities and gain their alignment and support. If you win, they win.

Make the all-important connection with senior management that your challenges are exasperating and need addressing. And where possible, your challenge might even be influencing their challenges. Be concise and direct that your current tools and processes lack agility to meet the new demands. With the team running at capacity or beyond, it can barely meet current demands. Overburdened and strained resources, manual processes, and spreadsheets are not the answer and will increasingly have accuracy and efficiency problems.

To really prosper you need to get out of the backward looking, reactive approach and adopt a proactive approach to planning or whatever the challenge is. It has to be faster, and it has to be always on to stay ahead of the changing market dynamics. It also must be able to provide strategic insights back into the organization that not only mitigate risk but also suss out new opportunities.

Focus on something real and immediate. Sometimes touting all the great things, a new tool can do can be too abstract for leaders dealing with daily crises. It's usually more engaging and effective to tackle a current and reoccurring pain point that most stakeholders would agree on.

Identify the biggest problem and demonstrate the benefits of solving it. Is it closely tracking cash flow, personnel, planning, scaling businesses, pricing, supply chain challenges, ability to forecast faster and further out, scenario planning maybe for a new drill site, play out, you know these all play out in different market dynamics? You have to be faster, more accurate, and you know plan accordingly with your budgets. After agreeing on the biggest problem explain how in the case of CPM [Corporate Performance Management] there is a solution that addresses it, cuts time, costs, and risks in the process.

For example, it could be if your company's static quarterly forecasts being wildly off, especially given the recent market dynamics, and affecting profitability and cash flow, you have a solution that will help cut the losses and uncertainty associated with the static forecast by enabling the organization with a tool that will allow you to implement rolling forecasts. This will not only dramatically increase forecast accuracy but also provide the basis for effective scenario planning to see further out and to be ready to handle whatever the future provides. Not only will this aid profitability and cash flow, this is a solid risk mitigation strategy. Some companies spend a lot of money on risk mitigation, this isn't just a finance department nice to have, it's a solution that will benefit multiple departments.

So, you've identified the benefits now quantify them. Start with your current state, what is the risk from doing nothing? Compare that with the expected outcomes and benefits using real projected ROI if you can. CPM vendors typically have the experience and customer case studies to support that with real data. CPM solutions normally pay for themselves quite quickly, but we have customer examples where the CPM tool is saving them tens of millions of dollars that they didn't even know they could save.

If you don't believe me the research is out there. In a recent report from Nucleus Research, it was found that in aggregate, companies recruit about three dollars and eighteen cents in benefits per one dollar invested in FP&A cloud software developments or deployments within the first three years. That means an investment in CPM provides a rapid ROI. The primary value drivers are of FP&A solutions include increased revenue, reduced operational costs, increased employee productivity, and improved organizational visibility.

So, if you can see that a fifty-thousand-dollar investment will produce a return of $1.5 million dollars within five years, then you might decide to scale that up to an investment of a hundred thousand producing a return of three million. It's an option other budget holders will almost certainly want to consider. Work with the vendor to help you quantify this. Present the estimate, expect to change management needs, and timelines linked closely to ROI, and anticipated outcomes as powerful drivers for the initiative.

Prove your case with other CPM customer benefit stories. Using relevant examples of companies of similar size and similar industries that would be most effective. Include direct and indirect benefits as well. This demonstrates CPM as a proven tool. A CPM vendor that has worked with companies in your sector won't be going to school on you. They will be bringing expertise that keeps costs in line and mitigates risk. A well-established CPM vendor will have plenty of case studies to share.

Ah making the ask. Using all the previous steps, present your business case and build a clear unambiguous request to adopt a system that will solve the big pressing problems and drive further value tackling other challenges. Be concise and be prepared with a plan. Remember you've been doing this a lot more and thinking about it a lot than anybody at the table.

And speaking of the plan, because you've already aligned with other key stakeholders and won their buy-in by incorporating solutions to their problems, you know who they are and have them on board. They need to know you have a plan so they can visualize and anticipate its rollout and outcomes. Given their previous insight, they will tend to be more engaged when you share it with them.

This is where you present them with the, what I like to call, what to expect when expecting details. In your plan include things like rollout timelines, associated business systems, who it affects, any change management required, and of course what is the first problem it will be solving. Ideally, it's one of the organization's primary pain points. And an estimated time to see results. Also include timelines for the broader adoption and subsequent anticipated returns.

Your new CPM system is not a static tool. Even after you have solved the primary problem don't get caught in the old trap of doing things the way you've always done them. Remember those most six most dangerous words in business, we've always done it this way. You now have a powerful tool for continuous improvement. Always be on the lookout for additional processes to automate, or new challenges you can appropriately tackle with your CPM solution.

CPM is designed to streamline almost every FP&A process. So, just don't solve a forecasting challenge move on to budgeting, reporting, scenario modeling, consolidation, and close, and so much more. This will allow finance to demonstrate how it's evolved from a reactive tedious number crunching machine into a genuine valuable proactive and strategic asset. By expanding the use of CPM within your organization you will have the opportunity to provide added value outside of finance through other departments within the organization. This should help prove your worth again and again and enjoy your new rockstar status.

And lastly, seek shared success. It's not only a profits branding pillar but also a key to the ongoing utilization and success of the solution internally. CPM streamlines FP&A, expedites results, and enables advanced analytics. Continue to market its value and don't be shy to promote your team's value and wins to the organization. The success of CPM buys you reputational credibility the next time you want to pitch your next strategically valuable idea.

And then if you're looking for a little bit more information, the ten steps outlined in this presentation are basic roadmap from finance leaders to use to help them gain awareness of problems, frame the issue present a solution, its anticipated impact, and the benefits including the anticipated return on investment. Again, each company and situation is unique but we found when working with business leaders this is an effective framework to build your pitch around. All it takes to change is a first reasonable step and that's something you need to do.

Hopefully this was time well spent. And if you'd like to learn more this presentation is a result of a paper entitled, “10 steps to overcoming crisis in front of me mindset, making finance a strategic asset”. Feel free to ask your Prophix representative that Pandell works with, and we’d be happy to make it available to you.

With that Eliza let's turn this over to some Q&A and see if anything's come in.

ELIZA WITH PANDELL Yeah, absolutely, thank you so much that was a lot of really great information. We do have one question I can ask you it's kind of a two-parter. So, with this increased strain of responsibility on CFOs have you found that they are seeking additional education and resource tools to help them deal with it? And if so, what are those resources that are out there?

ADRIANYeah, absolutely. You know what we are finding, again you know pointing back to that CFO dive survey, is a lot of CFOs are you know out there looking for solutions to you know help with, you know one is just you know cross-department communication. They want to be able to access the data a lot faster. Be able to see what the data is telling them. So, it's a bit of a journey as far as you know CFOs looking, you know how do they solve some of these problems and go about it? And you know this is part of the journey here is just you know bringing some exposure to that. There's been you know even just recently Gartner did a you know kind of a North American seminar, you know targeting CFOs and trying to educate them on you know where they can go to optimize their business and be more able to contribute to the direction and strategy of the organization.

ELIZA WITH PANDELL Thank you so much for your time and for the information you were sharing with us today. Thank you to everybody for joining us today. Have a wonderful afternoon everybody.