Thursday Apr 21, 2016

The Impact of Not Changing

Guest Blogger Richard  Harsevoort

How the World is Evolving

As a consumer, we have acknowledged that we are living in the digital era. There are roughly 1 billion active websites and 2 billion smartphone users worldwide; meanwhile the number of fixed telephone lines has decreased over the last 9 years. 

The impact of not changing.png

Companies may not see today how they will enact change tomorrow. According to Forrester: ‘only 27% of today’s businesses have a coherent digital strategy, which determines how the firm will create customer value as a digital business.’ Instead, more focus is spent on keeping the lights on rather than innovation.

To stay relevant, organizations, business units, and individuals need to know where business technology is headed, and be sure to remain up to date with the ever shifting digital trend. It is time to take action: make digital transformation your key strategic thrust.
Yes, most of us are too limited in our thinking. By simply changing the processes, we can be more successful with disruptive transformation. The digital era is asking to widen our horizon and adapt modern technology and new business models.

With ample possibilities today, there is no need to own the equipment to run your business. Lease it for the duration of a contract and put the responsibilities down to your suppliers, allows focus on your core business and respond effectively on chances.

We are all familiar with Uber and AirBnB, but startups have been making waves across all industries: temporary office spaces1, self-service bikes2 and food box delivery services3. Another shift that we are seeing is the introduction of Light as a Service from Philips to service Schiphol Airport in the Netherlands. The light as a service means that, Schiphol pays for the light it uses (pay-as-you go), while Philips remains the owner of all fixtures and installations.

Lighting fixtures were specially developed for Amsterdam Airport Schiphol that will last 75% longer, as the design of the fixtures improved the serviceability.

The Growing Use of Technology in the Finance Function

As business models change, the systems has to change alongside. Nowadays, Financial Controllers (FCs) prefer to have more insights and an increased focus on financial planning. Thus, better understanding of the income, cashflow and assets help determine the financial goals. Having real-time insights and adapting new business models are driving more and more financial departments to the cloud.

Similarly, Forrester states, systems are integrated and cloud-based to create a connected and dynamic ecosystem. The reasons for making the move are many, nonetheless the results are typically the same: faster innovation, greater scale, lower costs, and operational excellence.

If you are still concerned about the risks of changing
finance, keep in mind the risks of not moving on.

To learn more about Oracle EPM Cloud, click here


Wednesday Jan 20, 2016

Maintaining Margins by Understanding Costs

Recently, the Finance Executives Research Foundation (FERF) and Protiviti released the results of their Q3-2015 “Finance Priorities” survey, where more than six hundred financial professionals provided opinions on the priorities for finance organizations.  The report, “Maintaining Margins While Staying Vigilant” (available here), points out that “margin and earning performance ranks as the highest priority…in our survey.”

The report recommends an action item for Finance Leaders: “Review how the company currently manages and monitors margin and earnings performance, assess how this approach compares to best practices, and determine how to address any gaps.”

Ultimately, a key to managing margins is controlling costs. How does your organization manage costs and, by inference, margins?

When facing a cost-saving challenge, some organizations assign arbitrary cost cutting goals (e.g., “we will cut all costs by 5%”). While some organizations have seen short-term benefits in this approach, it doesn’t generally generate long-term success. This approach can actually increase risks, for example, by impacting employee morale because of unrealistic demands, or by reducing quality leading to customer dissatisfaction, just to name a couple.

A better approach to managing costs is to understand the behavior of costs. Organizations that undertake to study how costs respond to business activity are more likely to implement a reasonable approach to monitoring costs. It appears that initiatives like activity-based costing / management (ABC/M) may still have a place in finance organizations.

Continue to check this blog site. We will post more blogs on ABC/M to provide specifics on how it is being applied. I will also look at other findings from the FERF “Finance Priorities” survey.

To learn more about Oracle Profitability and Cost Management, click here

Friday Jul 31, 2015

Can EPM Go Fully Cloud?

By Guest Blogger Muthu Ranganathan, Director, EPM Product Management at Oracle

There is no denying the fact that the world is moving towards “the cloud”, and CFOs and CIOs have come to the point where they can’t avoid recognizing the many benefits of the cloud. While finance took more time than their peers in Human Resources or Sales to go to the cloud, recent trends indicate that more CFOs are open to “getting on the cloud”.

Opex vs Capex

Given CFOs care a lot about cash flow and ROI, the biggest advantage for them with cloud is the “Opex" (Operational expense) element, as cloud systems are not “Capex”(Capital expense) types. The cloud certainly helps them with profitability and cash flow as a justification to move to the cloud.

Beyond Organizational Boundaries
– You just need a URL and your cloud applications can be easily rolled out to your customers, vendors and other stakeholders in your business network. This is a huge advantage for finance, especially when they can exchange information through the systems. Imagine getting sales forecast data from your distributors, or project finance data from your subcontractors.

No Shelfware – One of the biggest pains of the past was that a lot of software was purchased, but not used. The unused “shelfware” became a sunk investment due to the lack of resources available to get the application installed and working. Cloud completely eliminates this issue as installation and management is provided by the cloud vendor.

No Hardware - other big benefit is that you don’t have to worry about hardware costs - and more importantly maintaining hardware - the installed applications, and having to consider different test and production environments.

New Features Rapidly – When we login to Gmail or LinkedIn every day, we often see that there are a lot of new features added. This is the power of the cloud. The same is also true for enterprise applications – you no longer have to wait for a long upgrade process to see new features, because they are installed by the Cloud vendor and appear regularly and rapidly in the cloud.

Simpler to Use – organizations can take advantage of new design ideas and new technology like mobile and social functionality which may not be available or difficult to implement in the on-premises solutions they currently use. Also Cloud solutions deliver significantly simplified application management designed for Business users with the complex IT management being handled by the service supplier.

Security is no Longer an Issue - Uptake of cloud solutions has been across many application types, including HCM, ERP, SCM, CX, and EPM, all industry sectors, including Public Sector and Financial Services, and organization sizes, from very small enterprises to global brands. For this to happen these organizations (especially sectors like Financial Services and Public Sector) have to be convinced that their data will be safe, their systems will be available when they need them and there will be sufficient capacity to provide the response they expect. Given the 1000s of organizations that have moved to the cloud and likely due diligence they have applied organizations should not be citing security as an impediment to moving to the cloud.

EPM and the Cloud
Enterprise Performance Management (or Management Accounting / Information Management) systems have evolved through different generations of software. Reporting, planning, profitability and consolidations have evolved from spreadsheets to desktop applications, to the web, and now to the era of cloud and mobile. While the above benefits are relevant for EPM systems, there are even more that make it clear it is time for EPM to move to the cloud.

Tapping the Unserved Business Users - While EPM systems have existed for over a decade, it has still been a highly corporate finance affair for many years. Still, many Business Unit level users rely on spreadsheets and other unstructured ways of creating and seeking information. There are several reasons for this, one of the main being difficulty in maintaining IT systems, costs, and lack of technical consultants to support their pursuits. With cloud, we see a change where we can now roll out these systems just via a url to anyone in the company at a very affordable subscription-based price. It starts to really tap into the departmental use cases for Business Unit CFOs and other business users such as HR, Marketing, Sales Ops etc. With Oracle Planning and Budgeting Cloud Services, as well as Oracle Enterprise Reporting Cloud Services, departmental business users are better served. 

Business Calls the Shots - Traditionally, Business users, especially coming from finance, have owned the EPM systems. Often in the past, due to heavy Capex and upfront investments as well as infrastructure/upgrade needs, IT had to be heavily involved in EPM projects. With the cloud, business users are able to make quick decisions and call the shots for EPM systems as they do not need major IT resources to get them up and running. They can be live in just a few days or weeks. This is certainly an exciting reason for business and finance to move to the cloud for EPM. We are seeing faster adoption due to Business being in charge for Oracle Planning and Budgeting Cloud services.

People as the Focal Point - Cloud brings with it the benefit of receiving new features rapidly, as mentioned earlier. As users have now experienced consumer grade cloud applications like Facebook, they will expect enterprise applications also to act in the same way; so the focus is mostly on user experience, flexibility and keeping it very simple for the users. Also, for EPM systems, users have been great fans of spreadsheets; so it’s very important to have the user experience to be like a great consumer grade application combined with the flexibility and simplicity of spreadsheets. The great advantage with cloud is, engineers who build these systems get really close to seeing how users use the solution and roll out changes more frequently. Oracle Planning Budgeting Cloud Service has been very well received by users because of the great user experience and spreadsheet-like flexibility on the web, and because it is supported by the Oracle SmartView for Microsoft Office interface - a great solution for the Excel lovers

The Case for Hybrid EPM 
But, with the benefits and value mentioned above the question still remains - can all of the EPM systems go fully into the cloud? The answer is yes!But, it may take more time since many companies have mission critical financial consolidation and reporting systems, as well as corporate planning systems in which they have invested over the years, and cannot be replaced in a short period of time.

This is why Oracle provides a hybrid EPM strategy for companies to combine on-premises and cloud based EPM systems. What we see is that customers are continuing to leverage their existing on premises deployments for the corporate finance needs, and using cloud applications and infrastructure to surround these for new Departmental and Business Unit needs.

As both on-premises and cloud run on the same best-in-class Oracle Hyperion technologies, they offer a seamless and integrated as a suite of hybrid EPM solutions. While Cloud EPM systems provide significant benefits to warrant moving to the cloud in the medium term, hybrid EPM is likely the best strategy for the short term; and Oracle is the best equipped to provide a comprehensive solution for both worlds.

For more information on Oracle EPM on premises applications, click here
For more information on Oracle EPM Cloud, click here

Tuesday Mar 18, 2014

Using Technology to Ease the Pressure Cooker Environment of the Modern CFO

Guest post by by Karen dela Torre

The finance function as we know is seeing big change. We’ve been talking about this transition here at Oracle for quite awhile. Last year in a survey Oracle conducted with Accenture we explored how the role of the CFO has evolved from financial overseer to corporate strategist and change agent. The results from that study illustrated that this transition is not only happening, but it’s happening very quickly.

We’ve entered into the era of Modern Finance. Not only are CFOs depended on to  drive the finance function forward, but increasingly they also play a vital part in all strategic business decisions In fact, it’s fair to say that today’s CFO lives in a completely different environment than five years ago. Put simply, CFOs live in a pressure cooker environment.

With the pressure to help identify new opportunities, products and services that will deliver growth and generate revenue, the modern CFO is undoubtedly presented with challenges and must leverage existing and new assets to deliver on the new mandate to provide strategic guidance and insight to the business. 

How can CFOs meet these challenges and stay ahead of their competition? One thing that comes to mind is technology.

Technology enables CFOs to drive change and innovation. Mobile, cloud, social and analytics are just a few types of technology that are completely revolutionizing the way organizations function. Implement these technologies and organizations can gain a significant competitive advantage.

CFOs are beginning to understand this and how technology can drive change within their organization that positively impacts revenue. For example, take the cloud. The cloud is reshaping finance best practices around buying decisions as organizations duke out the ROI of cloud versus on-premise. Cloud technologies save on overhead costs with less infrastructure, timely updates, and more productive employees.  

Modern Finance will be empowered through technology and CFOs are taking note.

For more information about the changing role of the CFO and best practices for keeping pace with the  ever-changing landscape, visit Oracle CFO Central at

Friday Mar 02, 2012

Key Findings from Latin American CFO Summit

I recently had the pleasure of speaking and attending a Latin America CFO Summit in Puerto Vallarta, Mexico, sponsored by Oracle and Deloitte.  The event drew over 50 CFOs from mainly Mexico, Columbia and Ecuador for a day and a half of presentations, workshops and networking.  Here is a summary of some of the key points and findings that were discussed at the event.

Keynote speaker: Alfonso Stransky Paniuahua, Partner, Mexican Institute of Finance Executives.  In his keynote, Mr. Stransky revealed new research from the 1600-member IMEF on the “Evolving Role of the CFO in the 21st Century”, and the CFO’s increasingly important partnership with management and the business to drive value and mitigate risk.  He highlighted the CFO's increasing role in talent management and development, focusing on intangible assets, and encouraging innovation.  He also discussed the new global economy and the need for CFOs to take a bigger role in strategic planning, driving efficiency, and re-engineering business processes, and encouraged CFOs to embrace change, adapt to the new rules of business and be prepared for increase risks.  His discussion of risk management included information risk as well as social risk and responsibility.  In summary, his research revealed an increasing focus on the CFO as a strategic business partner, key driver of both performance and risk management, with an increasing emphasis on creating long-term business value vs. short-term profitability.

Francisco Silva, Partner at Deloitte Latin America followed with a session focused on “current opportunities and challenges facing Latin American CFOs.  In this session, Mr. Silva highlighted the results of a recent benchmark study of LAD CFOs, and their recent CFO Signals survey on the transformation of Finance.  Some of the key finding from the benchmark study included the following:

-  Costs of Finance in LAD are generally 25% lower than for US companies at 1.10% of revenue.  LAD companies spend less on Finance Staff and IT, but they spend more time and resources on transaction processing and less on performance management and analytics than their counterparts globally.

-  LAD companies tend to make less use of technology, and apply more Finance staff – this was identified as an opportunity for productivity improvement via better use of technology.

-  LAD companies have a high degree of complexity in Finance – too many controls and costs of compliance, they need to strike the right balance of controls.

-  With regards to compensation, Brazil has the highest Finance salaries, much higher than the LAD average and very close to the US.  Chile has the lowest Finance salaries.

-  With regards to FTEs in Finance, Mexico and Argentina have the highest, albeit with some of the lowest costs of Finance staff.    

-  In general, it was found that the larger companies had the lowest cost of Finance as a percent of revenue, but LAD in general has a lower cost of Finance across all sizes of companies vs. the US.

-  One interesting point is that multi-national companies operating in LAD have higher Finance costs than local companies, but with fewer FTEs.  This trend reflects the higher salaries of LAD staff of multinational companies, but better use of technology and fewer FTEs. 

Mr. Silva also highlighted some of the key findings of Deloitte’s recent CFO Signals Survey.  Some of the key points include:

-  The role of Finance in driving strategy is growing in response to economic uncertainty, creating new demands on the broader finance organization.  This is causing significant growing pains, as many CFOs already operate lean organizations.

-  CFOs see the recession continuing, but most are focused on growth. Even as companies eye longer-term growth, they are focused on protecting near-term profitability.

-  Continuing global economic malaise appears to be causing rising uncertainty around global market demand and heightened competition for revenue. Pricing trends are a top concern for 52% of companies (up from 40% last quarter) and new competitive tactics are on the rise.

-  Over a third of North American CFOs surveyed cited economic uncertainty in Europe as the biggest potential risk they face - this despite European CFOs being among the most optimistic of the regions surveyed by Deloitte.

-  Despite focusing on growth and investment, CFOs in North America don’t expect hiring to pick up.

Marie Hollein, President and CEO of Financial Executives International (FEI) discussed “The Growing Influence of CFOs Over Technology’ and the finding of the 2011 survey on the use of Finance technology.  Some of the key findings included:

-  42% of CIOs report to the CFO, and this will likely increase.

-  Performance Management/BI/Analytics is the #1 priority for technology investments followed by Enterprise Business Applications.  This trend will continue in 2012.

-  Licensed software will continue to be the primary delivery platform, with 76% of respondents running their applications in-house.  But Cloud-based adoption is increasing with 10% embracing SaaS and 12% running with ASP models. 

-  ERP consolidation is a preference, with 64% of organizations favoring a single instance ERP. 

-  54% of companies are making improvements in BI now or are targeting BI investments over the next year. 

-  Planning/Budgeting/Forecasting is the #1 focus for BI/PM investments, followed by Performance Scorecards/Dashboard applications.  

-  The market for XBRL financial statement generation products is growing with 30% looking for in-house solutions and 24% of respondents outsourcing XBRL tagging to 3rd party publishers. 

-  Only 16% of respondent companies are planning or evaluating the impact of IFRS (this was not surprising since the survey base was mostly US companies)

There were also sessions at the event delivered by Oracle executives on key market trends and the investments Oracle is making to help CFOs address today’s challenges, as well as some customer case studies.    Key takeaways include:

-  The role and influence of the CFO continues to evolve and expand beyond Finance into corporate strategy, talent management, IT management all with a focus on optimizing performance while managing risk

-  While costs of Finance in Latin American companies is generally lower than in the rest of the world, CFOs in this region can improve productivity by better leveraging technology and shifting the focus of Finance staff from transaction processing to value-added analysis.

-  Performance Management and Analytics are key priorities for CFOs globally, and can help organizations plan and forecast more accurately through market volatility, while improving the timeliness and quality of information they deliver both internally and externally.

To get access to some of the content presented at the Oracle LAD CFO Summit, please visit Oracle’s CFO Central web site at


This blog will highlight key EPM market trends, recent events and other news of interest to our field, customers and partners.


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