Author: resilicore2016

Forward on CFO TechOutlook Magazine for November 2016

Today, business operations are complex and agility is paramount for being able to constantly analyze key performance indicators and take corrective measures against strategic initiatives that are failing to fulfill set goals. In such scenarios, Corporate Performance Management (CPM) tools can help organizations streamline their on-going processes and derive insights valuable while formulating future strategies. Modern CPM allows companies to make measured forecasts leading to higher fulfillment of business goals. They enable cost-optimization by injecting efficiency into every process through better informed decisions and well formulated strategies.

While CPM solutions are not new, the edge newer technologies brought into the space are causing businesses to revisit their current CPM capabilities. First, there is the growing interest in predictive capabilities: Rather than knowing what impacted their business processes, companies now seek to foresee what will impact their processes in the future. As to anyone’s guess, big data and analytics at this point make their presence felt in the currently available solutions. Second, cloud liberates companies from maintaining costly infrastructure for CPM solutions on-premise and shelling out big bucks for upgrades as their businesses grow.

This edition of CFO Tech Outlook aims to give the readers insight on major Corporate Performance Management solutions providers that have demonstrated strong capabilities in helping organizations navigate this complex, yet promising landscape.

A distinguished panel of CIOs, CEOs, VCs, analysts and the editorial board of CFO Tech Outlook has distilled the final 10 companies.  We present to you the Top 10 Corporate Performance Management Solution Providers 2016.


Profitable growth requires a cost focus which is at times, easily forgotten by the front lines of the business; sales and business development.  Although austerity headlines have waned today, CFO research surveys(1) show that reducing costs is always a key CFO priority.

CFOs we speak to are often alarmed by the realization that gains made by their cost reduction efforts over the course of the last three years have eroded with support costs proving particularly intransigent, and they are looking for solutions to identify where to focus efforts and how to best design and institute sustainable cost reduction.

World-class performers achieve overall back-office cost optimization that enables them to spend 24% less on total back-office costs than their average performing peers. For a typical Global 1000 company this translates to more than $100 million annual savings if it could apply the cost optimization strategies and tactics of world-class performers.(2)

In terms of specific functional areas, world-class organizations have applied cost optimization practices that result in savings of 47% on finance costs, 29% on procurement administration, 22% on human resources administration, and 12% on IT when compared to average-performing companies. (2)

Top industry performers tend to lead with an approach that creates a flexible, variable (lean) cost structure that is sustainable by promoting the following actions:

1.Review the company’s operating model and corporate strategy for fundamental direction

2.Determine cost reduction goals and prioritize service levels to ensure that services both internal and external are delivered to the extent of benefits gained

3.Identify controllable expenses and ruthlessly challenge uncontrollable, fixed expenses

4.Identify, assign, measure/reward end-to-end process ownership

5.Create environment, culture and operating structure to implement change that is actively supported by senior leadership

A Culture of Enduring Cost Reduction

While it is true that you should carefully track cost performance based on hard metrics and benchmarks, the real sustainability and long term gain comes in the form of a transformation of the company’s culture. The front line managers and employees must think and act differently or the gains will not last. And there needs to be an organizational design and incentive to help them in their efforts.

More regular and tired change management efforts will only result in employees getting more anxious. True change will come with an effort that includes and incorporates the most junior employee’s point of view.

Over-archingly, cost reduction is successfully sustained over years by adopting cultural change programs which should include the following  strategies

  • Effective and ongoing communications from senior management extolling the virtues of the program and keeping the realities of business in focus
  • Feedback and action on suggested process changes elicited from employees.  Also, reward the effort!
  • Risk assessment on the top 3-5 expense areas to allow the organization to be more proactive in making necessary changes
  • High-velocity learning loops where changes to processes are elevated and discussed frequently by cross-functional teams in order to get dramatic and quick changes in productivity
  • A forensic review of all contracts and policies conducted to ensure hidden costs, recoverable claims, and cost avoidance areas are highlighted and communicated
  • Rigorous and governed spending instituted in areas that employees suggest are wasteful

Finally, the above actions necessitate a process and operational change plan that is respectfully introduced to and supported by employees.  If process risks are reduced and employees are not penalized for taking ownership of tasks outside their area, a sustainable cost reduction can be experienced by the company.


(1) Duke University / CFO Magazine Global Outlook Survey 2012

(2) The Hackett Group and Standard and Poors 2013

I already see the CFO/Finance Leader’s eyes start rolling with this blog – here we go again! 😉 I LOVE the practical use of technology and have been at the forefront of  FinTech since the early 80’s. So I’ve seen technology cycles come and go.  However, the promise, enormity and pace of change of the changes that are about to confront the CFO in the near future, prompts me to comment on the topic of the “Internet of Things” IoT for short, with some degree of trepidation.  We all can see that technological advances are disrupting the operating status quo and creating huge turbulence for companies. Industries are converging, and new competitors emerging, fast. The pressure to innovate has never been greater, nor managing the risks more difficult especially for the CFO.  In reading about the developing market and discipline, the following are my thoughts that will continue to develop and deepen as I begin writing about this first of many articles on IoT.

First a definition: IoT is an all-encompassing term that refers to the internet changing from a giant network of PCs to a mega-network that’s connected to everything around you. From your kitchen to your car and everything in between, and it is changing the world.

The Internet of Things (IoT), along with Cloud, Big Data, Predictive Analytics and Mobile finance form the three most prominent technology issues for CFO’s and this is echo’ed in FinancialForce CFO John Bonney’s comment; “It won’t be long before smart devices are as ubiquitous as smartphones are today. Wearables and home appliances like Nest’s smart thermostat have already taken off with consumers.” Consider Gartner’s estimates of the IoT Market:

  • Estimates are that there will be 25 billion embedded devices and intelligent systems by 2020
  • Some 44 trillion GBs of data will be emitted from those devices
  • On a global basis, the IoT will enable some 4.4 billion people to be connected
  • Overall, the global IoT market is expected to reach $4.3 trillion by 2024

Where did this all come from? In my opinion, The IoT evolution has been driven by developments and convergence across technology platforms and business processes. Consider the falling costs of computing power and data storage as well as the emergence of the cloud and advances in analytics.  There has been an explosion in device embedding beyond business and into EVERYTHING. So when you merge this with low cost bandwidth and mobility, you have fuel for the rocket-ship that the IoT ecosystem promises with endless commercial applications. Companies are just beginning to explore how to monetize IoT to drive stronger business growth and increase customer satisfaction (and interaction).  Some have been very disciplined and we can already see a few common use cases emerging. These include:

Health and Well Being: IoT is leading here with prevention and monitoring, urgent care delivered remotely and customized health care treatment delivered just-in-time.  For example, there are a number of IoT-enabled devices (stationary, wearables, implantables) available to monitor diabetes, heart conditions, and other ailments.

Usage-Based Billing: IoT has the potential to profoundly upend how businesses bill customers for products and services. Traditionally, businesses have sold products and services by billing a one-time fee. GE was an early adopter of the usage-based billing model by embracing the “as-a-service” economy, and there’s been a direct correlation between that move and the company’s general stock performance. It’s become an important metric to the GE investors. Its “Power-by-the-hour” concept for jet engines is an example.

Optimized Solutions Selling:  One of the greatest benefits of IoT data is its ability to uncover cross-departmental insights that can lead to identifying new revenue streams or optimizing current ones. For finance, this introduces new billing models but also demands new methods for recognizing revenue. With optimized revenue streams, a CFO can further establish strategic guidance and the tangible impact on the company’s financial well-being.

Customer-Driven Business Decisions: When recurring or usage-based billing is present, customer satisfaction quickly becomes a precursor for financial health. A compelling IoT use case improves the customer experience and drives engagement. This in turn creates more loyal (and financially stable) customers — something any company can get behind. With ongoing, high-quality customer care, finance can rest easily that revenue streams will come in as forecasted. Without it, a major customer issue could cause you to fall short of stakeholder expectations.

So What Does this Mean for Finance Leaders?

TIME!  How does the finance leader find the time to understand and implement these new technologies and the business models they enable? The key is to embrace technology that automates labor intensive tasks so that finance teams have the time to focus on strategic initiatives.

LEADING THE IoT STRATEGY? Typically, the larger the company, the greater the number of involved parties setting the IoT strategy.   It’s our recommendation that the CFO play an “architect” role, he or she has to identify the players vital to execution of an IoT strategy and decide whether the solution needs ownership, sponsorship, or just the support of each.  Here the CFO will influence which drivers and performance metrics apply to measure new revenue streams, costs and capital spend.

ANALYTICAL PLATFORM & COMPETENCY:  In the future, all finance teams will have real-time data at their fingertips to make more accurate, strategic decisions for the business. They will also be able to break down silos between departments, further transforming finance into the foundation for any business strategy.

ACCOUNTING AND STANDARDS MODIFICATION:  The CFO has to become more flexible. Companies must also be aware of how accounting standards may now apply when a business adopts a recurring revenue or usage-based billing model. Recurring models are distinct from one-off product sales and can easily become complex for finance teams especially if there are a mix of revenue types.   Companies moving into IoT should prepare their finance teams for this transition.

CYBER SECURITY:  Is now the norm/expectation for many busy C-level executives. Wi-Fi and collaboration in the cloud has set many free to work flexibly or on the move. But this also poses dangers of its own.  How do you anticipate where machines are hacked

The promise of IoT should be considered as a strategic differentiater for a company as it begins to command its future.   The CFOs must adapt to the new demands of the digital business model in terms of accounting and revenue. Finance functions who have already gained significant experience in data collection and predictive analytics, are better prepared to manage the volume of information coming from IoT, however they will need to have the time, skills and understanding of how best to use the information to really exploit the value of this new ‘treasure trove.


  1. “Gartner Says 4.9 Billion Connected “Things” Will Be in Use in 2015,” Gartner, November 2014.
  2. “Expanding digital universe: transformative opportunities,” EMC Digital Universe Study, April 2014.IC Insights, April 2015.
  3. “The global IoT market opportunity will reach USD4.3 trillion by 2024,” Machina Research, April 2015.
  4. “The Internet of Things Business Index,” The Economist, October 29, 2013
  5. “Leveraging IoT: How to Get Started,” John Bonney,, May 2, 2016
  6. “Capitalizing on the promise-and the power-of the Internet of Things.” Deloitte University Press, July 2015

Key Takeaways:

  • Create an exception-driven close process that automatically highlights out of compliance transactions
  • Ensure the close process includes summary reporting on compliance activities
  • Formalize the reconciliation process, identifying each account’s specific risks criteria and supporting documentation
  • On-going integrated fraud testing on possible risk areas
  • Utilize reconciliation best practices to perform risk analysis

 The challenge for businesses is that many of the period-end close risks stem from manual tasks scattered throughout financial close processes during the pre-close, entity closes and the post-close. The result is that accounting and finance teams spend a lot of time bridging between the manual tasks and loading these into an ERP system that is supposed to make life easier.  On the more sinister side, the more complex and adhoc the process, the greater the chances of defalcation and fraud.  All companies can do better with some relatively easy process steps.

The common monthly transaction ‘schemes’ we have noted in our normal review of the close process are easy to detect if active monitoring of risk accounts is conducted. 

 Revenue recognition – Most common scheme we noted is the modification of sales terms and conditions in the closing of sales deals.  These contracts are modified or amended outside of the recognized sales process or reporting channels and may impact revenue recognition. Some modifications may include granting of favorable rights of return, extended payment terms, refund, or exchange. Sales personnel may provide these terms and conditions in concealed side letters, e-mails, or in verbal agreements in order to recognize revenue before the sale is complete. In the ordinary course of business, sales agreements can and often are legitimately amended, and there is nothing wrong with giving customers a right of return or exchange, as long as revenue is recognized in the proper accounting period with reserves established.

Holding accounting periods open – Improperly holding accounting records open beyond the end of an accounting period can enable companies to record additional transactions that occur after the end of a reporting period in the current accounting period. This scheme commonly involves recording sales and/or cash receipts that occur after the end of the reporting period in the current period. These acts are often accompanied by the falsification or modification of accounting documentation (dates on shipping delivery documents, PO’s, bank statements, cash reconciliations, cash receipt journals, etc.) in an attempt to cover-up the transaction trail.

 “Refreshed” Receivables – In order to mask rising account receivable balances while avoiding increasing the bad debt provision, a company may “refresh” the aging of receivables and improperly represent A/R balances as being current in nature instead of showing the true age of the receivables. This may occur with exchange transactions with customers, where customers can receive “credits” to their accounts and allowed to repurchase goods where little, if any, physical transfer of the product or service occurs. Sometimes the perpetrator may simply modify or edit dates of invoices in the A/R system that results in a “restart” of the aging process for the modified receivables. Schemes may involve the falsification or improper modification of accounting documentation (invoices, purchase orders, change orders, shipping reports, etc.) to cover up the fraud scheme.

So What Should You Do?

  1. Actively Monitor Risks

Monitoring risks and ensuring compliance are critical components of the financial close process. An organization’s chances of undetected fraud and/ or material misstatements making it into financial statements increases with a passive and non-systematic monitoring of risks.  You should consider:

  • Setting up an effective mechanism to ensure sound controls are in place and adhered to, by integrating active risk monitoring into your financial close process.
  • You should try to accomplish automated tasks and exceptions-based reviews, enhanced risk monitoring within your ERP or in reconciliation systems like Blackline®, with can be accomplished with very little extra work, effectively monitoring all desired activities, while only flagging those that violate your pre-defined thresholds.

Conduct Optimized Risk Analysis

By leveraging analytical capabilities of current systems and pre-packaged ones from respected vendors (e.g. Benford’s Law), companies should seamlessly monitor the financial close ‘in-process’, to spot anomalies, and detect fraud.

Use pattern simulations to conduct an optimized risk analysis so that you can focus the riskiest areas with the largest potential impact; and not get bogged down reviewing every low risk, low impact transaction and activity.  Simple Monte Carlo simulations will get you to the prioritized list of risk areas. More advanced techniques are available, and are relatively cost effective.

  1. Governance Within the Financial Close Management

By integrating your process and reconciliation tools with your ERP system you will create better risk transparency via a single financial close process system. With this seamless integration, you will be able to:

  • Create, update, and monitor financial master data in one system – and distribute changes anywhere – to accelerate the financial close process.
  • Strengthen and document internal controls
  • Streamline testing and assessments
  • Perform timely remediation

The overall benefit is that your company will generate accurate reports that comply with multiple regulations. This integration provides real-time visibility of risk related tasks, and helps your company increase transparency across their entire financial close process leading to higher stakeholder confidence.

Finance is in a unique position to assume a leadership role in the adoption of big data strategies. While it may not need to “own” the data, it can act as a central hub for analytics, pulling from multiple sources of information and using the data to inform is core planning processes, in particular forecasting to help drive faster and smarter management decisions.

  • Big data presents a real opportunity for finance to take a leadership role and become an analytics hub.
  • Big data enables finance to become the go-to expert in its area.
  • Traditional finance groups are adopting an evidence-based, predictive mindset.

According to The Hackett Group, big data and new tools present a tremendous opportunity for finance to take the lead, given its core fiduciary responsibilities.  “The challenge for finance is how to develop an enterprise view of analytics,” he said. “The first thing is to realize you can find out more. You can ask questions you couldn’t ask before and frame them in the form of business outcomes.”

“It’s time to move from a fixed, transactional-based approach to one that is more discovery-based and analytical.” What tools and analytical approaches to use is secondary. “It’s time to move from a fixed, transactional-based approach to one that is more discovery-based and analytical. It’s not just about reporting, but finding patterns and gaining insight,” he said. These insights can help finance provide the business with the information it needs to improve its performance and processes. “It’s a phenomenal opportunity for finance.”

Resilicore’s own experiences over the course of 20 + reporting engagements are as follows:

  • Ineffective investments: Despite considerable investments, spreadsheets (70 percent) and e-mails (68 percent) are still dominate the daily tracking, managing and reporting of business, suggesting that new technology investments are falling short of expectations.
  • Increased costs and uncertainty: The regulatory and data sourcing situation is largely opaque that managers across the finance function are unable to fully understand the financial impact or cost implications of reporting, with 60 percent of respondents admitting they did not know the total cost of managing and publishing their financial results.
  • Decreased visibility: A majority of our client CFO’s (over 70%) admitted that they have inadequate visibility into reporting processes, while three quarters of their finance managers said they find it difficult to source and control the quality of financial data across the entire reporting process.
  • Increased scrutiny over boards: and audit committees. We are in agreement with the EY findings where eighty-four percent of respondents said that audit committees and boards have increased their overall attention on reporting in the past three years, with 34% saying that the attention has increased significantly
  • Missed reporting deadlines: Due to late changes to the financial results and chart of accounts, >20 percent of global businesses regularly miss statutory filings, putting their companies at risk of financial penalties and potentially impacting share value.
  • Commitment to Change: Although businesses recognize they need to invest in financial reporting to address the challenges they currently face, less than half of our client companies have made substantial investments over the last year to the financial close, filing, and reporting processes.

Management accounting and reporting are key areas for continuous improvement as they provide an overview of the organization’s whole management picture. Resilicore provides a wide range of management account and reporting services for its valued clients.

Resilicore provides a broad range of services for identifying, analyzing, collecting, assessing, and interpreting management and statutory information. The information and data curated is then used for planning, evaluating, and controlling company performance and to ensure efficient utilization of company resources and cure the compliance and decision support issues above.


By working with us, you get access to better quality management reporting within a shorter amount of time.

You will enjoy a number of benefits:

  • A compendium of reporting forms that include both financial as well as non-financial indicators of performance;
  • Management accounting policy along with a detailed principles of management reporting;
  • Analytical reference catalogs that were used to gather data for the calculation and review of analyzing indicators;
  • Algorithms for the calculation of management reporting indicators;
  • Management data regulations for both gathering of data and its reporting, clearly specifying accountability and timing;
  • Training of business employees to assist themselves in the business/finance analytics process e.g. self-help in the building of scenarios.



1. Are you prepared for corporate reporting’s perfect storm? EY Survey, 2015

2. CFO’s losing confidence in reporting. CFO Magazine, Matthew Heller, April 2016

Companies that are experiencing high growth or disruption or whose industries are in turmoil, often need a comprehensive approach to controlling costs. In our experience, zero-based budgeting (ZBB) provides a practical way for companies to radically redesign their cost structures, and prepare for not just current year but future market conditions.  We have found that companies who take on the difficult task of a Zero Base Budget can achieve reductions as much as 20-25% of spending on SG&A and overhead and reduce the waste in capital projects by an equal percentage.


Zero-Based Budgeting is a broad-reaching cost transformation effort that takes a “blank sheet of paper” approach to resource planning.  It differs from traditional budgeting processes by examining all expenses for each new period, not just incremental expenditures in obvious areas.  ZBB forces managers to scrutinize all spending and requires justifying every expense item that should be kept.  It allows companies to radically redesign their cost structures and boost competitiveness

Zero-Based Budgeting analyzes which activities should be performed at what levels and frequency and examines how they could be better performed—potentially through streamlining, standardization, outsourcing, offshoring or automation.  The process is helpful for aligning resource allocations with strategic goals, although it can be time-consuming and difficult to quantify the returns on some expenditures, such as basic research


  1. Re-envision the business and ask what activities and resources will truly be needed to compete under future market conditions, then set a clear strategic vision and cost target
  2. Build a comprehensive fact base of current product offerings, functions and expenses
  3. Use a “blank sheet of paper” approach to build the ideal cost state and identify vital initiatives
  4. Build the future state, bottom up, by justifying what activities should be performed
  5. Reset budgets and full-time employee levels, redesigning the organization and planning for implementation


  • Confront conventional thinking and resource allocations by challenging every line item and assumption, including the most sacred of cows
  • Help organizations that are overly complex due to mergers or acquisitions, streamline
  • Fund key strategic imperatives while removing large non-value-adding costs
  • Align resources with the mission of the function and enterprise
  • Justify proposed activities and resources


  • Out of date inefficient operations are identified
  • Allow managers to quickly respond to changes in external environment
  • It promotes a questioning and challenging attitude towards costs and expenditures
  • It ensures efficient use of limited resources by allocating them according to the relative importance of the programs
  • The annual review of the programs indicates the relative worth of the programs and thus ensures no programs continues beyond its productive life
  • It helps the management to design and develop cost-effective techniques for improving operations


  • Increased paper work
  • Cost of preparing many packages
  • Subjective ranking. Strongest voices often prevail.
  • More emphasis on short term benefits and qualitative benefits often ignored
  • The identification of decision units and decision packages creates number of problems for the organization(Decentralized)
  • The process of zero base budgeting requires experiences, intelligence, expertise, and continuous training on the part of executives Thus , it is not suitable for an ordinary organization


Zero-based budgeting provides a systematic method of planning company financial resources. It requires a program to be justified in each financial year, as opposed to simply budgeting based on a previous year’s allocation. It takes ‘organizational sludge” out of the process but to do it right, may require an extensive amount of time and paper work. A hybrid of zero based budgets is implemented in more troubled areas along with traditional budgeting spreads the effort involved in justifying new budgets and is in our opinion a better method by which zero-based budgeting can be incorporated into current budgeting techniques.

I’ve conducted over 20 cost of finance assessments in the last 7 years and the one thing that continues to make me cringe is the fact that the cost of finance metric of the top 25% of survey companies appears to be less than 1% of revenues.  There are too many  factors that impact the decision as to what the target is for a finance department to hit and provide the right level of service to business.  Some of these are mentioned in an article in the CFO magazine recently “Five Reasons Why your Finance Transformation Efforts Fail”

1.  Too much focus on a guideline metric “total cost of finance.” Real effort should be on rightsizing the service delivery and service type model for finance

2. Concentrating too much on customer satisfaction. Seems counter intuitive, but unchecked demand fulfillment fitters away valuable time…

3. Transformation is not a one time thing.  There must be a ramp down of costs based on milestones reached where business is taking on some of the initial tasks of analysis and scenario planning (self help)

4. Dont create shadow finance costs.  Finance to lead end to end process management and training of non-or-quasi finance types in the business

5. You cannot pull off a finance transformation on your own…easily.  A good adviser (opposed to a consultant) is worth his/her weight in some precious metal !