Finance Unleashed (eBook)

Magnus Lind has moderated peer groups for senior finance executives from large corporations across the globe for over a decade, focusing on the transformation of finance in nonfinancial corporations from a ‘command and control’ function to a business leading role. The financial crisis was one driver for this change, together with new technology (including fintech), Industry 4.0, and new, alternative financial models. The challenge was finding a way to unleash finance to achieve its true potential and leverage it for innovation. In 2014, Magnus began to explore the ongoing paradigm shift in finance in a broader context, looking to understand how it fits into Industry 4.0. The reason for writing this book was just that - to explore what financial disruptions mean for CEOs, CFOs, and the boards of nonfinancial companies. Kelly Barner has built a career on her unceasing desire to learn, ability to apply critical thought, and her writing skills – all of which have proven essential for building a diverse, global professional network. Kelly’s education and experience in market intelligence and research – although not acquired for the sake of improving corporate supply chains – have opened many unexpected professional doors, one of which led to over a decade (and counting) in procurement and supply chain. Procurement is a field ripe for disruption from within, especially if ambitious professionals in the field can connect with colleagues in other areas of the business to create a cohesive strategy for increasing competitive advantage in collaboration with supply partners.

Dedication 8
Foreword 9
Preface 11
Acknowledgements 13
Contents 16
List of Figures 19
Part I: Background 22
1: Three Critical Changes to the Role of CFO 23
2: Finance Taking a Customer-Centric View 27
Finance with an Entrepreneurial Hunger 28
Your Best Strategy Is to Make Yourself Redundant 29
How Can Finance Provide Customer Value? 30
Welcoming ‘Disruptive Finance’ 31
3: Take a Process Flow Perspective 33
4: Allow the Whole Supply Chain to Innovate 37
Large Companies with Cash Holdings Can Release SMB Funds 39
Large Companies Can Partner with SMBs to Avoid Being ‘Unbundled’ by a Myriad of Start-Ups 39
Large Companies Can Leverage the Naturally Strong Linkage Between Innovation and Survival in an SMB 40
5: The CFO as the Driver of New Business 42
Part II: Perspectives 48
6: Visions for the Financial Supply Chain 49
Summary 49
Growth Through Digitalization 50
System-Wide Shift in Business Models 52
Moving Away from Centralized Systems 54
Natural Limits of Connectivity 55
Conclusion 57
7: The Innovator CFO 59
Summary 59
Conclusion 65
8: Nudging the Financial Supply Chain 67
Summary 67
Conclusion 72
9: Leadership Is Not Enough 74
Summary 74
Conclusion 78
10: Let Them Eat Cake 80
Summary 80
Conclusion 87
11: Building Competitive Advantage by Connecting the Physical and Financial Chains: A Study of UPS and DHL 89
Summary 89
Differentiation in a Red Ocean Market 90
Financial Services Built to Spec 91
Growing Offerings Without Losing Focus 91
The Value of the Whole Is More Than the Sum of Its Many Parts 92
Reaching a Natural State of Alignment 93
Conclusion 94
12: Back to the Future 96
Summary 96
Conclusion 104
13: The Whole Chain or Separate Links? 106
Summary 106
Conclusion 110
14: Leadership Is Leveraging the Full Output of Your People 112
Summary 112
Conclusion 118
15: Financial and Operational Measurements 120
Summary 120
Conclusion 122
Part III: Implications 124
16: The Context 125
The Big Picture 125
The Role of the Central Banks Became Central 128
Customer-Centric Financial Regulation 129
“Stop Pushing Payment Terms, Pay Promptly!” Demands the Government 130
Big Picture Conclusions for CFOs 131
The Drill and the Kill, or the ‘Ecosystem Fight’ 131
The Physical Chain Transformation, or Industry 4.0 134
17: Seizing the Opportunity 139
Customer-Centricity Creates Alignment and Eradicates Silos 139
Structure and Technology: Leveraging Transparency and Trust in an Ecosystem Play 141
‘New’ Trust Relies on the Ecosystem 143
Look for New Solutions 145
Getting from Here to There 149
Innovation by the CFO 150
Innovation: The Center of the Finance Function 151
Good Examples 154
18: Finance Unleashed: A Practical Model 159
Customer-Centric Targets and Objectives for the CFO 159
Voice of the Customer (VOC) 160
Financing the Customer 160
Introduce Advanced Pricing Capabilities to Drive Profit Gains 161
Payment Process Improvements 161
Lowering Total Ecosystem Cost 161
Multifaceted Risk Can Lead to Higher Prices for Customers 162
Finance Delivery 162
Establishing Processes for Mapping Customer Centricity to Innovation 162
Financial Supply Chain Coordinator 162
Current State Process Mapping 162
Future State Process Mapping 163
Re-map Current and Future State Around Other Variables 163
Distributed Ledger Technology (DLT): Follow, Experiment and Stay Updated 163
Involve the Ecosystem 163
Measure and Improve the Accuracy of Cash Forecasting 163
Extend Cash Forecasting to the Whole Supply Chain 164
How Unleashed CFOs Create and Measure Innovation 164
Make Innovation Inclusive 164
Innovation Is a Discipline, Learn It 165
Inside or Outside of Your Organization 165
Involve the Whole Ecosystem 165
Use Crowdsourcing 165
Create an Ecosystem Innovation Task Force 166
Define and Communicate Criteria for Success and Failure 166
Find Innovators 166
Find the Funds 166
Identify Areas with Exponential Potential 166
One More Thing… 167
Appendix 1 171
How CFOs Prepare for Tomorrow 171
Conclusions 175
Appendix 2 177
How Treasury Supports the Business 177
Conclusions 182
Bibliography 184
Index 186