Finance Transformed

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As Seen in CFO Studio Magazine Q3 2019 Issue

WHEN CFOS ASK, ‘WHAT CAN I GET OUT OF THIS DATA?’ SUTHERLAND CAN HELP THEM PUT THE RELEVANT INFORMATION TO WORK IN THEIR BUSINESSES FASTER

To understand how the Finance organization role has changed in today’s digital age, we recently interviewed Jim Lusk, CFO, and Tim Leger, SVP Business Process Transformation, for Sutherland, a digital process transformation company headquartered in Rochester, NY. Sutherland’s focus is on improving the customer experience and delivering meaningful and measurable business outcomes to clients. Lusk and Leger provide a unique perspective, bringing insights from a company’s CFO as well as from a business leader responsible for partnering with primarily small and medium businesses to transform and automate their Finance operations.

Jim started by sharing that, as CFO, his ultimate goal is “to become a strategic partner to the business.” To achieve this, his top priority is to make “the Finance organization more agile, forward looking and decision-centric to address stakeholders’ growing demands for access to the right information, at the right time, to make the right decisions. With the right data and business insights, he said, “you can really beat your competition. Th e most important question you need to ask is, ‘What information do we have that is not being used that can help the business run better?’ ”

 

Transformation Journey
Jim, like most CFOs, shares a passion for improving business operations, and recently completed a “multiyear end-to-end intelligent
transformation” of Sutherland’s entire Finance organization. It included implementing a new ERP system along with digital technologies and
an analytics platform. Th e results are noteworthy. The 50 percent operating cost savings are impressive, but the true benefits, Jim pointed
out, were the “business outcomes delivered and improved controls and compliance.” The department’s process transformation significantly improved cash fl ow by reducing DSO (days sales outstanding) to world-class levels. By rethinking and digitizing its transaction activities, the close was reduced from 22 calendar days to 7, leaving time to analyze results as opposed to just reporting them.

The most important result was significant improvement in customer satisfaction, achieved by automating the billing process. Automation improved accuracy while at the same time reducing cycle time from 80 hours to less than 8 hours.

Jim admitted the significant advantage he had was a built-in partner, Tim’s F&A transformation team. They have 8,000 finance professionals working with clients to create next-generation Finance organizations. Tim shared that a majority of small to-medium businesses, even some Fortune 500 companies, lack the skills and investments required to truly transform their Finance operations. An
interesting statistic he quoted was that “more than 50 percent of companies that try this themselves fail. The primary reason is that they lack the required automation experience, and there is a shortage of those skills in the market. My organization has that expertise to accelerate automation and takes on the risk of delivering the results.”

Real Estate A CFO’s Lever?

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As Seen in CFO Studio Magazine Q3 2019 Issue

SHEDDING EXCESS OFFICE SPACE FACILITATED TRANSFORMATION OF A 5,000 EMPLOYEE COMPANY

Sas Mukherjee, CFO and Chief Strategy Officer for York Risk Services*, has delivered his company millions in benefits using a financial lever that few CFOs employ. When he joined York, an insurance services provider, in 2016, he saw the potential to consolidate its real estate footprint. The company, based in Jersey City, NJ, had more than 100 facilities across the United States. By year end 2018, the number of offices had dropped 43 percent, with over 31 percent reduction just in 2018.

Decreasing the size of that footprint was not the only positive result. An important outcome that York is tracking in tandem is employee engagement, which has become markedly more positive over that period.

What York needed at the time of Mukherjee’s hiring was an operational leader who was more than a traditional CFO with proven track record who could help the company drive quick transformation. And that’s what the company got.

Mukherjee’s atypical route to the CFO role includes stints as Chief Executive at two different firms, including a top private equity portfolio
company; as Managing Director at a Big Four consulting firm where he formed a center of excellence to help Fortune 500 companies develop plans and implement long-term strategic transformation; and as Shared Services CFO/Head of Strategy and Business Excellence at health care company Kaiser Permanente.

He found his niche in the CFO role with its “360-degree view of the company, a view that is grounded in solid facts and financial numbers.”
Thus, a CFO “is in a much better position to develop a realistic vision and has a higher probability of success” he says. To take that a step further, “CFOs are uniquely positioned to wield many levers to drive strategic transformation,” Mukherjee says.

He has been an evangelist for the evolving strategic role of the CFO and has been a sought after speaker delivering keynote addresses at CFO
conferences around the country. He has engaged CFOs at Executive Dinner Series events hosted by CFO Studio, discussing how real estate can be a financial lever for organizational change, among other levers.

 

Not Just Cost-Reduction
Back in 2017, Mukherjee was implementing a broad portfolio of transformation initiatives requiring access to top talent, among other criteria. Location of York’s real estate, he knew from his prior global resource and real estate optimization experience, was an important enabler. Through a competitive procurement process, he selected  to be York’s commercial real estate broker, partnering with Scott Lesh,  Managing Director, after the two were introduced by CFO Studio’s CEO, Andrew Zezas. Mukherjee determined that any office space for York would feature elements of what Lesh calls the improved workplace experience.

The two made a good team, sharing an understanding that “the real estate lever can be equally as effective and enabling” as outsourcing or analytics for driving strategy, says Mukherjee. “We’re seeing a significant shift in the way employers are looking to attract and retain talent,”
says Lesh. “They’re giving employees spaces to collaborate and the opportunity to cross-pollinate with their colleagues.”
*York was acquired by Sedgwick in early September

In many companies it’s work-your-own hours, he adds. Huddle spaces or lunch areas that encourage getting together can be retention and collaboration facilitators, particularly with Generation Z and Millennials, whose focus is more on well being than on putting in long hours to
demonstrate their career commitment.

 

Areas of Savings
At York, Mukherjee absorbed generated market data for portfolio optimization.

“What we wanted to do was leverage this opportunity to identify markets within our current footprint with best talent pools, better cost structures, higher safety or lower crime, and ease of access to airports,” says Mukherjee. “There were multiple aspects to those requirements. We had to do the analysis based on families of jobs.”

Where current employees lived—and where customers were—factored into the decisions too.

“As part of the study we did with  Mukherjee, “we looked at tapping into locations with proximity to good schools, producing students with the skill set we needed for our future workforce, or migration patterns of workers to certain parts of the country. We looked at the availability of government tax dollars, although they didn’t play a very big role in the end.”

The course York eventually took was to create a hub and satellite model, where hubs would have at least 200 employees. Satellites were markets York had presence in that didn’t have the critical mass of employees but were strategically important.

Substantially fewer York locations meant savings in lease, maintenance, and utilities expenses. In addition,

•Leveraging existing available space to support growth avoided the cost of leasing additional space.

•Long-term commitment to occupancy costs and capital expenditures was reduced by using co working spaces (WeWork and Regus) to fill needs for offices in some cities where York needed a presence with few employees.

•Corporate policies to enable work-from-home arrangements, where appropriate, also reduced space requirements.

And then there are the soft benefits. To name just one, York adopted more cloud based technologies and “collaborative working tools for sharing documents and video meetings between employees across geographies,” says Mukherjee.

 

Sold on the Value
“Real estate was a lever to support a broader transformational journey that we were undertaking.” So real estate rationalization enabled other decisions, such as reorganizing the Finance team and anointing some of York’s existing locations as shared services hubs and promoting local leadership, says Mukherjee.

Were there tough choices? Yes, but Mukherjee emphasizes that the entire process was collaborative. “We engaged the business and operations executives to jointly agree on, ‘Here’s what’s in it for you.’ ” Business leaders who became more efficient in their use of space and in helping consolidate real estate would get a benefit on their P&L that in turn could be re-invested in employees and improving customer service.

From this point, York’s journey becomes a little harder, he says. The plan is to stay engaged with the global leadership team and, using criteria Mukherjee’s team has developed, continue to review “if the hubs and satellites we agreed on make sense and quarterly action plans. In that way we’ll keep executing on the long-term plan.”

Mukherjee is passionate that “CFOs who aspire to be more strategic should be looking at this lever and getting involved, because of the independent and unbiased view they can bring to the analytics around real estate and the bottom-line and cultural impact.” For him, rethinking real estate usage helped support “a broader transformational journey that we were undertaking—real estate wasn’t leading
that, but was enabling and supporting our shared services strategy and our brand rationalization.”

Sharing the Road

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As Seen in CFO Studio Magazine Q3 2019 Issue

WITH HIS COMPANY IN THE MIDST OF TRANSFORMATIONAL CHANGE, CFO BRENDAN GILBOY IS TAKING A FRONT SEAT IN DRIVING TODAY’S STRATEGY AND TOMORROW’S VISION

Founded over 100 years ago, Oak Brook, IL–based Chamberlain Group (CGI) is a leader in access control solutions with its Lift Master and Chamberlain garage door openers powered by myQ connectivity. Earlier in the year, this household name in homes (and businesses) around the globe joined forces with Amazon to provide package delivery into the garage, whether or not anyone is home to hit the clicker and open the door. And, like most things these days, it all happens in an app and on a phone. “Th e world is changing rapidly,” says CGI Chief Financial Officer Brendan Gilboy, “and trying to stay ahead of that change is really the most exciting part of my job.”

Gilboy, who’s been with CGI, a privately held company with more than 6,000 employees worldwide, for just over a decade, “developed the original financial model that was used to frame the discussions about what a win-win proposition looked like from a CGI perspective.” As for Amazon’s viewpoint: “Based on our experience,” he says, “Amazon looks to partner with folks who enable their vision of being the Earth’s most customer-centric company. Packages delivered safely and securely to the garage is truly a customer-centric solution.”

Gilboy is proud to have played a role in this new-to-the-world innovation, and believes a CFO can make the most significant workplace impact as a business partner and co-visionary to the CEO. “Continued focus on being a key element of setting company strategy is an important aspect of the ongoing evolution of the office of the CFO, moving from a numbers-only game to the position of the CEO’s right hand.”

But, with companies like Amazon disrupting the pace of business, such a partnership is not without its challenges. “You have that tension of making sure things get done right while moving quicker than the rate of change in the world,” notes Gilboy. It’s akin to speed walking on a tightrope, he says, but it’s all in a day’s work.

 

Office Culture
According to Gilboy, “the biggest challenge for any CFO is—and should be—actively supporting and, most importantly, guiding the company to support creativity and innovation focused on end consumers, while driving shareholder value creation by ensuring mind share and resource devotion is focused on greatest impact.” However, that doesn’t mean, he continues, that every good idea can be pursued.

“One of the most beneficial contributions a CFO can make at his or her company is to drive a day-to-day leadership strategy in which a culture of honesty and critical thinking wins the day and emotion does not.” Gilboy explains that such a culture is achieved when attention is focused on an honest assessment of what the data portrays. “This leads to tough, but objective, decision making, and it ultimately forces the team to pivot and move on to the next thing, instead of chasing ideas that aren’t going to pan out.”

Gilboy says the office of the CFO can foster this type of culture by maintaining a stance that “every ‘no’ is one step closer to a ‘yes,’ ” and by openly celebrating successes and “ideas that stick” so people feel good about being part of a winning team. And, most importantly: “By leading a team that clearly articulates a vision, and then a mission, of how we’re going to pursue that vision, so people can start with what the
bull’s-eye looks like and go from there.”

 

Top Teams
Gilboy, who spent two decades in public accounting at KPMG before sett ling in at CGI, believes he’s been able to propel his position to that of strategic and visionary “right hand” by forever focusing on being part of, and then building, great teams: “teams that were very performance focused, that understood what the goal was, and that went about achieving it.” Gilboy suggests CFOs zero in on people, and on trying to hire the best team possible. “At the end of the day, it’s a war for talent, and you need to build a team that makes the company better.” Th e CFO needs to lead that team to demonstrated results. “Not just financial results,” he notes, but “accomplishing
whatever the objective is.”

Furthermore, considering so much time is spent on data-driven insight, CFOs can seize the opportunity to play a more active role in shaping the next best move to create shareholder value by “shepherding the emerging trends of big data and predictive analytics in that context.” Gilboy recommends CFOs get up to speed—yesterday—on how such capabilities can add value to a company and how to build them into an organization. “In today’s world of rapid change and increased efficiencies, you have to work hard and smart.”

 

The End Game
As a strategic and visionary partner to the CEO, Gilboy is playing an active role in keeping the Chamberlain Group one step ahead of the times as it takes “access solutions,” a space where the company has a tremendous legacy, and redefines what that really means. “As a result, we’re transforming CGI from a manufacturer of products for the past century plus into an Internet-of-Things solution provider.” That, he says, is “very exciting.”

Although he’s far from retirement, Gilboy, 54, says the success he relishes the most is watching people he’s hired develop in their careers. “Seeing them flourish, starting their own consultancies and businesses because I gave them the opportunity, or coached them, and they rose to the challenge, it’s a tremendous compliment.”

And knowing that, eventually, their new flat-screen TV will be safe and secure in the garage, instead of out in the rain on the front porch—or worse, in the back of a getaway car—is just the icing on the cake.

Copyright 2017