>>from around the >>Globe. It's the cube with digital coverage of IBM think 2021 brought to you by IBM. Welcome here to the cube as we continue our series of IBM Thank on john wall's your host here on the cube for our discussion with scott. Layton who is the senior partner and global finance transformation practice at IBM scott. Thanks for joining us here on the cube. Good to see you today. >>Great to see you john, thanks for having me. >>You bet. Absolutely. Looking forward to it. Um first off, I want you just to put yourself in the CFO shoes these days, we're talking about this digital transformation and all that's occurring, particularly in finance and and what are the, I guess uh issues or the challenges you think that are kind of keeping them up at night and then we're going to transition over to how you at IBM. We're trying to solve those problems for him. But first let's let the CFO role. >>Sure, sure. Great question. And and you know, if you had asked this two years ago, we have a different answer in some ways, right? Uh Covid has has put a tremendous amount of pressure on businesses and CFOs in particular, especially when it comes to managing cash, managing logistics, supply chain has been has been pushed pretty pretty hard to its limits. I think cash has always been king, but even more so now in their preservation of cash. Um I think as well, we're now seeing in the last year to this push towards digitization, like you said, there was a long time in a lot of CFOs minds, a lot of reluctance around how fast they can move towards digitization. How how quickly they could get people working remotely or using technology better and move away from paper invoices and things like that. And what we're finding is when people didn't have a choice, it happened relatively effortlessly. And so we've now seen a much broader appetite towards digitization leveraging tools, again, in pursuit of managing cash and creating efficiencies, reducing costs. So it's the same, it's the same benefits. They've always looked at maybe a little bit more focused on cost and cash, but now the tools that they are able to use to to make that happen are are much more prevalent. They're much more open to their use. >>Yeah. So, so you're talking about making a decision voluntarily and then maybe external forces pushing you into into, you know, driving decisions. So is that kind of where we are right now, where there is, there's really no option. Uh you gotta go, you have to make this kind of move. And so you've got to answer to those external pressures. And and so this is not a voluntary mission. It's a must have in today's finance world. >>Yeah, I think so. And look, it's it's always been something that Cfos who wanted to move towards, like no CFO will tell you that they love manual processes and they want stuff on paper. But there was always this ability to defer the decision and punted a bit and and what's happened with the pandemic and changing the ways of working? It's forced that decision to happen again. I don't think it's created decision that wouldn't have happened eventually, but it's certainly accelerated it and cause them to take it quicker. >>All right. So you've conducted and just released study the CFO study where you've looked at and categorized. I think interestingly enough of three kind of stacks of Cfos ones the star side, right? Uh The other two are lagging a bit uh Tell us a little bit about that about the study and and those categories. And then we'll break down a little bit into why that one group is the star side of this equation. Kind of what they're doing and then what you're suggesting the other to do to catch up. >>Sure. Yeah. So so what we do is when we when we go and we do these surveys, we asked hundreds of cfos how they think about their business, where they put their priorities in the business and compare that to the performance of their business. And what we find is that when you look at these these different categorizations of of of cfos and organizations, you have one that clearly stands above the rest in terms of performance. And what we find is there's a direct correlation between things like the the usage of ai things like agile methodologies, lots of different kind of almost cutting edge techniques in business, but also in technology that they're using to differentiate their businesses and their again directly correlated with their performance in the market. >>So in terms of I guess the lesson learned or how another ceo CFO rather could learn from those, you know, this group that that's ahead of the game. What do you think is maybe some of the key takeaways if I was on the outside looking in or observing someone who you think is doing it better than I am or maybe has a little more vision than what you're suggesting, I have. What what should I be looking at if I'm if I realize I am in a deficit and there are people who are doing things perhaps in a more advanced state than I am, >>maybe maybe a couple of things. So one we we talked a little bit about digitization already ready, Right, leveraging technology more and more. Uh and when we talk about technology, you can think about technology in a couple different ways. You can think about this concept of a next gen er P or you can think about this technology is more of like what's called an exponential technology and our position would be that you as a as a CFO or as a business, you want to get as much of an off the shelf prp as you can and then build your exponential technology around it. So you're you're a i your machine learning, your automation set that on top of and around your E R P. Because it's inside the exponential technologies, you're going to create differentiation. So that's one thing that we're seeing is this adoption of next gen er PS an exponential tech. I think the other thing that we're seeing is a fundamental rethinking of the way that we're doing working. Uh it's agile, but it's so much more than that. We have a lot of discussions today with Cfos about agile and we make this distinction and says, listen, you can be a CFO and finance organization that practices agile or you can be an agile organization and there's a very big gap between them and what we're seeing is our best CFOs are adopting this new agile or methodology. And they're saying, we're redefining the ways that we're doing work. We're removing duplication, we're removing finance to finance the finance discussions, which is a tremendous waste, right? We're really trying to align our finance team, even though they're an internal team, we're trying to align them with value to the customer. uh so that's maybe the 2nd 1. And then, and then I'd say, you know, the third one is really focused on uh preservation of cash and using analytics to to drive a better understanding of cash and how cash flows through the business. So whether it's um improving your inventory turn whether it's improving your payment term terms, um any number of different ways to manage your cash and preserve it. And again using technology to do that. So again E. R. P. Exponential tech, agile and then leveraging tech to really drive value in the business. >>Is there can you raise a kind of an interesting point about that definition difference or deficient? Definitional difference in agility? Is there a difference in perception and reality? Then I may do some people think that you know because they're employing certain philosophies and concepts in one respect that were good across the board and and that maybe they're not. I mean is there is there a gap there? >>Yeah, there absolutely is. You'd be surprised the conversation we have you. Well, they say, well, we're, oh yeah, we're doing stand ups, were doing retrospectives, were doing mood marbles, that those are actual practices. What we're talking about is are you, are you eliminating huge amounts of part of your work because it's no longer needed and it's no longer driving value? Are you tracking uh, how agile, what kind of agile maturity your organization has and how you're driving towards a leaner, more efficient organization. There's, that's a very big difference. And yeah, we have daily meetings with our team versus this concept of being able to create an organization that is itself agile and is itself lean in align with the business. Uh, a lot of folks think by doing the former, they're accomplishing the ladder. And the true measure is productivity when you do this, step change soon. And I'll organization Big big numbers starting 40 50 in a matter of quarters, not years. It really can be significant because again, because the way you're fundamentally rethinking the way that work gets done >>well, that'll get your attention in a hurry, won't it? You're talking about those kinds of gains in those kinds of timeframes, that's significant. >>When you look at it, we're seeing the same kind of gains with agile in, let's say, a year and a half that we saw with labor arbitrage in five or 10 years, it's really changing the way where and again, you have to, you have to have an open culture to accept like that you're not going to do things or that you're maybe not going to support the business and the way you have for the last three decades. But once you have come to accept that the productivity gains and the value that you're able to create and again, we don't think about productivity in terms of reducing headcount, we think about it reinvesting. So what can finance now due to higher value add? How can they make their seat at the table bigger to better support decisions, better drive the business. This concept of of driving the top line versus controlling the bottom line is very important, >>and obviously AI has got a big role in that. Right? I mean, so let's talk about the function of A I in terms of finance and and what you see or what you're talking to your clients about in terms of how artificial intelligence can be better incorporated into their systems and processes. >>Yeah. Yeah, sure. Look with with Ai you've got a lot of different ways that you can apply it of course. But um where we see it really helping is traditionally when you look at the lower end of finance processes, you you were able to apply automation relatively well, but what you're finding is is you move up that complexity stack, you now start needing a i to give you a better opportunity to automate. It really allows you to help create the decision support. So we're seeing it in things like um being able to read contracts and use ai to suggest accounting treatment. We're seeing it and being able to um suggest best action. So when a problem is encountered in a business, any kind of business, right. It could be financed, it could be the core processes, it says, how have we dealt with this in the past? Was that successful or not? And using machine learning and ai it's suggesting maybe you should take this action and here's why. So it's it's we, you know, artificial intelligence or augmented intelligence, we prefer the latter, Right? It's this it's this technology that's designed to assist in decision making and provide you with more data and analysis and you could physically do on your own to make a better decision. >>You know what you're talking about these uh these really grand strategic transformations right, that are occurring and and and people have big decisions to make, but they're taking on big problems. So if you would just talk about some of those problems in terms of new platforms, new technologies, you know, these, you know, real life uh conundrums, sometimes people run into and and how they are dealing with that. How you're helping them deal with these big time challenges, especially like on the platform level. >>Sure, yeah, there's so many where to start. Uh you know, you look at things around uh financial forecasting and and it used to be and when you would do financial forecasting is an example, you'd have your financial analyst and they're looking at three years of history and they're trying to figure out all right, where's your revenue? The land for the court of the month, year, whatever it is, whatever period it is. And what we're finding very, very quickly is three years is irrelevant. You have to be looking at what happened last week, what happened the week before that, especially as the economy is changing so rapidly. And a I can help with that Ai can help you because what it's doing is when you when you now have to change your focus from years to weeks, you've got to start looking at different data sources to give you insight into what that means. Strange things right? Like if you're in retail, you've got to start looking at whether you've got to start looking at sentiment. We look at where uh you know previous months where lockdowns were having to help you understand whether you should be doing more business online or whether you're gonna have more in store retail as an example. So all of these different external data sources that finance people may not have traditionally been using. We're now having to incorporate because we don't have that that corpus of three years of business information is reliable. Um So financial planning is a good one. Um What else is we as we think about how to uh leverage ai audit and controls are near and dear to my heart. I used to be an audit director and do investigations, things like that. And one of the things that we always struggled with was how do we how do we leverage experience of the auditors or the investigators have gone before us. So we've implemented natural language processing and natural language search. So you can say tell me about the most significant risks that we found in china in the last two years and the Ai and machine learning is going through our database of documents and using understanding what you asked and giving the meaningful answer. It's not a google search, right? It's giving you a meaningful answer, understands what's significant is and understands the tone of the language and how it's being presented. Just a few examples around them. >>Yeah. I mean to me context is everything right And and that's where we were making this huge shift in terms of having a much greater awareness and and a sensitivity to the real context of of a data point that you're looking for. so you make a great point. Um So before we close that always like kind of like to hear about a practical application, so if you could um I don't know how comfortable you are with naming names are not naming names, but can you give us an idea of maybe how you've worked with a CFO or cfos in terms of identifying areas where they can improve or they can implement uh some of your of your advice, some of your solutions and where it's worked, you know, where they've had great success and and has inspired perhaps more success within organizations. >>Yeah, sure, sure. I think my and I won't name names but I'll give you an idea because of that. We do this a lot of different cfos but it's just I like to think of it as sizing the appetite and then serving what they want to eat. So when we when we meet with the CFO we we have a discussion with them about where their pain points are and talk about advisory and then instead of serving them this banquet meal let's start with the dishes they really like and it's really important to them. So we create this bite sized proposal and we use that because the days of 102 103 $100 million transformations, why would anybody do that anymore? You know, don't don't tell my bosses that but I like to start with you know a smaller bit right let's prove the value and then let's created self funded transformation where the value that you're creating, whether it's in working capital, whether it's you know day to day sales outstanding or an actual productivity. You create that value with a small pilot proof of concept, M. V. P. Whatever you want to call it and then you use that in a portion of those savings to then fund the next phase. And you can you can build to a very large transformation project very quickly. But again for the CFO it's critical to demonstrate value at every step of the way. So we like to do what we call um P O C M E P S, we do this through a garage, we may come together do some co creation, we might leverage one of our partnerships like Solonius to bring this fact based approach the table to help them understand where their problems are. We co create the solution with them and it's typically financed I. T. Developers all in the room building something unique and we're not talking months, we're talking in the morning, we talk about what the problem is. The developers build it in the afternoon and we show the CFO the next morning what we're thinking and what it actually looks like. And it's this concept of the days of a paper deliverable are done Because of the way that we've the society as a whole is democratized technology and made it so accessible. You can, you can listen to the requirements in the morning and build it in the afternoon. Iterate the next couple of weeks so that by the end of a 4-6 week period, you've got this incredible minimum viable product that is actually creating value for the business and then you scale it out. Uh that's the way I like to transform with CFOs. You listen, you learn, you help them build, create solve their problems in self fund transformation. >>That's for the cherry on top. That's dessert right there. You satisfied the appetite so >>all the way through. Right scott. >>Thanks for the insights. I appreciate it. And I love the analogy to it's really, really clear. I appreciate that. Thanks for the time today. >>Thanks john, appreciate it. Have a good day. You >>bet the same to you scott. Layton joining us here on IBM thing, talking about the appetite and trying to satisfy the CFO needs today, providing a little more than the appetizer but very significant. Main course. You're watching a cube and IBM thing. >>Yeah, yeah.