How Top CFOs Succeed In The Digital World

To explore how CFOs are transforming financial operations to drive success for their organizations, I held a roundtable on November 30, 2016 with industry leaders in technology, healthcare and transportation:

Mike Riccio, CFO and Treasurer, Panasonic Corporation of North America

Doug Vanderslice, SVP and CFO, Boston Children’s Hospital

Rick Short, EVP and CFO, Enterprise Holdings Inc.

Tom Fisher, Global Finance Transformation Practice Leader, IBM

Robert Reiss: What’s an important initiative your financial team is focusing on going forward?

Doug Vanderslice: We’ve undertaken a multi year initiative to upgrade all of our administrative infrastructure. Next in line is our human capital management systems. Health care delivery is a very people oriented service, so people are truly our most valuable asset and labor is our single largest cost. We have the opportunity to much better manage the core processes behind our employees but also to better understand how we’re deploying human resources and how we’re matching people with volume. This becomes extraordinarily important in managing affordability and capacity to reinvest.

Mike Riccio:  We’re now exploring ‘forward looking KPIs’. We’re pretty good at backward looking KPIs. So now we’ve picked a couple of our business groups and we’re working closely with them on some of the important business indicators either internal or external, that can help us be more predictive in terms of where their business is headed and what some of the gaps are, and we’re seeing financial results.

Rick Short: We have a decentralized organization that empowers employees to make local decisions to assist customers on the spot. These employees who interface with customers are providing invaluable feedback to their local management teams which then ends up being forwarded to the corporate office, so that we can use it to help enhance and grow other processes and systems to provide even better service in the future. It’s a collaborative process and since our culture is driven by change, it’s just a natural progression for us to meet the changing needs of the business with the use of technology.


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Reiss: What are you most excited in the digital world?

Riccio: The expansion of our business opportunities here in North America especially in automotive and avionics. 

Short: We’ve just created an innovation called “LaunchPad” which takes our employees away from the counter, so they can focus on the customer and what the customer wants wherever they want it.

Vanderslice:  Our ability to identify and treat patients or conditions that historically have not been treatable.

Reiss: What are you most fearful of in the digital world?

Short:  For probably most organizations, the most fearful thing is the cyber security issues that we all have to deal with every day.

Vanderslice:  I’m with Rick on cyber security. The other thing, though, that I’m fearful of is whether or not the significant capital investments we are currently making are going to be somehow rendered obsolete by new advances in care.

Riccio:  I too echo the cyber security concern, as well as, as we’re getting into fields that we have not traditionally played in, and just meeting the expectations of the market and also dealing with the new competition. 

Reiss: What one data point is most valuable in aligning with profitability?

Short It’s obvious for us: customer service. We want to know what our customers want and how we can satisfy that. We have a system in place where customers rate if they are completely satisfied with our service. We know a completely satisfied customer is three times more likely to rent from us again, and that is very significant from a long-term perspective.

Vanderslice:  I think it is treating as quickly and as effectively as possible at the right location, so as to manage the risk that health care systems are increasingly taking on as well as managing in a capacity constrained environment.

Riccio: For us it’s providing the solution for the customer but understanding then the business case and the return on investment because we are making new investments in these areas. So to me the metric that I look at is: Are we solving the customer’s problem and are we getting return on that investment?

Reiss: In healthcare, technology, transportation how is digital and innovation changing the competitive marketplace that you operate in today?

Short: Since we are such a customer-centric business we listen and our customers direct us on what kind of products and services they’d like to buy from us. And mobility is a key focus. From that, we have a total transportation solution model where you can “rent, buy or share” vehicles depending on your need.  And of course, we’ve had a lot of discussions with the auto manufacturers about the future of autonomous driving and accident avoidance.

Also, as a rental car company, we end up being an extended test drive for a lot of the auto manufacturers and their customers, because many people will be introduced to a new make and model of vehicle and its technology for the first time upon renting from us.  Another benefit to manufacturers is a program we call “Rate this Ride.”  Customers can rate the vehicle they are driving through an Enterprise Rent-A-Car or National Car Rental app or even by scanning a QR code, and the information is shared with the vehicle manufacturer. So it’s essentially a test-drive feedback session for our customer and eventually a manufacturer’s customer.


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Riccio: Top management has pretty much been remaking Panasonic, the Corporation, starting primarily here in North America. This transformation has us going from primarily a B-to-C box-sales-type business to a more B-to-B solutions type business. So the biggest transformation that we’re seeing that’s impacting us is how to provide solutions to customers. We are listening carefully to our customers, and each customer solution that we’re dealing with is quite unique, and the missing secret sauce in almost every case is data or software related, and we’ve been primarily a hardware manufacturer for most of our lives.

This has led us to make some strategic “niche” acquisitions. It’s changed us a lot because we were a company that traditionally did not make acquisitions. And then now we’re absorbing them into our organization so that we can have scalability going forward to provide solutions for other customers. This is true in almost every one of our groups: avionics, automotive, business-type computers. And, if you noticed, I didn’t mention the word “TV” because basically we’re not in the TV business now here in the US.

Vanderslice: Broadly in the healthcare industry the business model change is a shift from being volume driven to managing populations, being more value driven and looking at a hospital as more of a cost center. Also there’s a lot of non-traditional competitors that are starting to enter this space, particularly consumer-facing, including CVS and other drug stores entering into urgent care type settings. The tech companies are trying to find a variety of ways to play in the healthcare space. There’s a lot more biomonitoring and wearables that are available.

For Boston Children’s, and academic medical centers, the scientific advances have given us tremendous opportunities to treat conditions that were once untreatable and to identify conditions and treatments much more precisely with the use of genetic information, ‘precision medicine’ as it is now often called.

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In summary, Tom Fisher, Global Finance Transformation Practice Leader, IBM shared, “What we’ve found from our research with CFOs, are four themes which sum up the changing environment that CFOs need to adapt to: first is that competitive disruption – driven by technology innovation, virtualization and disintermediation - is real and accelerating every day; second that the CFO has become the most trusted advisor to the CEO and CMO on navigating business strategy and driving revenue growth; third is that order for CFOs to meet changing expectations, they need to transform financial operations by advancing from managing transactions and general ledgers to focusing on predictive and cognitive activities; fourth is that there’s a tangible payoff associated with reinventing Finance. For example, we see that analytically sophisticated companies have 55% higher revenue growth and 57% greater profitability and lower finance functional costs than their less analytically sophisticated peers  (Redefining performance - The CFO Point of View).”