To explore how the digital world has helped leading CFOs drive success, on October 19, 2016, I had a conversation with industry leaders in financial services, manufacturing and healthcare. We discussed digital opportunities, data and c-suite collaboration. The conversation was teed up by Bill Fuessler, Global Leader Finance, Risk and Fraud, IBM who shared CFO research stating over 90% of high performing finance organizations rely on predictive analytics in their revenue forecasting, financial planning and risk management while their peers use predictive analytics on a far smaller scale. The participants were:
- Fred Crawford, CFO Aflac -- a leading insurance company that is a perennial Best Company to Work for and Most Ethical Company.
- Tom Szlosek, CFO Honeywell -- a global manufacturer of technologies that address some of the world’s most critical challenges around energy, safety, security, and connectivity and a perennial Fortune Most Admired Company.
- Doug Vanderslice, CFO Boston’s Children’s Hospital -- founded in 1869 it has been cited for several years as the #1 Children’s Hospital in America.
Robert Reiss: How is digital creating opportunities to advance your business?
Fred Crawford: On technology and transformation, the digital world has helped us develop One Day Pay, which is our innovative program that enables us to pay claims in one day. This year we’re on pace to, through the One Day Pay program, pay upwards of two million claims through our One Day Pay system.
Doug Vanderslice: One profound way that digital has been transformative at Boston Children’s is in our enhanced tele-medicine capabilities, providing easier and better access to our specialists for second opinions and advice on rare and complex conditions. With the present digital capabilities, our physicians can quickly and easily assess more patients and transmit a variety of imaging modalities digitally, quite clearly and accurately. It’s allowed our physicians to see more patients and prevented patients from having to fly into Boston to see a Boston Children’s sub-specialist.
Tom Szlosek: Honeywell has a massive installed base of control systems, sensors and devices, distinct engineering and functional competencies, and a standard cloud offering platform. We are strongly positioned to help our customers capture, aggregate, and analyze data to improve safety, security, comfort and productivity.”
Reiss: Talk about data and analytics and your organization.
Vanderslice: Implementing price transparency in a complex care environment has been of great importance for us, but is exceedingly complicated. One of the big data issues that exist for a hospital is understanding what mix of services a physician is going to order for a complex case as standardization is difficult in complex care, calculating the price of the variety of services ordered, and understanding the arrangement between the patient and their insurance company.
Szlosek: When you consider that we have completed more than 90 acquisitions during the past 15 years and all of the different platforms that we inherited, you get a sense of amount of work we have to do to remain efficient and effective in this space. Today, we have over 150 different ERP platforms in Honeywell, which can prove to be challenging in terms of being able to aggregate data and see it in a transparent way. In response, the Finance function had taken the lead to drive better analytics and have built a plan to reduce the number of platforms from its current state to roughly 15 in the next five years. We are partnering with IT and other functions to drive standardization of the analytics tools and techniques across Honeywell, which we think is going to serve us very well into the future.
Crawford: As an industry, we collect a tremendous amount of insightful data on our clients, and not surprisingly, particularly at Aflac as more of a health insurer, we collect a lot of sensitive data about our clients as well. Throughout the years, a few things have developed with all of that data including increased cyber security and sensitivity around the data, and more recently a more offense-oriented use of that data for the purposes of growing and marketing products - and finding new growth opportunities. Cyber security moved from a defense mechanism in the health insurance industry to being part of our offense, protecting us as we look to advance the ball in analytics.
Reiss: Share some insights on how your C-Suite communicates and collaborates.
Szlosek: We’ve recently put together a cross-functional enterprise information management team, and we now have a Chief Operating Officer who has prompted more collaboration with IT, Finance and the other organizations that are served by IT and Finance. We’re focused on game-changers that are going to help drive the growth, as well as the productivity.
Vanderslice: For our C-suite, we’ve established a group we call our “Operational Effectiveness Group,” which is composed of myself, our Chief Operating Officer, our Chief Nursing Officer and another operating Senior Vice President. We’re the sounding board and the decision point for questions of financial resources, versus clinical and operating quality and effectiveness.
Crawford: We’ve matured our model of innovation, ideation, investments, and then yielding corporate venture capital initiatives. This has involved a cross functional team of executives, including outside expertise, to develop and institutionalize that practice to invest in new vertical business opportunities.
The future of the CFO role was summed up by Bill Fuessler, “In our digital world, the CFO is acting much like a ‘Chief Analytics Officer.’ They are best positioned to integrate all data sources – both internal and external - and to shape the metrics and economic forecasting models needed to uncover new revenue sources.”
