FOR FINANCE PROFESSIONALS VALUE INNOVATION …. FOR FINANCE PROFESSIONALS By RR Prasad , CEO, RRP Learning Tree Pvt. Ltd. rrp@rrprasad.com blog.rrprasad.com Ph: 9176691687

What is Value What is Innovation “…the regard that something is held to deserve; the importance, worth, or usefulness of something” What is Innovation “A new method, idea, product, etc.”

WHY IS VALUE INNOVATION IMPORTANT FOR FINANCE PROFESSIONALS Unique position to the front end and the back end of an organization. With technology taking over routine work compliance and reporting will be passé. Information is no longer just power, it is source of economic value. Activities are no longer drivers of costs but are now drivers of profits. Its time that finance & CMA professionals take an active role in value innovation.

In the US a business & economic survey conducted by AICPA amongst the accounting and finance professionals in 2013 say - 36% respondents said finance & accounts make a very modest contribution to innovation Management and operations are the biggest contributors to innovation in organizations

WHAT WE ARE GOING TO SEE WILL FLY IN THE FACE OF CONVENTIONAL LOGIC

CONVENTIONAL LOGIC OR STRATEGY IS ….

INDUSTRY/ PROFESSIONAL BOUNDARIES AND CONVENTIONS ARE A GIVEN

VALUE COST TRADE OFF

BEATING THE COMPETITION….

LEVERAGING ASSETS & CAPABILITIES – EG. BRAND EXTENSIONS

OR IMITATING… …AND WE CALL IT BENCHMARKING

Costs of these existing strategies… * Lower margins * Incremental improvements * Shrinking markets * Higher costs * Tending to lower differentiation * Costs chasing competition instead of profits

WHY None of these is about making money (profits) None of these about the buyer WHY

Because for the organization Value is about getting more money for your offering than what you spend for producing it (Profits) For the buyer, it is getting more from the product/ service than what he pays for it

VALUE INNOVATION

COSTS DIFFERENTIATION

Value Innovators deliver exceptional value to the most important customer in the value chain

People EXCEPTIONAL VALUE CAN COME IN MANY FORMS Business Model Delivery Packaging Service Process Product Technology, etc. People

4 ACTION FRAMEWORK A TOOL TO CREATE VALUE INNOVATION

4 ACTION FRAMEWORK RAISE NEW VALUE CURVE CREATE REDUCE WHICH FACTORS SHOULD BE RAISED ABOVE INDUSTRY STANDARDS ELIMINATE WHICH FACTORS THAT INDUSTRY LONG COMPETED ON THAT SHOULD BE ELIMINATED NEW VALUE CURVE CREATE WHICH FACTORS SHOULD BE CREATED THAT INDUSTRY NEVER OFFERED REDUCE WHICH FACTORS SHOULD BE REDUCED WELL BELOW INDUSTRY STANDARDS

ALL FACTORS THAT DOES NOT ADD VALUE TO THE BUYER/TO THE PRODUCT OR SERVICE SHOULD BE EITHER ELIMINATED OR REDUCED ALL FACTORS THAT DOES ADD VALUE TO THE BUYER/TO THE PRODUCT OR SERVICE SHOULD BE EITHER RAISED OR CREATED

VALUE INNOVATION FOR FINANCE & CMA PROFESSIONALS ELIMINATE CENTRALIZATION OF INFORMATION REDUCE DEPENDENCE ON PROFESSIONALS FOR COST REDUCTIONS

RAISE FINACIAL LITERARCY CREATE OWNERSHIP

How can CMA Professionals embrace Value Innovation

1) Be part of fostering a culture of Innovation 2) Leverage existing technology 3) Be an expert in a subject outside finance and accounting 4) Take time to analyse data and think innovatively 5) Re-examine processes when installing new systems

It is time to reorient & add a new dimension to finance and CMA profession through value innovation Create ownership by democratizing information