Siemens USA’s CFO details 3 strategies for C-suite leaders who are shaping the future of finance

Headshot of Martha Smith, the CFO of Siemens USA, who is wearing a dark blazer over a light v-neck top.
Marsha Smith says it’s imperative that finance leaders “understand technology enough to work across the organization” as they make collective company decisions.

  • Marsha Smith, the CFO of Siemens USA, says modernizing financial technologies boosts efficiency.
  • Smith emphasized that the drive to advance digitalization must come from C-suite leaders.
  • The right organizational mindset toward finance modernization is crucial, Smith told Insider.
  • This article is part of the “Innovation C-Suite” series about business growth and technology shifts.

For more than 160 years, Siemens USA has developed innovative technologies that support America’s critical infrastructure and vital industries. These technologies include auto manufacturing, mining industry solutions, and smart hospitals.

But according to Marsha Smith, the chief financial officer of Siemens USA, modernizing internal financial technologies and processes – from accounting to payroll – is essential for every organization, no matter how old or young the company is.

“If you don’t advance digitalization in finance and find new ways to do old things more effectively and efficiently, it’s hard to attract talent,” she said. While automation is often perceived as a massive transformation over decades, Smith added that individuals at Siemens USA are implementing new tools and processes all the time. “You need to make it exciting to come to your company and come up with new ways to do the same work,” she said.

The drive to advance digitalization in finance, however, must be a top-down initiative. “If it’s not a message that’s constantly being communicated to the organization, people won’t see it as a real need,” she said. The ideas, however, need to come from the bottom up: “Leaders have to open the door for their people to share ideas.”

Smith offered three tips for how C-Suite leadership can help shape a modern, automated future in finance:

1. Change the mindset around how people work

“People need to be willing to change how they work in order to work smarter,” Smith said. That means CFOs must focus on a different type of finance talent that works very closely with the IT department and already has knowledge of digital tools and processes. “One important thing I’ve learned along the way is that just because you implement a robot to do certain tasks for an individual that doesn’t mean the headcount is necessarily less,” she said. “It’s about hiring thinkers that can work across the company to transform finance as much as the rest of the company.”

2. Take one step at a time

Advancing finance digitalization doesn’t need to be (and can’t be) a massive one-and-done program, Smith said. Start with small projects, she explained, and take it one step at a time: “I think the low-hanging fruits, such as optimizing invoicing, purchase orders, or other workflows, are the most exciting ones,” she said. Even with a small starting point, she added, “people get excited when their tasks that used to take them two hours to do only take them 30 minutes to do right, and then they buy into it.” Slowly but surely, a whole group of employees will believe in what the CFO is pitching. “They see the impact on their daily work,” she said.

3. Understand the new CFO role

Finance leaders no longer fit a typical old-school profile. “We all need to understand technology enough to work across the organization to make good collective decisions,” Smith said. “What I’ve tried to do is at least open up the conversation to say, let’s find the automated tools and processes that are scalable, even though it’s a challenge since I’m not an expert on all the tools out there.” To that end, the CFO needs to employ team members with different skill sets. “They may have in-depth knowledge of accounting and finance, but we also need people who can improve on how we implement new automation technologies,” she said.

Overall, the amount of automation in finance has increased over time and continues to improve, which is crucial for the modern financial organization of the future, Smith said. As the CFO at Siemens USA, it’s important to lead with an eye toward getting people in different departments to learn from each other, and then scale those efforts, she explained.

“This comes from the top down, with our global CFO driving automation initiatives,” she said. “Then, it’s exciting for me to get to know the people in our company and how they are automated processes every day, whether it’s in accounting or in some other department.”

It all goes back to a C-Suite leadership that is willing to embrace change to stay competitive in a modern, automated world of finance. “Siemens is on its way to becoming more of a solution-oriented, ecosystem-oriented company and not just a conglomerate that sells hardware, so the whole company is changing,” Smith said. “The finance organization has to change with it.”

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The CFO of Siemens USA explains how finance digitalization presents challenges and opportunities

Headshot of Martha Smith, the CFO of Siemens USA, who is wearing a dark blazer over a light v-neck top.
Marsha Smith, the CFO of Siemens USA, hopes to transform the company by eventually implementing a cloud-based ERP.

  • Marsha Smith, the CFO of Siemens USA and Siemens Mobility North America, is modernizing the company.
  • This year, Smith and the global CIO worked to improve financial processes through automation.
  • Scaling automation efforts presents both challenges and opportunities, Smith told Insider.
  • This article is part of the “Innovation C-Suite” series about business growth and technology shifts.

A great deal has changed at Siemens since Marsha Smith first joined the global technology and manufacturing company over two decades ago. In particular, Smith, who became the chief financial officer of Siemens USA and Siemens Mobility North America in January 2020, has witnessed changes regarding the company’s digitalization in finance.

“We still used typewriters back then to type POs,” she told Insider. She recalled how even just 10 years ago, the finance organization’s month-end close was entirely manual. “We would all sit around on the first of the month until 2 a.m., waiting for things to upload and making sure the numbers were right,” she said.

Now, most of Siemens’ financial processes – everything from financial planning and analysis to general accounting operations – are highly automated, with little to no manual work in Excel or on-premise ERP systems required. The organization has implemented chatbots, Robotic Process Automation, cloud computing, AI, and machine learning – even Blockchain and advanced analytics and forecasting – to modernize various areas within finance.

Challenges and opportunities in transforming financial processes

There’s still a long way to go to transform the finance organization in ways that free up capacity, reduce manual tasks, and enable mobile and 24/7 control. For example, implementing a cloud-based ERP across the global Siemens organization remains an unmet goal.

“It’s a large project with a pretty massive cost, so we have a global team and steering committee determining what we want in an ERP system,” Smith said. “Right now, we do all our procurement, project-controlling, and order management in the ERP, but do we need a ‘lean’ ERP? If so, how lean is lean?”

However, Smith and her team have also made significant strides to identify the most suitable automation opportunities, working regularly across the C-suite to help redesign financial processes with digitalization while retaining flexibility and decision-making.

For example, in January, Smith raised her hand and agreed to have the US finance organization serve as a Siemens digitalization pilot, working closely with the global chief information officer to implement process improvements through automation. “I knew that we were a big enough organization to provide useful results,” she said.

One of the pilot’s first projects was to automate a finance spreadsheet process. Traditionally, the process required employees to spend nearly two days at the end of each month manually entering data and collecting commentary from multiple businesses.

“The global IT team took five months to recreate and automate the entire process in a cloud-based tool,” Smith said. Now, it’s automatically available on the cloud and anyone can have access to it 24/7. “There is one set of financials with no quality issues and no manipulation allowed, which makes it easy to quickly create a report,” she explained.

The advantage of process automation

The beauty of these new automated processes, she emphasized, is their ability to scale. “The pilot project is now going to be rolled out to any country that wants to use it,” she said. “The global IT department worked with us for five months and now it’s just a matter of using the process elsewhere, whether it is Singapore or India.”

The need to scale automation in finance, she added, remains one of the organization’s biggest digitalization challenges.

“Everyone is trying to optimize and automate and reduce manual steps, but you may not realize that someone in another department has already figured it out,” she said. “So we have to figure out how to get people to learn from one another, to do something right and then scale it across the organization.”

That can become a tall mountain to climb, however, when the number of possible digital tools seems endless. “In the past, we had an ERP system and Excel, those were the tools, and everybody knew how to use them,” she explained. “Now, if someone is automating invoice processes, why did he choose one tool and not another? It can be hard to know what is the best one to implement.”

Digitalization skills are now considered core competencies when it comes to recruiting within the finance organization, Smith said. “The idea is to find people who already know how to use these tools so they can improve what we do,” she explained. “The goal for us is to learn as much from our new hires as they learn from us.”

Read the original article on Business Insider