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Siemens: New Research Identifies 5 Key Competencies for Manufacturing CFOs

May 01, 2018, 07:05 AM
Filed Under: Finance News

Siemens Financial Services (SFS) has released a new research paper that describes “CFO 4.0” - the new breed of Chief Financial Officer in the manufacturing industry. The CFO 4.0 has a deep, holistic understanding of the competitive advantages of digital transformation, the competencies required to identify, evaluate and implement new business models for Industry 4.0, and the essential capability to drive and enable the transformation process.

Respondents to the SFS research identified five key competencies the CFO 4.0 needs to exhibit, to enable successful digital transformation in manufacturing. They are:

  1. A comprehensive understanding of available financing options that can enable a commercially sustainable transition to Industry 4.0.
  2. The ability to introduce relevant financing options at an early stage of the strategic Industry 4.0 process, to access and take advantage of the full range of potential solutions.
  3.  Specific Industry 4.0 knowledge and expertise – related to financial, technology, operations and market analyses – to accurately assess digitalization opportunity versus risk.
  4. The capability to build predictive Industry 4.0 business models, return-on-investment metrics and performance monitoring processes.
  5. The proficiency to create an effective phased plan to operationalize the business’s move to Industry 4.0.

Deployment of these competencies and capabilities allows each CFO 4.0 to enable tangible competitive and commercial gains for their company. Moreover, the commercial gains that the CFO 4.0 is enabling are considerable and can, to an extent, be reliably modeled.

Previous research from SFS (The Digitalization Productivity Bonus, April 2017) has highlighted measurable improvements in manufacturing productivity – entitled the Digitalization Productivity Bonus - as an important evidential starting point for the digital transformation business case, typically delivering returns of between 6.3 percent and 9.8 percent of annual turnover. The core competencies of a CFO 4.0 are critical in achieving these returns. When applied to a selection of USA manufacturing sectors, the Digitalization Productivity Bonus equates to the annual efficiencies listed in this table:

USA Manufacturing Sector
Digitalization Productivity Bonus ($ billion)

Food & Beverage
42.8 – 66.5

36.9 –57.4

Printing Packaging & Paper
11.6 –18.0

10.2 –19.7

Automotive (passenger cars)
16.1 – 25.0

6.6 – 10.3

Machine Building
24.6 – 38.2

Specialist financiers have developed a set of financing tools – “Finance 4.0” - that enable the transition to next-generation digital technology in a way that is affordable, sustainable and is designed to alleviate the manufacturer’s cash flow and working capital pressures. The paper explores these specialist financing methods, including pay-to-access/use equipment and technology finance, technology upgrade and update, software finance, pay for outcomes, transition finance and working capital solutions.

“The CFO 4.0 is now ensuring that financing options are considered right at the start of digital strategy development,” said Gary Amos, Siemens Financial Services Commercial Finance CEO Americas. “Using smart financing techniques, usually from specialist and expert financiers, firms can often find that their range of affordable technology options widens considerably – and that can make the difference in gaining significant competitive edge in your marketplaces through digitalization and transition to Industry 4.0.”

The study can be downloaded here.

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