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How One Of The High Tech Giants Use FP&A

Interview With Director of Finance for Intel's TMG, Greg Ricks

23Oct

Greg J. Ricks is director of Finance for Intel’s Technology Manufacturing Group (TMG). He is responsible for FP&A for TMG which is the majority of Intel’s Cost of Sales, for Intel’s capital budgets, and for Human Resource Finance. In addition he oversees TMG’s risk management and Sarbanes Oxley’s financial controls, and TMG’s hedging programs. Ricks joined Intel in 1996 and has held a variety of positions including working in Factory Finance driving down the costs and capital spending, he was the 300mm program finance manger as Intel transitioned to 300mm wafer manufacturing and was the controller for Intel’s Strategic Capacity planning. Ricks received his bachelor’s degree from BYU in 1991, and his MBA from Purdue University in 1996. He sits on the Valley of the Sun United Way’s Ending Homelessness Advisory Council and is the father of 6 children.

George Hill - What unique challenges have you found from working at Intel?

Greg Ricks - From a finance point of view one of the big challenges is that you have to go learn the technology to inform decisions. It is certainly the focus for me at intel the technology is very complex, made by PHD electrical engineers at the top of their field. We are drawing lines that are the size of atoms of waifers. It isc complex technology but me as a finance guy is I want to go influence business decisions that underlines our profit be that reducing costs or increasing revenue and to do that I have to go understand the business. I am in the manufacturing side and have been for most of my career so it has been important for me to go and understand as much about that as I can. Some of the ways I have done that for example is when I was a capital manager early on in my career I would go down onto the manufacturing floor every month a grab either a process engineer or an industrial engineer to have them teach me about the tools, the processes, the technology and what was going on, what was working and what each area did. That was important for me then to be able to go influence decisions that were made about how many tools we needed to buy. I needed to understand how our manufacturing flow was set up, how we used the theory of constraint etc to really go and influence. It is probably more complex that trying to make a soft drink or something! The manufacturing has been hard to understand and thats a challenge, and without that knowledge I don't think I am as good an influencer.

In your presentation you are going to be discussing your attempts to cut 100k hours out of the FP&A process, what can the audience expect to learn from your presentation?

I think that theres a couple of elements you have to have the feel for what's possible and what the problems are. An easy way to find out what the problems are is to find out what everybody hates, so thats at least a way to start. I think that the second thing is you have to be brave enough to set a big goal or vision. With that you have to be committed yourself. So setting a goal off one hundred thousand hours which is more than double what we had ever done before was a big goal. People need to also understand that you need to walk the talk, we had a watershed moment in my group where we had established a hotline where people could send in ideas about how to fix issues that they saw all over finance. I remember my very first meeting we sat down and started going through the ideas. There were about thirty that we were going through and sat there and watched as my team said 'well we can't do number one, or two, or three and all the way down to about number 10'. There were lots of good reasons about why we couldn't implement these, but I said ok, stop, we need to go back up and find a way to implement every one of these ideas.

That was a big moment for us because I think my team realised 'oh, something really has changed here' and we need to go figure out how to do that. This was a big deal because we had started down the path of how we could really transform what we are doing.

What do you think a company needs to consider before they take on similar streamlining initiatives?

You need more than just a commitment from yourselves, you also need some commitment from management. Although that can come and to get management on board we had to gather a lot of data on what people were saying, the hours that tasks were taking and some of the absurdities of the things that take a lot of hours. You need to have a message and a vision that you can sell thats backed up by some data, at least at Intel, here nothing gets done without data. You also have to have a desire to be more efficient but also to do things faster, to turn decisions faster, to do analysis a bit faster and so that played an important part. Then you have to communicate with the people involved that this isn't a headcount reduction programme, everyone shouldn't be scared for their job. We painted a vision of taking out some of the lower value added stuff to concentrate on the higher value added work that people want to work on but don't have time. People need to feel safe about finding a way to dramatically improve this. There are some areas that could improve themselves right out of a job so we need to communicate a commitment to our employee that take this kind of bold action and we will reward you for it.

Technology has had a profound effect on the FP&A role in the past 10 years, what effect do you see it having in the next decade?

The technology is a huge help but it is only an enabler for what you are willing to do already and the business processes you are willing to put into place. Here's an example we are looking at implementing a brand new budgeting and planning system and it has a lot of cool features that we haven't had before and as I look at it, a lot of opportunities to save us time. However, we can also implement that same system and keep doing business in the same way we are doing today, and that will result in saving us nothing. So you have to have a combination of both and a willingness to do both, but I do think that technology is there or will get good enough. Financial results will be a lot more instantaneous, we will know where we stand at every second. Some companies already today are carrying around iPads with dashboards on them that tells them where they stand at every second. The challenge is, what is relevant and what isn't? Its like the internet, there is a lot of data an knowledge out there but it does no good if you can't figure out what's relevant. I don't know where we will be in 10 years. Will things dramatically change? Maybe, but you are still going to have all the basic stuff. You have to do good budgets and planning, we need to have data to go influence decisions, business partnerships are still going to be very important. I look at it as the core, which will stay the same, the tools we use may change and they change things faster than we have ever had it before and because we have some much more data it may make it more of a challenge.

What do you look for when hiring people into an FP&A role?

What I am looking for as we hire people in this field is certainly the basic skills that people need, solid finance skills and accounting skills. I am much more interested in good problem solving skills, Leadership skills, the ability to take something on and take ownership as well as the importance of influencing skills. The ability to take data and turn it into an analysis that you can go sell and becoming creative about how you go and sell it. Those things are more valuable to me. We are really paid, finance professionals at Intel, to go influence decisions. That is what I am most interested in. Yes we need to close the books, yes we need to cost products but those are not the ends in themselves, in my opinion. My number one certainly is keep Intel legal, my number two is go have an impact on shareholder value. I think it makes the job much more attractive, sexy and impactful if we can go and help the business get a better result.

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