Established in 1962, AccuWeather is a US-based media company which provides commercial weather forecasting across the globe.
Serving more than 2 billion people worldwide, AccuWeather is a trusted source of weather forecasting for clients in business, government and media, among which are 245 of the Fortune 500 companies and thousands of other businesses. It also runs the free website AccuWeather.com.
Recent independent analysis of 95 million forecasts over a three-year period showed that AccuWeather's wind and precipitation forecasts are 33% and 21% more accurate than the second-best provider's, respectively.
Among other predictions, AccuWeather correctly anticipated that 2017 would be the costliest year for weather events since records began, allowing thousands of businesses to brisk themselves for the potential damage toll.
However, what does AccuWeather's quest for "superior accuracy" mean for the finance team? Innovation Enterprise spoke with Glen Parrillo, controller at AccuWeather, ahead of his presentation at Innovation Enterprise's Controller Summit to talk about the relationship between weather forecasting and profit; and the future of the finance industry.
IE: What technologies have been most helpful in helping AccuWeather's finance team expand globally and outsource?
GP: AccuWeather utilizes a global ERP system to help us manage a worldwide accounting system. This allows us to drop a financial reporting system virtually in any location around the globe. We also utilize a top-three global bank to help us deploy assets and resources in most countries. The value of this process is that we can control, monitor and manage those assets from Pennsylvania.
Additionally, we outsource a lot of our early global deployment to a company that helps open up payroll systems, HR contracts and benefit resources to employees in international locations. To reach local talent in international locations, we contract with a global consulting firm to source local resources.
Overall, we leverage a simple network of both technology and resources to expand globally. We take this approach until operations have matured to the point where a more robust function or process is required.
IE: What are the key skills needed to be a successful controller in 2018?
GP: The one overriding feature that any controller has to have is organizational skills. That has endured over time.
However, with technology and the overall environment changing, the role of the controller is evolving fast. In the past, the role was focused more around debits and credits and financial reporting. As technology is exposing systems and assets into environments in ever-changing frontiers, fraud risk is more and more becoming a pressing issue.
Outsiders and third-parties are constantly finding ways to attack systems and those incidents are becoming more sophisticated. Understanding those risks and how to defend them are sometimes beyond traditional control policies and the traditional technology capabilities of a controller. New controls have to be more woven into our IT infrastructure and technology. Controllers need additional resources (e.g., system admins, IT auditors, IT control reviews, software developers) to help understand the technological vulnerabilities that are ever present in today's accounting systems.
While stakeholders are demanding more real-time information from their financial systems on a daily basis, controllers are already being asked to be more of a business advisor than ever before. When you add to that job function the additional fraud monitoring and business advisory responsibilities, the controller is the primary defender of the company's assets. It is now a much more challenging and stressful role for the company.
IE: How will the analytics used to link weather and business outcomes be revolutionized by machine learning?
GP: This has been a prime function of AccuWeather since it was conceived 56 years ago. The idea of providing companies accurate weather information was a foundational idea of the company.
Think about the example of a business that sells outdoor equipment. It is important for that company to know if it will be an early spring as this will impact when they need to move inventory. Furthermore, think of a factory where a tornado warning may be present. The timing of when to close the factory and get employees to safety is of prime importance. Or how about companies where transportation logistics are critical for optimizing when and where their goods are transported? Flooding, high winds and other severe weather can significantly impact risk, safety and costs.
Much of what AccuWeather has built are complex machines and programs that can help our forecasters model and predict weather in the most accurate and comprehensive way possible. AccuWeather pulls data from around the globe, in an intricate weave of technology and systems, mathematical logarithms, to predict weather with the most accurate forecasts possible down to the micro-level details. This accuracy is why companies and individuals all over the world trust our forecasts to help them plan, manage their business and save lives.
IE: How can we address the finance talent gap?
GP: We do not see enough new talent coming into the accounting world as much as some of the larger, more metropolitan areas would probably see. That said, I think the industry needs to do a much better job of attracting new talent to the field.
One thing that I think was a mistake was the five-year requirement the AICPA and the universities implemented to sit for the CPA exam. This extra year of cost to students, in a period where tuition rates are rising fast, deters a lot of would-be accountants to enter the field. The industry forced a contraction to the pool of would-be talented accountants because of this change. We are now feeling the effects.
Examining a new approach where the technical requirements are still taught and applied, while at the same time of reducing the cost barrier for students looking to enter the field, will help bring in new accountants into the talent pool.
IE: What skills will become more important in finance as technology advances?
GP: The answer is embedded into the question: Technology.
Accountants will now need to understand the technological requirements as much as they will need to be accountants. Similar to my answer on what is changing in the controller's role, new accountants now need to understand the technology. The old adage of "I am not good with computers or systems" can no longer be uttered by an accountant. Accountants can no longer hide behind writing GAAP disclosure or just booking debits and credits. Accountants have to have a better understanding of how to build and architect the technology, manage systems, and identify gaps and weaknesses in those technologies.
The world is getting more complex and understanding how we work with and around technology is a critical pathway going forward.