When top-notch math skills and financial knowledge are described as “only the tip of the iceberg when it comes to excelling as a financial professional,” it’s pretty obvious that finance’s role is changing. To get ahead as a finance professional today, opportunities come to those who demonstrate strong communication skills, relationship-management expertise, sales and marketing experience, problem-solving capabilities—and, oh yeah, you must be tech savvy, too.
What changed? Cost control is no longer the primary emphasis of most finance organizations, Accenture reported last year. As finance teams play a larger role in connecting the enterprise, CFOs are focusing more of their attention on investment in growth and seeking opportunities to boost business transformation to build and measure new sources of value.
Respondents to a recent CGMA (Chartered Global Management Accountant®) survey confirm that CFOs are already playing a larger role in most areas of the business. CFOs retain primary responsibility for financial planning and analysis, risk management and shared service centers. In addition, they are ranked second as the people primarily responsible for strategy, supply chain, information technology and digital transformation.
Advanced digital technologies—such as cloud, big data, mobile and social—can give CFOs deeper insights into business drivers and a cross-functional prospective of the entire value chain. Armed with these new insights, and with their existing analytical skills, finance leaders are uniquely positioned to strengthen the connective tissue that drives enterprise excellence.
The majority of survey respondents said CFOs and finance teams are engaged in:
• Setting targets and financial performance measures
• Identifying measures to manage progress toward long-term strategic objectives
• Selecting leading pre-financial operational performance indicators
• Ensuring strategic alignment of performance measures across the business
Almost half of the respondents said CFOs and finance teams are actively involved in:
• Providing non-financial measures of progress toward strategic objectives
• Determining non-financial measures of operational performance
• Identifying intangible assets to be measured and managed to ensure long-term success
Not surprisingly, as finance becomes more influential in determining performance goals and metrics for the entire enterprise, as well as distinct business units, it is also being granted greater authority to veto or fund activities. More than 60%of survey respondents said the CFO can veto activities that don’t drive value. About the same percentage agrees that finance owns the business model and can allocate capital toward the new drivers of value creation.
To become the connective tissue that unifies and guides the enterprise, finance teams must develop the skills and business knowledge to provide more value to their colleagues. In some companies, finance team members are being rotated through different business units to get a more holistic view of the enterprise.
LinkedIn offers a great example of how finance teams are working with the business. “Our approach to business partnering has evolved,” said Richard Wong, vice president of finance, LinkedIn, USA, in the CGMA report. “We take time to understand the business and problem; have a point of view on all matters and issues; and provide value-added analytics to drive the right outcomes and bring clarity to all the noise (massive big data) out there.”
Finance teams are embedded in the business units, attend their staff meetings, and help manage the units with line-of-business leaders.
“Finance is sometimes the first line of defense for these business units,” Wong said, “to flag any risks and ensure that each business unit is contributing to the company’s growth and vision as a whole.”
Of course, requiring finance staff to provide more support to business units begs the question: Where do they find the time? More finance organizations are centralizing and automating non-value added processes, such as transaction entry, so finance teams can focus on business strategy.
The time savings that efficient finance tools can provide are dramatic. For example, procure-to-pay solutions can automate the processing of a vendor invoice, saving the 27 hours (on average) that it takes to complete the task manually.
Amazon offers a jaw-dropping example of how much time finance organizations can save via automation. During the close period, the company spent three to four days gathering data from 16,000 spreadsheets. Amazon implemented Oracle financial management solutions to automate the account-reconciliation process.
Now, the finance team can provide live reporting of status to executive management right up until the close. “We now close 80% or our recs in the fixed assets space automatically, with no intervention from anybody,” said Clarissa Inglehart, Amazon’s global reporting technology manager, during an interview at Oracle OpenWorld 2015.
At Oracle, we see the success companies can achieve when finance connects the enterprise. As more and more finance processes become automated, finance leaders are in a better position than ever before to be a guidance system for the business. And with finance systems and reporting now available in the cloud, achieving this level of automation is within the grasp of companies of any size.
A key step to accomplishing this is shifting focus away from day-to-day number crunching. Instead, finance leaders can devote their considerable expertise to partnering with the business—reviewing and analyzing data, and identifying the future opportunities, to support business growth.
For additional reading, download the CGMA report, "The Digital Finance Imperative: Measure and Manage What Matters Next."