By Robert Landon
Agile finance leaders are definitely getting something right, and the numbers speak for themselves. According to Agile Finance Revealed: The New Operating Model for Modern Finance—a new research report from Oracle and the American Institute of CPAs (AICPA)—agile finance leaders are significantly more likely to report increased revenues (89% vs. 63% of others) and profitability (95% vs. 70% of others) over the last three years than other survey respondents.
To help other organizations achieve these kinds of results, the AICPA/Oracle report identifies three dimensions in which agile leaders have transformed their operating model. In previous posts, we examined the first two:
This time, let's dig into the third dimension: the ability to influence decision-makers and drive better business outcomes. By partnering with the business, finance can “cascade the CFO’s influence through the business,” write the report's authors. To make that happen, finance must:
On its own, finance can squeeze efficiencies out of its operations. It can also leverage advanced analytics to better predict future outcomes. But the value of that insight can only be realized when finance influences the wider business.
Not surprisingly, agile finance leaders are significantly more likely than others to rate their influencing skills (55% vs. 23% of others) as “excellent” than their non-agile peers. Consider Arby’s.
“We work very closely with the business—marketing and operations primarily—as we lay out opportunities for where we might see our future growth,” Arby's executive vice president and CFO David Pipes said to researchers. “Other departments recognize we’re doing everything we can to help them in their initiatives and drive the business forward.”
According to the AICPA/Oracle report, a lack of skills to drive forward-looking analysis is the single biggest obstacle to financial transformation. For example:
However, agile finance leaders have managed to stay ahead of the curve, even when it comes to newer, less traditional finance skills. For example, the report found leaders were far more likely to rate their skills in data visualization (60% vs. 24% of others) and big data (60% vs. 21% of others) as “excellent.”
The most skilled data scientists in the world are of little value unless they understand how lines of business actually work.
“Business leaders need finance professionals who can interpret data within their unique business context,” says Ivgen Guner, senior vice president of Global Business Finance at Oracle. “It’s critical that business partners understand the strategy of the business, what metrics are most significant, what the competitive landscape looks like, and then advise leaders accordingly.”
Unfortunately, many finance departments suffer from a shortage of business acumen and commercial awareness, according to the AICPA/Oracle report. And in this area, even agile finance leaders are feeling the squeeze, with only 36% rating their level of competence as “excellent”—yet they are more active than their peers in trying to bridge that gap, from business skills development to recruitment of candidates with experience outside the traditional accounting skill set.
It’s a rare job candidate who has expertise in finance, data science and line-of-business needs. A CGMA designation, which distinguishes those with advanced proficiency in finance, operations, strategy, and management, helps finance professionals stand out. In addition to seeking a range of skill sets, the report recommends that finance build cross-functional teams.
In response to the need for new skill sets, Oracle created the Global Business Finance Training Academy so finance can partner more successfully with the rest of the business. The academy provides:
“Any finance person I hire today can go into business operations, product marketing, accounting, business market analysis, investment banking, and so on. I love to see folks go from one discipline to another because it makes them more valuable to the company in the long run,” says Oracle's Guner.
Arby’s is another leader in building cross-functional teams to support both rapid decision-making and longer-term strategic guidance.
"Our line of business executives know that they can always go to their finance partners for whatever they might need, whether it’s help in analyzing something that they think they might be doing, questions on their budget, help with their forecast, or whatever it might be," says Arby’s Pipes.