"Co-Pilot of the Business": In Today's World, Finance is the New Guidance System

There’s an elephant in the room, and it’s sitting on my keyboard. Every time I sit down to write this article—my first editorial for The Modern Finance Leader—the elephant raises its head and balefully stares at me. It silently asks the question that some of you may be thinking: “Why is Oracle writing about modern finance?”

The elephant is skeptical. I was too, when we first started researching the concept for this publication. But as our team dug into the research, a couple of things became apparent.

One is that Oracle is regarded as a credible source of expertise among finance professionals—not only because of the years we have spent developing finance software, but because of the financial health of our company and the business acumen of Oracle’s finance leadership team.

The other is that, compared to other lines of business (like marketing or sales), there is a relative lack of publications that specialize in corporate finance. Finance professionals are hungry for advice and information that will help them to do their jobs more effectively—especially when it comes to technology.

From Governance to Guidance

As finance technology experts, we at Oracle have a unique point of view that, we hope, will help to fill that gap. As the business world shifts under the pressures of digital technologies and global markets, we’ve seen today’s finance leaders move from governance to guidance. One Oracle customer described finance as “the new guidance system” for the enterprise.

Finance has traditionally been about control, compliance and reporting. The team’s main duties were to manage profit and loss, risk, control and compliance, and to provide the business with the reporting required to make informed decisions. But in today’s ever-changing economy, where digital technologies are spawning new business models almost overnight, expectations on finance leaders are higher. Traditional accounting skills are seen as merely the cost of entry for a finance director or CFO.

“Today, there’s an assumption that you already have those skills embedded in a team,” said Sinead Bryan, Oracle’s vice president of finance for EMEA systems, during a recent interview. “Companies are looking for finance leaders who are commercially astute. CEOs want a CFO who will be the co-pilot of the business—a strategic thinker, someone who can formulate a plan for the company and implement it.”

Our view is that, to provide a reliable guidance system for the business, finance teams should embrace three principles:

• Finance teams should be digital leaders
• Data is the new currency
• Finance connects the enterprise

These themes will be explored more in-depth in future articles, but let’s take a brief look at what we mean.

Finance Teams Should be Digital Leaders

With the explosion of digital technologies—dashboards and analytics, mobile apps, social collaboration, and the cloud—finance teams need to be more involved in technology decisions. It’s becoming accepted wisdom that the cloud can reduce IT costs, but the business benefits can extend beyond mere cost reduction into true competitive advantage.

For example, a growing real estate company recently embraced finance in the cloud, not only because of the cost savings, but also because the new system provided mobile capabilities to thousands of brokers and agents—thus making the company more attractive to new franchisees. In addition, the new analytics and dashboards made the company’s finances more transparent, thus making the business more attractive to potential investors. Understanding where digital technologies fit into your business model is critical to finance teams that want to guide and partner with the business.

Data is the New Currency

Finance helps the business say it with numbers. Because finance professionals are trained to be analytical and skeptical, they are ideally positioned to drive a data-driven culture throughout the enterprise. The CFO’s office has always had credence as being a source of truth. Today’s flood of data is the perfect opportunity to extend that credibility to other statistical analyses and more data sources.

For example, a global hotel chain monitored customer sentiment at every individual hotel and used this information to improve the customer experience and loyalty. Through predictive planning and analysis, they reduced forecasting cycles and close times, which freed up the finance team from routine reporting and gave them more time to partner with the business for revenue growth.

There are also regulatory implications associated with the availability and analysis of more data.  Consumers and regulators will assume that your company knows the reason why a product failed or a tragedy occurred, and that you have the capabilities to predict more, because of the volumes of data being captured.

As finance teams start to work with other business units—whether it’s marketing, sales or HR—they can help them identify the key performance indicators they should be measuring in order to demonstrate success. KPIs will vary for every business, but finance teams can help to ensure that the data sources are reliable, credible and viable, and that the numbers stand up to scrutiny.

Finance Connects the Enterprise

One finance director at a Silicon Valley start-up described his team as the glue that holds the company together. At some companies, finance is at the heart of every significant business decision. This is the aspiration for many of today’s finance leaders.

In order to accomplish this, however, finance teams must be freed of the tasks that have traditionally taken up so much of their time: compiling and producing reports from multiple data sources, often using spreadsheets. Finance leaders should automate, simplify, and outsource the tasks that don’t add value, so that their teams can focus on the more important, strategic tasks.

This is the approach that Oracle has taken within its own finance culture, said Bryan. “In Oracle we ‘drink our own champagne’—we are huge users of business intelligence dashboards. They provide us with real-time information freeing up our time to review and analyze the data and not just prepare it.”

A company’s organizational structure can also enable business partnering—a topic we’ll be exploring in future articles. “We’ve implemented a shared services model globally, with a reporting Center of Excellence that creates reports as required,” said Bryan. “Our finance operating model enables us to provide pro-active advice to the business—focusing on the future, optimizing opportunities and defining complimentary strategies which lead to growth, whilst identifying and eliminating associated risks.”

The New Guidance System

In the coming weeks and months, we’ll be exploring these and other finance-related topics in depth. Our contributors will include experts on digital technologies, financial planning and analysis, procurement, project portfolio management, risk management, and many more. We’ll look at how to effectively manage growth and achieve successful mergers and acquisitions. And, of course, we will share interesting product news and success stories.

We also want to create a dialogue with our readers. Please feel free to leave comments on any of our articles. And if you would like to contribute your own expertise, we welcome your ideas.

We hope that this publication provides at least some of the information that finance professionals are craving.  Our goal is to help professionals like you to become the new guidance system for the business, and steer your organization to success.

— Lynne Sampson, Managing Editor

For more on the changing role of finance, read Modern Finance in the Digital Age. We welcome your thoughts in comments, below.