Finance executives aren’t typically showmen, but at many companies they’ve unquestionably become the center of attention. They were first hoisted up on stage during the economic slowdown, when all eyes tracked their every move, whether hacking costs, wrestling with budgetary constraints, or tackling new regulatory requirements. Now, as companies seek to identify expansion opportunities while facing an unprecedented level of global competition, the spotlight still lingers on CFOs as they use analytics help illuminate the right path.
Despite its lofty status, the finance function must continue to operate as the provider of finance services, supplying everything from cash to administrative services to the rest of the organization. As they’ve become more tightly integrated with other business functions—helping management identify value-creating opportunities—finance executives have sought to streamline operations by making processes more effective and efficient. After having outsourced or centralized as much as they could within their own function, CFOs have turned toward wringing out as much risk and inefficiency as they could. As the providers of critical information and analysis for operational and strategic decision making, they are keenly aware of how significant an impact such changes can have on the bottom line. By implementing upgraded technology, finance executives can even gain real-time visibility into whether they are leading the transformation of finance at the optimal pace.
What makes such information so critical? Here are three reasons why finance executives need to turn their departments into paradigms of corporate efficiency:
The more successfully finance executives transform their own function, the more easily they can shift from their traditional focus on transactional accounting. CFOs are increasingly becoming key contributors to helping establish and fulfill company-wide goals and objectives. What’s true for them is also true of their staff, especially at high-performing companies: Instead of being engaged solely in accounting, they need to be able to devote time to serving in management support or partnering roles. As they fan out across the company, finance executives and staffers can demonstrate how to create value by improving internal processes, a welcome change from their habitual emphasis on cost efficiency.
As leaders of change, CFOs need their departments to serve as role models. As they ease into their new roles as initiators of change, spreading the word by engaging in cross-functional collaboration with different business units, finance executives need to be able to point to their own organizations as exemplars of how efficiency-boosting changes buoy corporate performance. Armed with the necessary information and analysis, for instance, they can point to ways that they have enabled the company to meet increased regulatory pressure while still managing to reduce costs and maximize profits.
There’s little insight to be gained from feeling overwhelmed.In an environment where corporate performance depends on clear and timely analysis for decision making, the finance function needs to operate at optimal efficiency. Achieving that end means adopting new platforms, such as cloud computing, automating finance processes such as invoice-payment and employee expense reimbursement, and embracing tools that enhance collaboration and improve productivity. That’s the kind of ultra-modern environment required for finance to manufacture the raw material that management is going to need in ever-greater quantities in the coming years: business insight, harvested from systems that provide valuable data about the risks, opportunities and possibilities just ahead.