Especially—but not exclusively—in a tight economy, finance leaders have no choice but to bear down on costs, cut spending and strictly enforce limits on budgets. Even their own department isn’t spared when it comes to delivering their brand of discipline. To cut costs and improve efficiency, finance heads sorted through every existing process, reshaping the function by outsourcing or utilizing shared-service centers wherever they could. By centralizing, standardizing and automating data in the name of driving efficiencies, they escorted their companies through the dim economy and into a still-brightening future.
They were rewarded for their efforts. Long considered aloof numbers-crunchers who preferred quietly consorting with spreadsheets in their offices, CFOs rose to become strategic business partners. Increasingly, they distanced themselves from transactions, devoting less of their time to recording and verifying numbers. They assumed a loftier perch, playing a critical role in driving strategic decisions by applying their unique lens.
Focusing on long-term outcomes, however, requires that they continue optimizing finance operations, equipping the function to produce a steady stream of usable insights. To become—and remain--catalysts for company change, they have to say “yes” to making steady investments in specific areas:
1. Advanced Analytics. “Big data” has the potential to empower CFOs, who will need to rely on technology that can help reroute the endless flow of information into smaller pools of effective analysis. By mining data from internal and external sources, the finance department can detect patterns that will help bring the future into clearer view and identify attainable strategic objectives. Before any data integration can be implemented, companies may have to work on improving data quality and aligning hierarchies with the structure and needs of the business. An improved financial information system will also produce more useful management tools, such as dashboards.
2. Cloud Technology. Finance no longer needs to shoulder certain responsibilities, such as planning, budgeting and forecasting, on its own. With data stored on the cloud, employees across the enterprise can access it, collaborating to produce an acceptable outcome. Having played a role in finding a solution, users no longer need the CFO to spend time persuading them to buy-in. By using cloud-based business intelligence capabilities, finance can produce more accurate and detailed reporting, thereby supporting more informed decision making. Aside from driving cost efficiencies, cloud technology provides improved access for mobile users, better coordination with customers and partners and greater opportunities for input and innovative thinking.
3. Robust Compliance. While traditionally seen as an expensive nuisance—injected with urgency by the lingering prospect of lawsuits, legal sanctions and fines—compliance now requires continuous attention, given the constant appearance of new rules and regulations. An efficient and effective compliance function can even produce tangible benefits. An ongoing, as opposed to ad hoc, effort can have a positive impact on several aspects of business performance, including productivity, efficiency and even profitability. And, yes, it can effectively counteract the increased scrutiny and ramped-up expectations emanating from regulators, shareholders and other stakeholders.