CFOs and their Finance teams have a clear opportunity to ensure that they remain a highly relevant, flexible department that supports business growth at a time when there is an ever more pressing need to react quickly.
And if Finance is to achieve its true potential, it requires evolving for the future and strong leadership.
The adaptive Finance skill
Finance needs to be agile. Forward-thinking CFOs are developing agility to support the business in developing long-term strategies for profitable growth and sustainability. While not losing focus on cost and efficiency, Finance leaders must recognize that closing the books and transactions are fundamental but won’t drive the business forward. Solving business problems, defining how to make decisions, and delivering increased value to stakeholders is where the value lies.
The analytical skill
Let’s take spend management for CFOs as an example. Finance leaders need to gather details of every cent that leaves the company, who it goes to, what it's for, what spending is overdue, and when current and future payments are due. These are just examples of the more obvious things that need to be managed…but they’re just the tip of the iceberg.
Finance also needs to review the terms with suppliers, which suppliers are responsible for the bulk of spend, the agreements or contracts in place and the associated risks.
Ideally, modern Finance functions will have the tools, and staff, in place to get a handle on data.
When thinking about what the future will demand, visibility of data will become the key determinant of competitive differentiation. Effective information management is quickly becoming an essential requirement to achieve control of spend and a healthy bottom line. For many organizations, this takes the form of data-driven spend management, i.e. strategic purchasing, cost reduction, and supply chain management informed by in-depth data.
The speed and sophistication of management dashboards is vital. Business users should be able to ‘self-serve’ their analysis and slice and dice data, and results should be presented in a more visual way.
In terms of spend management, CFOs need to be able to provide:
- Clearer insights, by communicating performance and highlighting shortfalls.
- Faster insights, so that management can understand recent performance and make decisions to change its trajectory quickly and decisively.
- Richer insights, based on more robust datasets from a wider variety of sources, providing broader perspectives than those based only on internal financial data.
The digital skill
A digital Finance function will lend itself greatly to the adaptive and analytical function. CFOs who take time to understand the digital transformation potential and use this to help plan their way forward, will provide their organization with a competitive edge.
The best spend management solutions can overcome these tricky issues and more. Modern tools ensure that Finance constantly have the right information, at the right time, with 100% insight into the organization’s financial and operational performance. They can aggregate, cleanse, validate, categorize and analyze every ounce of data across transactional systems.
Contact us today to speak to an expert about how to achieve these requirements.