Adaptive Insights founder and Chairman Rob Hull examined how chief financial officers can contribute to today’s organizations in his presentation to Argyle’s CFO membership at the 2018 Financial Leadership Forum: Strategy & Innovation in the Digital Era in Chicago on May 9. In his presentation, Hull offered insights to help CFOs realize the full value of data and incorporate this information into all aspects of a company’s day-to-day operations.
The role of the CFO is constantly evolving. In the past, CFOs frequently used a static process to develop a budget and implement it at all levels of a business. Today’s CFOs, however, must be ready to adapt to new technologies and processes. And a CFO’s failure to do so may cause a company to fall behind its rivals without a clear path to recovery.
Oftentimes, CFOs are responsible for collecting data and determining how a company should allocate funds. But, increasingly, CFOs must become strategic contributors within their respective businesses. If CFOs take a strategic approach to a business’ everyday operations, they may discover innovative ways to help a company achieve its goals.
There are technologies available that enable CFOs to analyze data and gain actionable insights from it. If CFOs find and implement the right technologies, they may be better equipped than ever before to drive informed decision-making across a business.
“We think about how you can make your finance organization a much more strategic partner to the business,” Hull indicated. “Finance organizations need to not just look to the past but be proactive and look out into the future.”
CFOs must be prepared to adapt to a rapidly evolving global marketplace, too. Although CFOs sometimes craft annual or bi-annual budgets, they now must maintain flexible budgets. If CFOs can craft easily and quickly modifiable business plans, they could help a company keep pace in a fast-moving global marketplace.
“All around you today, you’re faced with change,” Hull pointed out. “With a static planning process … you aren’t able to react to change well, and the plan doesn’t react to how your business is currently operating.”
Data management plays a key role in the success of CFOs as well. Many CFOs prioritize data collection and analysis, yet are often are forced to dedicate significant time and resources to retrieve and assess data. To help mitigate this, CFOs should search for ways to automate data collection and analysis. By deploying automation technologies, CFOs can focus on generating meaningful insights from data and using these insights to help a company bolster its everyday operations.
“Leading and understanding the business often takes too much time,” Hull stated. “The technology to do these things is really not up to the task, and you need to think about what tools you’re using for planning, forecasting and analytics.”
CFOs must lead planning across a business. If CFOs engage with different departments as they develop business plans, they can foster a culture of collaboration. Meanwhile, this culture may help a company optimize the time and resources at its disposal.
“Little time is actually available to sit around with an organization’s business managers and understand what data tells you,” Hull noted. “We know that everybody plans … but typically, in an organization, planning is led by the office of the CFO.”
Collaboration may dictate a company’s short- and long-term success. If CFOs take steps to eliminate departmental silos, they can make it easy for multiple departments to contribute to a company’s planning process. Plus, CFOs can reduce the risk of miscommunications between departments that otherwise could result in wasted time and resources. In addition, if CFOs prioritize collaboration, they can determine which technologies and processes can help bridge the gaps between different business departments.
“You can’t let technologies and processes get in the way [of collaboration],” Hull said. “Otherwise, you just end up spending all of your time just managing [these technologies and processes].”
Going forward, CFOs must take a data-driven approach to their everyday operations. If CFOs can retrieve actionable business insights, they can help a company determine the best ways to invest its time and resources. These finance leaders also can empower executives across a company with the insights they need to make the best-possible decisions – something that may help a business thrive for years to come.
“You need to capture data from historical systems and combine this information with your current systems to allow for variance reporting, analysis, trend analysis and overall reporting on the state of your business in a timely fashion to enable … data-driven decision-making,” Hull stated.