Mark Woodhams, Managing Director, EMEA for Oracle NetSuite
In order to be successful in an ever-changing, digitally-disrupted business environment, companies are increasingly looking to CFOs and finance teams to help them keep pace.
The challenges facing organisations come from many sides, including political and economic changes, increasing compliance and the rapid progress of technology. While many organisations may feel that they have only just understood the potential impact and opportunities of big data and the Internet of Things (IoT), new technologies like artificial intelligence and machine learning are already emerging on the horizon, with the potential to change the playing field further. These new innovations, combined with changes to regulation and fast-shifting global economics, have left businesses looking to the finance function – with its overarching view of the organisation, a strong understanding of the drivers of success, and experience in planning, forecasting and compliance – to inform strategy.
With external factors driving change on one side, and operational complexity forcing it on the other, chief executives are increasingly drawing on CFOs and finance teams to provide a view that spans the whole company. While responsibility for technology has traditionally sat with CIOs and CTOs, pressure to compete effectively and meet quarterly performance targets has boosted the CFOs position and strengthened their hand when it comes to investment decisions more broadly.
Create a future-proof, effective and efficient finance function
With increasing demands on their time, it’s never been a more challenging time to work in finance. Not only are CFOs faced with shouldering more responsibility than ever before, they are also expected to continue running an effective and efficient finance function at a time where the volume and complexity of regulations has never been higher.
Fortunately, they are not facing these myriad challenges alone. Technology to collate and organise data and automate traditionally time consuming manual tasks such as financial reporting, tax compliance or cash management is within reach, enabling them to focus on their more strategic role.
CFOs that are faced with an expanded role should seek out solutions that streamline operational elements of corporate governance and provide an accurate real-time view of business-critical information to help inform decision-making.
Establish a foundation for taking action
When it comes to innovation, there is always a tendency to believe that competitors are able to develop and launch new products and services at breakneck speed. Such assumptions provide the impetus for organisations to invest in new technologies and take brave decisions that advance what’s possible and what’s normal across industries. In order to be an organisation that is shaping the future of the industry it operates in, leaders, as well as their finance teams, need to ensure they are able to act on the information they now have access to.
As such, businesses need to make sure that they are not just set up to deliver insights that define strategy, but can also act, react and scale when opportunities present themselves. This requires an agile platform that allows them to test new approaches and business models.
In retail for example, a British kitchen furniture maker could potentially consider expanding to the US market due to beneficial currency fluctuation. As the Pound falls,products manufactured in the UK become cheaper, giving British businesses a competitive advantage overseas, including the US. To seize this opportunity, our kitchen furniture business needs to have technology on hand that allows it to scale into new markets with ease, helping take care of tricky issues such as multi-currency financing, multi-country tax compliance and keeping up with local laws and regulations.
Failure to do so not only limits a business’ ability to move into new markets quickly, but can also result in degrading a company’s operational consistency, controls and visibility into foreign operations once expansion is made.
Set clear priorities
Despite all of these new responsibilities, you could argue that at its core the role of the CFO remains broadly unchanged. To be reactive for a moment, you could say that it all comes down to helping the organisation concentrate on what matters most. While the landscape has become more complex and unpredictable around them, the new responsibilities are merely an extension of their traditional role of safeguarding the organisation and advising on the priority areas for investment.
Finance teams need to make sure they don’t get caught up in the confusion and inconsistency surrounding their place in the organisational pecking order and remember that their raison d’être is broadly unchanged.