Finance leadership plays a key role in the study and evolution a company’s ecosystem. In fact, the CFO will likely be the final arbiter of whether investments into technology meet or exceed internal capital thresholds throughout both evaluation and sign-off. Solving technology, architecture, and innovation issues across supply chain, operations, production, engineering, human resources, requires you bringing Finance on board with your assessment and evaluations, and this goes for every other organization in the company needing a similar decision on investment.
As a CFO, ask yourself: Where are we as a company today? What is it you think you will find out about yourself as CFO and about your company?
As open-ended, vague and ambiguous a question as that may seem, by design, there is a logical progression of thought, start-to-finish, that may drive you to certain conclusions, based on your circumstances, your perceptions, and your market or industry standing. Now, think about posing the same question around your executive leadership team roundtable and see what kind of responses you get back from them. While many of the others at the table may seem to think operationally, their answers should cycle back around to how they perform against the company KPI’s and metrics, which typically, at the C-level suite, are mostly financially driven. The answers that are proffered, should revolve around “Sales, Orders, Margin, Cash”, and, possibly company returns and shareholder value measures (EPS, stock price); there you have the finance element as by-product of their responsibilities. And that is exactly what posing such a question should provoke as discussion and answer, each C-level staff member should look for the means and methods to achieve these company goals and objectives, through their organization. After all, the primary reason a company is in business is to make money for its investors.
Finance as the Strategic Partner
So, on-the-heels of the ELT roundtable question(s); Strategic partnership from the Finance C-level, is becoming the norm throughout the corporate hierarchy, and for good reason. Strategic Partner is the Goal! Strategic Partner is the Objective! And the pathway to achieving “Strategic Partner” status, begins with a common language enabled through business insight, technology, systems infrastructure and innovation, and not just for finance solutions, but integrated views across all areas of the business.
The Finance organization is the steward of the company’s resources in its entirety; the company’s risk and compliance control are all paramount responsibilities for the viability and sustainability of every company whether public or private and the gateway to coverage is intelligent technologies.
The term “Strategic Partner” had come to be overused and misinterpreted over the years. If you remember your older technology and are still holding on to some of that older technology, being viewed as a strategic partner was/is particularly more challenging, if not unattainable. You cannot be a true, trusted, strategic partner if the technology you have deployed to run the business has gaps and holes in its infrastructure in the data stores and data sources, and in multiple ERP platforms that make a patchwork quilt of systems and solutions. It makes your staff data miners; it makes your staff ill-equipped to spend their time on what really matters to their support organizations and to the wider business to the leadership and to their real intent – consumable, intelligent and actionable representative information.
Finance at the Core of the Enterprise
You will always find Finance at the nucleus of any organization, look no further than the seating chart of an executive office suite. Typically, the CFO office is nearest the CEO office, I cannot remember when it was not located closest, and that is for good reason, everything revolves around the finance organization; the CFO is the right-hand man/woman to the CEO. When you have earnings calls with external investment analysts, the financials are the mainstay of the conversation.
As you can see, finance and all the other organizations of a business are inter-related. They rely on each other for support, intelligence, and for record keeping and reporting, for both the strategic and tactical pictures. The bottoms-up basis for planning and analysis may start with a production plan, which creates a manpower plan to accomplish, which demands a supply chain, which needs procurement to fill in the overhead materials gap or additional outside labor needs. At the top-down you will be given a sales plan, followed by engineering depictions and creation, on paper, of the product. We then layer on selling and administrative plans and profit goals and we have the tactical and strategic rendering of what makes the company work.
Call to Action
SAP is well-positioned to demonstrate our value as we help our customers through new market paradigms to become stronger and more agile. We are offering solutions, technologies and innovations that can support your business goals for single source of truth, greater transparency, analytical insight, and robust predictive analysis. Our simplified, enhanced user experience and mobility options make the transitions to new technology and work from anywhere innovations, much easier to consume and use.
Finance Value Advisory is here to assist you in developing your vision, mentoring your teams to act on that vision, and assisting you in crafting educational programs, developing businesses cases, and conducting workshops that help you to create the compelling case for change needed to transform and evolve your company.