Consistent, profitable growth – these are the words which define one of the biggest challenges facing the enterprise today. They form the mantra of the Chief Financial Officer (CFO) and underscore the inordinate pressure on the enterprise as it seeks to thrive in mercurial markets and shifting political landscapes. The organisation is in the tricky position of having to navigate these minefields while continually improving efficiencies and enabling innovation.
The way in which the CFO tackles these challenges has a fundamental impact on the viability and longevity of the enterprise. If the organisation doesn’t adjust fast enough or adapt quickly enough it can lose significant market share – the demise of many well-known organisations tell this tale all too well. Companies such as Blockbuster, Kodak and Motorola have all failed to move with the changing economic and social tides.
That said, there are steps the CFO can take to steer the enterprise towards success and sustainability.
The first of these is to throw out the silos. Instead there needs to be alignment of the entire value chain which is then accurately measured against strategic objectives. The supply chain, production, customers, workforce and capital expenditure should be aligned with one another and with organisational strategy.
This philosophy needs to be represented throughout the business – from the top down, overcoming the chasm between executive decision and employee implementation. The executive disconnect must be repaired, remuneration schemes adjusted and middle management visibility made a priority. By automatically ceding operational finance plans from strategic financial models, the CFO can create the perfect bridge of alignment between top down and bottom up planning.
The second step is to drive the business forward by focusing on the road ahead. Time spent analysing historic variances without looking to time spent on relevant forecasting is like driving a car using the rear-view mirror. Always backwards, never forwards. Strategic modelling, budgeting and forecasting are fundamental to success. Your business is only looking forward when it is laying down the operational and financial roadmap with a clear vision for success.
Finally, the enterprise must find the right balance between detail and speed of process. Economic, social and political volatility make it difficult to plan and forecast accurately. In addition, the rate of change in these environments make it essential that the CFO redirect organisational plans faster, and more often. Add to this the expectations of stakeholders for swifter results reporting and accurate forecasts, and it is easy to see why the financial executive is under pressure.
This is where technology can play a pivotal role. Technology implemented correctly will ensure an effective balance between planning, speed and agility. Today, the CFO has access to EPM solutions designed to help them achieve their strategic objectives. It allows them to move away from traditionally complex and convoluted systems towards more integrated and intuitive solutions which deliver richer reporting functionality and financial management.
According to research conducted by CFO Publishing LLC, more than 70% of CFOs feel that, by being able to automate their financial processes, they would make finance more important in the organisation by becoming more involved with operations and providing more time to deliver higher value work.
It is essential that the CFO embrace what the right technology can do for their business. And the emphasis here is on the word ‘right’ – an EPM solution which is correctly matched to the business will deliver the productivity, capability and agility the enterprise needs.
By Allan Saffy, Director EPM Solutions at Decision Inc.