The role of finance continues to evolve to thrive in this digital era. Finance organizations must support the innovation and growth of their companies. They must also continue to attract, develop, and retain professionals. Here I will discuss 5 strategies for supporting this evolution.
Let’s discuss these strategies in more detail. (You can also read more at CFO Perspective | Transforming the Finance Organization.)
1. Provide the insight decision-makers need
Businesses need to respond quickly to fluctuating market situations. They need to identify issues, find the root cause, assess the impact of different responses, then act as soon as possible. This cycle used to take days or weeks, with batch processes needed to extract and analyze the data. Today, technology is making insight, analysis, and response in real time a reality. Flexible, self-service reporting is available with built-in simulation and prediction capabilities. So the ability of finance departments to provide sophisticated insight and guidance is increasing.
2.Simplify operations for greater efficiency and effectiveness
If finance departments and CFOs are to spend more time supporting business decision makers, they need to simplify and automate transactional, operational, and compliance activities. The La Trobe University IT department describes this as giving time back to the business, and it is a key driver of their IT strategy. Advances in technology have enabled a complete redesign of underlying architectures. Relational databases mandated constraints on processes to ensure performance.
In-memory technology has no such constraints. Now processes can be redesigned and run in real time. This reduces or eliminates long batch processes, such as reconciliations and allocations. It also streamlines labor-intensive process such as bank reconciliation and receivables. Business networks can also automate collaborative processes such as invoice management, driving efficiencies. All this allows finance teams to spend more time on more strategic and value-added activities.
3. Optimize working capital
Cash and solvency continues to be important for finance executives. Currencies continue to fluctuate across the world, markets and stocks can be unpredictable. Finance managers need immediate visibility into global cash positions. They also need the ability to respond in real time to mitigate exposure. Managers that have to compile information in spreadsheets or manage banks one by one are at a disadvantage. This in turn puts their companies at risk.
4. Proactively address compliance and risk
Finance departments must still meet statutory requirements as well as proactively manage risk. Today’s world includes Big Data, supercomputing, cloud computing, and cybersecurity threats. So prevention strategies must be flexible and always adapt to new situations. In today’s digital economy, cybersecurity threats are a big risk faced by companies. But often landscapes and systems do not make it simple to address that problem. This is covered in more detail in the Loudhouse report, which talks about managing risk in the age of complexity.
5. Develop skills to support the new role of finance
There have been and will continue to be new opportunities for finance professionals. According to CFO.com, CFOs and finance executive are concerned about their team skill composition. Finance organizations need to define and develop the skills needed for their evolving role.
What strategies are you using?
To learn, more click here: CFO Perspective | Transforming the Finance Organization.