One of the biggest challenges my team and I face is to continually do more, and do it faster. When we meet that challenge, we have the opportunity to drive better business performance.
Why are some CFOs more successful than others? According to a recent study by Oxford Economics, there are six distinct traits that the top finance leaders share. However, the common thread that distinguishes all these leaders is that they understand the importance of digital technology.
In a global survey of 1,500 finance executives, these high-performing leaders said that they view cloud-based applications, Big Data, and real-time analytics as critically important to the finance function’s successful performance today and in the future. I happen to agree.
Outdated systems keep companies from achieving business goals. To do more and do it well, finance needs to free up resources to focus on the tasks that are of greatest value to the organization. This requires running a large part of our core processes as efficiently as possible with as little touch as possible.
Cloud-based applications enable efficiency by standardizing and automating processes, as well as lowering infrastructure expense and other IT barriers to making these improvements. The leaders surveyed agree with me. In the study, nearly a third of respondents whose revenues grew by 5.1% to 10% over the past year say automation improves the finance function’s efficiency — twice as many as respondents with slower revenue growth. But efficiency alone is not enough.
Maximizing the power of people, data, and insight
We also need insight into business data, which in and of itself can be a challenge with the increasing amount of data businesses generate today. Companies need not only the digital tools to manage Big Data and flush out insights, but they also need people who can use these tools, articulate the insight, collaborate across boundaries, and influence better business decision-making at all levels.
At SAP, we’re increasingly moving to a world of dashboards. For example, I have a CFO dashboard built by our Enterprise Analytics team that displays a standard set of KPIs and metrics that SAP CFOs use to stay informed and steer their business. I increasingly see new dashboards emerge for different areas of our business. Each dashboard draws from a trusted source of data, so everyone sees the same view of how the company is executing on its business priorities. This visibility, accessibility, and consistent use of data has enabled us to improve our decision-making process and work more effectively.
Bringing it all together to drive performance and growth
In the past, it was common for our business leaders to use spreadsheets to track and present KPIs in face-to-face meetings. People would spend hours producing the data for the spreadsheets and even more time creating PowerPoints to present KPIs. Now rather than meet, we can click through dashboards and see various levels of detail on a self-help basis. We can then collaborate with our business partners and have a conversation to decide, “OK, now that we’re informed, what do we need to do?”
In these ways, we have the insight we need in a very visually and consumable way that goes straight to the point of what action we need to consider. We can also have a much more forward-looking approach aided by simulation and scenario modelling tools. We can make impactful business decisions to manage risk, optimize working capital, and evaluate the financial viability of strategic growth initiatives. In short, we can better deploy our resources to drive performance and growth.
When I talk to other finance leaders, it’s clear that our thinking is aligned on our greatest challenges and opportunities. Fortunately, with the ongoing evolution of technology, there are more tools at our disposal that enable us to work smarter, faster, and more efficiently – so we can all be high-performing leaders.
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