In this blog, I’d like to outline the CFO’s role as a transformation agent. Historically, in the organization I’m a part of, we looked to our finance team to fill one of several roles. The clear and traditional role is as a steward, working to ensure that there were no compromises in compliance with internal and external guidelines, to safeguard trust and reputation. The steward provides transparency across all metrics to support a company’s regular financial performance and operations in the best way. Clearly, this is a role that continues to this day, and it remains vital to maintaining business integrity.
Supporting business goals, driving efficiency
This has expanded to include a second role as business partner. In fulfilling this role, CFOs and their organizations began to dive deeper into what the business is doing, helping to steer and support the business leaders in reaching goals and key performance indicators (KPIs). As this role began to mature, we started carving out transactional tasks and moved them to the newly established shared service center (SSC) organization. The employees of the SSCs started harmonizing and simplifying our processes while creating process handbooks. They realized that accounting procedures were performed differently from one country to the other; for example, in the usage of different subaccounts for the same cost posting or a deviating month-end closing timeline for the same account. Our shared service centers nowadays create greater levels of process standardization and with that, enable automation to drive efficiencies around the world.
As with many companies, at SAP we’re exploring new ways to do things—new business models, how to introduce new business processes, and opportunities to do things in different and powerful ways. This is driven at all levels, from the business leaders at the board level down throughout the organization, and it includes all roles people perform within organizations. Innovation, whether via product or how we conduct business, is an essential component of our company’s culture.
Challenging the status quo
This innovation has surfaced now with a new role for CFOs and their organizations as a transformation agent. This role is applied in a range of ways, such as driving and defining strategic projects like software rollouts or the introduction of IFRS 15. In other words, the transformation agent role becomes important where the “status quo” and “business as usual” situations should be challenged. These are situations where change and innovation offer an opportunity for new businesses, business models, and improvement to existing business models.
A transformation agent is increasingly important, since every company should be exploring its business model and how to either expand or introduce new ones. The traditional software license model has been upended with the adoption of cloud, and with so many new options to the traditional model—software as a service, infrastructure as a service, platform as a service, and so forth. There is an increasing number of dimensions that need steering.
This is where the transformation agent role emerged. In this new role, the CFO drives the change and helps to shape and drive competitiveness while steering the business to make the most of its investments, searching for and finding new efficiencies. We keep the organizations focused on the transformation topics.
Maintaining the focus on transformation projects
We’ve been working with the sales organization with workshops to help guide them accordingly. These colleagues in turn provide a multiplier effect, helping our customers understand how they can benefit from emerging innovation—leading to new processes, greater efficiencies, and new business models. In one instance, we had an individual leave such a workshop and introduce a new process at SAP that will save the company an estimate of 15 million euros a year. So as you can see, this isn’t incremental impact.
I’ll expand on these in future posts, exploring how the transformation agent role helps as innovations such as blockchain, IFRS 15, and machine learning make their way into the company. In the meantime, I’d be curious to hear from any transformation agents out there and whether you’re experiencing anything similar.
To learn more about leadership in finance, read the Oxford Economics study “How Finance Leadership Pays Off: Six Ways CFOs Stay Ahead of the Pack.” Oxford Economics recently surveyed 1,500 finance executives to understand the attitudes of finance professionals toward the function’s changing requirements and challenges.