The Finance Leadership Playbook Part 3: Taking Charge Of Innovation To Deliver High Performance

Michael Diehl

Part 3 of the “The Finance Leadership Playbook” series 

The image of a CFO and an innovator are rarely one in the same. Experimenters, movers and shakers, hangers-on, and risk takers—these attributes usually describe the spirit of a successful innovator. But finance leaders are much different. Often characterized as the skeptic, voice of reason, and gatekeeper of a data-based business model, they evaluate innovation with logic, comparing its value against key drivers such as cash flow and revenue generation.

The CFO temperament for routine stability may keep risks at bay, but it doesn’t promote a culture of innovation visionaries. In fact, the findings of the Oxford Economics study “How Finance Leadership Pays Off,” sponsored by SAP, indicated that an alternative approach may be in order. Fast-growing companies are led by finance leaders who exert a strong influence over the innovation of core business areas including operations, marketing, procurement, sales, R&D, HR, and customer service.

where finance leaders break the mold

Source:How Finance Leadership Pays Off,” Oxford Economics, sponsored by SAP, May 2017.

The reward of innovation-driven finance leadership

It’s easy for finance organization to get caught up in the day-to-day responsibilities of budgeting, expense management, billing, compliance, and reporting. But workflow ruts can be dangerous for just about any function, even finance. Settling for the same workflow—automated, digital, and manual—can hamper new opportunities for more efficient ways to get work done, service customers, and engaging suppliers and partners.

Most CFOs who have realized the risk of being workflow-complacent are taking action by implementing ERP solutions, cloud-based applications, Big Data, shared services, as well as real-time and predictive analytics to deliver a high level of performance excellence, according to the Oxford Economics survey. And some finance leaders indicated going a step further by pioneering processes with emerging technologies such as the Internet of Things, blockchain, and artificial intelligence.

finance leaders leverage emerging tech

Source:How Finance Leadership Pays Off,” Oxford Economics, sponsored by SAP, May 2017.

Remarkably, these digital investments, commonly regarded as risky, are paying dividends for finance teams. For example:

  • Automation is improving the efficiency of the finance function.
  • Faster response to organizational needs, opportunities, and risks, and the flexibility to address them, are leading to rapid business model innovation.
  • Live insights and predictive analytics are empowering in-the-moment decision-making and action.
  • Digitizing the mechanics of budget creating and reporting is freeing employees to focus on uncovering data-driven insights and strategically contributing to the bottom line.

Ballance Agri-Nutrients is a prime example of the power of business process innovation. With a focus on increasing productivity and profitability for the farmers it serves, the fertilization product provider and expert decided to invest in a digital core running on next-generation ERP and enabling simplification and real-time transactions.

A digital strategy that started as a customer-centric endeavor ended up being a transformative opportunity. Ballance’s customers and employees are benefiting from knowledge growth and real-time decision-making to deliver optimal outcomes. Internally, critical business processes are 75% faster, and real-time insights are extracted from years of data in a matter of one minute. In turn, the company increased sales productivity, reduced month-end closing time, and decreased sales reporting from two hours to just 20 minutes.

The new CFO mandate: Empower a strategic partnership built on innovation

Deciding whether the finance organization’s workflow process will evolve or stagnate is a tremendous responsibility that can impact the entire business, as well as the finance function, for years to come.

By encouraging creativity and reasonable risk, CFOs can create an environment where innovation thrives and solves some of the company’s biggest financial challenges. Live data can be translated into informed, quick decisions and forecasts. Dynamic planning and modeling can be accomplished from insight to action across the enterprise. And combining deployment flexibility with the rapid pace of innovation can yield immense competitive advantage.

Further explore the benefits of each of these pillars and the technologies that support them. Check for new weekly installments to our blog series “The Finance Leadership Playbook” and read the Oxford Economics study “How Finance Leadership Pays Off,” sponsored by SAP.

Learn how organizations are gaining instant financial insights and using them to make better decisions—both now and in the future. Register now for the 2017 Financial Excellence Forum, Oct. 10-11 in New York City.

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Michael Diehl

About Michael Diehl

Michael Diehl is a senior director of Global Finance Audience Marketing at SAP, where he lead messaging and customer insights. With 16+ years of experience at SAP, he has a strong track record in technology innovations. His specialties include finance, machine learning, thought leadership, go-to-market strategy, digital marketing, messaging, and positioning.