Part 1 of the Finance Leadership Pays Off series
Growing businesses with fewer than 1,000 employees face a range of challenges on a daily basis. From scaling production and recruiting staff, to fulfilling customer demand, to optimizing working capital, decision makers must counter emerging market risks, opportunities, and disruptions with creative solutions that go one step further than the competition.
As complex as these challenges may be, they are no match for what is perhaps the most significant hurdle for leaders running a small or midsize business: freeing leadership from hum-drum daily duties to strategically drive future growth and optimized business performance. And for the finance function, this reality can greatly hinder the significant opportunity to position the business for future success.
But not all hope is lost. According to “How Finance Leadership Pays Off: Small and Midsize Companies Can Boost Performance Through Finance,” an Oxford Economics study sponsored by SAP, smaller organizations can improve enterprise performance by expanding the role of the finance function to prioritize company-wide strategic goals and growth initiatives.
Overcoming the dreaded “B” word to resolve finance’s biggest challenge
Of the 1,500 finance executives surveyed by Oxford Economics, two-thirds indicated that the finance function is more visible and influential, while 82% are involving finance leaders in strategic decision making. Although this level of attention and trust is a tremendous opportunity for finance leadership, it also leaves less time to handle day-to-day responsibilities.
Solving this conundrum is a matter of rethinking the existing IT landscape. However, small and midsize businesses are typically hesitant to do so because there’s little room for errors, which can prove disastrous to the bottom line. In response, most finance leaders are complacently relying on the risk-adversity, stability, and security of tried-and-true legacy technology. Unfortunately, this philosophy is also impeding the function’s full potential for operating as strategically, efficiently, and quickly as possible.
All too often, organizational leaders outside of finance prefer to describe the implementation of new technology as “bold” – a word that always makes finance leaders hesitant to consider the investment any further. However, in reality, the technology is not as risky, reckless, or rebellious as one may think.
For example, predictive analytics is quickly becoming a mainstream solution that simplifies and increases the accuracy of informed decision making. Cloud platforms and solutions have matured so much that businesses can curate the best delivery options and capabilities that fit their requirements right now, then eventually scale up or down when needs change. Plus, machine learning has progressed to the point where various use cases enable the accuracy, speed, and responsiveness needed to not only process mundane tasks, but also recommend the best actions to handle exceptions.
Magnifying the full value of finance leadership through digitalization
Adopting cutting-edge technology, such as predictive analytics, cloud, and machine learning, can further magnify the inherent speed, flexibility, and agility of the finance function within a small and midsize business. With a growing portfolio of mature solutions available today, companies can invest in solutions that can grow and evolve with them well into the future.
By embracing these innovations, finance leaders can automate tasks that are consistent in terms of process and outcomes so they can divert more mindshare towards strategic company growth. Over time, the burdens of finance’s traditional scope are lessened, allowing more time to do what it already does best: collaborate with every area of the business and deliver financially driven insights to boost performance and drive growth.
Discover how finance leaders from small and midsize businesses are building a reputation for driving strategic growth. Read the Oxford Economics study “How Finance Leadership Pays Off: Small and Midsize Companies Can Boost Performance Through Finance,” sponsored by SAP. And don’t forget to check every Wednesday for new installments to our blog series “Finance Leadership Pays Off” to explore the possibilities for your finance leadership and your business.