Part 2 of “Finance Leadership Pays Off” series
The role of most finance leaders has steadily evolved into a position of authority when converting company-wide strategy into execution. Once regarded as a steward and trusted advisor of financial health, the top finance job now goes beyond controlling and accounting. Now, they’re expected to be knowledgeable about capital markets, mergers, and information technology, as well as functional areas such as procurement, supply chain, and operations.
While the focus on talent and seeding growth has never been so high, this well-rounded expertise isn’t acquired in a silo. And thankfully, according to the Oxford Economic study, “How Finance Leadership Pays Off: Small and Midsize Companies Can Boost Performance Through Finance,” sponsored by SAP, the ability to collaborate with all business areas is becoming a critical competency. At the same time, finance leaders may be short-changing themselves by not optimizing peer-to-peer engagement with their fellow functional leaders.
Collaboration: A finance aspect that can be optimized
Finance leaders spend a significant amount of time prioritizing investments, finding services that should evolve, or identifying irrelevant cost items that should end. However, they cannot ensure that every decision is informed, timely, and strategic enough to fuel business growth unless they openly communicate with functional leaders.
According to the Oxford Economics study, active peer-to-peer collaboration is a top priority for finance organizations. In the survey, finance leaders from small and midsize businesses indicated that they regularly work with departments such as operations (81%), IT (68%), procurement (53%), HR (45%), supply chain (43%), manufacturing (41%), R&D (39%), and customer service (17%).
Although they are on the right track to enabling strategic business growth, finance leaders may want to reconsider their digital investments to promote collaboration company-wide for the long term. The study suggests that only 55% are using technology to encourage collaboration, significantly behind the 71% of larger enterprises that are doing so.
Collaboration enablement technology delivers big payoff
Collaboration is about uniting people to a common goal aligned with the overall business strategy. Meanwhile, it also increases the pressure on all organizations, including finance, to leverage only relevant, up-to-date knowledge – which can be a challenge in our world of 24×7 change.
To enable ongoing transformation and growth, a collaboration strategy must comprise five objectives:
- Combine the best skills and expertise of every business function
- Adopt a platform that provides a foundation for candid discussion and insight to understand the business from different perspectives
- Provide information and business insights that are timely and fresh
- Nurture an open culture that values initiative and innovation
- Leverage data-based capabilities, such as machine learning and artificial intelligence, to reduce bias
Luckily, the latest technologies are giving functional leaders the space to share their immediate perspectives, innovative ideas, and thoughts. Collaboration platforms and solutions have advanced so well recently that the management team can participate in two-way discussions that are highly productive and accessible across any device. Plus, cloud technology is emerging as a reliable platform for collaboration, providing anytime, anywhere access to information that is consolidated and managed in one location.
With finance leaders serving as the anchor of the peer-to-peer engagement model and supporting platform, businesses can drive continuous, real-time discussion and 24×7 access to information and expertise. This increased level of authority and involvement will then enable the function to add more value in areas where they may not have traditionally exercised influence or decision-making power. And for the finance leader, this means an excellent opportunity to potentially change how the entire business operates and drives strategic growth for years to come.
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.