“The past is a foreign country; they do things differently there.” There aren’t many quotes that can aptly sum up digital business disruption and the role of the CFO in one sentence, but this one comes pretty close. It’s the opening line from L.P. Hartley’s book, The Go-Between, which is fitting for CFOs because being “the go-between” for managing business risk, controlling costs, and identifying growth opportunities across different parts of the business is what most of us do these days.
Some CFOs find this an exciting opportunity, while others are hesitant about being accountable for any sort of disruption. It’s a delicate balance of calculated risk-taking and strategic planning, but it’s rapidly becoming the norm for many successful, growing businesses.
Look at the cloud, for example. There was a time when organizations didn’t think that cloud solutions were appropriate for their enterprise. But as security and compliance became more robust in the cloud, in addition to the efficiencies that can be delivered, cloud adoption is rapidly becoming the norm.
Any technology that delivers large-scale efficiencies, productivity gains, and risk reduction tend to spread rapidly once it’s deployed and the merits are experienced first-hand. As cloud solutions have matured and advanced, we’re seeing brave moves of large enterprises to totally cloud-based solutions. But how do you know when the time is right to justify such a move?
The truth is that every company has a unique set of circumstances and will require its own way to justify a major project or make changes to old systems. Part of our job as CFOs—and our skill set—is knowing how and when to identify it and trigger that change to maximize growth, competitive advantage, and agility. One perfect example was our adoption last year of a new cloud-based travel solution. It was a disruptive move. But the flexibility, productivity, and compliance it’s giving us are huge. Claiming travel expenses is no longer a time-consuming task.
Visibility on the T&E lines improved massively, unclaimed backlog of expenses dropped greatly, human error is negligible, and compliance rates are improving significantly. In all likelihood, this cloud tool has brought an overall improvement to the T&E end-to-end solution by more than 90%.
The more we can improve standardization across the front and back ends of our organizations, the more capable we will be at identifying cost savings, mitigating risk, and capitalizing on growth opportunities. In the words of L.P. Hartley, sometimes that requires us to “do things differently.”
An effective CFO must establish a 360-degree view of the organization, covering each individual line of business without bias. CFOs also hold the key to an enormous amount of data, which grants them the unique ability to identify areas of concern well before their peers. It is their role to establish strong management, resourcing, business development, and budget-forecasting processes—each of which affects cultural priorities. In fact, Deloitte’s CFO Signals survey found that CFOs aspire to spend roughly 60% of their time as a catalyst for change in their organizations.
For more on this topic, please read Balancing the CFO’s Twin Objectives: Growth Versus Optimization.
This article originally appeared in Information Age and is republished by permission.