“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 pretty fitting for CFOs, because being “the go between” for managing business risk, cost control and identifying business growth opportunities across different parts of the business is what most of us do these days.
Having an insight into each individual line of business and fulfilling the role of strategic advisor gives us the unique ability to identify areas of concern well before anyone else. Most of us have the enviable bird’s eye view. And thanks to digital transformation, we are now inextricably linked with (and dependent upon) technology to fulfil almost all of our objectives around operational efficiency, leadership, and fiduciary responsibility.
But with that holistic bird’s eye view comes the need to know when to make incremental or sometimes significant changes – and in a timely manner. Whether we like it or not, we are the change agent for the organisation.
Some CFOs find this an exciting opportunity, while others are hesitant of 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 cloud for example. There was a time when organisations 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 tends 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 skillset – is knowing how and when to identify it and trigger that change to maximise growth, competitive advantage and agility. One perfect example where we have adopted was last year, a new cloud-based travel solution. It was a disruptive move. But the flexibility, productivity and compliance it’s giving us is 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 standardisation across the front and back end of our organisations the more capable we will be at identifying cost savings, mitigating risk, and capitalising on growth opportunities. In the words of LP Hartley, sometimes that requires us to “do things differently”.
An effective CFO must establish a 360-degree view of the organisation, covering each individual line of business without bias. The CFO also holds 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 organisations.
Sourced by Eman Goubran, CFO at SAP MENA, a subsidiary of SAP SE