As the Chief Financial Officer of an organization, you understand your job is to not only manage financial planning, record-keeping, financial reporting, and risks, but also to enable and empower your team to make reliable decisions. The C-suite has changed over time, and with it have come necessary changes in the way leadership operates, delegates, and collaborates on issues. It’s no surprise that digital transformation can improve efficiency and flexibility of the C-suite and their teams, reduce risks, and streamline processes. But how does a CFO lead digital transformation in such a fast-paced environment?
1. Align Financial Strategy with Company Strategy
CFOs must be more collaborative than ever. In the past, issues related to finance would be solely solved by the finance department. Now, with many issues impacting IT, HR, marketing, finance, and operations, these complex challenges require integrated expertise that won’t be solved by working in silos. While some team members know to rely on the expertise in a different department, what about leadership? As CFO, are you working with operations, HR, sales, IT, and marketing?
According to “Finance Redefined: Workday Global Finance Leader Survey,” a study featuring responses from over 670 CFOs and senior finance leaders across the globe, CFOs are not collaborating effectively with their cross-departmental counterparts. Seamless collaboration and communication between CFOs and other leadership members can mean shared priorities and goals, aligned financial and corporate strategies, and finance employees who feel their work is valued across departments. Cloud technology can aid communication, thus enhancing collaboration between departments by providing a platform with relevant cross-functional analytics for discussion and decision-making.
2. Identify Opportunities and Anticipate Risks through KPIs
Measuring the success of your budget allows you to improve on ineffective areas, i.e. accounting, financial reporting, and budgeting. With hundreds of potential financial metrics to track, it is important to regularly measure key performance indicators (KPIs).
As the financial leader in your organization, you’ll need to manage expectations and long-term goals with concrete, measurable numbers. You know that common financial KPIs include gross profit margin, net profit, and current ratio. These tell you crucial information such as whether you’re pricing your products or services appropriately, the amount of cash you have left over after you’ve paid all bills, and whether a business will be able to pay all future expenses, respectively. Through long-term monitoring of these KPIs in a cloud-based system with real-time, unified HR data, you’ll be able to identify trends and indicators of future financial pitfalls and successes and adjust current business practices accordingly.
For example, Virtus Investment Partners leveraged our Foundation Data Model Readiness Workshop after a recent acquisition in order to deploy a scalable, cloud-based solution that would meet its operational needs, provide visibility into KPIs, and scale to keep pace with the growing business. Before partnering with Collaborative Solutions, Virtus Investments was struggling with:
- A lengthy monthly close process;
- Inefficient manual processes;
- Siloed financial data; and
- Lack of visibility into Key Performance Indicators.
Virtus Investment Partners achieved ROI within six months. Collaborative Solutions consolidated the company’s siloed financial data, increased visibility into KPIs, and reduced its month-end close by 1-2 days. With clearly-defined KPIs, Virtus can anticipate risks and identify marketplace opportunities unique to the firm.
3. Embrace Technology
CFOs now play a role in recognizing which digital tools and technology can help transform and expand the business. As CFO, you should lead your finance and accounting teams to move out of data collection and calculating, and into a more strategic, analysis-based role where data can be turned into insights, and insights into action.
By partnering with the financial and accounting teams you oversee, as well as other C-suite leaders, you’ll be able to determine the best modern cloud and advanced analytics technologies for your organization. Your software should enable your employees to create reports using real-time transactional data, deliver meaningful financial statements and scorecards, and take action that will impact your bottom line. For example, Buncombe County embraced the cloud through deploying HCM and financial management software, which allows the team to quickly gain an accurate picture of the entire business and equips leaders with relevant financial insights. What’s more, according to the IT Manager at Buncombe County, “Collaborative Solutions was integral to the success of our Financial Management implementation,” permitting financial leaders to spearhead improvements through technology.
As the financial leader of your organization, you’ll lead digital transformation through aligning your finance strategy with your company strategy, identifying opportunities and anticipating risks through financial KPIs, and embracing digital technology. According to a Techvalidate survey of Collaborative Solutions customers, 83% of surveyed organizations saw a return on their investment in deploying cloud-based technology with Collaborative within 6-12 months or sooner. For more information on how you can lead digital transformation, read our eBook on the 6 Value Drivers for Finance and HR Transformation Success: