ABOUT COOKIES ON THIS SITE

We use cookies to personalize content and ads, to provide social media features and to analyse our traffic. We also share information about your use of our site with our social media, advertising and analytics partners.

Cookie policy
Cookie Settings Accept Cookies
Content
One size does not fit all It all starts with a vision

How to unleash Finance’s strategic talent

Oct 06, 2016
To deliver value in the digital age, Finance needs to make a broad and continuous effort to reinvent its discipline. In my previous blogs I’ve talked about the importance of defining the right set of metrics and enabling easy access to trusted and relevant data. Once they have taken these first two crucial steps, organizations possess a solid foundation for overcoming the next hurdle in the race to transform Finance. But it’s not an easy hurdle to tackle, since it entails breeding analytical skills to enable foresight and to play a stronger part in the company’s strategic planning process.
One size does not fit all It all starts with a vision
Business users will acknowledge that it can often be a struggle to obtain reports in the right format, at the right time and providing the right insights. Many CFOs I know seem all too aware of the fact that Finance is not (yet) optimally delivering useful insights that enable business users to react quickly and appropriately.

One of the aspects that often prevents Finance from delivering such insights is the lack of necessary IT infrastructure. Having the data is one thing, but analyzing it – looking for new opportunities – and translating it into useful business insights is another. Finance often finds itself hampered by rigid IT systems. This complexity is exactly the opposite of what the business is asking for: convenience, i.e. easy access to data and insights.

One size does not fit all

Traditional on-premise IT architectures are based on the duplication of data – coming from various systems – in a data warehouse for reporting purposes. In today’s complex and rapidly evolving business context, however, business users want to do their operational, financial and management reporting on the fly. Traditional business intelligence (BI) tools and data warehouse technology do not meet these real-time reporting requirements. In order to implement the right set of tools – ones that adequately fulfil all the business reporting needs – companies should start by making a clear distinction between operational reporting, financial reporting, management reporting and performance reporting.

Most companies have their operational and financial reporting pretty well covered. Reports about the number of outstanding orders and invoices or accounting reports are widespread, meeting the more basic reporting needs and supporting the everyday business activities. Management reporting and performance reporting, on the other hand, are often are less well developed. These reporting tools support strategic development and allow companies to perform business simulations so that they can explore their future.

It all starts with a vision

To be able to run relevant strategic scenarios for the business, performance management tools need to be fueled with insights that come from – amongst other sources – cost-to-serve data and profitability-related data, from both Sales and Operations. This is valuable data about customers, channels and products that should not be locked away in data warehouses but instead is worthy of real-time processing. I’m not saying that data warehouses are no longer of value, but companies need to develop a clear vision of how they should deliver insights to the business and which tools – whether data warehouses, financial systems or self-service BI tools – optimally support which reporting needs.

Those tools are already available today. Recent evolutions in cloud technology enable quick access to data within an easy-to-set-up and low-cost environment. It is now up to Finance to develop a vision, to make the best use of modern reporting tools and to utilize the data to support the strategic process – i.e. translating trusted data into valuable insights using the right set of metrics and the right tools. That’s the challenge Finance has to rise to if it’s to become truly indispensable in the boardroom.
This article is the fourth of a series of 6. After setting the scene of why CFOs need to transform the finance role, I dive deeper into the 5 challenges CFOs are facing today. I also shared some of my findings in the report `Fast Forward Transformation or Back to Basics?’



Author: Thierry Bruyneel. You can connect with Thierry on LinkedIn.
Read the other articles in this series, on the 5 challenges CFOs are facing today:What Finance should be, but rarely is ...Are your metrics future-proof?It's all about the data
Related Content
Building a better risk management strategy in the crisis and beyond
The definition of risk management has evolved over the years. While in previous years it would allude to identifying and attempting to avoid risks, businesses have now come to realize that an element of risk is inevitable and have previously misconceived it as something they could control. Focus is now shifting towards better managing its impact.
IT
Strategy
Operations
Read more
Maximizing margins in professional services with self-service and automation
It can be extremely difficult for professional services firms to get their financials back on track once profit margins begin to decline. Losing margin at the beginning of a project can be disastrous for profitability and, consequently, for employee morale when annual bonuses are also impacted.
Finance
Operations
Strategy
Professional Services
Read more
Mitigating risk and driving agility – how businesses can benefit from a move to the cloud
By Simon Harbour, SAP S/4HANA and Microsoft Azure lead, delaware UK and US
Read more
Innovation driven by necessity [Research insight report]
Why flexibility and transformation are key for manufacturers to deliver in uncertain times
Operations
Strategy
Discrete Manufacturing
Automotive
Read more