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written in collaboration with Marlene Katzschner from SAP Engineering

THRIVE. For us this would be the most important verb that should be used to determine the success of any corporate or supply chain function for an organisation. So how can we thrive within the finance and risk function in any industry?  Read on.

The chief financial officer (CFO) is a figurehead and relies on input from his team that is made up of finance professional to determine the size, shape and direction of the finance and risk function. The CFO will interact with supply chain and other corporate functions. This interaction is based on a range of organisational tools such as governance, organisational design, technology and systems. Driving corporate strategy with input from finance and risk is a key deliverable of the CFO. For this input to be more effective, the role of the finance professionals in the finance and risk function becomes a critical lever for the CFO.

So where should the finance professionals focus their time for better outcome based on lessons from other industries, transformation projects, mergers and acquisitions, change management initiatives etc. Experience has shown that the top areas where finance professionals can drive benefits for their organisation, independent of industry sector, and move towards becoming a world class finance function are as follows.

Diverse Talent First Approach

More and more top performers are either looking to quit or move to pasture new. This output from Mckinsey research clearly indicates attracting and retaining talent is key to a word class organisation. Yet, organisations continue to treat talent as a job or a task. Moreover, rewards are handed out equally to everyone to maintain the status quo.

Not all things are equal. Excellence comes from the best people from all backgrounds and these individuals need to thrive. Many organisations talk diversity and inclusion yet have failed to implement practises that promote diversity and inclusion beyond a % based leadership statistic that reflect recruitment only. Organisations need to reflect this in all levels and ensure all backgrounds are represented in leadership. It should not be a statistic but an outcome that embraces human diversity. It can only be embraced if we are inclusive too.

Over the last 2 decades, many transformation projects have focused on driving change through implementation of technology but have very often forgotten to recognise talent that underpins sustainability. Organisations hire for roles rather than for talent that is intrinsic to an individual. Given, most of finance tasks can or could be automated, the need to ‘Roles’ has disappeared or will disappear over the next few years. What is needed instead is sustainability of the finance and risk function that can thrive on change driven by technology that is managed by talented individuals.  Management today is defined by the ability to hire into roles. However, the key metric of success should be to measure the ability to attract, keep and motivate top talent.

Build an Eco-System of Data

Finance professionals are very good at moving and consolidating data from different sources into a presentable format using a variety of tools. An individual finance professional become the data platform for the enterprise where all rules, connectivity and outputs fail to scale as individuals operate in isolation. The finance professional needs to build an eco-system that incorporate both internal and external boundaries of relationships.

Building an eco-system of data beyond the function or enterprise will make information easier to consume, manipulate and share across any boundary. The focus should shift from multi-system data approach to transitioning into a single repository of data that has a common business meaning. The eco-system is here to stay and a single common data model is the only way to leverage the this landscape of data. Eco-systems are great at storing data. By moving to a common finance data model across the stored data, the CFO is enabling the discovery of utilisation of data into information for multi-stakeholder partnering.

Process intelligence is More Important

If we accept that a process is a series of tasks, then we must accept that this has now been achieved over the last 25 years. However, this change does not allow for a world class finance and risk function to exist or thrive. World class finance functions are the most integrated across the enterprise. Data flows into finance from almost every event in the organisations to allow stewardship.

The finance professional evolution is now about process intelligence rather than tasks or process management. Process intelligence is about automation and analysis of the process. Automation is enabled through artificial intelligence (AI) or  Bots. Process intelligence is where the process is being monitored at an intrinsic level to provide insights to identify gaps, improvements, or simplification an better business practises for internal and external customers.  With process intelligence, there would not be a need to have different tools for monitoring and calibration for purposes of automation and process execution in a better way.

Analytics Consolidation

Data volumes are increasing as a result of mergers/acquisitions, external data availability, diverse systems and processes, lack of standard set of reports to manage the business etc.

Too much effort has been spent on just trying out analytical tools and moving from vendor to vendor in search of one source of the truth. Lesson learnt have clearly indicated that organisations need to solve the data eco-system challenges before tool selection. Point solutions create short term value but are all responsible for long term challenges.

Analytics strategies focus on reporting for sake of analytics. However, reporting enablement on their own does not lead to solving underlying difficulties of data harmonisation across a landscape of platforms. Organisations need to move toward consolidation of data as a priority. Without data consolidation, it is difficult to manage analytics given the ever-increasing volume and availability of data.

Optimisation is the New Theme

Lean has been a goal of many finance and corporate functions. This is what lead to outsourcing and/or creation of share services. Moving to a lean model is all about lowest possible cost per unit of a given task, service or resource. However, lean in the short terms does not always mean lean in the medium to long term as costs always increase due to inflation, change requests from outsourcing partners, squeeze on labour supply etc.

Finance professional focus should shift to how they can help their organisation optimise what they need.  Focus needs to move away from expense management, low inventory levels, etc. to value generation. For example, what is the cost of lack of inventory on sales, what is the cost of outage if systems are down for 5 days. The shift is to move away from cost based decisions to business risk and its impact on profitable growth.

Every CFO can now utilise Rise with SAP initiative to help achieve these priorities.