In 2020, Digital Transformation Mandated for CFOs

CFO 2020 mandates: agility, speed, efficiency

Every CFO must contend with formidable forces at play today. Economic and geopolitical uncertainty. Fierce, unrelenting competition. Dynamic market conditions. Constant compliance and security concerns. There’s worry about a possible recession in 2020. And let’s not forget the CFO’s ever-growing purview of responsibility. CFOs today must serve equally well as company cost managers, enterprise-wide transformation leaders and boardroom strategic advisers.

In line with this, CFOs are extending their functional scope from directing finance-centered accounting activities to leading cross-functional teams that link sales, distribution, marketing, finance, customer service, and other critical areas. They are broadening their focus from reducing costs and ensuring governance and control to driving transformation and growing revenue. In every way, CFOs are increasing their value to the enterprise and growing, deservedly, in power and pay.

In 2020 a CFO’s success will ultimately hinge on how well he/she performs against today’s unrelenting mandates for agility, speed and efficiency. To accomplish everything and deliver on these mandates, CFOs – once considered technology laggards – are embracing digital transformation and racing to the cloud.

 In fact, 93% of the respondents to Deloitte’s 2018 Global Outsourcing Survey of finance and other business leaders reported that their organizations have already started, or are considering, new cloud implementations. Similarly, a poll of 3,000 finance executives conducted during a recent Deloitte webcast found that nearly half (48%) of respondents believe that cloud technology will be critical to the performance of their finance departments within the next two years.

 Now let’s have a look at how today’s Corporate Performance Management (CPM) solutions help CFOs deliver on these mandates.

 Agility mandate

 The only constant in business is change. Simply negotiating the typical fluctuations of business is challenge enough. Add to this today’s blistering pace of technological advancement and digital disruption and keeping pace with change becomes more difficult by orders of magnitude. Moreover, the consequences for not reacting or adapting quickly enough to changing conditions can be disastrous.

At a minimum, agility for CFOs means the ability to respond quickly to opportunities, address variations to assumptions or expectations, and to minimize the negative impact of threats and challenges. For this, CFOs need unhindered access to their organization’s trove of data to uncover hidden threats as well as new sources of value – and to do it all while controlling costs.

More than anyone else in the enterprise, the CFO is responsible for curating all the data that drives and defines a business. As the influence of CFOs ascends within the C-Suite, they’re the ones taking responsibility for turning that data into insights for better, more timely decision-making.

Accordingly, there is an urgent need for dynamic planning and forecasting that provides the agility businesses need to respond quickly and drive better financial decision-making. Gone are the days of ‘point-in-time’ pictures.

The natural fit between analytics and planning, budgeting, forecasting, and consolidating processes is driving a growing number of organizations to embrace analytics and select planning, budgeting and forecasting or financial reporting and consolidation as ground zero for migrating their CPM processes to the cloud.

Speed mandate

When I talk to CFOs about process improvement, pretty much without exception they tell me that their top priority is closing the books and reporting faster and more efficiently. Why the pressing need for a speedy close? Simply put, speeding up the process of closing the books each month frees CFOs and their finance teams to focus on more strategic priorities. If CFOs can get the books closed in just five days instead of 10, that’s five extra days each month they can spend on forecasting and decision support with the CEO, planning future projects with department heads, and perhaps most importantly, analyzing big data to drive efficiency and growth throughout the organization.

For decades, CFOs had no recourse other than to slog through a sea of spreadsheets in order to report on how their organization (or any aspect thereof) was performing. Not an enviable or effective task by any measure. Tragically, spreadsheet madness and disparate point solutions still hamper the CFO’s ability to close the books, let alone gain visibility into performance across the enterprise.

When a CFO can act faster, the entire organization moves faster. When a CFO can work smarter, the entire organization operates smarter. For this to happen, CFOs and finance teams must streamline and automate core, regularly occurring functions such as closing the books and preparing reports.

 Thankfully, cloud-based financial close and reporting solutions, generally under the umbrella of cloud CPM, enable you to adapt lightning-fast to changing business and compliance requirements while reducing risk, improving control, and delivering faster, more accurate insights to all stakeholders—anytime, anywhere.

 Efficiency mandate

It may be a cliché, but its truth cannot be denied. Working faster and smarter, not harder, is the key to sustainable efficiency gains. Recent research reveals (in financial terms) the widening gap between top performers and bottom dwellers when it comes to the efficiency of their financial operations.

Data from APQC’s Open Standards Benchmarking database shows that top-performing companies today spend 0.56% of their revenue on the finance function; median performers 1% and bottom performers 1.6%.

Companies spend less on finance as a percentage of revenue because they have optimized, efficient, and effective processes. Those processes have lower cycle times and require fewer full-time employees. When companies spend less to accomplish the same amount of work, they have opportunities to reinvest those resources in improving the bottom line.

Efficiency gains will always yield cost savings. Unsurprisingly, the top reason CFOs move CPM to the cloud is to reduce costs.  Even closer to the CFO’s heart, moving to the cloud also enables CPM users to innovate and adopt best practices such as rolling forecasts, driver-based planning, and faster reporting and close cycles.

Contact AST today and let our experts put the power of  the OneStream XF simplified platform for Financial Close and Consolidation to work for your enterprise, as well as unified Planning, Budgeting, and Forecasting with robust Financial Reporting.

Aside from our OneStream implementation services, ASTcan share deployment options and highlights of the XF platform’s key features that customers and Gartner alike recognize in its “Magic Quadrant”.

Whether your organization is highly manual in the Finance area or looking for more from you CPM software, contact us today to assess the power of OneStream XF.