To win market share and increase profitability, every department must be aligned on goals and objectives, allocating resources to the right market opportunities at the right time.
This was the topic of a recent Argyle virtual event, sponsored by Host Analytics, titled “Break Down the Silos: Align Finance and Operations.” The panelists included Michael Bowman, Regional CFO at Weber Shandwick and Nick Hawtrey, Chief Financial Officer at Allied Electronics. Here are the highlights of the webinar.
State of the Market
To set the stage for the panel discussion, I reviewed the results of a recent Argyle CFO survey that was co-sponsored by Host Analytics. This survey was focused on how CFOs foresee their roles and priorities transforming. We ran this survey initially in late 2015, then again in late 2016 to see some trends. This survey of CFOs and other senior Finance executives had about 125 respondents. Here’s what we found.
- Over 70% of surveyed CFOs are collaborating more with the CEO.
- Besides collaborating more with the CEO, CFOs are also collaborating more with the Chief Revenue Office (CRO) and Chief Information Officer (CIO).
- 53% of respondents said the CFO of the future will focus more on adapting to change and 18% said driving growth.
- The top 3 performance management challenges for 2017 are 1) planning and forecasting in volatile conditions, 2) aligning finance and operating plans, and 3) defining the right KPIs for the business.
- Only 18% of CFOs surveyed said Finance and Operations are totally aligned.
- 61% of CFOs surveyed said Investments in new technologies such as cloud and mobile are increasing Finance productivity
- 56% of CFOs surveyed said these technology investments enable them to shift more time to value-added analysis and decision support.
Insights From the Experts
The panelists, Michael Bowman and Nick Hawtrey, echoed many of the themes presented in the survey results. The panelists are both finding their roles shifting away from budgeting, historic reporting, and policing – to putting more focus on corporate strategy, data analytics, and investment assessment with line of business executives.
Keeping the lines of business aligned with Finance is challenging. This requires a lot of time and effort, and requires organizations to change their perceptions of Finance. A critical part of this is ensuring Finance and LOB objectives are aligned through the strategic planning process. Finance and operations need to actively engage and collaborate on investment decisions.
Other strategies for ensuring alignment between Finance and operations include training of LOB executives on Finance concepts, as well as ensuring standardization around key terms and key performance indicators (KPIs) across the business. The use of benchmarking performance both internally and externally can also help drive alignment.
The new skill sets that are required for Finance to be a better business partner include communications, analytics, curiosity, partnering, and pragmatism. New technologies that can help Finance shift its focus from record-keeping to business partnering include robotic process automation (RPA), predictive analytics, cloud and mobile applications.
Ensuring Finance and Operations alignment is critical to achieving success in today’s competitive and fast-changing market. To learn more, listen to the replay of the webinar.