Global CFO’s can attest that it’s been a long, taxing year – from every dimension. Regardless of the industry, organization size, geographic presence or business longevity, few CFO’s have escaped the challenges of ‘Super Recession 2009,’ a nail-biter if ever there was one. CFO’s of mid-sized organizations in particular have had to re-assess cost/efficiency fundamentals behind repetitive actions and routine processes…like the preparation of audit ready financials.
As a former CFO, and as a founder of a company catering to the needs of CFOs, I spend a lot of time talking “financial shop” with my colleagues about their new priorities. Their current drive? Better processes, best practices and improved utilization of all corporate resources.
Here are some interesting tips I’ve collected from more than a dozen CFO’s turned “chief financial coaches” on how to do more with less…and win.
TIP #1: PLAY BY THE NEW RULES
Today’s CFOs say the game has changed and it’s time to toss out the plays that you ran throughout the last century. The new administration is already reviewing and revising many prior rules, laws and compliancy mandates. No one knows what’s coming next in the capital markets. And, the budget that financial chiefs approved just two quarters ago has likely been re-written. Even more challenging is the revolving door at the CEO’s office. Can it be long before suit jackets, like athletic uniforms, come stitched with CEO names across their backs for identification purposes?
So what are the new rules and how do you play by them? You don’t know them all yet, and they’ll change anyway – so you stay nimble and control the one thing you can change – your playbook.
The CFO role is transitioning into two distinct roles: strategic and non-strategic. CFOs who will survive must move beyond their comfort zones and traditional scopes to evolve into the next generation coach. It’s not that the ongoing routine financial and advisory needs are gone – they are more important than ever. But strategic CFOs are quickly finding ways to get out from under routine, non-strategic activities -- like technology and accounting resource management. These tasks take a large bite out of the CFO and Controller’s workday.
CFO’s still need to close books, be IPO or merger ready, and react swiftly to changing sales, materials, and services conditions. But the new strategic CFO is finding new and better ways to get these activities done.
TIP #2: KNOW YOUR OPPONENTS
The reality is that the global landscape has introduced new competitors, new technologies and new sales and service channels. Yes, these realities are re-writing the strategic CFO’s playbook. As with all successful pre-game planning activities, scouting, information and intelligence can make the difference between a blow-out or a barn-burner.
Analytics are the CFO’s ally, but time is the enemy. Speed and streamlining is a must in every dimension of play – go to market strategies and financial assessments can change capabilities and routine execution. Acceleration on all fronts is mandatory in the new game.
TIP #3: TAP NEW RESOURCES
The convergence of the talent management paradigm with new business processing outsourcing alternatives is a game-changer. CFOs need to re-write past proven plays to trim workforces and reallocate human capital to strategic activities, where they’ll produce the most value, versus routine activities that are better off outsourced. Payroll is a perfect example of outsourcing as a best practice framework. The routine (audit-ready) financial function will be the next necessary-but-not-strategic financial area to be taken off premise for greater cost savings and better business processes.
Additionally, software-as-a-service (SaaS) is a CFO game changer for many reasons: by removing the time, cost and aggravation of on-premise technology deployment, user training, licensing, maintenance and changing needs, SaaS accounting solutions will reduce the burden of non-strategic activities currently borne by the CFO.
TIP #4: KNOW YOUR BENCH DEPTH
Chief Financial Coaches are thinking strategically about their financial staffing needs and bench strength:
- First and second string players: Emphasis here is building and fielding the right combination of in-house and outsourced teams and technology. Keep your high-value on-premise financial teams focused on strategic plays like high priority financial analysis of new/emerging business scenarios, fast reconfiguration of financial metrics supporting new initiatives and financial adjustment strategies for those that have failed?
- Scrubs: Save repetitive/routine activities for your important, but non-strategic outsourced talent. There are new opportunities to access outsourced talent while off-loading high-maintenance infrastructure.
TIP #5: KNOW YOUR PLAYBOOK!
Strategic CFO’s combine historical insights with visionary thinking. They are reviewing and selecting SaaS solutions for routine application needs like routine financials, because this is a smart way to save time for more strategic pursuits.
Same thing for Business Process Outsourcing (BPO) –CFO’s are re-assessing their HR options and choosing outsourcing more often. Many have found that a highly organized, vetted and proven external talent pool can be a strategic ace.
And finally, they are leveraging the newest best practices and business process management tools – particularly those that can now be embedded into easily accessible web portal frameworks.
No one knows how long it will be before working capital is more readily available for smaller organizations, and whether more cost-cutting challenges still lie ahead. But what I’ve gathered from these Chief Financial Coaches is a true desire to think out of the box, be more resourceful than ever with their options, and provide their organizations with the financial guidance and structures they need to remain competitive. As we move into the second decade of the new millennium, CFO’s are going to become even more important partners to CEO’s and their boards. It is the changes and rethinking that they are doing now to prepare their organizations for success, which will make the difference.
By Karen Watts, CEO & Founder, Corefino
Karen Northrup is the CEO & Founder of Corefino, a turn-key people/place/platform combination of outsourced accounting experts, outsourced technology and its Triple-C (Connect-Correct-Comply) Best Practices/ workflow framework. Corefino operates on a variety of Software-as-a-Service (SaaS)-based platforms via a monthly subscription service for a best in class audit-ready financials solution for mid-market companies. The company is based in Sunnyvale, CA. For more information, please see www.corefino.com.