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May 21

How CFOs Can Transform Finance Operations

How CFOs Can Transform Finance Operations

In a world where so much changes from quarter to quarter, never mind from year to year, ensuring peak business performance requires keeping track, and keeping up to date. For many businesses, doing that effectively today requires business process transformation. How well that transformation goes often depends on the vision and mindset of the finance team.


Why Finance is So Important in Business Process Transformation


Financial operations are sometimes looked down on as being in a “supporting” role in a business. There’s truth to this, of course; finance isn't directly making or selling, and there’s a sense in which every other aspect of an organization exists to support these key functions without which there would be no business at all. 


On the other hand, it’s the approach transmitted by a CFO, finance team and finance operations that can make the difference between smooth, predictable functionality and success, and day-to-day chaos. In other words, a supporting role can really be the support on which the structure stands or struggles. 


How CFOs Can “Set the Tone” in Business Process Transformation


Financial operations have a direct impact on how other departments perceive their own parameters, opportunities and success. How money is tracked moving in, out of and around the company is key to a perception of which departments are succeeding, and how. 


For this reason, it’s crucial that a CFO ensures that financial operations in their organization functions as a company player, focused on company goals. If financial operations become about each department, or team, defending their own budget and turf and role, rather than about making sure everyone is working together to achieve shared goals, you get a “wooden dollar” disaster. 


Wooden Dollars Have No Place in Your Company Finance Chest 


Wooden dollars are money that’s traded around within an organization, whose movement makes no difference to the results or profits of the business. Wooden dollar debates are internal arguments, usually carried out because the people involved are too focused on their own priorities. They’re not focused enough on how they fit into the bigger picture of the company. 


Wooden dollar discussions are often heated and can be full of animosity. They’re bad for organizations because they waste time and distract from what should be the focus. Plus, they can both create and exacerbate a culture in which it’s every team for themselves. 


CFOs can proactively avoid this problem by making sure that discussions about budgets and priorities are set in the context of company goals and how to achieve them. In fact, it’s this that should be at the heart of business process transformation. Processes should support, or encourage teams to support, wider business goals. 


How can you make sure this is what’s happening? Make sure you’re grounding processes and priorities in data.


Silos Are the Enemy of Successful Business Process Transformation


Successful financial operations in a company require both a 10,000 foot view of what’s going on, and a gnat’s eye view of the detail. That way you can see what’s working, what’s working less well, and which processes need to be changed or created to improve. 


You can also see the places in which new technology such as automation or machine learning can help streamline work and make operations more efficient and effective. All this requires solid grounding in real data - without silos - and a realistic understanding of how people work.


Break Down Data Silos in Business Process Transformation


CFOs are often asked for their advice or opinion. They’ll frequently take part in board meetings because their insight and expertise is valued. What lies behind this vision, however, is hard facts. 


The more complex business operations become, the more vital it is that financial professionals be able to see data from every aspect of the business, have it centralized effortlessly in one place, and be able to draw conclusions from an analysis. 


Once this would have been extremely challenging, but modern finance platforms such as Firmbase mean that bringing all the necessary information together and analyzing it can be easy, real-time and intuitive. This means that financial professionals can be confident that their conclusions and recommendations are always driven by, and based in, data. 


An essential element of business process transformation is an in-depth assessment of where data silos may still exist in your organization. Once that’s clear, you can take the necessary steps to remove them and educate relevant departments about the changes and how to leverage them. 


Even Financial Operations Processes Are Really About People


The data-based part of business process transformation is crucial. Successful financial operations cannot work by data alone, however. It doesn’t matter how good your data is, if you’re not managing the people who create it and use it effectively. 


CFOs working to bring their company’s financial operations in line with the company’s needs and goals have to be as focused on the human side of things as on how they can use automation and data to improve efficiency and accuracy. 


Each company is different, and company culture (and aspirations for company culture) vary widely too. On the other hand, people are always people. Here are some things to bear in mind:


  • People want to do it right. So make it clear what “right” looks like. If business processes are changing, employees need to know how, and how it impacts their work


  • Finance must be willing to bring bad news. It’s vital for the company that problems not be ignored until they grow unmanageable. It’s also a crucial example for other departments that those professionals closest to company finances be transparent about what’s going on


  • Avoid a culture of blame. Understanding where problems come from can sometimes make it natural to phrase reporting around whose fault they are. CFOs must ensure that instead, language remains factual, data-driven and fair


  • Educate around real-time analysis. Access to real-time information about what the company’s finances look like is a relatively new possibility, and some companies are still making the shift to a real-time reality. If you’re switching to use a platform like Firmbase’s, make sure everyone who can benefit from it knows what it is, how to use it, and how they might benefit


  • Ensure understanding that automation makes work better, not at risk. There’s a lot of misunderstanding around automation that leads employees to fear it will replace rather than enhance their roles. To ensure you get the most not only out of technology, but out of the employees using it, education is essential to help them see the ways their jobs will be made easier and more interesting, with time freed up for client interactions, research, analysis, etc.


  • Incentives are powerful motivators. Make sure financial operations have the right incentives built in for each department to encourage transparency, accountability and punctuality of reporting


  • Be transparent. Business process transformation can mean significant changes in day-to-day operations. Employees are often willing to make these changes with good will, as long as they understand why they’re necessary and will help the company in the long run


In Business Process Transformation, Aim for Impact


Financial operations used to be almost exclusively focused on the present, based on knowledge of the past. That’s still important. But if you’re engaging in business process transformation, you have an opportunity to ensure that your finance team resets its processes - and its mindset - to focus on the future as well


With data centralized in a single platform, and silos between data sources and departments broken down, CFOs can ensure that the work of the finance team is geared towards impact. In other words, analyze the past, see the present, and plan for the future.


Don’t just gather accurate data and provide accurate reports. Turn that knowledge into actionable insights for different departments that can truly transform operations for the company to make the business more efficient, more effective, and more profitable. 



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