What are the key challenges facing finance managers today?

Implementing an organizational transformation

Until a few years ago, the main concerns of a company’s financial managers were focused on the regulations applicable to their business, the irregularity of the markets and the recruitment of people with the right skills.

The CFO’s mission is rapidly evolving with the digitalization of the company. It is no longer just a matter of deploying new accounting and financial tools, but of implementing a profound organizational transformation. The main challenges are now also related to internal company issues.

CFOs will be increasingly involved in strategic decision making, based on analytical reports built in partnership with different departments. This is particularly the case for investment forecasts in the most promising new technologies, such as
big data
and
artificial intelligence
. Their role, far from being limited to accounting or regulatory issues and cost control, is set to expand more and more.

Reinventing the job of the financial manager

If the contributions of new technologies are undeniable, few companies still have the internal skills to manage the issues of data hosting in the cloud, big data or AI. With dematerialization and the implementation of new tools, such as software in SaaS mode, production times have been considerably reduced, staffing levels streamlined and supervisory controls accentuated.

New missions will therefore emerge to support the role of the CFO, who will have to manage costs and investments in a particularly rigorous manner while promoting innovation. Only then can effective tools be deployed to optimize the performance of the finance function.

The missions of the Finance Manager are therefore moving further and further away from the recording of management facts. The latter will have to anticipate the transformations several years in advance and become the actor of the change support. It is only by identifying trends and developments that he can prepare the company to face the challenges of the future and ensure its development.

Achieving these goals requires a wide variety of skills, some of which are even opposite. It is very unlikely to find a person who can possess them all. Financial managers will therefore have to surround themselves with a multidisciplinary team and optimize processes. It is impossible to be on all fronts at once.

On the other hand, the CFO’s job will tend towards new objectives: becoming a manager or leader, learning to communicate in order to be able to rely on competent and trusted people, delegating more, etc. Data collection, analysis and decision making are now part of a team effort guided by a multi-year projection.

Adapting tools to user needs

Current financial tools, both transactional and decisional, are not always adapted to the analysis of large volumes of data. A brute force processing of these information flows is no longer sufficient. It is essential to adopt the right tools, capable of cross-referencing very large amounts of data and processing them in an “intelligent” manner.

For this, it will be necessary to invest in information processing capacities , but also in software with interfaces designed primarily for the user. The user experience will have to be integrated with the raw computing power of the chosen solutions, because if the user is not able to easily perform the processing he needs, the investment in new solutions will be useless.

The new Business Intelligence and Analytics technologies will allow the interconnection of large volumes of data related to the company’s activities. The use of this data will help the finance teams to perform an efficient analysis and to refine their short and medium term projections, especially concerning the evolution of the turnover, the sales forecasts, the investments…

CFOs will have to adapt to new tools, new organizations and new processes. The same goes for their teams. It is important to integrate future users in the choice of solutions and to anticipate the risks linked to these changes.

Supporting increasingly complex operating models

It is no longer “just” a matter of interpreting financial data. The approach needs to be more comprehensive and include data from the outside as well as the inside. The creation of value for the company must be at the center of everything. The data collected and analyzed will be used to identify the improvements to be made, the adequacy between the needs, the skills and the distribution of tasks, or the optimization of processes.

The automatic feedback of vital information in real time, such as key processes carried out in different departments or steering and production indicators, allows them to be taken into account immediately. It is then much easier to check that the milestones defined upstream are respected. This provides a realistic, real-time view of the actions carried out in the field, and therefore of the company’s activity. To obtain such indicators, it is essential that the employees concerned master the capture of key information. Missing data can lead to significant dysfunction in the decision chain.

By asking the right questions, it is possible to obtain a global vision of the different activities of the company, coupled with a fine vision of each task. It will thus be possible to determine which positions require versatility or, on the contrary, specialization. In this way, the different skills can be better exploited. Decisions may then need to be made to ensure redeployment of skills to optimize processes.

Processes, work habits and management rules must no longer be fixed and must be able to evolve over time to adapt to new needs. The use of a structured methodology such as Six Sigma can facilitate the implementation of tools, indicators and best practices in order to develop efficiency and optimize value creation for the company. However, the implementation of these methodologies within the company is not neutral and generates a cost. It should therefore be integrated into a more transverse plan for the medium to long term.

Financial managers: managing IS heterogeneity

It is important to remain vigilant about the architecture of the information system set up to retrieve, store and process the information intended to feed the reporting and decision support tools.

While the information may come from different departments within the company, it is common to find that it also comes from heterogeneous systems. Whether the reasons are historical or due to technical constraints, aggregating data from heterogeneous information systems via multiple applications is never easy. Each application usually has its own connectors, which even if they are standard, will always have some subtle differences that require adjustments.

It is imperative to have a transverse vision of all IS providing data and their interactions. It is necessary to be sure that the various elements are correctly sized in relation to the new requirements. The efficiency of the supply chain and data processing will always be conditioned by the least efficient element of the whole. Even if you have powerful servers in place at each data entry point, if the computer network is not capable of absorbing the load and transferring large amounts of data in real time, the entire system is at risk of collapsing.

If a single critical piece of data is not reported, the indicators will not be reliable. If the datacenter doesn’t have enough power, or if the resources and infrastructure shared in the cloud are hogged by another system when you need them most, your organization will be completely disrupted. If data is missing at a given time, it will be impossible to retrieve it and the entire information chain will be affected.

The application of a methodology such as Lean Management is able to focus on these issues. Identifying weak points to eliminate them or minimize their impact on the entire information system is a prerequisite for the implementation of effective decision-making tools.

Also read in our " ERP Finance project " file:

• What are the key challenges facing finance managers today?
• What are the key regulatory issues for CFOs in 2019?
• Digital transformation of the finance function : where do you stand?
• Digitization of the finance function: what should we expect in the future?
• What changes does dematerialisation bring to the finance function?
• Finance management: what technological tools are available to CFOs?
• ERP software definition: what is an ERP?
• What is the use of an ERP solution for the finance function?
• ERP finance: what do you need to know as a finance manager?
• CFO: what are the advantages of an ERP for the finance function?
• Finance software: which ERP to choose for your company?
• Postmodern ERP: the right choice for your company?
• Should you consider a Postmodern ERP solution?
• The challenges of a post modern ERP
• Post-modern ERP: the checklist
• Help in choosing ERP finance: why use a firm?