Gone are the days when the finance department of an organisation was confined to the back office, crunching numbers and churning out spreadsheets and annual reports. The role of the CFO has evolved in recent years, becoming more closely aligned with operations across multiple levels of the business.
Rather than being an observational part of the business, handling the incoming and outgoing funds, the modern finance department is in a position to have a real impact on the strategy and direction of the company. If, that is, organisations are willing and able to allow them the opportunities to contribute.
Establishing the finance department as a strategic partner is a tactic adopted by a large number of successful companies, however there's still a long way to go before it becomes a universal concept. Research from Argyle Executive Forum has shown that 46 per cent of surveyed HR and marketing leaders view their CFO as only somewhat of a partner at best. Perhaps more troubling, the same study learned that over a third of respondents felt the CFO wasn't contributing to innovation within the organisation.
Building a stronger partnership
According to a Deloitte survey, while half of all finance departments were involved in the business strategy process, less than 20 per cent were considered to be leading the way in their organisation. The results of that research identified three key priorities to developing a better partnership between finance and the business as a whole:
- Growing access to credible internal and external data to assist with strategic decision making
- Acquiring and nurturing a strong base of talent to populate the finance department
- Clearly defining what the department can offer to the organisation, and providing it with the resources to add value
The first point in particular has risen to prominence in recent years. Deloitte's research showed that 57 per cent of companies surveyed felt they were being held back from a better finance partnership due to a lack of information.
Practices, tools and strategies to make finance a better partner
In a recent discussion on the topic, Vice President of Product Marketing for Host Analytics John O'Rourke queried a number of CFOs on the most effective ways to bring down the walls between finance departments and the wider business. His findings suggest that bringing the department into alignment relies on establishing a strong presence for the CFO amongst the executive team, offering them a prominent seat at the table where strategic decisions are being made.
To be able to build up that partnership, day-to-day tasks associated with the finance department need to be easily delegated, allowing senior members to focus more on strategic planning and supporting their colleagues on the leadership team. Here the value of Deloitte's second priority outlined above shows itself - the CFO needs to know that the team working on the ground are not only capable of managing the daily processing and reporting, but have the best tools to do so.
Having an integrated enterprise performance management solution is an effective place to start. After all, 24 per cent of respondents surveyed by Argyle Executive Forum stated that leveraging data and analytics will become critical to building a solid relationship between finance and the wider business.
