The role of accounting and finance is changing and here are the finance transformation innovation agenda items that should be on top of minds of many CFOs (Chief Financial Officers). To innovate and reinvent the finance and accounting function CFOs and finance leaders must rethink the structure, role, and approach as a part of the broader finance transformation (F&A Transformation).
Top Five Items for the Finance Transformation Innovation Agenda:
- Beyond Bean Counting, Business Enabling: The role of finance is shifting from a basic recorder of events to a business enabler. This is a fundamental change in how finance leaders should think and do. The business enabling role involves everything from offering the flexibility to tweak the operating model, being a good steward of capital, and an asset allocator of scarce resources based on overall return. In companies growing inorganically, facilitating the M&A activity and deploying capital in the most efficient means – stock buybacks, dividends, spinoff et al.
- Become a Business Leader, not just of accounting and finance functions: The accounting and finance leaders all the way to the CFO should think that their domain is more than finance. They need to think of their role more expansively and have a strong footprint in fields like manufacturing, sales, marketing, and other functions. This does not mean the CFO is going to write the advertising copy and optimize customer experience. What it means is the CFO and her/his team having the right level of appreciation of the functions and their leverage of organizational resources and providing the right level of resource support. And leadership is a critical success factor in enterprise transformation.
- Recorder of Events to Analyzers of Data and Providers of Insight: Of course, recording the data and having right controls for the accuracy of the data is very important. However, today it is more important to analyze the nuances of sourcing of capital, the cost of capital, the optimal project budgeting, business model implication on the financial model and vice versa, and providing the right level of data and insights for executive decision-making.
- Orchestrator and Facilitator of Business Model Transformation: Large Global 2000 firms are being attacked from every direction – established digital giants to upstarts as well as other traditional competitors. The accounting and finance function should analyze the implications of the digital channels, the impact of revenue models such as freemiums or subscriptions, the complexities of dynamic pricing, etc. proactively.
- From viewing Regulations as a Burden to using them as Guideposts and Guardrails: Despite lip service to lowering the regulatory burden, regulations are here to stay and grow. Country to country, state to state the rules vary, and this poses tremendous challenges for larger firms doing business nationally or regionally or globally. Instead of trying to comply with an army of consultants, CFOs should use the prevailing regulatory framework to help plan and streamline processes and optimize operations.
Of course, it is important to just not have an accounting and finance transformation innovation agenda on paper, but incorporate into the actual transformation roadmap.
What other items are your finance transformation innovation agenda? Please review the finance transformation resources CIOPages.com offers.