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Policing the CFO’s Highest Level Challenges to Stop the Impending Losses

Policing the CFO’s Highest Level Challenges to Stop the Impending Losses

The CFO’s highest level challenges are four-fold.  The table below lays them out succinctly:

Policing Current State of Affairs for CFOs

As we see, with each highest level challenge, the CFO loses many things.

Loss 1 – With Budgeting and Planning challenges, CFO’s deal with weak authentication of the process that sources the numbers.  Sometimes the processes take too long.  Approval processes are clumsy and they are unstructured.  Planning models often have a lack of comparison scenarios.  Maybe the organization can only source one year of actuals.  Can Finance easily go back five years?  Sound familiar?  All this means that CFO’s, and the Finance office in general, experience a loss of trust, and a loss of credibility and a loss of insight.

Win 1 – How does this get remedied?  By incorporating a set of processes and tools that use the best practices of Application and Process Improvement for Budgeting and Planning.  These would include but not be limited to the following:  Emphasizing tomorrow.  Putting a stake in the ground, some place in the future and working toward that.  By simplifying your chart of accounts, wherever possible as a primary initiative. By emphasizing process management over data integrity.  Data integrity comes from well executed and well managed processes.  Read about all of the tools and processes for best practices here.  Pressure, Pressure, Pressure, What Can We Do?  Best Practices for Combating the Current State of Affairs for CFO’s.

Loss 2 – When we look at poor modeling we find the challenge of spreadsheets filled with errors.  We have versioning and blaming issues.  “I didn’t put those numbers in there, Finance must have.”  This really speaks to the need for version control and a secure budgeting process.  Do you know what the “what-if” capabilities are?  Can you put together models that are based upon variables outside your chart of accounts?  Do you have a lack of organization-wide scenario planning?  So what does all this translate into?  It translates into a loss of integrity, a loss of collaboration, and a loss of vision.

Win 2 – Excel is a great tool so you want to take the best of Excel and leave the shortcomings behind.  Use a tool that allows for the following:

  • All models integrate into one centralized database – avoid versioning issues and no more blaming.
  • Still has the look and feel of Excel – we’re all familiar with Excel and it’s immediately adoptable for users.
  • User-friendly interface – all budgeting solutions must make user-experience a top priority.
  • Access anywhere – with the capability to be connected on demand 24×7.

Read about all of the tools and processes and their best practices here.  Pressure, Pressure, Pressure, What Can We Do?  Best Practices for Combating the Current State of Affairs for CFO’s.

Loss 3 – Skilled planning and skilled planners are crucial for the effectiveness of a CFO’s organization.  Talent is tough to acquire because FP&A analysts or leaders don’t grow on trees as they say.  It takes years of situational modeling, being analytical across several disciplines, and collaboration.  It’s almost an art-form with the “art” of the future unceremoniously back-dropped by the cold and hard facts of the past.  And when we struggle obtaining resources and trying to integrate those resources into our operations we have difficulty managing budget calendars causing difficulty throughout the budgeting and planning process.  This leads to a loss of time, a loss of productivity, and a loss of efficiency.

Win 3 – .  Any culture that promotes continuous learning has the best chance at reducing this pressure more than anything else.  For example: millennials love organizations that force learning.  They love change and they are easily adoptable.  They adapt to changing circumstances and will move through a learning curve faster than employees of previous generations.  I’ll humbly quote myself here from a previous publication.  “There is someone who will learn in three years, what took you ten.”  Expose, expose, expose.

Loss 4 – Finally, with disjointed processes and integrations we find CFO’s and their organizations struggling to find tools in hopes that processes will seamlessly align with data collection and reporting needs.  Well, you can certainly do an internet search on any process anywhere and you can find a list of best practices that can be adopted pretty quickly.  But tools themselves will not fix any organizational problem until the underlying processes producing the data for the tool are optimized.  Anything short of that is a disjointed process and integration.  And that robs the CFO of incredible efficiencies.  In the end this leads to a loss of vision and a loss of control.

Win 4 – Working through disjointed processes and integrations is difficult.  But there are tangible efforts that can be perused immediately.  The following is a list which combat disjointed processes:

  1. Future State – set a stake in the future of whom you wish to become. The best way to do this is to create a chart of what the ecosystem (all of the data being collected or distributed and process maps supporting each of those collections and distributions – the greater the detail the better) of finance should look like at a given point in time.
  2. Current State – Map out who you are by creating a chart of you current ecosystem.
  3. Identify Deltas – the deltas are the opportunities. Each delta reveals the amount of progress that can be achieved if both feasible and considered a priority.
  4. Identify Remedies – List out the tasks required to reduce the deltas. These tasks must be actionable, measurable, timely, and capable of being assigned to a responsible party.
  5. Prioritize Remedies – Prioritize the tasks to be performed according to saliency and feasibility of the tasks.
  6. Execute the tasks – No explanation needed here.
  7. Evaluate the Results – Determine through your decided measurement rubrics whether or now the deltas in your processes and/or integrations are being reduced.

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