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Best Practices for Combating the Current State of Affairs for CFOs

Best Practices for Combating the Current State of Affairs for CFOs

When we talk about the current state of affairs for CFO’s what we’re really talking about are those challenges and the forces that CFO’s have to deal with and how the CFO’s themselves deal with some of those particular challenges and forces.  The image below highlights those forces:

CFO State of Affairs

Lack of Accurate Information

Starting off with a lack of accurate information.  We’ve all heard the stories about nearly 88 percent of all spreadsheets containing an error.  Our staff is in such a rush to get us the numbers that so often what happens is we forget one small piece of the puzzle.  That problem often cascades across every product we produce for the organization.  It’s frustrating for your employee but it’s potentially devastating for those of us making decisions.

We get analytics without explanation, perhaps a footnote is missing or it’s as simple as putting new headers atop spreadsheets. Maybe we get new headers on columns without understanding where the numbers came from.  We often get graphs that leave assumptions on our part.  We are Finance, we are the ones who are supposed to making assumptions.  We’re not supposed to be leaving it to others to guess.  Then we have just the opposite situation that lack of visuals.  Many of the organizations we work with bombard leadership with data when a well-crafted picture will speak at thousand words.  And then there’s risks.  What can we say about risks and their impacts?

  • Do we even know what the risks are and do we understand the impacts resulting from those risks?  Do we understand the outcomes?
  • Do we understand how to link those risks to operating results?
  • Are we able to respond to the CEO or any of our other Business Partners when sitting before them?

All of this leads us to be more reactionary.  We can never be proactive enough.  It’s like costs.  You can never improve costs enough.  Still, I am sure many of us feel like we are too reactionary as we try to work through risks and anticipate.  One of the directives I give my staff is to always anticipate everything.  I got this neuroses from my mother when I was learning to drive.  She taught me to drive like everyone else on the road was crazy.  Cars could come out of any intersection at any time.  In other words, anticipate and plan for whatever challenge may come.

Talent Scarcity

Then of course there is a talent scarcity.  The costs of acquiring and retaining talent is always a force to be reckoned with.  It’s important to note that we are currently trying to hire six generations of individuals in our workforce and they are all motivated by something different.  For example we have millennials.  Millennials, they’re attracted to technology.  It’s not foreign to them.  They’re very adaptable and certainly more accepting of change than say a baby boomer like myself.

Overcoming the CFO’s Challenges

So how do we deal with all of these forces?  By instituting best practices.  The two tables below highlight the characteristics around the best practices deployed to transform and improve both applications and processes within Finance.
CFO Process TransformationLooking at how we pursue best practices the first thing we want to look at is performance reporting and make sure that it’s available to smart phones and tablets.

We are working in a mobile world.

We are all expected to be on 24×7.

We want to ensure that we have the portability of our favorite devices.

We have access anywhere, playing off that theme we want to make sure that we have the capability to be connected on demand.

We don’t want to wait until Monday if an idea hit us on a Friday or Saturday.

We certainly don’t want to wait until the morning if an idea hits us after 5 p.m.

We want to ensure that we can track our transactions and actually make sure that were are monitoring the status of things, not storing our transactions in a process flow and hoping they show up two days later only to find out that our transactions went somewhere into the ether.

We want to become finance independent.

We want to take back some of that overhead from IT.

We want to solve our own problems in our own time.

We want a familiar user interface.

When we work with clients at the beginning of all of our projects we ask them what defines success for you.

What would it mean for you all to be successful?  Nearly every time one of them lists that they would like to have their users have a good experience, an easy experience, and an easily adoptable experience.  Then finally uptime.  You want to have an application with a really high (99.9%) SLA for system availability and uptime.  Fortunately all best of breed applications like Intacct and Host Analytics have made this type of capability standard for their applications.

Centering in on the Pursuit of Your Vision

Carrying along the transformation through process improvement and keeping in mind best practices, you want to center on the pursuit of your vision.     This is where really want to take hold of that vision and be thinking about tomorrow.  Today is history.  Stop worry about it.   But you can put a stake in the ground, some place in the future and certainly work toward that.  Simplify your chart of accounts, wherever possible as a primary initiative you want to make sure that you simplify your chart of accounts.  This impacts every downstream process you will eventually produce.  You want to start with the end in mind and certainly work your way back to what you think your chart of accounts really needs.

With reduction in transaction cycle times.  It not just about the reports that you put out, it’s about how you collect the data.  It’s about how you source the data from other systems.  Improve process management over data integrity.  Don’t put the cart before the horse.  Data integrity comes from well executed and well managed processes.

Pursue secured distribution not only in the data you disseminate but in the data you collect.  And finally with HR and Capital planning.  Most companies have fantastic operating expense models.  Then when it comes time to do their HR and Capital Planning, they are off in some remote spreadsheet somewhere.  You don’t have to work this way.  Applications like Host Analytics have pre-built connectors and pre-built modules that make of all of these concerns configurable.  And wouldn’t it be so much easier to store all of this type of information in one centralized database and immediately make it possible to integrate with any operating and capital expense budgets.

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