The senior roles in enterprise management are fairly fluid – depending on where decision-making takes place, and where value is prioritised.
Going into 2017, one of the biggest questions for those in Finance will be:
‘What are the steps needed to become a successful CFO, and how do I play a bigger role in business transformation.’
Following on from our previous CFOs guide, we hope this helps you to navigate the ever changing role of finance in your organisation.
What does a successful CFO look like?
A CFO does a lot more than just crunch numbers – they:
- Possess a holistic understanding of the inner workings of their company, and indeed the industry that they work within.
- Are a pivotal part of the senior leadership of an organisation, helping to make crucial financial decisions and often leading the execution of those decisions.
The difference between a good CFO and a great one is the ability to analyse data and use that to project the future financial picture of the business. This is why the CFO plays a major role in any successful business transformation, and is often the main driver of meaningful change.
In 2017 the key to getting the most from any business transformation is unlocking the vast amounts of data that sit within a business – it just needs to be used in the right way.
With that in mind, here are 3 essential habits for a successful CFO in 2017.
1. Monetising data
Yes, for years’ both large and small enterprises have been collecting vast sums of data. So what?
Even as early as 2006, CFOs would have noted the many issues surrounding their data. The increased problems of storage coupled with the enormous overheads – both Capex and Opex.
Therefore, the CFO was often occupied with expensive hardware refreshes, increased storage costs and attempting to juggle cash to cover all of these costs.
However, the last few years have seen a huge turnaround in how CFO’s and their organisations plan for and manage these costs. In addition, both public and private clouds allow the switch from a Capex model to an Opex model.
Furthermore, payment for storage and compute power can be both monthly, and according to use.
Such elasticity and scalability of the cloud, particularly the public cloud, has meant that companies costs can be far more linked to demand.
Focusing on objectives
The widespread use of the cloud has allowed the CFO to focus on what is really important, the data contained within the business.
That data is now incredible valuable. It enables enterprises to
- Understand their clients through analytics
- Unlock entirely new revenue models
- Become leaner and more profitable
- Transform their position with their industry.
Such that –
“87% of CFOs agree that growth requires faster data analysis and 50% of Networked enterprises are more likely to increase their market-share.” Source
The enterprise cloud
CFO’s have realised over the last couple of years that it is not a ‘one size fits all’ play, and that more often than not, a hybrid cloud approach is the most efficient and rewarding policy.
This type of enterprise cloud strategy puts companies in a position to make their data more malleable and unlock the opportunities that it contains.
If you take an organisation that relies on large excel spreadsheets to run their models, these type of workloads form the backbone of their operations. This means that in order to expand these operations the CFO has two options:
- Increase the number of physical infrastructures that are needed to scale and fork out 4-8 years’ worth of costs
- Push these tasks into the cloud and expand in accordance with business objectives
For the forward-thinking CFOs, option two will seem the most appropriate. If this is the case for you, there are an array of tools that enable your calculations to run at the rate you need it to.
As noted by Abe Cohen, vice president of marketing at Kaufman Hall –
“Over-reliance on Excel has many pitfalls,”
… “and not everyone involved in the planning process is an Excel expert.”
As a result, the No.1 play for a successful CFO is to enable your team to create and monetise in a manner that reduces friction and blockage.
2. Cost containment
In addition to adding value, CFOs in 2017 are becoming ever more responsible and aware of the need for cost containment.
The assessment of the IT departments time and allocation of resources.
As such, if you were to bring in IT self-serve solutions, you could dramatically save the time for generic issues like passwords resets, and therefore reduce the headcount in the IT department, or at least allow them to be more productive working on areas that move the business forward and create value.
Moving estates into the cloud
The issue of public vs private cloud is no longer relevant in today’s world as workloads can be seamlessly combined in a hybrid cloud solution that uses public cloud, private cloud and even on premise solutions to deliver an appropriate strategy.
Point in case, if you look at moving algorithmic platforms to the cloud, you can see that from a CFOs perspective, they no longer need to be singularly reliant on the cost structures of companies such as IBM.
This timeline is essential to a successful CFO.
The mind-set of moving from a three year, to a one-year plan.
With the hardware refresh that was traditionally needed with lots of on-premises hardware now being virtually obsolete, the successful CFO can focus on a much more Opex driven model, better understanding the monthly costs of running a hybrid cloud platform and putting the resources freed up too much better and more efficient use.
With SAM (Software Asset Management) audits taking place once a year the CFO has a better handle on costs going forward.
In addition, reviews for cloud consumption are becoming annual, which has a major impact on how the CFO approaches forecasting and budgeting.
These tools also allow a CFO to reduce risk and introduce fail fast systems that catch anomalies quickly, enabling the CFO to change tack and further save costs.
On top of these, Surface as a service is something that is being launched by Microsoft to take the Capex vs Opex argument a step further. Amazon Web Services and Google are following suit with tools such as “Google for work”.
So as 2017 marches on, it is clear that the role of the successful CFO has become an incredibly important one in securing the future growth of an organisation.
Summary: becoming a successful CFO
Markers of a ‘successful CFO’ can of course be argued, with their different responsibilities within their organisations.
As noted above, we see value in:
- Monetising data
- Cost containment
Let us know which of the habit of a successful CFO is your favourite below. Should you wish to learn more, download this guide on discovering the capabilities of excel ⇓