Rob Mitchell, Editorial DirectorTel: +44 (0) 1367 820919Email: rob@longituderesearch.comwww.longituderesearch.comOracle/Ac...
The past few years have brought market and economic volatility, and combined with increasing regulation and organizational...
The operating environment: CFOs continue to face a low-growth external environment in which pressures on costs and margins...
The operating environment:• Use the lessons from finance transformation to rethink operating models in the broader busines...
Skills and capabilities:• Scale up high-potential talent programmes within finance to develop the next generation of skill...
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Oracle/Accenture CFO story overview

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From CFO to Chief Change Agent

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Transcript of "Oracle/Accenture CFO story overview"

  1. 1. Rob Mitchell, Editorial DirectorTel: +44 (0) 1367 820919Email: rob@longituderesearch.comwww.longituderesearch.comOracle/Accenture surveyStory overviewJanuary 2013
  2. 2. The past few years have brought market and economic volatility, and combined with increasing regulation and organizational risk, haveproved challenging and fast-changing for the CFO. One the one hand, finance leaders have seen their role broaden and become morestrategic. They have gotten closer to the business , have been driving finance transformation programs, and have seen their role expandto become a more valued strategic and commercial partner. At the same time, they have seen their own profile within the organizationbecome more prominent, and their focus on cost management and efficiency has, in many cases, meant the difference between survivaland extinction.CFOs understand that this is a journey that remains incomplete. They admit that there is insufficient integration between the financefunction and the business, and that they are not playing as prominent a role as they would like in either strategy or businesstransformation. Moreover, the traditional tools and structures that have served finance leaders well in the past may not be fit forpurpose in future. Cost levers that used to be effective are becoming less so as margins become squeezed and as it becomes moredifficult to find efficiencies in the business. An uncertain, volatile economic environment makes it highly challenging to set priorities andplan investments for the future. And complex business structures hamper the ability for CFO to gain visibility into performance acrossthe entire enterprise.How then, should CFOs navigate this challenging environment? While the past few years have brought uncertainty and volatility, theyhave also provided CFOs with a unique opportunity to demonstrate their unique abilities in a whole range of areas such as: capitalallocation strategy – guiding the company on which investments will provide the greatest ROI; identification of strategic planningscenarios – to respond to the continued volatility and product and customer profitability. It has also created a platform for CFO tobecome the Chief Change Agent to the enterprise.2From CFO to Chief Change Agent
  3. 3. The operating environment: CFOs continue to face a low-growth external environment in which pressures on costs and margins remainextremely intense. A focus on the traditional levers of cost management and efficiency therefore remain critical. Yet at the same time,the CFO role has broadened, and finance leaders are now expected to be strategic and business partners, change agents as well asplaying a greater role in technology and operations. Survey respondents tell us that lack of time and role overstretch are key problems.They also point to lack of integration between finance and the business as a key barrier to the effectiveness of their role. This can oftenbe attributed to organisational barriers and operating models in finance and the broader business that are poorly aligned. CFOs canleverage their existing relationships with the business that they have formed during their everyday interactions and critical crossfunction major initiatives like the annual budget process, to expand into value creation areas of greater importance (i.e. scenarioplanning and strategic planning) to driving short and long term results.Technology: Many companies still struggle with legacy IT systems that are poorly connected and expensive to maintain. This consumes asignificant amount of time, that could be much better allocated to implementing more innovative technologies, such as cloud, mobileand social, into the business. CFOs, together with CIOs, must maintain their focus on technology innovations to improve integrationbetween finance and the business, enable the better flow of information and insight, and facilitate quicker, better decisions. Better useof data and the incorporation of leading, as well as lagging indicators, can help finance teams to look forwards as well as backwards.Skills and capabilities: The ability to train and retain well-equipped finance resources has remained elusive for many companies. If CFOsexpect to free up capacity to focus on strategic matters, they need to have a team to whom they can delegate important but lessstrategic activities such as cost management and risk assessment. A through assessment should be conducted to determine what skillsare needed and compare that assessment against the current team’s skill level. The gaps will provide opportunities for targeted trainingto appropriate team members. CFOs therefore need to work closely to develop a strong pipeline of talent that can meet theserequirements. They also need to strengthen their own capabilities – particularly with technology..3The challenges
  4. 4. The operating environment:• Use the lessons from finance transformation to rethink operating models in the broader business• Consider multi-function shared service centers to drive the next generation of efficiencies and savings• Continue cross-functional integration by focusing on end-to-end process improvements such as procure-to-pay• Balance time spent on cost control and growth by recognising that the these two issues are inter-twined ratherthan mutually exclusive• Focus on enterprise performance management processes that drive growth at acceptable risk• Use technologies such as cloud to drive additional cost efficienciesTechnology:• Use cloud, social and mobile to improve integration between finance and the business• Focus on technology innovation, not just IT maintenance• Collaborate with the CIO, CMO and others to gain a better understanding of potential ROI from technologyinvestments and work out how to measure it• Harness big data and analytics to ask the right questions and provide the rationale for change.4The solutions
  5. 5. Skills and capabilities:• Scale up high-potential talent programmes within finance to develop the next generation of skills (e.g. Analytics)• Improve productivity within finance by providing the tools and time necessary to do the job effectively• Assess the scalability and speed of operations across the business to cope with volatile economic outlook• Form strong collaborative relationships with HR practitioners• Leverage the practices and capabilities available to address and manage volatility, respond to an increasingly difficult regulatoryenvironment, and develop and maintain advanced skillsIn particular, the best performing finance organizations are far more likely to have advanced capabilities in the following areas:• Finance function strategy and governance – developing an operating model and governance structure that will support thestrategy of the organization and reporting capability necessary to measure how the company is performing against strategicobjectives.• Value-centered culture – driving a shareholder value orientation throughout the organization, ensuring analytics and metrics areunderstood and leveraged in key decision making processes.• Strategic planning and target setting – linking value drivers and key performance indicators to the strategic objectives and,developing targets which are cascaded down through the organization.• Forecasting reporting and analytics – developing an integrated approach to forecasting and reporting to provide timely insightsthat will provide for near real-time course corrections to be made throughout the organization. Most companies are focused onhistorical information, which does not allow for timely corrections.• Financial Risk Management –managing risk more proactively and holistically across the enterprise. Traditionally, credit andoperational risk have been managed separately. However, the ability to assess and report these risks across the enterpriseprovides the organization with the ability to monitor risk exposures before they become financial operational losses.5The solutions

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