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The emergence of the Chief Financial Information Officer - Reogroup

The emergence of the Chief Financial Information Officer - Reogroup

May 29, 2018 by Tom Nisevica

Recently I had the pleasure of facilitating an enthralling discussion with a range of finance leaders around the role that finance plays in the market in the face of data transformation and how, as finance leaders, we can realign our seat at the table.

A point that really struck me was that finance is one of the top 5 declining professions globally. So what are we doing about it?

We covered four key themes through the discussion:

  1. The changing face of finance in the world of data – the evolution of Finance2.0
  2. The melding of finance and information creating the Chief Financial Information Officer
  3. The growing need of influence as a key competency in our people
  4. The increasing relevance of capability over skill to ensure agility in a dynamic world

A key ingredient across all businesses that are enabling the next stage of growth is…data!

Data is now the holy grail for enabling differentiation, disruption and growth. Which really begs the question – as finance people, what does this explosion of data mean for us? How do we ensure we are part of the disruption, and not the disrupted! Will we be sidelined as old school compliance “bean counters” while other functional teams look to invest in data and data analytics?

The flow on from all this is ensuring you invest time NOW to re-align the business’ perception of the role of finance.

Finance2.0

In an ever increasingly competitive landscape, the demand for timely and simple information that helps make business decisions easier is growing exponentially, incorporating internal and external data, financial and non-financial. Similarly, the demands on finance, or what would perhaps traditionally be thought of as finance, to support this has also been growing.

We learnt about coming back to the need or the problem the business is facing to drive relevance. A simple structure that was mentioned by our panel was OBI – Outcome, Behaviour and Insight.

       Outcome = what is the business outcome we are trying to drive?

       Behaviour = what is the behaviour that you need to change to achieve that outcome?

       Insight = in order to drive that behaviour what is the insight you need?

So no, not a Star Wars reference and not just a clever play on BI and BO acronyms!

Interesting how this simply comes back to understanding your ‘why’ in business partnering, but with the need to then connect the ‘why’ with the business drivers whilst leveraging the depth of data in a simple way.

Key ingredient across business is data

A key ingredient across all businesses that are enabling the next stage of growth is…data

The Chief Financial Information Officer

As our systems become increasingly more important and the reliance on finance to deliver solutions and information quicker and simpler, we are seeing a blurring of lines between the CFO and CIO, with the CFO needing to become ever more tech savvy.  BO is no longer just a reference to someone’s personal hygiene!

A lot of us have had the joy of being part of ERP implementations that focus on core financial control aspects. But we are seeing more and more around the use of BI tools in delivering insights, quickly and simply to facilitate smarter and faster business decisions. Can a CFO be just a CFO anymore? Or are we moving to a hybrid finance-technology leader?

The key here is how does finance be more customer-centric in aligning data and processes to what our customers really want. Considering this, it shapes an increasing level of importance as finance people in immersing ourselves in the business to understand their needs (think 5 Whys and OBI) and the business drivers while also positioning ourselves as thought leaders in leveraging data to drive insights and analytics. 

If you think about the alignment across ERP and BI, the impact of poor quality data and hierarchies, it’s easy to see how finance can be stuck in the mud struggling to get out of the day to day.

Can a CFO be just a CFO anymore? Or are we moving to a hybrid finance-technology leader?

Realigning focus on influence

With better reporting tools, growing automation and the emergence of AI we can see a growing importance on the skill of the finance individual as a business partner to leverage information to support the business. This wealth of information can be a double-edged sword, with more data captured across different parts of the business creating more noise. There is a greater need to influence alignment and clarity of messaging to drive business decisions – herein lies our opportunity. The skillsets finance need are increasingly different, being less process driven and more focused on behavioral competencies, such as the ability to influence, to really shape a clear message from noise.

Similarly, as a leader, promoting this change and the perception of finance is a shift in mindset for people in the business – we aren’t just bean counters sitting on the sidelines with our abacus, we are a critical seat at the table that supports the growth of the business. Which brings us back to influence as a competency and what we need to drive as leaders, to realign the purpose of finance with our business partners.

Focusing on capability to build agile teams

Interestingly, this really brought to the group the notion that in a dynamic and ever-changing marketplace, how does finance realign itself internally to grow with the times? Are we focusing the hiring and development of our people for today or tomorrow (think Finance2.0)?

With a collision of data and BI with traditional finance responsibilities, the need to invest and reinvest in our people is becoming increasingly important.

There were some home truths, including the realisation that the usual compliance to commercial thinking is old school. Data and technology are reshaping the role of finance and disrupting its relevance across organisations. This poses intriguing opportunities and challenges to the finance leaders of today in navigating a range of new reporting tools, demands from the business whilst also balancing with our core governance needs. This is financial re-engineering – being savvy on governance and control, reporting and analytics as well as systems and data.

As compliance aspects are continually centralised, offshored and automated, the Australian finance landscape continues to evolve around commercial business partnering, insights and how we help drive business decisions. This is still relevant for us but over the next 3-5 years, the onset of exponential technologies will collide to really disrupt the finance brand and in turn, the kind of people that we need now to transform as part of that – But are you ready?

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