To The CFO: Does Your CEO “Get” The Numbers?

Chances are that your CFO’s office is a fair distance from the accounting operation.

There’s also a good chance that your CEO doesn’t pay much attention to the day-to-day workings of the group, until he or she starts to look at the quarterly financial reports. Or until something goes wrong and the CEO suddenly needs an answer for a material misstatement in the financials.

But some CEOs, many from financial backgrounds, are taking a closer look at finance, and for good reasons. Here are three.

Finance is becoming increasingly relevant to strategic issues

Issues like enterprise risk management and sustainability are coming closer to the CEO and board of directors every day.

Bob Hirth, chairman of COSO, tells of a CEO who is serving on another company’s board and learned that they had implemented an organization-wide enterprise risk management initiative. Recognizing this as an important step forward, he went back to his company and began asking his teams about it.

In fact, enterprise risk management and its close cousin, sustainability, are both largely driven by “the numbers.” And they are quickly finding their way into the annual reports – and the collective consciousness – of top companies.

Finance has the ability to handle ever-larger data volumes

“Big data” is now being generated by the likes of Facebook, Google, and the surging Internet of Things. When organizations begin analyzing this data in real time, they gain competitive advantage over the competition.

As a result, business-unit and IT managers are asking for more resources to help with this challenge.

But somehow, the finance operation seems to make do with existing resources —and the reports still show up on time.

Finance is a model for process excellence

A well-oiled, well-automated finance operation tends to gain visibility among other groups within the organization. That’s because finance can put “the numbers” to work to help business units determine the risks and rewards of new initiatives.

In fact, thanks to the advanced automation capabilities that are now available, today’s finance organizations are sharing data with other groups to the benefit of all.

With this visibility comes a new appreciation for the process excellence demonstrated by finance. Continuous improvement, total quality management – these are terms understood by all managers and executives, and they’re operating, in real time inside the finance organization.

This, too, is unlikely to escape the attention of a savvy CEO.

What The CFO Can Do

All of this should generate both appreciation and curiosity. How might finance help other groups improve their processes? How could finance help the CEO and the board with strategic planning?

1. Use graphic dashboards

High-performance reporting solutions equip the CFO to quickly show executives how that process excellence comes about — and suggest how it might help with their own data management and analysis processes.

The reporting capabilities available today use colorful dashboards that make it easy for non-CFOs to see everything from process performance and benchmark KPIs down to the most minute detail of any given accounting transaction.

These solutions are also integrated with the processes themselves, so they show live data — not “snapshots” that might be changed by the time the screen is up. And they can handle massive data sets of not just millions of rows, but hundreds of millions of rows.

2. Own the technology

First, though, the CFO must put in place the best technology available for running the finance operation. Only then can he or she delegate operations to free up the time and thought necessary for strategic leadership.

As FSN: The Modern Finance Forum points out in its 2017 survey, “Taking charge of their own technology requirements demonstrates a commanding knowledge of one of the main business growth drivers. CFOs who do that will be accepted as credible business partners.”

That way, notes the survey, CFOs can become “The financial architects of new, disruptive business models that can compete in today’s marketplace.”

Chances are that your CFO’s office is a fair distance from the accounting operation.

There’s also a good chance that your CEO doesn’t pay much attention to the day-to-day workings of the group, until he or she starts to look at the quarterly financial reports. Or until something goes wrong and the CEO suddenly needs an answer for a material misstatement in the financials.

But some CEOs, many from financial backgrounds, are taking a closer look at finance, and for good reasons. Here are three.

Finance is becoming increasingly relevant to strategic issues

Issues like enterprise risk management and sustainability are coming closer to the CEO and board of directors every day.

Bob Hirth, chairman of COSO, tells of a CEO who is serving on another company’s board and learned that they had implemented an organization-wide enterprise risk management initiative. Recognizing this as an important step forward, he went back to his company and began asking his teams about it.

In fact, enterprise risk management and its close cousin, sustainability, are both largely driven by “the numbers.” And they are quickly finding their way into the annual reports – and the collective consciousness – of top companies.

Finance has the ability to handle ever-larger data volumes

“Big data” is now being generated by the likes of Facebook, Google, and the surging Internet of Things. When organizations begin analyzing this data in real time, they gain competitive advantage over the competition.

As a result, business-unit and IT managers are asking for more resources to help with this challenge.

But somehow, the finance operation seems to make do with existing resources —and the reports still show up on time.

Finance is a model for process excellence

A well-oiled, well-automated finance operation tends to gain visibility among other groups within the organization. That’s because finance can put “the numbers” to work to help business units determine the risks and rewards of new initiatives.

In fact, thanks to the advanced automation capabilities that are now available, today’s finance organizations are sharing data with other groups to the benefit of all.

With this visibility comes a new appreciation for the process excellence demonstrated by finance. Continuous improvement, total quality management – these are terms understood by all managers and executives, and they’re operating, in real time inside the finance organization.

This, too, is unlikely to escape the attention of a savvy CEO.

What The CFO Can Do

All of this should generate both appreciation and curiosity. How might finance help other groups improve their processes? How could finance help the CEO and the board with strategic planning?

1. Use graphic dashboards

High-performance reporting solutions equip the CFO to quickly show executives how that process excellence comes about — and suggest how it might help with their own data management and analysis processes.

The reporting capabilities available today use colorful dashboards that make it easy for non-CFOs to see everything from process performance and benchmark KPIs down to the most minute detail of any given accounting transaction.

These solutions are also integrated with the processes themselves, so they show live data — not “snapshots” that might be changed by the time the screen is up. And they can handle massive data sets of not just millions of rows, but hundreds of millions of rows.

2. Own the technology

First, though, the CFO must put in place the best technology available for running the finance operation. Only then can he or she delegate operations to free up the time and thought necessary for strategic leadership.

As FSN: The Modern Finance Forum points out in its 2017 survey, “Taking charge of their own technology requirements demonstrates a commanding knowledge of one of the main business growth drivers. CFOs who do that will be accepted as credible business partners.”

That way, notes the survey, CFOs can become “The financial architects of new, disruptive business models that can compete in today’s marketplace.”