BlackLine Magazine: How do you think the CFO’s role is changing?
Korakis: I worked with a lot of CFOs when I was in public accounting. Their number one responsibility then was crunching the numbers, which is much less important today than making sense of the numbers. The old stuff is pretty low on the list of things that concern me today. I’m focused on the changing landscape of regulation and the globalization of markets, industries, businesses, our competitors and our customers. Keeping pace with all that and the increasing demand for timely and actionable information is what absorbs much of my time. Notice I said information, which is different from data.
BlackLine Magazine: Data and information are two different things?
Korakis: Yes, and it goes back to what I was saying about the evolution of the CFO’s role. Number crunching was a way to get the historical view of what was happening. You looked in the rear-view mirror at your performance to guide decisions on the business going forward. Today, you take what has happened historically – all this data – and you apply your intellect to this data and turn it into information. You use your analytical skills to forecast the future the best you can, and then align your business strategy accordingly. It’s forward thinking finance.
BlackLine Magazine: It sounds more exciting than the old CFO description, but also more demanding. How do you stay current?
Korakis: It’s probably one of the hardest parts of my job; you can’t know everything about everything. The trick is to know enough to know when to react or to reach out to an expert before you react. It’s important to stay close to customers, to get on the phone and talk to the larger ones, and get their view of what they see in the market. The same goes with talking to vendors, peers, competitors and colleagues. You need to be a good listener, taking in others’ perspectives. After that, you follow your own instincts.
BlackLine Magazine: So today’s CFO is left brain and right brain, someone with accounting savvy, analytical gifts and conversational skills. What else has changed?
Korakis: Back in the day, the CFO would prioritize the financial goals once a year. You can’t do this today. Business is more dynamic and fluid now, even if the basic principles remain the same. New ideas are constantly being generated to make the business more efficient or bring in more revenue. You have to be agile as the CFO to allocate or reallocate investment dollars where they will have the biggest impact.
BlackLine Magazine: What are some of the measures you use to ensure finance is going in the right direction?
Korakis: I’ve come to the point where I no longer believe there is a single set of metrics that you can use to determine success broadly. The most important determinant of success is making sure the financial plan is well aligned with the business plan. They have to be in lockstep. Having metrics around that is relevant, but they have to change year to year. For instance, you may have a year where you think a certain set of objectives are most important to the business, and then something happens that forces you to change your plans. Locking into metrics can cause you to be shortsighted and too focused on the short-term.
BlackLine Magazine: That makes tremendous sense, particularly in today’s dynamic business environment. How do you determine where to expand the company’s market and geographic footprint and where to hold off?
Korakis: In today’s global economy, companies have only so much bandwidth – you can’t go to every country and engage every market and expect to get a good return on your investment. So it’s up to me and others to investigate the local customs, culture and tax laws to determine whether we need to replicate every function in this market or region or serve these needs from another region. Are there skill sets available in the market? Should we maybe engage in a partnership as a better way to protect the brand? My point is this is not a one-size-fits-all answer, where we simply do the same thing with each growth opportunity. You need a business plan, but you also need flexibility to dial up or down parts of the plan.
BlackLine Magazine: What’s your take on process and technology as related to business strategy?
Korakis: The ERP system may not be best suited to solve all problems. That’s when cloud applications make sense, assuming integration with the backbone ERP system, whether it’s on premises or in the cloud. Changing a process is more problematical because of the sheer volume of data that comes through that process. An example is the thousands of individual transactions being reported in different ways using spreadsheets. There’s too much risk of a mistake when you have multiple people touching all these elements. To drive critical business decisions, you need information that is accurate the first go round. The faster you have that information, the more informed and quicker your business and financial decisions.
BlackLine Magazine: How do you drive continuous improvements in your finance group?
Korakis: You need to establish clear performance metrics measuring where you are going. Understanding what these metrics are is difficult and takes some time. But once you’ve defined them you can drive a culture of accountability.
BlackLine Magazine: Is SaaS the future of finance? We ask because the finance function has been late to the party, slow to adopt cloud applications when compared to sales or HR.
Korakis: I get asked that question a lot. I think the slowness has to do with people’s fear of letting go of their current systems and the data that goes along with them. For me, the primary concern is, `Does this app have the right functionality to drive the results we are looking for?’ If the app offers this, then I move to the next step of whether or not to have it hosted or run it internally. That decision rests with how much customization of the application I need, which would lead me more towards internal control. Otherwise I am fine with a trusted third party managing the app for me.
BlackLine Magazine: Where do you see the current use of business and financial applications headed?
Korakis: The world is so connected today; mobile apps make our work more efficient. Last Saturday, I sat on the beach approving expense reports using an app on my smartphone. A few years ago, I’d have to be in my office doing that, which is not where I want to be on a Saturday. I use apps to approve invoices for payment on my phone. When you have apps like these, you have great visibility into the data, which is on hand 24/7.
BlackLine Magazine: Meaning you can work and catch a tan at the same time.
Korakis: Then, go for a swim.