Recently I was contacted by SAP if I was interested in reading a research report on the CFO’s role after the financial crisis and if I wanted to share my vision on it.
The title of the report is: “The Superstar CFO: After the crisis”. It is prepared by CFO Research Services in collaboration with SAP. The subject of the report is about the impact of the financial crisis on how it may be affecting companies’ ongoing efforts to transform the corporate finance function into a true value-added partner to the business. CFO Research Services interviewed CFOs and finance directors at multinational companies based in four regions:
• United States: Brady Corporation, Edward Don & Company, Esterline Corporation, Dimensional Fund Advisors
• Europe: Scottish Power (UK), SNCB Holding Company/ Belgian Railways (Belgium)
• Latin America: Rossi Residencial (Brazil), Cosan SA Indústria e Comércio (Brazil)
• Asia-Pacific: Ingersoll-Rand (India) Ltd., Tata Consultancy Service Ltd. (India), Lenovo (Hong Kong)
I can highly recommend the report to BI experts that not only have a technical focus but also want to have a understanding of the information needs of CFO’s and their role in an organization. Of course, the report is also interesting for finance professionals in general. You can download the report from this site.
The report contains a serie of quotes by CFO’s from successful multinationals around the globe. I selected a couple of the quotes to share with you.
“Finance executives say that providing the right information at the right time is central to their ability to support their companies growth initiatives.”
This sounds like an open door to every BI professional. BI is all about providing the right information at the right time to support the companies strategy. However, nowadays it still is a challenge to get all relevant information at the right time. Often you’re waiting for data-warehouse data loads, you have to manipulate data in MS Excel, or you think you’re missing the latest info records. Even though all of the above is true, we already knew this.
“You need a CFO who is very in tune with markets, able to give early warning signals to the organization, and able to help the organization think through how to adjust quickly enough to market signals.”
BI is very often aimed at presenting the companies internal information while the CFO is really interested in adding external market information. How are my competitors performing? What are market trends? Are there emerging markets? Are there political developments I need to be aware of? This kind of information often not consists of digits but is textual. Many of the current BI solutions are mainly focussed on presenting figures and ratio’s instead of textual information. Combining the figures with the external market information would really improve the added value of BI.
“You’re going to spend time on really understanding what is behind the numbers.”
This sounds really familiar. With todays BI products and solutions we are pretty good at presenting the numbers in a structured way with supporting graphs. However, I think most of the BI solutions that are available right now, still need to improve the possibility to add the explanation on the numbers. We all know the great looking dashboards and many times clients are blown away by the graphics. Luckily there are sometimes real professionals in the room that ask me “Well great to present all these positive KPI values but I want to add my explanation or taken actions which resulted in these positive KPI values and save these explanations to share them with colleagues facing the same challenges.”
I think there really is room for improvement in this area. With the BI suite of of SAP BusinessObjects BI4 you’re able to integrate with for example MS office products (for example powerpoint or word) or integrate dashboards in email messages or your BI portal but this still isn’t sophisticated and functional enough. I still haven’t seen a solution to add custom explanations to your dashboard and report values to support the figures and graphs so that other business partners can benefit from your taken measures.
“The Mobile CFO: mobile as information delivery instead of information-processing. Access reports instead of operating the financial system.”
People want to be able to have their information at their fingertips, no matter when, no matter where. CFO’s are sort of a mobile BI unit moving through the company departments and factory locations talking with all kind of departments. There is a growing need for self service BI where your not depending on the IT department for gaining access to your critical information. Since the amount of smart phones and tablets within companies is growing massively, the BI solutions need to follow the trend. Luckily, more and more great solutions arise in the mobile area. I think the challenge of mobile security is way larger than the challenge of being able to deploy reports and dashboards on mobile devices. We now see that people are used to have access to all their private information on their smart phones. For example access to their bank accounts, social media, latest news, etcetera. At their work they are pushed back 5 years in technology because companies cannot secure the connections or support the mobile platforms. This report shows again how important it is for companies to support mobile BI.
“You’ve got to be able to walk out there and have the people respect you, talk to you, and tell you what’s going on.”
BI should really support this in terms of mobility, making it visual, being able to collaborate and making it simple to understand and use (User Experience).
“The biggest impact of the CFO is eliminating, mitigating, and managing the risks. And, unfortunately, when a CFO is successful you don’t see the impact of these actions very much, because the risk doesn’t materialize. So it’s quite difficult to measure.”
This must be frustrating at some point. Humans tend to remember the bad experiences much more than the positive experiences because they have more impact. In some way this isn’t fair of course. A CFO that saves a company from bankruptcy by exterminating the risk in a very early phase might receive less credits or visibility than a CFO that intervened at the last moment. Funny and frustrating at the same time.
I must say that I’m happy that SAP provided this report to me since it really gives great insight in the role of the CFO after the crisis. The Superstar CFO is a sparring partner for every business unit and needs to develop a deep understanding of the real drivers of the business. They provide the numbers and analysis that allow business units to optimize performance in line with corporate growth strategies. They not only focus on Finance but have a much broader focus. Therefore the CFO can be the number one sponsor of BI because he has the greatest need for it and is the greatest distributor of it.
With todays technology we are getting more and more able to succeed, but there still is a journey up the hill ahead of us before we really excel in terms of Business Intelligence. Using the proper BI tools can make the journey more efficient and effective. I think SAP is really working it’s way up the hill.
On Tuesday August 23rd there is a webcast on the Superstar CFO report.
You can register through the link below: