Financial executives are too often excluded from strategic decision-making and are not perceived by other executives as strategic partners. In a blog published by Workday, the business applications firm, Jim O'Connor, a management consultant at Hackett Group, gives his views about the role of finance and chief financial officers (CFOs) in contributing to successful business strategy. Here are five suggestions made by O'Connor for positioning finance to be a valuable business partner.
- According to data gathered by Hackett Group, only around three out of 10 business leaders, such as CEOs or heads of HR, perceive finance as a strategic partner. As a result, financial executives are sometimes excluded from strategic decision-making. O'Connor notes that finance leaders have to prove their strategic worth to their executive peers, with efficient and timely financial performance and forecasts, as well as knowledge of the business and customer needs.
- Financial leaders have a unique view of cash flow and business resources across the organisation, so their input into early-stage discussions on strategy, such as mergers and acquisitions, are important. They are the ones who can advise on investments and capital allocation. Make sure you have a seat at the table.
- Finance leaders should align finance with business strategy by starting with an analysis of cost and capability. O'Connor says: “To get a top-level view, they can look at how long it takes to close the books, get reports out, create a budget, and develop a forecast.”
- Finance should aim not just to cut costs but also to help achieve growth objectives, O'Connor says. Financial executives also need to focus on changing customer demands.
- Finance professionals should also innovate with a long-term strategy in mind, says O'Connor. This also means taking a hard look to see where skills within the finance team can be improved, whether the data structure is optimal and where the focus should lie. O'Connor concludes: “Begin your planning with a customer-centric mindset by engaging customers to help understand their specific needs. Then craft a clear finance strategy and roadmap to drive value oriented to your stakeholders.”
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