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November 2, 2015 By Samuel Dergel Leave a Comment

Good news CFOs: The Future of Finance Looks Bright (But Only if you Plan and Act)

A new research report released today by CFO Research and sponsored by SAP shows that while Finance has improved a lot over the past years, there is plenty of opportunity to Finance to deliver more value to the organization.

The report, Thriving in the Digital Economy: Four Reasons Why Finance Is Excited About the Future has four key findings that CFOs, senior finance executives and board members will find of significant interest:

Finance professionals are embracing their influence in their enterprises—and looking forward to a bright future as their profession evolves.

The good news is that finance professionals are more influential than ever in their organization, and have opportunities to go beyond core traditional areas of ‘old’ finance. The biggest challenge with this opportunity comes from ensuring that talent with leadership potential in finance can grow beyond the core additional areas.

The organizational scope of the finance function—already broad— continues to expand to encompass risk management, IT, M&A, and other key functions.

Again, as Finance becomes the central organizational address for all administrative and support functions within an organization, can the talent planning match this need?

Finance teams will be challenged to fulfill their core performance management mandate in the face of rapid change and greater business complexity.

High value-add within finance can only happen with the right people, processes and technologies in place, especially as business gets more complex and change continues at a faster pace.

Finance professionals see the rising wave of digitalization and automation as the key to their ability to partner with the business to manage performance.

In a conversation with Thack Brown, general manager and global head of Line-of-Business Finance at SAP, he said that the impact of technology opportunities (digitization and automation) will radically change how the transactional part of finance is being managed, even by those following current best practices.

Stay tuned as I will be sharing parts of my interview with Thack Brown. The insights he offered were fascinating, and combined with this report, provides excellent food for thought for the CFO who is looking to be the best business partner possible to their organization.

July 30, 2015 By Samuel Dergel 1 Comment

CFOs: How the IoT (Internet of Things) Impacts You and Your Organization

Anyone reading news in the past year has come across the words IoT (or Internet of Things). As senior finance leader in your organization, this trend has an impact on you, your peers, and your organization.

The question you may have asked yourself but were not confident enough to ask others was “So What?”

My colleagues Jim McFadzean and Andrew Lane at Stanton Chase recently released a whitepaper called: The Internet of Things: Adapting Corporate Structure to Reflect the Connectivity of IoT.

This whitepaper allows you to learn more about what IoT is all about, and the impact it has on the CFO as well as the organization.

In this 11 page report, McFadzean and Lane discuss the impact of IoT on the C-Suite. Here is what they report on the impact on the Chief Financial Officer:

Bruce MacLean, CFO at Infomart Data Centers, already finds the Internet of Things to be integral in his daily management. “Our accounting, payroll, HR, phone systems – all of our administrative and financial functions are connected and supported via the Internet.”

The CFO will need to adopt an offensive approach in order to keep finance and accounting information secure in the age of the Internet of Things. The data acquired via an organization’s internet-enabled devices will be new, limitless, and contextually raw. Such a wealth of information has the potential to be reconfigured and mined for trends that offer insight into an organization’s business activities, be it customer purchasing habits, production information, or shipping histories. The CFO will need to work closely with the CIO and CSO to insure the security not just of financial records, but of any data that could be used by an unscrupulous third party to gain an understanding of an organization’s dealings.

CFOs:

Are you aware of the impact that IoT will have on the future of your career and your organization?
What will you be doing about it?

January 28, 2015 By Samuel Dergel 1 Comment

Analytics, Shmanalytics? Why the CFO should care

The office and the role of the Chief Financial Officer continues to evolve.

This evolution may cause apprehension in some seasoned CFOs. These experienced financial executives feel this way because, in part, they have worked very hard to get to where they are. They believe that their past experience and success should speak to their future opportunities.

Yet for any executive, especially one in the finance side of the business, resting on your laurels is so 1980s.

The world is changing at a rapid pace, and the business world is either leading this change or trying hard to stay ahead. Organizations that do not continue to stay relevant wither up and disappear into obscurity. Ditto for CFOs.

Cindy Kraft, a CFO career coach, works with CFOs who want to stay ahead of the curve in their career. I like her work, and am always happy to refer senior finance executives to her. As a fellow blogger, she and I agree most of the time. In recent posts (here and here) she discusses technology and its relevance to CFO careers.

The statistics from Cindy’s questions on whether technology should be in the domain of Finance is interesting. I believe the results would be more telling if there was corresponding information on company size. From my experience, companies of a smaller size have CFOs responsible for IT, while larger companies have an executive in charge of Technology.

From my vantage point, CFOs who are able to stay ahead of the changes in the business world, including technology, are able to continue to stay relevant and add value.

So why does Analytics matter to the CFO?

In my book, Guide to CFO Success, I ask and answer “What is a Chief Financial Officer?” in the first chapter (you can preview a copy of Chapter One here). To summarize, I say that a CFO is a Strategist, Leader and Advisor.

Corporate value comes from making great decisions. Decisions based on analysis rather than gut is where Finance and the CFO have the ability to make a difference at the executive table. Technology is just a tool that helps intelligent people make great decisions.

CFOs need to be a Strategists, Leaders and Advisors to their businesses. If a CFO is not helping the company make decisions and adding value to the organization, they are not a Strategist, not a Leader and not an Advisor. In essence, they are not a real CFO.

To continue to be a real Chief Financial Officer today, you need to be able to help your organization make the best decisions possible.

The term Big Data has been bandied about as the cure-all for corporations. Technology vendors are very happy to use the term to get attention and their portion of corporate spending. But data itself is not enough, no matter how big the data is.

The Data Value Chain illustrates that data is only the beginning. It is the usable information that is pulled from this data, viewed through the lens of intelligence, either human or artificial (or both), that wisdom can be obtained.

As CFO, it is your duty to provide wisdom to your organization. This wisdom will lead to the creation of corporate value. Analytics is the point where you turn all that data into valuable decisions.

If you’re not providing the wisdom you would like (or think that you should) to the rest of the business, understand why that is.

Is it because…

You do not have the tools?
You do not have the people? Or,
You do not know where to start?

As CFO, no one expects you to be intimately aware of the available tools and be able to analyse this yourself. However, as CFO, you are only as good as your finance team allows you to be.

As CFO, no one expects you to choose the right analytical tools by yourself. As CFO, no one expects you alone to do the analysis necessary to come to great decisions. However, as CFO, you need to make sure your team can support you in this value added activity. As CFO, understand the power of these tools and information yourself of what they can do. Then you need to guide, lead and develop the team necessary to do so.

I had the pleasure of meeting RK Paleru at the AICPA CFO Conference last May. RK is the Analytics guru (Executive Director, Systems Analytics and Insights Group) to the CFO at George Washington University.

RK blogged about an article I shared with him about the idea of companies hiring a Chief Analytics Officer. While I do not think that most companies are ready to create another seat at the executive table, I do think that Analytics can add tremendous value to the executive table. I am certain that the CFO of GWU thinks that the analytics that RK does bring tremendous value to the CFO, as well as adding significant value to the institution and its mission.

Anders Liu-Lindberg wrote recently about his take on Analytics within the finance function. Anders, from where he sits in his role as Regional Finance Business Partner at Maersk Line, sees corporate value ONLY IF the talent team is built properly within finance is able to partner with the generalist functions. Finance should act as a true business partner to the business, helping make decisions at all levels of the business.

CFOs who do not continue to improve, change and learn will, as mentioned earlier, wither. Resting on laurels is career limiting.

If, as CFO, your response to “Analytics” is “Analytics, Shmanalytics”, you’re not only missing the boat, you’re doing a disservice to your employer and your team.

To remain CFO, both today and tomorrow, both within your company and at your next employer, understand the power of Analytics. Then, ensure you develop and nurture a finance team that can give you the wisdom to help your company make great decisions.

November 5, 2014 By Samuel Dergel Leave a Comment

The C-Suite Relationship Map

I am fortunate to speak with hundreds of executives each year, in addition to those that I follow and track. Over the years, I have learned a lot about success, what works and what doesn’t, from these talented leaders.

One area that successful executives have in common is their ability to get the best out of their corporate relationships. No matter the discipline of the C-suite executive, their technical ability is just the base upon which they start having an impact on their organization. The CXO is not an island, but is integrated into an ecosystem that is mutually dependent. The success of any executive relies on others. Those who recognize, nurture and sustain successful corporate relationships are those that accomplish more.

My blogging and recent book, Guide to CFO Success, focuses on my primary audience, the CFO and the Office of Finance. Some of the content is CFO specific, but the guidance with respect to relationships applies across the executive suite. Guide to CFO Success spends a few chapters dealing with relationship management for the Chief Financial Officer. A key tool in this discussion is my CFO Relationship Map, a copy of which is visible below.

While I created the Relationship Map for my discussion with my Finance audience, this Relationship Map is useful to all executives who wish to succeed in their own environment.

The Relationship Map is a graphical representation of the areas of corporate relationships. They include who you work for (at the top of the map), who you work with (internally, on the right of the map, and externally on the left), as well as those that support you (your team).

In the CFO Relationship Map, you’ll notice that the CFO reports to the CEO, Board and Investors, and works with the other executives of the company internally. The CFO has a number of important outside relationships, which can include bankers, lawyers, auditors and other advisors. And, as I say in my book, the CFO can only be as good as the team they have allows them to be.

Depending on your own situation, your personal Relationship Map will look different. However, like other executives, you have people you work for, work with internally as well as externally, and have people that support you.

To read the full article on the BlueSteps Executive Career Insider Blog at this link.

You can also map out your own relationships, using this blank Relationship Map or by creating your own.

March 7, 2012 By Samuel Dergel 4 Comments

CFOs and The Cloud

In my last blog, CFOs, Information, and IT, I wrote about why IT is important to the CFO, and what the CFOs today need to understand about IT.

The Cloud is a hot topic for many in IT today. This is an important topic for CFOs to be understand, because as I mentioned in my previous blog, CFOs today need to be aware of ongoing changes in IT and the impact it can have on them.

What is the Cloud?

“The Cloud” is short for “Cloud Computing”, which Wikipedia defines as the delivery of computing as a service rather than a product, where shared resources (software and data) are provided to computers and devices over the internet.

To get a better understanding of the options when it comes to the Cloud, I went to my fellow CFO Intellectual Exchange Network member Laura Mikovsky, HANA Solution Partner at SAP.

Mikovsky explained that there are 2 options when it comes to the Cloud.

Software as a Service (SAAS) – this is a licensed (per user) model, hosted by a solution provider.

Infrastructure as a Service (IAAS) – this lesser known Cloud solution is more appropriate for larger companies. Essentially, the company is responsible for managing and installing the applications and data they use on remote computers and storage that is running remotely.

“It is important for an organization to define which option is best for them.” says Mikovsky.

What are challenges that CFOs face with the Cloud?

To find out what these challenges were, I spoke with Yehuda Cagen from XVand Technology in Houston. Cagen’s company services small and mid-sized companies in Texas and around the US. Cagen says, “There are two types of challenges CFOs face with the Cloud. The first is that they know what the Cloud is, but are not sure where to start. The second type of CFO isn’t sure what the Cloud is, but their problems can be solved in the Cloud”.

What are some of the benefits of the Cloud?

Less worrying about IT – Cagen quotes one of his CFO clients who, after implementing a Cloud solution from ISUtility, said “I don’t talk about IT anymore”.

Cost and Cash Effectiveness – Paying per user allows for paying for what you need and use, as well as spreading IT costs over a period of time, without making an upfront investment in hardware and implementation. SAAS counters the ongoing uncontrolled costs of upkeep on an IT system installed on premises.

Self-Service – Mikovsky says the working with the Cloud allows the business user to have more control over their IT needs, and be less reliant on the IT department. (This is good news for anyone that has ever waited for IT to deal with a mission critical finance technology issue).

The Mobile CFO – The Superstar CFO: After the Crisis published by CFO Publishing in partnership with SAP, refers to The Mobile CFO. Most CFOs will admit that a lot of work does not happen at the office anymore. Having access to their data and information in the Cloud allows a CFO (and the finance team) to be more mobile, and possibly more effective.

Disaster Recovery and Business Continuity – Stuff happens. Earthquakes, hurricanes and other natural disasters can have a strong negative impact on a business. Moving to the Cloud can allow for a business to continue in unfortunate times. Cagen recommends looking at how this impacts the business, as well as how potential Cloud providers are set up to ensure this continuity.

There have to be downsides to the Cloud. What are they?

Implementation risks – “Garbage in, Garbage Out” applies. We have all seen the impacts of a bad implementation. Becoming involved with the needs analysis and planning of implementation should lead to reducing implementation risk when it comes to the Cloud.

Security – Finance people are often able to better understand what they can see. Not having your computers and systems on-site can feel uncomfortable to a CFO. If the computer equipment is all locked up in a room, CFOs feel more secure. But this may not necessarily be the case. It is possible to have better security off-site than on. Asking the right questions can lead to better sleep patterns – at least about IT. Cagen recommends that CFOs put their potential Cloud providers in the hot seat and ask them the tough questions about security.

Backup Recovery – Systems work. Most of the time. Sometimes they fail. Ensuring recovery via testing of backups is critical to any system implementation. The Cloud is no exception.

As CFO, you should not expect to be an IT expert. Understanding key IT concepts, such as the Cloud, will allow you to understand how you can better access the data and information you need to make more appropriate decisions.

Have you moved some or all of your systems to the Cloud? How has the Cloud impacted your finance team and organization?

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March 1, 2012 By Samuel Dergel 6 Comments

CFOs, Information, and IT

CFOs are not expected to be IT experts.

CFOs are expected, however, to know all aspects of the business, and use available information, internally and externally, to the company’s best advantage.

To be “all knowledgeable”, CFOs not only need access to the data, but more importantly, have the right information gleaned from that data on a timely basis to be able to help their company make the best decisions possible.

Since I started my working career over 20 years ago, the information landscape has certainly changed quite drastically, in a good way, to benefit those who are willing to make the right investments in time and money to get the information they need.

The challenge CFOs face today can be defined as having access to too much data and not enough information. Regular blog readers know that I put a lot of emphasis for CFO Success on their ability to manage their relationships (See Road Map to Successful CFO Relationships). When it comes to relationships they have with IT (or the CIO), CFOs face a continuous challenge.

In smaller companies, the CFO is ultimately responsible for IT, either directly, or by having IT report to him or her. When this is the case, the relationship is less of the issue, but making appropriate IT decisions can be.

In larger companies, the CFO works with the CIO/IT to make sure that they have access to the data as well as being able to get decision capable information when needed.

One thing is for certain. The CFO of today can no longer ignore IT as they may have done 20 years ago (or even 10). Today’s CFO must have access to the information they need to be able to help their business make the best decisions.

CFOs today need to be able to understand:

1. The current and ongoing changes affecting Information Technology,

2. How these changes affect where, when and how they access their information.

3. The impact of these changes on the budgets and expenditures for IT and other departments.

4. The value that these changes are supposed to bring, and how to ask the right questions to ensure the promised value is actually delivered.

As CFO, what do you need to understand better when it comes to information, and the technology that provides it?

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