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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.

January 23, 2013 By Samuel Dergel 1 Comment

Do CFOs need to master IT to succeed?

As the person responsible for all things financial in an enterprise (of any size), the Chief Financial Officer needs to combine people, process and technology to drive results across the enterprise.

Solutions for organizations and finance departments that were best in class only a few years ago may well now be obsolete, and incapable of providing companies the functionality they need to succeed in today’s dynamic business world.

Does a CFO need to master Information Technology to succeed?

I asked this question to John Kogan, CEO at Proformative, an online community by and for Corporate Finance, Accounting and Treasury Professionals. Here is his response:

Master IT? No. Truly understand how IT can be used within their organizations and across the enterprise? Yes! CFOs can’t outsource their understanding of technology and its use within the enterprise. They need to embrace it in order to understand how it is being used and how it might be used to better advantage. Armed with such knowledge they can create a plan, with help from others in their organization as well as IT, and work to make whatever they do have better and more effective. This is a never-ending process.

I also asked John the following question:

Are CFOs afraid of IT?

I’m sure they are out there, but rare. I think it’s more common for some CFOs to be so busy doing all of the other things they are responsible for that IT may fall between the cracks or they outsource it to someone else internally. They may not realize they are doing this or they may not believe IT merits more of their time. Obviously they have a lot to do and there is never enough time to do it. However, this takes them out of a very important loop at their companies – the loop that provides data upon which their company makes decisions, for better and worse.

What can a CFO do to better understand IT?

Knowledge is power. CFOs may not need to be an IT master, but they certainly need to understand where IT is going, how it affects their business and how it impacts their finance team. Staying up to date and current in the fast paced changing world of IT can be difficult. It requires reading, speaking with peers, listening to vendors and industry experts.

How does a CFO find the time to stay on top of all things IT?

A CFO makes the time. Like most successful CFOs, they are efficient and effective in how they get the best value from their available time. Finding an excellent conference that can allow you to learn from experts and speak with your peers (with an additional benefit of finding time to network) can be a very effective solution.

So where does a CFO find an all-encompassing conference like this?

One conference that can meet a CFOs need for all things IT is PROFORMATECH 2013 on March 20, 2013 in San Francisco. This conference is geared for Senior Finance Professionals like yourself who need to stay on top all things IT.

Even if you’re not on the West Coast, I recommend you make the time to attend this conference. It will certainly be worth the cost, because the conference is FREE (which is the right price for most CFOs).

Don’t delay. Register today!

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Note: I am an Advisor with Proformative and a Topic Expert. There is no compensation for these roles, unless you consider that I usually win the $25 Amazon Gift certificate each month for most popular blog on the site. 🙂

August 2, 2012 By Samuel Dergel 6 Comments

Why are 87% of CFOs male?

I asked myself this question last week in preparing my blog 5 Most Popular Names for CFOs.

The overwhelming majority of CFOs are male. The sample that I used, with over 1,100 names of CFOs hired and promoted over a ten month period, is significant enough to be considered a close representative of the reality that exists in the CFO World in the United States. (You can follow our weekly edition of CFO Moves by signing up on the CFO Moves Blog page).

In essence, this male domination cuts across most senior executive positions and board roles. CFO roles are not alone in this matter. I’m certain that many of the reasons CEOs and other senior executive roles that are mostly male apply to CFOs as well.

When I look back to my undergraduate years, my classes were well balanced between males and females. Perhaps there were even more women than men at the time.

So what happens between graduation and career success?

Some would say that ‘life’ gets in the way. Some would say that it is more difficult for a woman to have a career and a family than men. Some would say that the “Boys Network” makes it difficult for women to be successful at an executive level. Some would say that women are more interested in work/life balance than men.

I don’t know if these are good reasons to explain the difference or not.

I do know that when I’m looking for a CFO candidate (or any executive candidate) for my client’s search, I’m looking for the best people. Best experience. Best ability. Best skills. Best fit. Period.

Cookie Cutter

I was recently looking at a company’s Management web page. I didn’t know the people or the company well, but at first glance, it was hard to tell the difference in the photographs between the executives. They looked ‘cookie cutter’. I don’t know much about the company, but I got the impression that they were not a diverse crowd. I thought that not only did they look the same, they probably thought the same and may even have had similar backgrounds and experiences.

What is Diversity, and is it Profitable?

A company that is diverse in background and experiences can allow it to be successful. You can read more about how Diversity is Profitable, written by my colleague Robin Adams from Stanton Chase International in Hong Kong.

Diversity at the executive level includes people from different backgrounds and cultures. It also includes having more women.

I always recommend that clients hire the best person for the role they are looking to hire. I also always recommend that clients consider diversity in their search to get the best out of their executive team.

My clients should be hiring the best person for the CFO chair (or any executive position). Sex, color, ethnicity, religion and orientation should never be reasons not to hire the best person.

What do you think?

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July 11, 2012 By Samuel Dergel 1 Comment

CFOs & Reputation Management

The Chief Financial Officer cares about reputation. They care about their personal reputation, the reputation of the company that employs them, and the reputation of the people and companies their employer does business with. Reputations are very important to CFOs.

Michael Fertik, founder & CEO, Reputation.com

To find out more about how Reputation Management affects the Chief Financial Officer, I spoke with Michael Fertik. Michael is founder and CEO of Reputation.com, a leading and award-winning Internet Reputation Management Company based out of Redwood City, California. Reputation.com’s mission is to empower individuals and businesses to control their privacy and reputation online.

Fertik sees Reputation Management as a very important issue for CFOs. He finds that CFOs are not only a key organizational leader working to manage the reputation of the company, but that Chief Financial Officers are also very aware that managing their personal reputation is key to their career success. In today’s age where every person has to manage their own career and be their own PR agents, being responsible for your own reputation is important to CFOs, who tend to have high profile visibility on the internet.

With CFOs often responsible for Risk Management at a company, Fertik finds that CFOs are many times the one calling on Reputation.com to help instead of the head of marketing or communications.

Fertik believes that CFOs need to know how important Reputation Management is to a company. Referring to a survey of risk managers, Fertik points out that the number one major risk to a company is not financial risk or catastrophic risk, but reputation risk. He points out that this is true no matter the size of the company.

There are 2 factors that affect a company’s reputation according to Fertik.

Product / service reputation. This impacts corporate reputation, customer reputation, business positioning and strategic leadership reputation.

Personal reputation of key executives, including the CFO. Every potential and current customer, supplier and employee is looking you up on the Internet AND making decisions based on what they find. Fertik says that surveys show that the internet is the number one source of information on people and companies and that people rely overwhelmingly on quick assessments based on very quick searches to make actionable decisions about those subjects.

How does Reputation.com help CFOs manage their Reputation Risk?

Reputation.com’s product suite, with dashboards, maps and understandable tools, makes it easy for Risk Managers and CFOs to identify and remedy online reputation problems.

CFOs that have been part of an executive team that has had to deal with a reputation crisis know that these challenges can have catastrophic impact on their company and its employees. In a crisis situation, Michael’s team at Reputation.com continues to deliver results as reputation crisis experts with their ability to operate 24/7, using their tools and learned knowledge from helping companies in crisis all over the world.

Fertik recommends that companies take a proactive approach to managing Reputation Risk. He says that it costs 20 times more on average to solve a reputation crisis as opposed to preventing the problem from happening on the internet in the first place.

Have you ever had to manage a reputation crisis as CFO?

April 12, 2012 By Samuel Dergel 5 Comments

A New Intersection for Finance & Human Resources?

Will the sometimes tenuous relationship between HR and Finance get more involved?

A new proposed disclosure on Human Capital, developed by a committee at SHRM chaired by Lauri Bassi, CEO of McBassi & Co., is in process of being considered by ANSI (American National Standards Institute).

David McCann wrote an article on the proposed Human Capital Standard in CFO Magazine this week, and says that the proposal “could ultimately have a profound impact on investors’ understanding of why companies succeed or fail. Or it could have no impact at all.”

Whether the proposal will have an impact or not remains to be seen. I first learned of this proposed project in September 2010 when I had the opportunity to meet with Lee Webster, Director of HR Standards at SHRM at a conference. I was involved in a Taskforce at the beginning of the process, but I stopped being involved after a few meetings due to personal time constraints.

However, I was (and still am) enamored with the idea that a standardized manner of reporting human capital can add value to investors and other users of information. I believe that solely reporting financial capital to investors without giving valuable and relevant information on human capital gives them incomplete information on the assets and performance of an organization.

Most accounting and financial reporting standards develop over time. They need to start somewhere. Having human capital reporting standards that are voluntary can lead to better information which will lead to better decisions. So this is a good thing.

I’m curious as to what impact this reporting will have on the relationship between Finance and HR in organizations. Having identified HR as a key Relationship for CFO Success (Read: CFO Relationship Map), and surveyed CFOs relationships with HR (Read: CFO / HR Survey Results), CFOs and HR in many companies have challenges working together.

Will the need for HR and Finance to work closely together to make reporting on human capital have a positive impact on the Finance / HR Relationship?

I’m hopeful. What about you?

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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September 9, 2011 By Samuel Dergel Leave a Comment

Become a Better CFO: Be on Trend. Create your own Luck.

I received this video in my email yesterday, and I wanted to share it with you. I was fortunate to be attending a conference in May 2010 where Mike Lipkin was the keynote speaker.

[Sidenote: I have always been skeptical of Motivational Speakers. It was never my style. But I ended up in a room with Mike Lipkin and he is one person I thank for making the changes in my life and career that has brought me here today].

If you are the kind of person that does not like motivational speakers – do not watch the video.

If you are the kind of person that likes to hear new ideas, be current, and are open to change and improvement, go ahead and listen.

[youtube=http://www.youtube.com/watch?v=NT1Y8hed0K4]

Based on the research done by Mr. Lipkin’s company, Environics Lipkin, Mike explains these seven powerful and current trends that have the ability to make you a Better CFO.

Instrospection and empathy.
New social responsibility and community involvement
Social learning and cultural fusion.
Vitality and effort for health.
Rejection of authority and support for government.
Equality of the sexes.
Pursuit of originality.

If any of these trends interest you and you would like to understand them better, watch the video.

Do any of these apply to you?

Can you be on Trend?

Will following any of these trends help make you a Better CFO?

As Mike says “You may be the one that others have been waiting for.”

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