CFO’s point of view: Leveraging Technology to transform finance and drive business performance

Over the past years, data and digital technology have provided opportunities to improve several aspects of our lives and how we do business, too. All fields are affected by this unprecedented acceleration in technological innovation, making us question how our ways of working and our operating model could be more effective through automation or Artificial Intelligence.

Finance is no different. Following up on last year’s article How big data helps pharma plan for tomorrow https://financedirectoreurope.com/features/how-big-data-helps-pharma-plan-for-tomorrow/ on the changing role of the CFO and Finance teams in making data drive better decisions in business planning and finance, I would like to share further reflections on our evolution, from focusing on cost control to partnering for business growth, facilitated by digital transformation. I believe that some of my learning and leadership insights can apply to other business areas beyond finance.

From reporting on past performance to anticipating future opportunities: the changing role of business finance

I started my career in private equity and venture capital businesses, where the focus was always on growth while keeping a close eye on maintaining a healthy financial position. This meant ensuring enough liquidity to fund further growth and secure sustainability of the business.

Upon entering the pharmaceutical industry back in the early 2000s, Finance was seen as the function responsible for financial compliance/risk management, “closing the books” and financial reporting. At the time, the CFO was expected to manage costs rather than drive business growth through strategic input and business partnering. I believe that both aspects are important, and first and foremost, we need reliable and accurate data. However, from the beginning, in all of my positions, my aim was to keep and apply my Private Equity experience and

value creation mindset.         

I wanted to transform Finance from focusing on past performance, which remains relevant for measuring success and learning from the past, to proactively identifying future opportunities for growth. My goal was to standardize routine processes, such as monthly financial reporting and the closing process, in order to allocate more time and energy to enabling business growth.

Business focus and people engagement at the core of the “shift”

I want to share three key areas that have stood out for me during this “shift” in role and value creation:

1.?????? Understand the business to define the problem or the opportunity.        

2.?????? Change the mindset of key stakeholders, including ourselves, through data-driven value-added input.        

3.?????? Simplify data and processes before applying automation or other digital technology tools.        

As a Finance team, it is crucial for us to have a profound understanding of the business to navigate uncertainty. Learning is never-ending because our business continuously changes and adapts. This entails understanding the strategic direction, market trends, potential opportunities, and unexpected issues that may arise. We use data analysis to substantiate our recommendations and bring facts to help decision making.

This required us to change how we thought about our role, from being inside-looking and administration-focused, to a more proactive, externally oriented and forward-looking strategic partner.        

As a leader, I learned a lot about the importance of articulating and communicating a clear vision to my team and to my stakeholders, explaining our shift in focus towards higher value-added work, with less time spent on routine tasks. It is not always easy to say no or to let go of what we used to do. We must define and focus on a few priorities. To lead change, I have to be open and honest about what we need to do and why, and make the team feel part of the challenge and of the solution.

We see the benefit of what we are doing. With the facts on the table, we can have better conversations, challenge assumptions, and offer new perspectives, thanks to a wider set of data.

 What’s different is that we offer opinions about the future, not just about what happened in the past.        

Concretely, we have made several improvements: we simplified and automated those processes that are the backbone of our work. For example, we automated standard processes in financial reporting and planning, we simplified procurement processes, and integrated financial and market data to make better data-driven decisions. Our key learning was that we had to work on the availability and standardization of data first, before we could automate the processes.

Turning the technology conversation into a data-driven business conversation

Over the past years, I learned to be part of different business conversations and contribute with an informed view, without being the expert. I acknowledge my own limitations in knowledge and experience with data and digital technology. Therefore,

I choose to focus on business discussions rather than technology discussions, as I believe that first, it needs to be clear what kind of problem we want to solve and then we can decide if data, digital, and technology can provide a solution.        

Personally, I have been privileged to work on many exciting projects, e.g. M&A, post-merger integration and business transformations, which always challenged me to learn new things and adapt quickly to new environments. This learning process never stops. The fun part of it is that it requires us to experiment and explore new methods and ways to be more effective. To me,

it is key to start small and think big.         

For instance, we are currently exploring an algorithm-based forecasting method.

No doubt, we are seeing ongoing technological transformation globally, impacting all areas. However, I feel that depending on the industry, in some cases, new technologies can be drivers of change and help develop new business models, and in other cases, the technology is an enabler to deliver better results in existing business models. Having impact goes back to having the facts. With data-driven business conversations we can create better value for customers and patients, while at the same time growing and learning as individuals, teams and organizations. To do this,

it is important to stay curious, to try things you haven’t done before and to seek different opportunities as sources of lifelong learning.        

#data #digital #technology #finance #financetransformation #lifelonglearning #PrivateEquity #ValueCreation #growthmindset