Today’s Chief Financial Officer is Tomorrow’s Chief Value Officer
Finance Really Hasn’t Changed Much
30 years ago, when I first set out on my career with Unilever we spent most of our time in Finance messing about with Lotus 1-2-3. We knew it was wrong then, but as I look around my clients now, one would be forgiven for thinking not much had changed. Despite the years of investment in mainframes, ERPs and data warehouses, the rows and columns addiction seems to be largely in place, even if the brand on the box of the spreadsheet has changed.
Nevertheless, I am now optimistic as never before, that this time it’s different. Indeed, I don’t think there’s a choice.
The Customer is the Game Changer
There have been many false dawns. However, the difference this time is that it is customers driving the change through their own adoption of a digital infrastructure. Not only this, but as the customer is setting the pace and direction of the change, its speed has been accelerated and its impact accentuated. With their heightened power and awareness, customers are now far more savvy and far less brand loyal than they used to be and unless businesses can be directly relevant to these customers both today and tomorrow, then it is likely they will be businesses for not much longer.
What does this mean for Finance? Compliance of course remains the core foundational activity for the CFO supported by assimilated digital technologies and adaptable analytical tools. Beyond this digital tech allows the CFO to realise entirely new operating models (current cost models being unsustainable) through simplification of processes, globalisation of activities and integration across the whole ecosystem. This then directly frees up value to invest in analytics, to unlock the power of digital to drive value in the enterprise through a transformed and forward-looking understanding of products, channels, and customers.
The Chief Value Officer
Whereas the CFO’s attention has largely been on creating better yesterdays, the CVO is now squarely focussed on orchestrating better tomorrows. The main armoury of the Chief Value Officer is a rich, multi-dimensional reporting and analytical toolset, a digital capability, reporting that is predominantly cloud based and an ability to collaborate with colleagues and partners anywhere in the world. With data volumes exploding, value is then created by filtering and synthesising data to support critical business decisions. This indicates a profound shift towards Management Accounting, a transition which itself will have to be managed.
Increased uncertainty in all markets has created much anxiety, but it also creates greater opportunity for ambitious organisations. Indeed, with price points collapsing almost any size of business can now get access to world class software through as-a-service and cloud. The challenge is to now pick up those tools not only available but imposed by customers on organisations and to weave that analytic tapestry to add long term business value.
Ed Tann
Managing Director
Semita Ltd
March 2016