How Cloud-Connected CFOs Can Model for the Future
The CFO’s sphere of influence has expanded in the last several years. In the past they were tasked with managing costs and trimming expenses. Now, the CFO must be fully aligned with the CEO in finding ways to achieve sustained growth. If CFOs can help identify opportunities to refine pricing, increase profitability, and create more money to invest in innovation, they will be the change agents CEOs are seeking to make a significant impact on growth.
“Big” Data Today:
Organizations capture a tremendous amount of data. Those that leverage analytics tools to glean insights from that data consistently outperform their competition. Why? “Big” Data has forced a dramatic shift for today’s Chief Financial Officer. Traditionally this more retrospective and operational role, (similar to IT) CFOs must now bridge the gap between strategic management and the operational running of a business through informed decision- making. They do this using new technology, but the technology they choose is second to the processes they must employ to support the collection and analysis of that data. Acumen Solutions helps these business develop tailored processes that address the operational elements that are crucial to delivering the insights organizations need to thrive.
Today’s business leader will be crushed if they don’t have the right strategy in place for organizing and analyzing the relevance of their data. CFOs continue to struggle to view their data in a meaningful way, leaving opportunities for their competitors to take the lead with new technology supported by better processes. In short, the difference between informed decision-making and hunch-based guesswork is in the tools and processes a CFO uses to strengthen the tie between present-day business activities and future opportunities.
CFOs know the data they want to have but the tools accessible to them (typically Excel) don’t let them answer those questions in a timely manner or in a way that facilitates responses to “what-if” scenarios. Speed and accessibility are only part of the equation - the other part is the flexible aggregation and organization of relevant information.
What to Focus On:
- Empowering the finance and accounting team to analyze their own data
- Access to the right data and the flexibility to add additional elements
- Modelling capabilities that support a number of hypothetical scenarios where multiple variables change
Better Processes, Better Insights:
CFOs have a defined process for standard accounting to close the books and report financials, but few have applied the rigor of that process to pricing optimization, modeling or other detailed analysis that drives top line growth. Having a scripted plan for the recurring review of new data will help your business maximize the data provided by any new technology employed.In addition to the plan, elite organizations mesh new processes with their existing business operations. If there’s no process, there will be no way to translate this incredibly insightful data into information that can be integrated into a normal business work plan. CFOs must be able to quickly answer specific strategic questions in a self-service manner if they are to meet the strategic challenge. Historically, data has lived in operational data stores accessible only to IT where requests for custom reports and information typically take days (or weeks). Dynamic decision making can’t exist in a monthly/quarterly reporting atmosphere.
Imagine what you could do differently to improve the performance of your business if you had the information you wanted at your fingertips. What if you could have that information now, not a month from now, and if you could get it without having to go through IT?
Visualize what having access to real-time data and reports could do for you and think of all the questions you could answer based on having current information.
Technology is available that can compile and organize your data, but it’s crucial to separate what really matters from superfluous data when you’re getting a summary snapshot. With the right data, Finance could drive spend-analytics initiatives to evaluate margin erosion, service level/customer profitability alignments, as well as help with new product launch profitability and more. Stand-alone metrics do not support decision making, they simply provide an isolated data point. Finding ways to deliver on the operational aspects of the analytics by relying on new processes and people to meaningfully apply them to business planning at the right times will ensure success.
The Future of Financial Modeling
With tools like Anaplan, it’s possible to take control of plan creation and modification by yourself. You no longer need to rely on IT or specialists to build dynamic scenarios. You can assess risk to value in minutes and model for scenario projections.
Anaplan Can Help CFOs With:
- Strategic, Multi-Dimensional Planning
- Budgeting, Planning and Forecasting
- Financial Consolidation
- Profitability Analysis
- Capital Expenditure Planning
- Workforce Planning
- Cash Flow Planning and Forecasting
You can work real time with multivariate modeling from cloud connected data sources and even adapt your pricing effectiveness based on the dynamic needs of the business.
The Future Of The CFO: Self Service Changes The Game
CFOs can catalyze growth by improving forecasting and modeling across the enterprise. CFO are being asked to prove how their work is contributing to the growth and success of their business. Simply keeping a tight lid on the coffers (cutting costs) isn’t enough anymore. The ability to quickly answer specific strategic questions in a self-service manner will be a game changer. CFOs already know the data they want to have, but the tools accessible to them (typically Excel) don’t let them answer those questions in a timely manner. Excel also doesn’t support quick responses to “what-if” scenarios. Tools like Anaplan, which can help with organizing a continuous stream of operational data, while PROS pricing software can help you with powerful pricing analysis and optimization.
Analyze, Manage and Optimize
PROS pricing software can help you regain control, exceed growth targets through pricing analysis, planning and management. Tracking transactional performance of your products against business goals helps identify lost opportunities and inefficiencies. You can begin to analyze price as it exists in complex environments and optimize based on proven data science you can even maximize margins and track your customers’ willingness-to-pay.