NO SURPRISES: MAKING LIFE MORE PREDICTABLE FOR THE CFO

By Ian Stone, MD of UK and Ireland, Anaplan

Imagine, if you will, the following scene taking place during a regular board meeting: the Chief Financial Officer (CFO) is ready to present her numbers, prepared in collaboration with her team. It’s taken three weeks of uninterrupted work to get the true picture of the company’s financial health. She delivers balance sheets, consolidated sales reports, major product line analysis; in short, all the traditional tools you can think of.

When it’s finished the CFO sits back and asks: “Any questions?”

“Yes,” exclaims one of board members. “What is the evolution of sales in Lynton?”

“Lynton?” asks the CFO? That quaint little village in North Devon, she thinks, but why Lynton?

Well, as it turns out, this board member was born there. He appreciates the ‘Walking Capital of Exmoor’ and regularly goes there on holiday.

As you may imagine, this is not good for our CFO who, unfortunately, is unable to answer the question. “I’ll have to get back to you on that one,” she says.

As you can see, it is a fairly innocuous question, but one which has completely derailed our CFO, certainly taking some of the shine off her presentation. And should it have? After all, the relevant data on the village of Lynton is certainly inside the organisation’s IT system, it is simply very difficult to extract and process into operable insight from within the different silos.

An Unpleasant Surprise

Our CFO has been is the victim of outdated technology – namely the spreadsheet. And although this technology is well-adapted to provide a macro view of the business, it doesn’t facilitate an ad-hoc drill-down to a more microscopic level of detail. However, in a competitive and unpredictable world, we need a magnifying lens to make the right decisions and adapt to a changing environment at all levels of the business.

Today’s CFO needs speed, flexibility, and the ability to process large amounts of data. She should not be powerless to react to surprise questions, no matter how odd or arbitrary, because this indicates a lack of control. Let’s not forget that the CFO’s job has changed dramatically over the last fifteen years, they are no longer isolated in an ivory tower counting coins but expected to bring experience and vision to every division of the company. They must master other skills like navigating through the intricacies of global taxation, or mastering mergers and acquisitions strategy.

In this new financial landscape, basic profit and loss indicators are no longer sufficient. Each business stakeholder needs relevant indicators with fine granularity and these indicators need to be updated weekly, daily or even in real-time; to review finances annually or quarterly is simply too little too late.

The CFO Revolution

With these new requirements, we have grounds for a revolution. The tools at the CFO’s disposal are often not sufficient to handle this change. Too many financial controllers rely on cumbersome, error-prone processes involving static spreadsheets to obtain the data they need. Their Business Intelligence tools, which require the expertise of an IT specialist, may be able to offer an accurate reflection of the past but are totally unsuitable for planning.

Organisations should consider a cloud and collaborative solution that allows finance and business to work and plan together, a solution that provides a broad vision, but can also provide visibility on the deep details. With this type of tool, our CFO would have been able to give, on the fly, the sales status in the town of Lynton. No surprise questions will tarnish her reputation and her fellow board members will be confident in the numbers.

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