Today’s increasingly unpredictable economic conditions create business challenges that must be managed. These same conditions can also create business opportunities for companies who have the internal processes and disciplines that enable them to respond quickly and more intelligently than less-prepared competitors. CFOs are increasingly playing a more strategic role in applying financial modeling and analysis to assess and plan for potential risks and opportunities. However many small to middle-market companies lack the financial skills, disciplines and processes to conduct adequate financial planning and analysis.
A recent survey of the current trends and challenges in corporate financial planning, budgeting, and analysis of 500 leading companies revealed that 77% say financial planning capabilities can deliver competitive advantage and 72% have experienced better business results through financial planning. Companies that take a comprehensive approach to finance strategy can better position themselves to:
- Improve their financial reliability and predictability
- Lower overall costs in finance
- Improve information quality for better, faster decision-making
- Adopt an investor value perspective into organizational performance management
Pressure is nothing new for good CFOs, but today’s environment of constant volatility has raised the stakes for many to excessive levels. CFOs are center stage as they work to manage the challenges of business strategy, operations and control – all converging in an exponential growing complexity. From regulatory scrutiny and shareholder/investor activism to governance, growth and capital, CFOs have more to do – and more risk managing – than ever. CFOs need to more think strategically and more commercially, improving performance by delivering insight to decision-makers. This role has typically been described as “business partnering,” with the CFO acting as a catalyst or value integrator. In our view, the essence of a CFO as a good business partner is someone who:
- Facilitates transparency of financial performance across their organization
- Works with commercial leaders to drive improved performance
- Ensures business decisions are grounded in sound financial analysis
- Ensures business decisions endure processes that drive robust financial challenge and accountability
- Provides analysis and insight to prioritize the allocation of scarce resources to areas where value can be generated
- Define a finance vision and role
- Define a target operating model
- Identify change initiatives and develop a roadmap and business case
Most small to middle market companies need a highly-skilled CFO who has the skills to not only efficiently manage the finance function, but also has the to focus, skill set and discipline to perform value adding analysis to support strategic and commercial decision making and enables proper assessments of business strategy. Good CFOs help drive profitable growth and bring finance into tighter alignment with the business, while keeping a firm hand on the fundamentals required for effective reporting and efficient operations.
The ability to deliver business results is a key competence for top CFOs. Highly-skilled CFOs have a careful but entrepreneurial approach to risk. They can also talk about business models in addition to financial statements, and support their views with value indicators. Harvest CFO Consulting brings highly-skilled CFOs to organizations – these individuals have deep experience with all aspects of improving a company’s finance function. Harvest CFOs enable companies to deliver high value through their finance organizations.