In many organizations we see a shift in the CFO’s role after EPM adoption — as CFOs become the ones uniquely positioned to leverage financial resources like never before.
The premise of enterprise performance management is that it brings together in a single a view a picture of the enterprise that is both highly granular — exposing the impactful financial details from within and across operational silos — and also highly global by combining all these details into a complete organizational overview. Not only is this granular and global picture presented in a singe view, it can also be quickly understood thanks to the powerful and highly visual self-service analytic tools EPM provides.
Whoever has this view thus has unprecedented situational awareness, to understand the financial impacts of what’s really happening as it is happening. Furthermore, if in looking at that view, they do spot a business issue or opportunity, they now also have something else that’s new that lets them respond like never before. That is a common frame of reference shared with line of business managers where all concerned can discuss those issues and opportunities in real time — without waiting for or reconciling a hodgepodge of emails and spreadsheets.
So, let’s suppose you are a CEO or board member of a company that has just provided an executive with EPM’s unprecedented, all-encompassing, and empowered view. What might you expect from that person in return? For example, would you expect the person to continue on in the same role as before, doing the same job in the same way?
EPM’s central focus, after all, is to help orchestrate company finances — in other words, to help CFOs do their job. It is no surprise then that CFOs who welcome EPM into their businesses also welcome the changes that come with EPM adoption — not the least of which are the changes to their own position. Here are the three big ones:
From Financial Custodian to Business Leader
Once CFOs have the ability to see the likely outcomes of financial decisions — theirs and others, including decisions made by line of business managers — they won’t let that ability go to waste. They won’t simply generate reports after decisions are made, or approve spending decisions based on pre-existing budgets, balances, and forecasts. Quarterly reporting and annual budgets and forecasts will still matter. But with EPM these documents will take much less time to prepare — leaving more time to take advantage of EPM’s real-time data integration, analytics, and cross-silo collaboration features. In other words, CFOs will spend more time on the higher-level activities EPM supports, both strategic and tactical.
Because EPM-empowered CFOs no longer have to extrapolate the future from the past in order to create a budget or forecast, they won’t. They can consider information, analysis, and discussion previously unavailable. That helps on both on a strategic level — looking out one to three years — and on a tactical level with the agility to respond to unexpected events almost as they happen, if not before. CFOs will thus take a more strategic role in determining the overall direction of the company while also increasingly being seen as a valuable intelligence resource when it comes to day-to-day operational decisions.
Increased Analytics Skills
Another way EPM changes the CFO role is that CFOs will increasingly serve themselves when looking to incorporate analytics into their discussions with colleagues. EPM provides CFOs (as well as other stakeholders) with self-service tools that enable non-analytics professionals to create complex models and revealing visualizations. These end-users have subject matter expertise and hands-on familiarity with whatever business problem they are trying to solve that data scientists, programmers, and other analytics professionals may lack. Thus, the time-consuming back-and-forth that often occurs between stakeholders and analytics professionals is eliminated. Furthermore, CFOs using EPM’s self-service tools are more likely to understand the analysis they themselves created and can therefore use it more effectively in discussions with colleagues. The result is that CFOs increase their value within the company and come from a stronger position to any case they look to make.
A More Performance-Focused Culture
The upshot of these first two changes is a change in the organization’s culture itself. It will become more performance-focused. That means that the daily interactions of people throughout the organization will be much more oriented around the things that drive performance — because they will actually know what those things are along with having current knowledge of their impacts. This change is one that CFOs will drive by virtue of the real-time, all-encompassing view EPM continuously and uniquely delivers to CFOs.
All three changes fundamentally alter the CFO’s role, and CFOs would do well to prepare for them as they move forward with EPM adoption. It’s one more area where you should rely on your EPM partner for help.