CFO. Chief financial officer, of course. But might we tweak the title a bit? Maybe to “chief fundamentals officer?"
The fundamentals of business is what we're talking about here: Stretching across everything from external forces, such as competition, to internal workings spanning expense management to communications to defining and spearheading strategy that can change with haste.
And all of it is underpinned with data – but which is the right data?
In an interview with PYMNTS, Todd Ford, CFO of Coupa, told Karen Webster in the latest Data Drivers that much change has marked the C-level suite as data becomes ever more prevalent. From AI to machine learning to real-time analytics, there's extensively more detail about what goes on within the firm, and in the environment at large.
The changing nature and needs of financial professionals’ roles have been captured in a study by the firm, which surveyed hundreds of financial executives and their views of financial spend management. The study offered a sense of strategic priorities, said Ford, and also where there is room for improvement in managing day-to-day operations – and longer-term horizons.
Data Point #1: 66 Percent
This is the percentage of CFOs who say they lack complete visibility into their firms’ transactions.
That comes as the CFO role has been focused, said Ford, on what happened in the past, and what has been technical in nature.
“But what is starting to take on more prominence is what is happening in the future,” he told Webster. That really speaks to the visibility that is derived from having to work with all the other departments within a firm.
“If you look at companies, oftentimes they tend to operate in silos,” he said. “The silos can be how they make their decisions, or it can be about their technologies.”
Tough barriers to break, maintained Ford. The challenge remains up and down the chain of corporate command, and between departments, to understand how corporate pieces interrelate.
Though most companies would start with revenue as the starting point of corporate self-examination, education is key, he said, and so is quantification. Understanding how and what marketing is doing to generate leads, how the pipeline is developing, and how deals are converted to revenues and how revenues ultimately become cash – all of it can give insight into what is working well and what is not. From revenue, the typical push has been to examine the returns on employee assets and then business spend management.
Data Points #2 and #3: 60 percent and 30.2 percent
Data point #2 is the percentage of Coupa survey respondents who believe that new technology can help them become more efficient. Ah, but the key, as always, is what technologies to embrace.
To help boost efficiencies, at least some of early adopters in the C-suite are using technology to rethink the way that business is conducted.
“I still think we are early in this digital transformation,” Ford said, noting that transitions now occur one step at a time with caution afoot, as some financial executives have been burned by a rush to replace legacy systems in the past.
And yet there is acknowledgement that tech is needed, at some level. The fact remains that 30.2 percent (data point #3) of executives are worried about losing ground to the competition. The battle for market share can be tied to having the right data at the right time, said Ford.
This speaks to the CFO being a strategic catalyst, with a hand in several operational aspects, eyeing everything from data breaches to tracking the competitive footprint – and in using that data to foster communication between departments housed within a company.
“There are a lot of buzzwords that come with respect to IoT and machine leaning," Ford noted. As an additional observation, he said he was a little surprised to see that such buzzwords were bandied about in the responses.
“I still think we're in that early adopter to early majority phase, which is probably why we're at 30 percent versus 70 percent – the masses haven't moved there. And I think a lot of people are afraid to take that first step,” he said.
Reflecting on his own time as a CFO, Ford said “a lot more of my role in particular has become operational in nature … at a very high level, my number one job is to create long-term shareholder value.”
Efficiency plays a part here, he said, but then so does deciding where to invest an incremental dollar – across, say, marketing, research and development or any number of opportunities. Such opportunities may be visible most readily when observing the data flows across an organization (thus the interest in AI and machine learning) and how they stack up against the competition. “Each stakeholder understands how they fit into the business,” he told Webster.
“I think of the CFO as the control tower for all things risk,” Ford said.