Think that a CFO isn’t a major player in an integration? Think again.
Companies integrate with the intention of optimizing processes: connecting sales and marketing data to enhance targeting, combining financial systems and CRMs to streamline invoice and payment histories, feeding emails into CRMs to keep accurate data for customer service reps, and more. The CFO plays a role in each of these departments. Digital optimization will trickle down throughout the entire company, and therefore affect the CFO’s financial management options.
Why does the CFO need to be involved? What does he need to understand about the integration to make the most of it? How will it benefit him? Let’s find out. Here’s what every CFO needs to know about integration.
Why Should the CFO be Involved?
Optimizing a business involves more than streamlining physical supply chains. The financial supply chain is critical as well. If a CFO does not get involved when an integration project is underway, he misses out on a prime opportunity to influence how those integrations affect his work.
With sales and marketing teams directing much of an integration, it’s easy for invoicing, payment collection, and other financial aspects to slip through the cracks. Other departments simply “leave it for the CFO”, assuming he has the innate knowledge to figure out what’s necessary on his end. The problem with this approach is that, while the rest of the business is being digitized and streamlined, the financial integration is ignored, so all the potential benefits the CFO could see from these new integrations are null.
If the CFO can jump in mid-process or even immediately afterwards, there may still be a glimmer of hope, but the work it takes to alter processes and incorporate the financial tasks is now doubled, and it complicates all the strategizing the other departments worked so hard on.
That is why it is so imperative for the CFO to be involved in the integration process from the start. The change must be structured, and every department must be on board with their contributions to the shared outcome. The CFO must understand how each aspect of the integration will affect him and be vocal about what he needs from the rest of the company for the undertaking.
How does an Integration Benefit the CFO?
The CFO is the gatekeeper to financial information, using financial histories and data analytics to inform decisions for the company. However, without proper visibility to the data, the CFO may find himself spending less time focused on decision-making and more time on day-to-day transactions. A recent survey by Genpact confirms that the average CFO spends 51% of his time on transactional activities and only 21% on decision-making support. To spend more time on the decision making, the CFO must create a better balance using the right business intelligence. Integration empowers the CFO in many ways, including:
- Providing complete data visibility for more comprehensive financial analysis
- Streamlining transactional activities to cut down on the time spent inputting data
- Matching records between systems for the most accurate depiction of current financials
- Simplifying compliance through aligned data and comprehensive reports
- Boosting efficiency and flexibility with process-driven analysis
- Offering more reporting options for a deeper and more dynamic view of financials
- Facilitating faster decision making with real-time data analysis
What Should the CFO Understand about the Integration?
Integrated systems are the keys to unlock hidden opportunities for growth and change. To take full advantage of these new revelations, teams must adapt. The CFO must go into the integration project understanding how he and his teammates need to adapt. Here are a few things the CFO must understand (and plan for) to reap the maximum integration benefits:
1. Understand that processes will change.
As integration breaks down data silos, it also alters how teams collaborate. To adjust, its necessary to develop new processes for aggregating the data, sharing it, reporting on it, and analyzing it. Why run the same reports with the same metrics when you have so much more information at your fingertips? Change is the whole point of integration – change for the better that is. So be prepared by planning and asking questions to learn how the integrated data might influence the current processes. What is the plan to address those changed areas?
2. Plan to take the reins.
Altering processes, streamlining with automation, and transforming the relationships between business systems all affect data. How are the financial systems going to work with the non-financial systems to aggregate what’s important and build rich metrics? Because the CFO knows the financial information better than anyone, it puts him in a position to take the reins and find out the answer to this question. Teams will look to the CFO for answers on which financial data will be crucial in the integration and how it will need to be applied. The CFO must educate himself on the integrating data and think about how he’ll use it to create a holistic view of the information.
3. Realize the need for soft skills.
With new collaboration abilities, the CFO and his finance team must reflect on how to use soft skills to connect their views with the rest of the teams. The CFO must use soft skills to communicate with other departments, understand what they need, and learn what they’re hoping to gain from the integration. In this way, the teams can work in parallel to create outcomes acceptable to all parties. This approach takes interpersonal skill and leadership, which CFOs will need more of as connected systems continue to edge towards becoming the “norm” for businesses.
Integrated, real-time data analysis is essential for success in any of today’s industries. Every day, more tools are being built and more advances are being made towards the creation of truly connected systems. CFO’s must look to the future and realize they are part of this transformation. A more involved approach to integration will create more options for financial teams and build more satisfactory results for all parties. It’s the CFOs responsibility to lead the charge for the financial department and connect to other teams for a 360-degree solution.