How can finance teams identify the right insights to share with the right people?
The session opened with a discussion about finding the right insights to bridge the gap between finance and business strategy — with the two core pillars to success here being people and technology.
When discussing the two core pillars, Konstantin addressed the role of technology. He stated that companies must ensure they have access to the right insights and data to make informed decisions quickly. He further explained that technology could help drive this. Still, definitions and setups of systems need to be aligned across departments to avoid business divisions working in silos and using different data sets. And finance leaders must play a vital role in the scrutinization of such data to ensure there are no loose ends.
How can finance teams become open to feedback from other departments?
If your company is like most, your finance team has a lot on its plate: managing budgets, forecasting expenses, and ensuring that your company stays within budget. But as pressures increase and technology changes, you must ensure your finance team can keep up with everything else in your company — including maintaining healthy relationships with other departments outside of finance.
The discussion progressed to explore the importance of finance teams mastering the basics and how they must be open to feedback from and willing to collaborate with other departments.
Finance professionals were encouraged to focus on cross-functional collaboration, understand other departments' needs, and actively set business strategies. By doing so, they can help improve processes that may be dragging down overall efficiency or performance levels, which could adversely affect company revenue if left unchecked.
Now more than ever, finance teams must also be 'enablers' for business growth rather than 'controllers.' Obviously, this doesn't mean rescinding any financial control and letting company spending go wild. But it does mean finding a balance supported by technology that allows finance teams to offer their non-finance colleagues freedom within a framework for spending.
The right technology can help make expense management easy, controlled, and efficient for all parties. Moreover, the right technology can free up hours and even days of the finance teams' time to focus on strategic activities, share insights, and provide guidance to non-finance functions.
Beyond the basics: Improving data insights and financial models
When it comes to improving financial modeling, the panel advised that creating a two-way street for insights to be shared between finance and other departments can offer a significant impact. The finance leader needs to make the right internal processes as their company scales or moves through the various stages of the economic life cycle.
An excellent example is how intelligent companies now use data science to improve business decisions. Finance departments can't afford to rely on outdated processes and recommendations and must work with other departments (e.g., sales and marketing) to get appropriate feedback from them. The insights from these different functions help build a bridge between what's happening in reality and what's happening in the model.
Mitar also explained that making fast decisions with business counterparts is a priority during rapid expansion, but scrutiny and efficiency take precedence during a slowdown.
Due to a downturn in the economy, finance leaders are now carefully reviewing organizational processes and are considering zero-based budgeting to slow down decision-making processes. Konstantin then mentioned the benefit of using subscription tools, which can help optimize performance by analyzing recurring expenses so teams can check their validity.
A good way of doing this is by ensuring the right financial tools are in place to have all the data and information they need at their fingertips, including access to various systems such as ERP, CRM, and accounting systems.
Becoming business bilingual and the role of technology in building strong relationships
Good finance functions will play a crucial role in strategic decision-making, so it’s important for finance leaders to fully understand the whole organization before sharing their insights.
Konstantin and Mitar recommended that technology will reduce manual tasks and free up time to build strong relationships within non-finance functions to understand how they work and the insights they need to optimize performance and growth.
Many finance functions are currently undergoing a digital transformation. They use technologies specifically to automate low-value tasks, empowering their leaders to focus on becoming better business partners by collaborating with other functions. Technology like artificial intelligence will remain the key driver when uncovering new insights. As we move into the future, finance professionals must embrace change by embracing technology and making it work for them — rather than against them.
Company policy and employee compliance
When encouraging employees and expense policy compliance, finance professionals need to simplify their communication to focus on the essential points. Automating internal processes and policies with technology can facilitate adoption, encourage compliance, and increase efficiency.
Mitar also discussed how his organization's approach has been to better understand financial strategy by introducing a 'finance for the non-finance initiative. This included creating pitch decks for different areas of finance to inform and educate employees, and it has proven beneficial. However, many attendees shared that they see invoicing filings as their biggest hurdle. As a solution, Mitar and Konstantin suggested looking at the KPI management concept as a remedy to integrating finance into business strategy. Mitar shared his experience of creating OKRs and KPIs aligned with the broader business plan and how they monitored progress.
However, he cautioned that involving all stakeholders is essential when defining KPIs, as you must ensure relevance and motivation. The importance of technology and automation in empowering finance teams is needed to unpick detailed analysis for strategic decision-making. Both session speakers encouraged finance professionals to get out of one's comfort zone and spend time with peers in different departments to establish and drive KPIs and other goals.
Finance teams are often focused on building tools and processes to enable them to do their jobs better. However, using technology to facilitate collaboration, transparency, and better data gathering, finance teams can help their business leaders make better decisions.
Konstantin said, “Finance is becoming more business focussed as modern technology makes traditional finance work easier. Multitasking is still required, but now better tools are available to help solve (manual) ongoing problems.”
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