In IBM’s latest CFO study, “Pushing the Frontiers,” we surveyed more than 576 CFOs worldwide. A number of important trends emerged, particularly as we compared their priorities today to those they cited in 2005. One such priority that stood out was the value they placed on information integration across the enterprise. In this same survey, we also identified a group of CFOs, which we have called “Performance Accelerators” – as CFO’s who been able to generate 70 percent more revenue and profit over the past three years than their peers. What’s their secret ingredient? Yes – its insight – from all the information that flies around our companies. These highest performing CFO’s have been able to implement enterprise-wide information standards and are better at driving the integration of information across their enterprises from numerous sources.
And how have they done this? They have created a shared service delivery framework to guide the design, development and operation of key financial processes – not just transactional processes like accounts payable, accounts receivable, general accounting, but also complex finance processes like business performance reporting and analysis. This, together with the adoption of common information standards across the entirety of the business (including financial and operational data), has catapulted their enterprises into the next league of high performing companies. Over the last 18 months, this Globally Integrated Business Services model is the focus for many companies.
With a single point of responsibility and accountability for the consistent design and deployment of every financial process, regardless of business unit or territory, it’s much easier to automate manual procedures, detect variations in performance and disseminate best practices. And then combine internal data (i.e. income, expense, balance sheet data) with external data (i.e., economic indicators, liquidity factors, FX, inflation data) – and these CFO’s are able to gain real insights from all the information.
Some key actions:
- Go global – create a single global operating model; establish centers of excellence to ensure a consistent approach and generate economies of scale, use a shared services center to become more efficient; and encourage a culture of continuous improvement,
- Get clean and lean – simplify and standardize; develop common financial data definitions, processes and reporting procedures to deliver a single version of the truth; automate wherever possible; and
- Connect the dots – forge seamless links between the different parts of the business, including customer-facing functions like marketing and sales as well as back-office functions like manufacturing and distribution. Data and analytics are essential for efficiency, and both depend on common technologies and processes.
So there should be no debate as to whether it is a worthwhile to drive standard or common processes, mandate standards in data, and drive integration of information across companies.
As a CFO are you using insights to create profitable growth and capitalize on Big Data? Are you addressing the need of driving integration of data across the enterprise? What is the greatest obstacle you or your company faces as you work to drive integration and standardization of data across the enterprise? If you are already on this path, what recommendations would you have for others?
Check out the detailed findings and how you stack up to Performance Accelerators – http://www-935.ibm.com/services/us/en/c-suite/csuitestudy2013/cfo-infographic.html – and test how well you are tracking with the latest CFO imperatives.