By: Tricia Ang, DigitalCFO Asia | 22 January 2021
From talk show hosts to successful business, the consensus is that small and steady improvements are more achievable, and just as impactful, as big dramatic changes.
Marco van der Kooij of Foresight Consulting lays out his 5 steps to Make a Move for Continuous Modernization thinking along these lines in terms of unleashing the potential of the CFO office to plan smarter, manage better and act faster.
And it’s important because we live in changing times, especially with the ongoing pandemic. All sorts of factors throughout the supply chain are requiring increased storage of so-called big data. This is impacting the CFO office and has evolved into a role of a business partner, rather than just an information provider, for the planning and control cycle. The information technology behind such a transformation needs to support this revolution in data-driven decision making.
Data-driven decision leads to advantages such as higher productivity and profitability, because when operational, financial, non-financial and external data are used together in real time, it gives the business a competitive edge to propel forward more effectively with forward-looking insights.
The MIT Center for Digital Business found that organizations driven most by data-driven decisions had 4% higher productivity and 6% higher profits. To achieve it calls for a vision and roadmap for continuous modernization, which factors in:
- The competence within the organization and office of the CFO
- Information needs and data
- The planning & control cycle
The Whitepaper describes the WHY, HOW and WHAT of continuous modernization for the CFO office to overcome challenges caused by legacy systems.
As Gartner puts it, “Spending large sums of money to update legacy systems, instead of implementing a continuous modernization program, does a disservice to your organization.”
The CFO office today is faced with many obstacles and trends, including increasing transparency and accuracy from shareholders, the need for self-service real-time analytics, plus , and new regulations. But what is holding it back are siloed systems and cultural practices in the office. Traditional EPMs do not address it and rely on spreadsheets to bridge the gap between ERP and EPM.
The solution is enabling digital transformation and utilizing the most powerful resource in the organization, the data, to empower the CFO office.
To continuously modernize the CFO office requires a unified platform for EPM and Advanced Analytics. The process is to:
1. Get started: think big and start with small steps
2. Understand where you are now
3. Imagine where you could be: For example, these could be the tangible outcomes that make a business case for a move to continuous modernization in the CFO office
4. Find How to get there: the roadmap, remember?
5. Make your move : Don’t forget to assess the risk of NOT doing anything.
A data-driven architecture needs to be able to capture both financial and operation data at a granular level to support both EPM and advanced analytics enterprise wide. Preferably owned by finance to be flexible and to act fast when changes occur.
Marco van der Kooij helpfully points to the four digital technologies which will reshape the finance function.
Start the journey of continuous modernization
Once you are committed to start your journey, you can start by figuring out where you are and setting goals for the future. Define what is required of your CFO office. Do you have the tools and culture for continuous modernization and if not, how do you acquire them?
Invest in a unified software platform for EPM and Advanced Analytics. The optimal solution should consist of:
- One software package with the technical and functional ability to unify all processes in the planning and control cycle
- The collaboration tools to share insights based on the same set of master data without needing to copy these from one part of the software to another