Article provided by Oracle Cloud
Smart organisations treat the finance function as a navigator – showing where to invest, what strategies make sense, and how to deliver them. But that can only happen when CFOs innovate for themselves – freeing up resources to plot new adventures for their businesses.
There’s an argument that without the incredible wealth and banking efficiency of the Medicis in 15th century Italy, there would be no Renaissance. Innovation in art, science, philosophy and politics was based on patronage made possible by excess wealth and smart ways of moving money – while the rest of Europe was largely subsistence farming.
Which begs the question for organisations in the 21st century: are they subsistence economies? Where most people work hard just to stay fed? Or do they free up their best minds for radical innovation?
It’s a question for CFOs, in particular. The finance function, with access to incredible amounts of data and sophisticated analytics, can identify opportunities for growth. The challenge is to find ways of doing day-to-day finance jobs more efficiently and build up ‘navigation’ capabilities to support innovation – what Accenture calls ‘the evolved CFO’.
We can characterise this shift by re-christening ‘ERP’. ‘Enterprise Resource Planning’ is still essential. But by connecting systems more effectively and layering on advanced analytics, ERP is refocused on growth and resource deployment. It creates headroom for talent within finance, and across the enterprise, to experiment and innovate. It becomes ‘Earn, Rest and Play’.
Companies earn more because they minimise waste, control costs, and more easily identify revenue drivers. They can rest more – the unforgiving cycle of reporting locks finance function talent into an unhealthy work-life balance. And they can play – experimenting with innovative ideas that create new markets.
The message is getting through. About 40% of finance executives in Hackett’s 2018 survey of companies with more than $1 billion revenue say they’ve already adopted advanced analytics; on the two to three year horizon that figure rises to 80%.
One of the CFOs using an ‘agile finance’ approach is Umair Junaid, CFO at Access Power, a fast-growing power producer in Africa and Asia. He wanted to improve the accuracy and timeliness of reports to enhance decision support – and automating processes with ERP Cloud enabled his team to do that without more hours at work.
Or take Christophe Eouzan, Chief Accounting Officer at Orange. He needed his corporate finance team to focus on higher-level transformation initiatives. ERP Cloud automated non-strategic tasks like requisitions, purchase orders, and vendor invoices. They’re now free to focus on forecasting, supply chain transparency, and building a working environment designed to attract new, young talent.
As Declan Tyrrell, a former CFO and CEO now working with Oracle, says: “With access to real-time data in the cloud and machine learning-infused automation, finance leaders have more time and capabilities to drive profitable change by improving decision-making, automating non-value adding tasks, managing risks, and optimizing assets.”
But, like in the Renaissance, there also needs to be focus to these efforts. Neil Sholay, VP of Innovation for Oracle EMEA, has been thinking about the philosophy of true ‘ERP’ businesses. And he argues they should refine five corporate ‘senses’ to direct their efforts:
They must be ‘human’ – enhancing the experience of employees and customers.
They should be connected – innovation accelerates when ideas cross-fertilise.
They should be insight-driven – refined analytics give innovators confidence.
They should efficient – free up talent from business as usual.
They must be trusted – change can be unnerving; a supportive finance function helps.
The new ‘ERP’ might not redefine Western culture as much as Columbus, Erasmus, Galileo and Da Vinci did. But with the right philosophy behind it, there is a real opportunity for a new corporate renaissance.