Chief financial officers (CFOs) are increasingly being asked to get involved in more diverse projects within their organizations, using their skills and experience to contribute to strategic growth. However, this creates various challenges for finance leaders, who need to use all the tools at their disposal to make sound decisions based upon quantitative evidence.
Investment in enterprise resource planning (ERP) solutions can make a difference for CFOs in this regard. Many businesses, from small to larger enterprises, already rely on ERP software to gain greater insight and exercise control over business operations. Yet many more are still to launch integrated solutions, citing fears over implementation, training and budgetary constraints, among other issues.
As such, many CFOs are missing out on an array of potential efficiency, information accuracy and cost benefits. At the start of a new year, finance leaders should consider how ERP systems can add value to their organization by making their job easier.
What are CFO’s main concerns?
When questioned by Korn/Ferry International in 2013, more than half of CFOs (51.8 percent) said they are concerned about revenue growth within their organizations, and 37.6 percent were worried about keeping up with regulatory changes. Another 24.7 percent said they had concerns about meeting quarterly financial goals, with the same number worried about managing enterprise risk. Even as the economy recovers, CFOs clearly have plenty on their minds as they attempt to manage their organizations’ finance function effectively.
Consolidating finance data, and using it to provide a real-time view of core business processes, can offer real value to CFOs as they aim to establish a solid foundation for growth. Opportunities for expansion are emerging across a variety of sectors as the recovery kicks into gear, but businesses need to get their house in order first.
ERP solutions offer value by integrating data from across departments, or entire organizations, and automating key processes. For instance, ERP removes the need for invoice and order processing to be conducted manually, therefore freeing up the finance team to focus on alternative value-adding tasks.
ERP solutions provide a single view
With ERP at their disposal, CFOs can gain real-time insights into exactly what is happening within the finance function and within other arms of the business. This means it is possible to manage income and expenditure more effectively, monitor customer orders and also control stock within the business. The finance chief is able to see exactly what is coming into and out of the business, where and when – allowing them to budget and forecast accordingly.
Ideally, CFOs need to have access to all relevant information in a single location, and this is where ERP solutions add value. Data which exists in silo is of little use to the finance chief – they need to make decisions based upon a range of different variables, each of which is impacted by the others. Centralizing data in an ERP system overcomes this obstacle, and ensures all relevant factors are taken into account.
These solutions also help ensure the accuracy of information, since anomalies and errors can be flagged up. This is crucial when it comes to cash management – particularly as the CFO is likely to be responsible for sizeable budgets. Even minor errors in the data used to support decision making can prove extremely costly when scaled up.
In terms of organization costs, implementing an ERP system allows CFOs to identify potential efficiencies, enabling costs to be reduced across organizations. In addition, integrating data can render some systems and processes redundant. This means they no longer need to be supported, helping to preserve valuable budgetary resources.
ERP offers value to CFOs
Whether organizations embrace on-premise ERP, software-as-a-service, or cloud-based solutions, the same principles apply. ERP solutions offer a more cost-effective way of collecting, managing and analyzing data, allowing it to be used to support decision making in the boardroom.
In the wake of the economic downturn, it is only natural that the CFO has an important voice at the top table. Having seen so many companies run into difficulties over the last few years, executives are keeping a closer eye on the bottom line.
When called upon, CFOs need to ensure they can add value to the debate, based on a clear view of the finance function, and of the organization as a whole. ERP systems can provide this, ensuring CFOs can have courage in their convictions when key decisions need to be made.