Fractional CFO and FP&A Consulting Services
The best route to a competitive organization is through a solid foundation of information integration bridging operational activity to finance through cost behaviors.
Sure, it sounds complicated but all process activities generate data naturally. What you choose to collect is up to its potential value and ease of collection. Some of this data collected ends up translated and aggregated onto your financial reporting statements, some will be used for internal metrics, but all of it paints a picture of costs throughout the value chain that are necessary to support day-to-day operations.
The deeper understanding of how these costs "behave", namely if they are fixed costs such as financing charges and salaries or variable costs such as direct selling costs like commissions, direct production labor, direct material, and inventory purchasing, introduces a better foundation for cost analysis, performance metrics and future planning.
In order to be a true leader in an organization the future CFO needs to develop beyond the 'bread and butter' of the three statement model, of the treasury and controller, of the accounting clerk and step into the realm of BI, data and IT partner to identify data, applications and points for automation and integration enabling better analytics, budgeting and forecasting.
The deeper understanding of how these costs "behave", namely if they are fixed costs such as financing charges and salaries or variable costs such as direct selling costs like commissions, direct production labor, direct material, and inventory purchasing, introduces a better foundation for cost analysis, performance metrics and future planning.
In order to be a true leader in an organization the future CFO needs to develop beyond the 'bread and butter' of the three statement model, of the treasury and controller, of the accounting clerk and step into the realm of BI, data and IT partner to identify data, applications and points for automation and integration enabling better analytics, budgeting and forecasting.
In a data-driven organization, CFOs must take on a completely new role...part finance guru and part data scientist.
...The historical view of the CFO as fastidious accounting clerk detached from the nuances of operational divisions is as far removed from the reality of modern corporate finance as paper ledgers and mechanical calculators.
With the continued evolution of financial and accounting software, the nature of finance has shifted from transactional and historical to real time and analytical. CFOs are still responsible for traditional finance like FP&A, audit, compliance, and treasury management, but in the era of dig data, effective CFOs additionally must become masters of business intelligence.
--Glenn Hopper, Deep Finance: Corporate Finance in the Information Age.
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An organization wishing to become data-driven can create a differentiated company and core competency for competitive advantage through information technology, but it is more than collecting data. Attention to data must be given over the life-cycle from sourcing to managing and governance to reporting. Most importantly there must be a method , a purpose, to guide what data is collected and how it the data is to be analyzed.
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