4 Steps for Driving Business Agility and Growth

4 Steps for Driving Business Agility and Growth

Software executives know they need to operate their businesses with more agility because of the pace and volume of change due to innovation and new competitive offerings. C-suite executives grappling with how to turn plans into action faster than ever before need to focus on four steps in order to achieve agility and growth.

1. Rapid Decision Making

Driving business agility requires that leaders have accurate information to make fast, informed decisions. In a recent Sand Hill Group study underwritten by Intacct, CEOs and CFOs ranked “delivering real-time relevant financial information and KPI performance to all stakeholders to drive the business” as most important to their organization. With real-time financial data and KPIs, senior management and board members are in an advantageous position for sound decision making.

Knowing what’s working in the business and what’s not allows leaders to take immediate action, rather than waiting weeks for any real business insight. Having real time KPIs allows an organization to make decisions at the point of need for improved results. The difference between a three-day financial close and a three-week financial close may be the speed advantage a company needs to capitalize on a new opportunity and beat the competition. CFOs and finance teams can make their company more agile by speeding up the delivery of accurate, insightful financial data to key stakeholders.

2. Forecasting and Investing

Another process that is nearly as important to software CEOs and CFOs is quick and accurate revenue and expense planning/forecasting. Accurate forecasts rely on a variety of data sources, and CFOs that can unite disparate financial, business and market data in a single ERP application, automatically and in real time, can rapidly deliver holistic forecasts that enable business leaders to stay agile and ahead of the competition.

Let’s say, for example, a CEO wants to forecast the revenue impact of potential product features in order to prioritize engineering and marketing resources. A modern cloud ERP system lets the CFO analyze, in one place:

  • The revenue impact of recent product releases by line of business, by customer, by channel and more, creating a solid foundation for building a forecast
  • The revenue and profitability of new customers by size and vertical to assess the effectiveness of marketing spend

With this depth of visibility into different aspects of the business in a single location, the CFO and CEO are able to make an informed decision on critical investment priorities.

3. Cloud ERP Systems

When it comes to adding and improving financial systems, software business leaders in the Sand Hill Group study indicated their most likely action in the next 12 months would be to implement business process changes, and their second most likely action would be to implement a business intelligence/data analysis solution. Both of these choices make sense for fast-growing companies.

Growth requires change, and business and finance systems that are inflexible or cannot scale at the same pace as the company will not do. By changing business processes, software companies attempt to add speed and reduce wasted efforts, particularly in the finance function, in order to be more agile and responsive.

Likewise, growing companies require business intelligence solutions because they struggle to find the information they need to make informed decisions in a timely manner.

However, there is a way to solve both challenges. Modern cloud ERP systems allow the finance team to efficiently complete the processes they have to do, yet move beyond those processes to the visibility-creating activities that finance teams need to do such as data analysis, forecasting, and operational reporting. This creates a better outcome for the finance team as well as the company than either process change or adding business intelligence alone.

There are real-world examples of finance teams that take advantage of a modern cloud ERP system to streamline processes and perform deeper financial and operational analysis for more accurate forecasting and greater visibility into the entire organization’s performance. A fast-growing U.S. software company implemented a cloud ERP system that delivers segmented reporting and profit and loss statements by multiple dimensions like department, item, customer, vendor, location, project and employee. The system enables the finance team to be more productive by automatically and proactively providing each department with standard reporting for revenue by customer, spending by vendor and costs at a project level.

This allows business leaders to increase agility and optimize their performance by managing against plan and refining the forecast in real time. As a result of this insight, departments can get instant answers without having to ask finance for key financial information, and executives benefit from deep, real-time insights into the sales pipeline and collections for better forecasts. The added efficiencies from a modern cloud ERP system help a company’s finance team spend less time on transactional bookkeeping and compliance tasks and more time empowering the entire company to focus on strategic, proactive planning, and enhanced execution.

4. Raising New Capital

Software businesses at one point or another need to raise new capital. Surveyed executives in the Sand Hill Group study reported their biggest challenge in this area is modeling future revenue and net income growth. As noted above, accurate forecasts rely on a variety of data sources, and CFOs that can unite disparate financial, business and market data in a single ERP application, automatically and in real time, can rapidly deliver holistic forecasts that demonstrate the full value and potential of the company.

In addition, the study participants rated establishing and enforcing financial processes and controls as their second top challenge in raising new capital. Establishing a robust set of internal controls is something a company has to do in order to demonstrate the effectiveness of the company’s accounting and reporting for a financial statement audit and to earn investor and lender trust.

Proper financial controls ensure no single individual has control over all parts of a financial transaction — and generate the audit trail to prove it. A modern cloud ERP system enables CFOs to deliver error-free financial statements and forecasts built on well-documented, carefully organized and approved transactions that support a realistic forecast and high valuation. Well-documented and enforced financial processes and controls make it easier for software companies to raise capital because of the accurate, trusted financial data provided to investors.

With these four enablers of agility and growth in place, C-suite executives and their boards and investors can be confident that the business will perform to expectations – or even outperform.

Four Crucial Enablers for Driving Business Agility and Growth was originally posted on Sandhill.com.

How Do CFOs Keep Up with Technology Changes?

How Do CFOs Keep Up with Technology Changes?

Changing Technology and Financial Pressure

Rapid change in technology has put a lot of pressure on finance and accounting teams. CFOs have increased responsibilities and their role is evolving. As a result, boardroom-level strategy is now as much of a focus as the balance sheet. Robert Half Management Resources recently released a survey with over 2,200 US companies of all sizes where they asked CFOs the following question:

“In general, what would you say is the single greatest pressure facing your accounting and finance function?”

Their responses were:

  • Keeping pace with changing technology
  • Meeting regulatory compliance mandates
  • Harnessing and managing big data
  • Finding and keeping skilled staff

Thus, based on the survey conducted by Robert Half, it seems that the greatest pressure CFOs are currently facing is changing technology. Leading financial managers should be able to look at a problem from many points of view and find a solution among disparate notions as a result. Therefore, gaining visibility into data and turning it into information is key. If data isn’t accurate, information and perceived solutions are flawed, or even worse, your solution only leads to further problems and you lose credibility.

7 Ways for CFOs To Keep Up with Technology

Paul McDonald (senior executive director for Robert Half), James C. Bourke (CPA/CITP/CFF, a partner in a large CPA firm) and Jeff Drew (Senior Editor at CGMA Magazine) have come up with seven tips that are especially relevant for CFOs to keep up with changes in technology.

  1. Hire financial staff with strong technology knowledge.
  2. Interact with in-house IT staff and outside consultants who are trusted technology experts.
  3. Attend conferences featuring sessions on current and emerging technologies.
  4. Set up RSS feeds with specific technologies as keywords.
  5. Join and become active in technology user groups.
  6. Collaborate with other CFOs at companies that use the same technologies.
  7. Meet with fellow CFOs to discuss technology issues.

How do you keep up with the pace of change in technology at your business? Do you employ any of the methods listed above?

Data-Driven Approaches Guide Businesses

Data-Driven Approaches Guide Businesses

Data-Driven Decision Management

The data-driven approach is gaining popularity as the amount of available data increases with market pressures. The success of the data-driven approach relies on the quality of the data, its analysis and interpretation. However; errors can creep into data analytics processes at any stage and serious issues can result when they do. Therefore, it is important to have the right tools and procedures in place to lessen the risk of errors.

Related: How Do CFOs Keep Up With Technology Changes?

How CFOs Value and Use Data

The following points from a recent Adaptive’s Insights research study provide insight into how CFOs value and use data to set strategic direction.

  • 84% feel the most important skill they have is to think and act strategically
  • 69% want to leverage data to make more insightful analytics-based decisions in 2015
  • 40% consider the ability to leverage analytics to make data-driven decisions as one of their most required skills
  • 47% want their analysis to be based on predictive data, and 48 percent based on historical data
  • 76% are facing an increase in KPI demand from the executive team
  • Financial KPIs are the most effective types for management decision making

It wasn’t long ago that only large enterprises had the budget and resources to be able to utilize data-driven tools. However, as companies are leaning more towards the data-driven approaches, companies of all sizes are now using dashboards and other visualization tools to track KPIs, metrics, and other key data points relevant to their business. Data visualizations, most noteworthy, simplify complex data sets to provide users with at a glance awareness of current performance.

To learn more about how finance leaders are addressing and planner for quicker and more agile finance, check out the CFO Indicator Report: Q1 2017 from our partner Adaptive Insights below.