Traditionally, CFOs and their finance teams stayed narrowly in the arena of management. They strategically employed data-driven analytics to manage the business from the upper levels. As the ability to collect and analyze data has exponentially expanded, CFOs are increasingly in a position to aid their organizations in improving profitability and efficiency and more granular levels.
CFOS CAN MANAGE AND RUN THE BUSINESS
When CFOs optimize the use of business analytics, they can be involved both in strategic decisions that are at the level of management, as well as operational decisions that are more related to the daily tasks of the organization. Data-driven analytics on a larger scale combined with familiarity with the details of running the business, allow CFOs to make quick decisions that can potentially tighten up financial leaks to help improve profits.
CFOS CAN JUSTIFY THE USE OF BUSINESS ANALYTICS
To build credibility on the management and operational levels, CFOs need be convincing in their assertions that business analytics are applicable throughout operations. The finance department could present data indicating where money could be saved in realms outside of the finance department itself. In sales and marketing, for example, CFOs could apply data analysis to recommend specific price points in particular situations.
Similarly, CFOs can make recommendations in other departments. For example, they can help manage vendors in the procurement department, perform price analytics in business units, get involved in new product profitability in supply chain, and enhance planning in the IT department.
BRING THEORY INTO REALITY
Another important step for CFOs to take as they venture from management into operations is to demonstrate their effectiveness in real life. It is not enough to claim to be able to save money or improve operations based on data analytics. They must actually do so. This can be done in a number of concrete ways, such as retaining a customer or setting and achieving new business goals for their department.
FOLLOW A THREE-STEP STRATEGY
CFOs can follow a three-step strategy as they use business analytics to improve overall organizational operations. First, they can define the challenge. This might be to gain a larger market share, increase customer satisfaction, or make prices more elastic according to demand.
Next, the CFO must articulate the plan. This is the path that the organization can take to figure out which approaches is the most feasible. If the goal is to gain a larger market share, CFOs can employ data analytics to figure out which customers use which services, and where money might be saved.
Finally, the plan needs to be deployed. This involves collaboration between departments. For example, the business units department might develop slightly modified products, while the sales and marketing department may launch a campaign to publicize the new, more relevant products so that consumers are enticed to purchase them.
The amount of data that organizations can collect and analyze is vast. CFOs can take advantage of data analytics to bridge management and operations to create a more vertically-directed and efficient business model. One example is to mine expense reports across the global sales teams to determine the true cost of new customer acquisition.
Our choice of Chrome River EXPENSE was made in part due to the very user-friendly interface, easy configurability, and the clear commitment to impactful customer service – all aspects in which Chrome River was the clear winner. While Chrome River is not as large as some of the other vendors we considered, we found that to be a benefit and our due diligence showed that it could support us as well as any large players in the space, along with a personalized level of customer care.
We are excited to be able to enforce much more stringent compliance to our expense guidelines and significantly enhance our expense reporting and analytics. By automating these processes, we will be able to free up AP time formerly spent on manual administrative tasks, and enhance the role by being much more strategic.