By James Lopes

In today’s business environment, soft skills, negotiation skills, and communication skills are as critical as technical skills for financial leaders. Finance departments, CFOs, and Controllers must increasingly contribute towards the shaping and execution of business strategy, while simultaneously delivering on their traditional responsibilities more and more effectively. Such strategy and execution should include driving the use of data and information to promote more critical thinking. Progressive finance departments should be positioning themselves to help shape and execute on the strategy of insightful decision making through business and data analytics.

Effective finance departments routinely:

  • support the CEO in assessing the marketplace, setting strategy and allocating capital resources;
  • engage with virtually all operations of a company;
  • act as a catalyst for desired behaviors/execution;
  • recruit analytical thinkers and critical problem solvers that have been exposed to a multitude of industries and operating models; and
  • leverage various technologies within its own operations (e.g., financial ledger, planning/ modeling tools, payroll systems, data warehouses, etc.). A fully functioning financial department will consist of many different areas of expertise. Some of these disciplines may be staffed inhouse while others are outsourced, depending on which is the best solution.

Evaluating and understanding how your Finance Department can help meet your organization’s needs

Why might two companies’ financial departments look different? Quite simply, need. One company’s needs might be very different from another. To understand your organizational needs, CEOs and CFOs need to evaluate some key factors:

  • The size and complexity of your company and its organizational structure
  • The type of industry you operate in – is it a service/knowledge-based industry? Is it materials/inventory-based? Is it highly regulated?
  • Are your clients, vendors, operations large or concentrated, or are they small or very fragmented? Once you have that deeper understanding, the next steps are to evaluate:
  • People – Do you have the right skill sets to meet today’s highly technical, data-driven world?
  • Business Practices – Do you have set structures, best practices, protocols and workflows in place?
  • Tools – Do you have all the tools in place to help you accomplish what you are setting out to do?

In the case of Rogers & Gray, we came to the realization that after our people and our reputation, data might be our organization’s most valuable “asset.” Carefully managing that data – in particular our “operational data” was essential to becoming an “informed” organization. Many people use the terms “data” and “information” interchangeably, however, they are very distinct. Data only becomes information when it is delivered in a way that allows users to understand and act upon it – when it is actionable.

Data modeling and visualization software tools allow users the ability to easily unlock useful information from their data and deliver that information in a format that is useable, meaningful, and transparent. Over time, the technology to do this has become more robust, more user friendly and more affordable via cloud-based solutions. The process is an evolution and must remain ongoing. The benefits are initially seen in both productivity and access to information not previously available. An insight driven organization embeds analysis, data and reasoning into the decision-making process every day.

What’s in store for the future

Blockchain, Internet of Things, artificial intelligence, robotic process automation, the breaking down of industry boundaries (Google cars, Amazon Health Care) are all here. CFOs, controllers and finance teams can play a key role in framing these technological advances in the context of the company’s overarching strategy by focusing on:

  1. What are our key client markets (geographic, client segments, distribution channels, product)?
  2. What is our competitive advantage? What do we provide that competitors cannot easily replicate?
  3. What key constraints on growth and profitability do we need to push through?
  4. What are the greatest uncertainties facing our company and how can we minimize risk?
  5. If we double or halve the size of our organization, can we rescale quickly?
  6. What do we do currently, that we should not be doing? By following these processes and answering these questions, CFOs and other financial leaders will be able to focus on the most important strategic steps to follow for continued success and growth.

James Lopes is Senior Vice President and Chief Financial Officer at Rogers & Gray Insurance. He can be reached at (508) 760-4632 or jlopes@rogersgray.com.