Bruno J Navarro, Staff Writer at Workday, on how CFOs can be a driving force for change
By Bruno J Navarro, EMEA Staff Writer
Technology-savvy and analytics capabilities help finance leaders forge the strategic partnerships they’ll need to prepare their organisations for the future. Executives from Deloitte Consulting LLP and H&R Block discussed their journeys at a recent Fortune event.
From her professional vantage point, Amy Shaw Feirn, Deputy CEO, Partnerships and Offerings at Deloitte Consulting, has the unique opportunity to witness a variety of CFO transformation journeys – and the successful finance leaders are those who operate as strategic partners.
“A distinguishing factor I see in CFOs is that they see their role as way more than scorekeepers,” said Feirn. “The CFO has a better sense as a leader of many other things that make these enterprise-wide transformations more successful."
It’s critical for a CFO and the team surrounding the CFO and the finance function to be as tech savvy as possible right now.
Feirn said she helps CFOs from a variety of industries embark on their transformation processes, whether it involves an enterprise resource planning (ERP) project, reimagining an operating model, or navigating mergers and acquisitions (M&A) activities related to an integration.
“Thinking about finance as an analytical capability as opposed to a function is huge,” she said, adding that CFO insights can provide a deep understanding of the organisation’s operating model. “CFOs get the nitty-gritty of what would need to change in areas of the organisation during a transformation that are often very overlooked, and really, really important to getting it right and keeping it on time.”
Identifying the need for financial transformation
“Transformation is one of those words that gets so overused in business,” said Jeff Jones, President and CEO at H&R Block. “For us, it literally means repositioning the business for the next generation."
While the iconic brand is practically synonymous with consumer tax preparation services, Jones said H&R Block had stopped growing and had begun losing clients. Noting that the business generates a robust free cash flow, Jones said the process it started in 2018 wasn’t exactly a turnaround.
“We talk about it as a crisis of relevance,” he said.
For Jones, the process needed a strategic partner. He found that in CFO Tony Bower, who has been at the company for 17 years.
“When we think about driving transformation, the first thing that mattered was alignment on the problem that we had to solve,” Jones said. “When you have a partner that deeply understands the business and is in it day to day with you, that’s kind of a ‘CFO-plus’ role and I’m very fortunate to have that."
Jones added that he relies on his CFO to provide a critical perspective.
“I couldn’t imagine somebody who didn’t just tell it to me straight all the time,” he said.
Feirn added that the CFO’s framing and strategic lens is valuable. “The question I always hear from our CFO is, ‘tell me what you want to achieve and I’ll tell you how we’re going to do it,’” she said, adding that alignment in developing a transformation road map is preferable to arguing whether it’s the right strategy.
What finance transformation looks like
Jones acknowledged the pressure that can come from those who track the company’s stock price.
“We all get frustrated with how the market sees your performance, but when you’re really focused on a multi-year repositioning of the business, you’re going to be in zones not all investors like – and to have the courage to do that side by side, every day, is just incredibly important."
For H&R Block, finance transformation involved a robotic process automation (RPA) programme that streamlined such tasks as expense report approvals or hiring and onboarding seasonal employees. Jones said RPA now handles roughly 35 processes throughout the organisation and saves in excess of 50,000 person-hours per year.
The programme has allowed executives to think more about machine learning (ML) models and finding the right balance between automating tasks and helping employees be more strategic and valuable.
CFOs get the nitty-gritty of what would need to change in areas of the organisation during a transformation that are often very overlooked, and really, really important to getting it right and keeping it on time.
Bower noted that while the RPA programme has been successful, it also required finance leaders to collaborate closely with IT in order to manage and maintain data flows. “You really need a high volume of processing you can automate to make it worth the investment,” he said.
The critical skill to enable finance transformation
A keen understanding of technology is a key element for finance leaders, Feirn said.
“It’s critical for a CFO and the team surrounding the CFO and the finance function to be as tech savvy as possible right now,” she said. “You don’t have to be a cloud-native developer or a software developer in order to understand the influence of technology on how the organisation’s business model is going to change.”
Noting that Deloitte is now undergoing such a process to include both professional services and products, Feirn said the CFO plays a key role in understanding how both technology and operations must adapt to support different revenue recognition and receivables management.
“CFOs have an understanding of the degree of change management required to succeed in that transformation,” Feirn said. “The ones I know who understand and partner in a way that is more than just keeping track of the transformation but provide insights on the operating model – those are the CFOs that really distinguish themselves.”
