Home Finance How Finance Leaders Steer Growth-Focused Businesses

How Finance Leaders Steer Growth-Focused Businesses

By Michel Haesendonckx, Global Solution Owner Financial Planning & Analysis, SAP and Kevin McCollom, Chief Marketing Expert of Finance Solution Marketing, SAP

Over time, finance leaders from growth-focused companies have begun to understand the value and dynamics of steering the business in real time. And there’s a rising sense of significance in doing so.

In its study of midsize companies, the SAP Insights research center reported nearly one-quarter of finance leaders consider continuous cost improvement a top priority. This ranks on the same footing as enhancing processes that are traditionally and unnecessarily periodic, such as budget planning, forecasting, and profitability assessments of customers, products, and services.

Such real-time management is what most CFOs from multinational enterprises and conglomerates call business steering. But this is not to be confused with a committee deciding business priorities, architecting organizational structure, and managing operations.

In the context of growth-focused companies, steering is about overseeing, analyzing, and guiding the business with real-time information, key performance indicators, and a sense of proactive urgency.

Moving from intermittent routine to strategic continuity

SAP Insight’s findings signal a departure from the tradition of waiting for quarterly financial results to assess financial positions, select investments, and adjust the business strategy. Financial risks are evolving too quickly in response to economic shifts, technological advancements, regulatory updates, and market dynamics.

Most midsize businesses are already aware of the risks of the current landscape, including operational compliance, brand reputation, fraud prevention, and sustainability.

Explore research-based insights on how finance leaders from midsize companies address priorities, opportunities, and risks. Read the SAP Insights report, “The Transformation Mindset: Expanding Priorities for Finance Leaders of Growing Companies,” and our analyst video, “Transforming Finance in Growth-Focused Companies,” featuring IDC

But the SAP Insights study notes those that are growth-focused further protect their financial positions by proactively addressing cybersecurity breakdowns, internal talent shortages, supply chain fragility, and climate change.

To successfully navigate continuous change, finance leaders must transform the business mindset on risk and opportunity by adopting three critical principles:

  • Provide fast, detailed access to trustworthy information anytime, anywhere, and by trusted stakeholders
  • Install agile processes, improve collaboration, and reduce the cost of operations
  • Prepare for different scenarios and look beyond financial performance alone

Listening to this advice is an expanding group of finance leaders running growth-focused companies, as evidenced by SAP Insights’ survey. They are adopting a combination of financial performance monitoring tools and analytics – such as automated business intelligence dashboards and process intelligence solutions – to make timely, well-informed, and data-driven decisions.

And increasingly, these technologies feature an AI-driven “just ask” capability that allows decision makers to use natural-language keywords to find the right information, instead of clicking through multiple dashboards.

Driving value with true finance leadership

A prime area in which real-time steering can be highly effective is financial planning and analysis. A crucial part of running business processes, this finance responsibility has traditionally been completed manually with stand-alone spreadsheets, disconnected planning systems, and months-old data based on the last financial close.

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Growth-focused organizations tackle these challenges by establishing a single version of financial truth. One method is consolidating and migrating multiple ERP systems to a next-generation cloud ERP, providing a unified business architecture for convenient access to the right data anywhere. The inclusion of a cloud-based analytics and planning solution further enhances the advantages of this exercise, yielding real-time insights.

Furst-McNess Co. recently adopted this digital strategy and realized improvement that accelerated reporting on dashboard metrics and cost center performance. The agribusiness provider and consultant of customized commercial animal feed established a self-service analytics design that allowed employees to update reports by themselves, rather than involving IT intervention. Now that financial details are accessible in real time, the company reduced its 40-page financial reporting package to 15 pages.

By integrating the cloud ERP with a cloud-based analytics solution, Furst-McNess employees gained quick access to enterprise-wide expected and actual data. This step allows the company’s leadership team to continuously receive up-to-date and accurate metric reports, leading to decisions that stakeholders and employees can trust.

Turning forward-looking insights into future success

Instead of quarterly financial assessments, finance leaders of growth-focused companies use real-time information and key performance indicators to oversee and guide their business. They prioritize not only periodic processes, including budget planning, forecasting, and profitability assessment, to navigate the evolving financial risks, but also continuous cost improvement.

And with fast, reliable access to information and agile processes, midsize businesses gain the holistic view necessary to steer themselves toward ongoing revenue growth and profitability.

Explore research-based insights on how finance leaders from midsize companies address priorities, opportunities, and risks. Read the SAP Insights report, “The Transformation Mindset: Expanding Priorities for Finance Leaders of Growing Companies,” and our analyst video, “Transforming Finance in Growth-Focused Companies,” featuring IDC.