Analysis, Flexibility, and Innovation: Key Priorities for CFOs in 2016

4 min read

This week, CFO Magazine penned a piece looking at the concerns and priorities of a few top CFOs in 2016. While many leaders will argue that the economy is in financial peril, the article pointed out that these CFOs are “far from pushing the panic button,” and instead focused on continuing growth, momentum, and looking at the long-view ahead. Richard Peretz, the CFO of UPS, noted that in this post-recession economy it takes a “different yardstick to measure success.” One common sentiment among these financial leaders was the need for increased flexibility to successfully navigate in such a complicated environment. The piece also added “for these finance leaders, innovation goes hand in hand with flexibility” and that “this perspective reflects a subtle shift observed in finance functions from a narrow focus on cost control and toward a more expansive view of the business.” In sales performance management, in particular, the line for CFOs between cost control and innovation is often blurred. For example, once a company rolls out a new innovation, they need to incent a sales team to sell it. But without the right technology in place, it’s often unclear how prioritizing and incenting around new products will cannibalize existing sales and impact the bottom line. Companies need the flexibility to model and analyze new compensation scenarios and tweak them before they go into production, thus minimizing the risk involved. This same principle can be applied across the sales function. In the ‘new yardstick’ world of modest growth, sometimes ingenuity in how to approach an existing opportunity can reap equal rewards to a completely new innovation. For example, Alberto Manuel Horcajo Aguirre, CFO of Telefónica Brasil, commented that his “greatest single challenge is maintaining growth in revenue” and as such, that the company would be investing “surgically” in the territories and the customer bases that can deliver the most value. By analyzing their existing sales and compensation practices, and benchmarking them against similar companies, businesses can identify these very opportunities. As in the case of Telefónica Brasil, some of the greatest avenues for growth could lie within existing customers and channels. But all too often, companies’ sales information is lodged in silos or stuck spreadsheets – locking it away from deeper analysis. Big data holds the answers, but you have to be able to ask the right questions. VS Parthasarathy, group CFO, group CIO, and president of group finance and M&A at the diversified Indian enterprise Mahindra & Mahindra, closes the piece by adding “It goes far beyond simply saying this reduces cost, or that increases revenue…Your insight and analytics may save cost in one instance, and they may identify new business opportunities coming up in another, or they may signal a danger coming ahead.” The value comes in having the tools you need to analyze and spot these signals – and the flexibility to turn them into innovations and opportunities.