3 Ways the CFO and Finance Can Partner with the CMO

3 Ways the CFO and Finance Can Partner with the CMO

Today’s CFO – and by association everyone who works on the Finance team – plays a more strategic role within the organization than ever before.

For example:

  • A Recent Dun & Bradstreet research report shows that CFOs are shifting from being “financial stewards to growth accelerators”, capitalizing on their command of data, insight, and analytics
  • Another study by Grant Thornton confirms that CFOs now spend more than a third of their time as strategic advisors, as they move beyond their traditional role.

Of course, none of this is news to you. It’s what you do every day. Just how easy it is to achieve often depends on your relationship with other leaders in your organization, like the COO, CRO, and CMO.

Collaborating with Marketing has historically presented some unique challenges to Finance executives, the size and scope of which vary depending on your vertical and on the personalities involved. Marketing is unique because (in most cases) it represents a sizeable part of your company’s overall spend, and (also in most cases) it’s populated by people who see things differently from you and your team, for reasons we’ll explore below. Again, not news to you, but something to acknowledge.


The budgeting and planning modules of cloud-based enterprise performance management (EPM) platforms, such as Planful, do a great job of capturing all the underlying details behind departmental budgets and can provide Finance executives with full visibility into budgeting assumptions.  These systems can also support regular reporting and analysis of actual spending against budgets and plans, and they can support rolling forecasts of spending in future periods.  However, these systems were not designed to support the detailed program planning that most Marketing departments undergo.

Software platforms like Allocadia help marketers get their strategic and executional house in order. They use the platform to build marketing plans, allocate their investments, and track results. We call it marketing performance management (MPM), and investment management is a big part of that. CFOs and controllers at our customer accounts see Allocadia as a “Finance compliance tool” for marketers because it ensures that they’re using sanctioned, Finance-sourced data, and because it gives you visibility into their world that you otherwise couldn’t get.

Allocadia can work hand-in-hand with Planful, and other systems, to exchange data – such as receiving financial targets and exporting detailed Marketing budgets and spending information. Several joint customers are already doing this today.

Three Ways to Partner with the CMO

If you’re looking to build, re-build, or grow your relationship with Marketing, here are some insights into how Marketing thinks and talks, complete with suggestions on how to win them over so you can fulfill your vision of being a growth accelerator and strategic partner.

1.  Learn their language. It may sound like a cliché, but marketers do speak a different language, especially when it comes to financial management. Your GL codes and P&L reports don’t typically line up with how they look at their world. For example, when you get an invoice from a digital advertising agency, you assign that cost to an advertising GL account. But over in Marketing, that invoice may need to be split across several campaigns, products, or regions. The GL account code simply doesn’t provide the granularity Marketing needs to run its business.

Another related example: that same invoice may include a retainer for a full year of service and needs to be amortized accordingly. Your accounting team may not know this, but Marketing does, especially if they want to evaluate program ROI for the period in which the spend occurs.

Truth is it’s actually more of a different dialect than an entirely different language. It will be easy to grasp because it’s close to your own. Once you see how Marketing builds their plans and tracks their spend, you’ll have more confidence in what they’re doing and will be better equipped to help.

2.  Build dashboards that matter. In our experience, the area where Marketing and Finance typically struggle the most is in figuring out what’s been committed budget-wise and what’s left to spend for any given period. If yours is like most companies, any funds not spent in the quarter for which they were allocated are unavailable once the quarter closes. From the marketer’s perspective, there’s nothing more frustrating than finding out you’ve left money on the table.

The challenge is the way you report on revenue and expenses – via an income statement prepared for the CEO and board of directors – doesn’t translate into cash so it’s of little use to marketers. They need a real-time view into actual spend vs. plan, among other dashboard details. They also need a view into unmapped or rogue spend.

These are just some examples of the insights that a Marketing-centric management tool can provide both you and the Marketing team. You should easily be able to build whatever analytic views you need to measure the business.

3.  Delegate.  Although no one (and no system) outside Finance should be allowed anywhere near the company’s official financial records, wouldn’t it be great if you could spend less time on budget reconciliation? As with the unmapped invoice example above, imagine Marketing being in control of its vendors to the extent that it can issue purchase orders or purchase requests that fully comply with your procurement policies and procedures.

Imagine Marketing being able to handle accruals and prepayments in its own system that fully complies with your rules, without your help. Imagine marketing managers being able to transfer funds between sub-accounts on their own, and with a complete approval and audit trail. And imagine them being able to see exactly how much money they have left to spend 10 days before quarter end without having to ask. How much time and effort would that free up for you and your team?

Becoming a Strategic Partner

As a growth accelerator and strategic partner, you want to empower the rest of your organization to make smart, data-driven decisions that are fully aligned with corporate objectives and fully compliant with fiscal policy. You want to be a partner and advisor, not an overseer. To achieve that with Marketing, you need to understand how they see the world, and then you need to help them be better stewards of their financial resources. Hopefully we’ve helped you begin that process.

To learn more about Marketing Performance Management and how to collaborate better with Marketing, visit us at https://content.allocadia.com/marketing-and-finance-stories.

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How to Align Enterprise Performance Management with Risk Management

How to Align Enterprise Performance Management with Risk Management

Achieving financial goals and objectives and maximizing performance are the primary focus for most organizations.

However, in today’s business environment, stakeholders are increasingly looking to boards and senior management to better manage strategic, regulatory, and other risks – while they make decisions that impact performance.

This was the focus of the New Jersey Chapter of the CFO Leadership Council at its May 2017 panel discussion titled “How Much Risk Is in Your Risk Management?” Moderated by Angela Tise of the CFO Leadership Council, the panel included Claire Doherty, Director of the Risk Consulting Practice at KPMG, Brian J. Hall, Area Vice President and Director of Surety at Arthur J. Gallagher, and Renee Yozzi, Director, Strategic and Enterprise Risk Management at Benjamin Moore & Co.

Here’s what the panelists had to say about enterprise risk management (ERM), based on their most current experiences.

Why Is Risk Management Important?

Most companies are doing risk management anyway, maybe just not in a formalized ERM program.  It’s really about factoring risk into decision-making.  It starts with defining the goals, objectives, and strategy of the business and, as part of that, identifying enterprise risks and prioritizing them as a team.

In doing this, executives need to understand the risk appetite of the organization.  It’s more than just surviving a crisis – it’s getting ahead of the risks and being proactive in mitigation.  Insurance is also part of risk management.  It tends to focus on known risks.  The problem is the unknown risks, things like supply-chain disruptions or store closures caused by natural disasters.

What’s the Right Number of Risks to Focus On?

enterprise_risk_management.jpgThe chief risk officer (CRO) should be involved in organizational strategy discussions and planning, and help the executive team factor in the risk perspective.  Examples might include the risks of entering emerging markets, extending the supply chain, or introducing new products.  There’s no magic number – it’s more important to align to the strategy, prioritize risks, and focus efforts on the most critical areas.

One example given was an organization that started off with 30 identified risk factors, then prioritized them down to 10 key ones.  The CRO should also be involved in quarterly business reviews (QBRs) to track progress, changes in strategy, and impact on risks.

Moving from risk strategy to implementation is challenging for many organizations.  The key is to focus the efforts and fit the program to the culture and organization.  Identify key risks and the related mitigation plans.  Risks need to be owned by key executive staff members.

Risks can be identified at corporate, department, or location level.  It’s critical to meet with operational teams and work through a questionnaire to identify all potential risks.  Risk managers should make themselves visible and accessible to line managers, engage regularly to raise awareness, be a resource, and help people work through issues.

Best Practices in Monitoring Risks

risk-heat-maps.jpgA “risk heat map” should be developed and used as a living document, with programs and governance built around it.  The risk management strategy can fail if the executive team is not aligned on the risk program, or if the culture doesn’t support the program.

Ranking risks using a low, medium, high heat map can be a good starting point.  Assigning quantitative key risk/performance indicators (KPIs/KRIs) can be a next step.  Quarterly is the most common frequency of gathering and reporting risk information.  Risk-based, data-driven decisions is where the KPI link comes into play.  Organizations need to define tolerance levels on KPIs/KRIs.

Where Does Risk Management Report?

In most organizations, risk management falls under Compliance or Legal.  In some cases, it’s moving out of these functions and into internal audit, but is generally owned by the CFO or COO.  But a key point is that the CRO doesn’t own the risk.  Line managers need to own and manage the risk.

The risk management group helps raise awareness and manages the program.  Whoever owns it needs to be connected to the CFO and needs to have a strong sense of how the business runs, including operational expertise.  The risk team may need outside subject matter experts as well.

What’s the Value of ERM to the Enterprise?

The main value is when risk management becomes integrated into the culture and the organization’s decision-making processes.  Just getting a risk management thought process in place can be helpful.  There needs to be a top-down culture of factoring risk into decision-making, which can bring other benefits. For example, another benefit of risk management is that it keeps insurance rates down if a company is actively mitigating potential risks.

How to Get Started

Focus on the issues that could have the biggest impact on the organization.  Think about the organizational culture and what makes the most sense.  Match the ERM program to the appetite of the organization.  One size doesn’t fit all.  Start small, focusing on what’s achievable in the short-term.  Prove success.  Then expand over time in bite-sized chunks.

Aligning Risk and Performance Management

This was an interesting panel discussion, one that may have opened the eyes of many in the audience to the need to think more strategically about risk management.  As a professional focused mostly on enterprise performance management (EPM), I was reminded of the need for risk and performance management to be thought about in parallel and closely aligned.

Both processes start with the establishment and communication of corporate goals and objectives, development of strategy, and cascading this down through the organization.  And as plans and programs are established and approved for execution, the related risks should also be identified and tracked, along with performance results.

balanced-scorecard-dashboard.jpgAs KPIs are established for monitoring performance, KRIs should also be identified and monitored, whether these are qualitative or quantitative.  And these KRIs should act as early warning signals to potential programs.  Examples include key financial ratios in banking, staff overtime in manufacturing, customer complaints or billing errors in a Telco, staff turnover in HR, or virus attacks in IT.

As with EPM – which relies heavily on the collection, consolidation, and reporting of a wide variety of financial and operational data and metrics – effective ERM is also dependent upon the regular, systematic collection and consolidation of data related to enterprise risks.

Today’s modern, cloud-based EPM platforms are well-suited to collecting and reporting financial and operational metrics that can be used as KPIs or KRIs.  Whether this data originates in GL/ERP systems, HCM, CRM, Supply Chain systems, or a data warehouse – the data integration capabilities of an EPM platform can automate the collection, consolidation, and reporting of these metrics in whatever form is needed for management.

To learn more, check out our white paper titled:  Introduction to EPM in the Cloud.

Download the White Paper

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Planful Spring17 Supports More Complex EPM Requirements

Planful Spring17 Supports More Complex EPM Requirements

It’s been a long wait, but Spring has finally arrived!  Along with that comes Planful World and the Spring feature release of our cloud enterprise performance management (EPM) platform.

The Spring17 release offers a number of new capabilities that will be attractive for both existing and new customers.  This includes new features to help address more complex planning and consolidation requirements, further user experience improvements, enhancements to reporting, and improved integration with NetSuite ERP.

Improved User Experience

With the extension of cross-browser support to Dynamic Report Sets, Initiative Planning, and Template-Based HR, with this release, 100% of Planful’ end-user functionality is now supported on modern web browsers.  Now users can access all Planful functionality via supported modern browsers including Microsoft IE 11, Edge, Firefox or Chrome on Windows PC’s, or Chrome, Firefox and Safari on macOS platforms.  This provides improved flexibility and more options for users.

New, Advanced Features

The Spring17 release includes a number of new features designed to support more complex planning, consolidation, and reporting requirements.

The big news for users of Planful Consolidation is enhanced “Organizations by Period” functionality, which was initially introduced in the Winter17 release.  The Spring17 release adds the ability to change the parent organization of an entity, which eliminates the need to add new subsidiaries to handle ownership changes over time.

The main benefits are the removal of redundancy, more automated data consolidations, and a simplified process to manage changes to organizational structures and generate reports comparing financial results based on different structures over time.  This makes life easier for organizations that are actively acquiring or disposing of companies, or have frequent reorganizations, so that they can analyze the impact of these changes on their financial results.

In Planful Planning, this release supports mass editing of employee details in Workforce Planning, which saves time in headcount, salary, and compensation planning.

Excel Reporting.pngEnhancements to Planful Modeling include “breakback allocations,” a powerful feature that enables users to quickly and easily make top-down adjustments to forecasts and models, allocating changes across multiple dimensions.  This release also includes change data tracking capabilities that improve data aggregation speed as well as enhancements to the data load API.  It also includes enhanced Excel reporting – which allows users to take full advantage of the formatting capabilities of MS Excel when creating Excel-based reports accessing Modeling data.

Improved Reporting

The Spring17 release includes several enhancements in Planful Reporting.  A big improvement is an enhanced user experience for Dynamic Report Sets across all modern web browsers.  This includes advanced formatting capabilities, such as font types, font size, and color, additional border types and color, header formatting, granular data formatting, improved grid features, and improved rules builder.  The main benefit here is modernization, improved usability, and flexibility in reporting.

This release also includes enhanced cash flow reporting – which allows companies to report cash flow in local currencies and gives them more flexibility to pull opening balances from different historic scenarios.

Improved Integration with NetSuite

NetSuite tab integration.pngThe Spring17 release includes great news for NetSuite ERP customers.  Planful can now be integrated with NetSuite as a selectable item under the EPM tab within the NetSuite application window, with single sign-on (SSO) capabilities.  In this release, we’re also offering a native NetSuite data connector that makes it easier for users to integrate, map, and load NetSuite ERP data into Planful.

Learn More

As I mentioned earlier, the Spring17 release offers many new capabilities that will benefit both existing and new users.  And this release will be especially attractive to NetSuite ERP customers who may be struggling with spreadsheets and manual processes, or have outgrown their existing solutions for planning, consolidation, and reporting.

Those of you attending Planful World this week will have many opportunities to learn more and see demonstrations of our new capabilities.

If you’re an existing customer and want to find out more, you can view the full release notes in our online help and discuss these new enhancements via ourCustomer Community.  You can also view the Spring17 new feature release training webcast to get more information.  If you’re a prospective customer and want to learn more, sign up for a Planful Live Demo.


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What’s the Difference Between EPM and CPM?

What’s the Difference Between EPM and CPM?

The concept of managing performance in organizations has had a variety of labels applied to it. The most popular variations are enterprise performance management (EPM) and corporate performance management (CPM).

Many practitioners and experts in the industry have positioned these terms as basically meaning the same thing. However, subtle differences exist between these terms and what they are intended to convey.

The common thread is that both terms refer to a process and software system designed to help organizations achieve their financial goals and objectives, by linking their strategies to their plans and execution. (as opposed to HR or IT performance management.)

Corporate Performance Management (CPM) – is the term used by some industry analyst firms and many software vendors and consulting firms in the market. This term is typically used to highlight the “corporate” application of performance management processes, mainly driven by the Finance organization.

Enterprise Performance Management (EPM) – is a term that more broadly applies the concepts of performance management across the enterprise. This includes Finance, which is typically the key driver of EPM. But it also includes Sales, Marketing, Services, Manufacturing, Supply Chain, and other line-of-business operations. The term EPM is also more easily applied outside the corporate world to educational institutions, government agencies and non-profits.

EPM and CPM include the following business processes:

  • Planning

    – Budgeting, Planning, Forecasting and Modeling

  • Consolidation

    – Financial Consolidation and Close Management

  • Reporting & Analytics

    – Management, Financial, Regulatory, Ad Hoc

The IT industry analyst firms who track this market use different terms. For instance, Gartner uses CPM, Forrester originally used FPM (Financial Performance Management) and then evolved to EPM.

In summary, the terms EPM and CPM refer to the same set of business processes, designed to help organizations achieve their financial goals and objectives.  However, the term EPM is used more broadly to promote the use of these processes across the enterprise, and in non-corporate environments such as higher education, government agencies and non-profits.

Learn more about enterprise performance management (EPM).

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What’s All the Buzz About Continuous Planning? Get to Know the Concept and the Continuous Planning Process

What’s All the Buzz About Continuous Planning? Get to Know the Concept and the Continuous Planning Process

There’s been an increasing amount of buzz in the market around the concept of “Continuous Planning.” While the concept has been around for a while, why is this getting so much attention now? What does it mean? And how continuous is continuous?

Let’s start with the continuous planning process definition. Industry analyst Rob Kugel Rob Kugel at Ventana Research offers up a very simple explanation: “Continuous planning uses technology to enable rapid planning and review cycles to support a more agile organization.”

What’s the alternative to continuous planning? The answer, per Mr. Kugel and other experts in the industry, is “static budgets.” In today’s volatile global economy, managing based on static, annual budgets no longer works. The best practice in the market is to shorten the annual budgeting process, make it less granular and use it to set initial targets, then revisit and update the budget assumptions on a regular basis through rolling forecasts.

How Continuous Is Continuous?

This notion of updating the budget assumptions on a regular basis begs the question – how continuous is continuous?  Should organizations be constantly planning?  Based on BPM Partner’s 2016 BPM Pulse Survey, the answer is that most companies update their forecasts monthly (34%) or quarterly (24%).  Per BPM Partners, another 13% of companies update their financial forecasting weekly.  Retail is a good example of an industry where this approach makes sense.

BPM Pulse survey on forecasting.png

And there’s a small segment of the market (9%) claiming to update their forecasts “continuously.”  If we assume that means daily, then I could see this approach making sense in “fast-changing” industries such as financial services or transportation.

The Link to Rolling Forecasts

Rolling forecasts are clearly a key component of continuous planning.  We’ve covered this in webinars and other blog posts, but here’s a quick overview of the concept.

In their purest form, a rolling forecast budget allows organizations to project future results based on a combination of actual YTD financial results and the original budget, or updated revenue and expense forecasts for future periods.  The future forecast period can extend to the end of the fiscal year, but in its purest form, the rolling forecast period typically extends out 4 to 6 quarters into the future.

This approach provides the organization with a head-start on budgeting for the next fiscal year since the work is done in advance and considers the latest results and assumptions about the agile business going forward.  In some cases, organizations that have adopted and executed a rolling forecast process have eliminated the need for an annual budget.  This concept is promoted by the Beyond Budgeting Roundtable, which is led by industry guru Steve Player, another friend of mine.

How the Cloud Supports Continuous Planning

So you may be wondering, what type of budgeting and planning system does an agile organization need to support rolling forecasts and the concept of “continuous planning”?  The consensus from industry experts such as Rob Kugel and Steve Player is that reliance on spreadsheets severely limits an organization’s ability to execute rapid, agile planning and forecasting cycles.

Leading companies are adopting packaged financial planning applications found in enterprise performance management (EPM) software packages to streamline the planning process.  Moreover, cloud-based EPM applications are becoming the preferred approach in today’s market due to the speed of deployment and low cost of ownership EPM applications offer, as well as the ability for users to collaborate and update or create their forecasts – anytime, anywhere.

Continuous Planning Customer Examples

Thousands of organizations are now adopting cloud based planning software and applications and are adopting the rolling forecast process as a result.  A number of Planful customers have testified to their ability to reduce planning cycles and adopt more dynamic planning techniques as a result of moving from spreadsheet-based budgeting to cloud-based planning.

Learn more about what is Continuous Planning and the Continuous Planning definition in our Guide to Continuous Planning

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Is Zero-Based Budgeting Back in Vogue?

Is Zero-Based Budgeting Back in Vogue?

Over the past few years, the zero-based budgeting (ZBB) approach has gained renewed interest and is being adopted by a growing number of organizations.

Why the renewed interest?  How has this impacted organizations?  And what are some of the pros and cons about the approach?

A recent article published by McKinsey & Company highlights ten myths and realities that illustrate the power and practicalities of zero-based budgeting for the consumer-packaged-goods industry.

While zero-based budgeting (ZBB), is capturing the imagination of investors, analysts, boards of directors, and executives across industries, some skepticism remains.  Some organizations have seen limited impact of the approach, while others have actually seen negative impacts through under-investment.  As a result, many executives still wonder whether ZBB is an appropriate discipline for their organization—whether the results would justify the effort they envision.

In the article, McKinsey recognizes the potential power of the methodology to unlock shareholder value, especially in the consumer-goods industry.  And by contrasting ten myths and realities of ZBB, they aim to clarify what the methodology is all about, what changes it requires, and what actions are necessary for successful implementation.

McKinsey concludes,

“When done well, zero-based budgeting can drive significant, sustainable savings and is a machine for efficient resource reallocation. But getting it right requires leadership stamina to see through initial resistance. World-class ZBB programs build a culture of cost management through unprecedented cost visibility, a unique governance model, accountability at all levels of the organization, aligned incentives, and a rigorous and routine process. When these elements are in place, ZBB lets organizations free up unproductive costs and redirect those resources toward profitable growth.”

To learn more, check out the article: “The truth about zero-based budgeting: ZBB for consumer-goods players.

The Planful Point of View

At Planful, we view zero-based budgeting (ZBB) as one of many viable budgeting and planning techniques – including traditional budgeting, and rolling forecasts.  One size doesn’t fit all, so organizations need to implement the approach that works best for their size, culture, maturity and economic situation.

For smaller companies, that aren’t growing rapidly, the traditional budgeting approach is often sufficient. For fast-growing, dynamic organizations, rolling forecasts can be leveraged to more accurately allocate future funds, providing the versatility businesses need to respond to changes quickly. And zero-based budgeting can be leveraged in public sector organizations, or private sector companies looking to make sure all departmental costs are completely justified before funds are allocated.

Whichever approach you choose, make sure your budgeting software is flexible enough to handle multiple approaches. With cloud-based enterprise performance management (EPM) software, your business can support standard or zero-based budgeting, with the flexibility to augment the budget with rolling forecasts on a quarterly or monthly basis, as needed.

To learn more, check out our Planning and Forecasting Best Practices white paper.

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The First 90 Days:  How to Succeed as a New CFO

The First 90 Days:  How to Succeed as a New CFO

The first 90 days is a critical time for any CFO taking on a new role.  While a new CFO wants to hit the ground running, there are many challenges to take on during the transition process.

These include learning a new organization, working with a new boss, managing a new team, and implementing change in a new culture.  This topic was the focus of the NYC Chapter of the CFO Leadership Council at its April 2017 event.

Led by moderator Nick Christiano, Jr., National Managing Partner, Healthcare, at Tatum Partners – the panel discussed their experiences and learnings in onboarding as a new CFO, managing a new team, working with a new CEO, and getting productive quickly.  The panel included Ben Golden, CFO at Novantas, Sam Judd, CFO, COO, and Business Head, John Miller, CFO at Gravitas, and Randy Zeno, CEO at Urban Therapy.

Here’s what they had to say.

Interacting with the Board and Investors in the First 90 Days

This depends on type of company and role.  In larger, pubic companies, this may not be feasible.  Worst case, a new CFO should have contact with the head of the audit committee.  Getting engaged with the board is more viable in VC- or PE-backed companies.

A key opportunity in small, private companies is meeting with board members during the interview process.  This gives the incoming CFO an opportunity to understand board member expectations, and issues that need to be addressed.  This can be valuable input to use in developing the 90-day plan.

Gaining Confidence in the Financials

Integrity as a new CFO is critical.  The CFO must get comfortable with the financials quickly, whether it’s a public or private company.  That means getting auditors involved if the CFO suspects issues.  A CFO must be confident in the results being produced.  This includes the historic actuals as well as forward-looking forecasts.

If a new CFO finds issues in the financials, the recommended approach is to reveal these quickly.  Being transparent with the board and CEO is critical in the first 90 days.  This can be painful, but it’s critical to be transparent about issues that are uncovered.  This can come back to bite the CFO in many ways.

How Important Is Industry Expertise?

CFO skills are usually transferrable across industries.  But some industries do have nuances a CFO needs to understand – e.g., Biotech, Government, Defense, CPG, High Technology.  This is especially true in revenue forecasting.  Industry experience can be helpful in understanding how the sales pipeline evolves and how real the pipeline is.  The first 90 days is a critical time to dig in and truly understand the sales process and sales forecast.

 In the hiring process, CEOs are looking for general CFO/Finance skills, as well as industry expertise.  So if you’re applying for a CFO position, it helps to tailor your resume to highlight skills that would apply to a target company.  Worst case, your resume can be more generalized and the cover letter and emails can be tailored to highlight specific experience.  Look for ways to transfer skillsets and experience.

Assessing and Managing a New Team

bigstock-Business-Woman-876649.jpgThe new CFO should get to know the Finance team in the interview process and continue the assessment during the first 90 days.  The recommendation from the panel was to keep the existing team in place during the transition period.  If you’re a new CFO, that means leveraging the team’s knowledge and assessing their responsibility and skills.  Don’t make changes in the team until after 90 days.  Don’t be hard core, but do be open-minded, learn, and assess the situation.

Make any exits on your own timeline vs. theirs.  Try to ensure a smooth transition in staff, where a change is necessary.  If there’s a toxic situation, become a shield for the team while you’re enacting change.  As new a CFO, you can have a lot of pressure to get things done quickly.  Go slowly.  Take time to assess the talent and situation.  Make the team part of the change process, and demonstrate leadership.

Making Changes at the Right Pace 

Onboarding starts before the new CFO starts the job.  Initial interviews provide an opportunity for light due diligence.  After an offer is received, that’s an opportunity for deeper due diligence – this should allow the new CFO to start assessing the situation.

While setting priorities as a new CFO, get a sense of the organization’s capacity and appetite for change.  Identify 3 top priorities.  Take lots of notes.  Interview the Finance team and the executive team.  Get input from all perspectives.  Don’t jump to make changes too quickly without understanding the full impact.

How Should the CFO’s First 90 Days Be Remembered?

Results are key.  The new CFO must identify 3 top priorities, show results quickly, and get a win.  Getting aligned with the CEO and the board is also important in the first 90 days.  Gaining confidence from key stakeholders is critical.

As a new CFO, keep your messages to management simple.  Highlight accomplishments.  Earn credibility.    One of your top goals should be a P&L item.  Find a way to pay for yourself – through increased revenue or enacting new cost controls.  This builds trust with the CEO.

How EPM Software Can Help

This was a great panel discussion with useful tips for CFOs in transition, as well as those thinking about making a change in the future or those looking to become a first-time CFO.  Assessing the Finance staff, processes, and systems that are in place is clearly critical during the first 90 days.

When it comes to financial systems, embarking on an ERP system replacement can be a long, expensive project that often disrupts the business.  New CFOs will have a better chance of getting a “quick win” by identifying Finance processes that are currently supported by spreadsheets and email, and can quickly be improved by implementing a purpose-built software application.

cloud-computing.jpgPrime candidates for quick improvement can include travel and expense management, purchasing, budgeting, planning, forecasting, and financial and management reporting.  Today’s modern, cloud-based applications for processes such as these can be deployed quickly, typically in 3 months or less.  

Planful has worked with many companies to help them improve their planning, consolidation, and reporting processes by replacing spreadsheets and email, or legacy applications their organizations have outgrown, with a scalable, cloud-based platform that can support future growth.  These systems can be deployed quickly, at a fraction of the price of on-premises systems.  They can also help organizations automate and accelerate processes such as financial budgeting, quarterly forecasting, financial close and consolidation, and financial and management reporting.

To learn more, check out our white paper titled “Building the Business Case for Cloud-Based Planning and Reporting.”

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From the Field to the Bleachers, Red Sox Turn to Planful

From the Field to the Bleachers, Red Sox Turn to Planful

Few U.S. professional sports teams are so well-known that they fill stadiums wherever they go. The Boston Red Sox are that kind of team.

Founded in 1901, the eight-time champions of Major League Baseball frequently draw sellout crowds for home games at historic Fenway Park, and draw large crowds at other ballparks, as well.  Data is key to driving that level of consistent success.

In 2002, utilizing a system of statistical analysis similar to what the Oakland A’s had adopted, and which was later profiled in a bestselling book and movie entitled Moneyball, Boston Red Sox former General Manager Theo Epstein struck financially savvy deals that would propel the 2004 championship team. Data-driven analysis would win bring another title in 2007 and a third in 2013.

Sophisticated number-crunching had become central to the Red Sox’s success, and not just on the field. In 2011, the finance team adopted Planful’ cloud-based enterprise performance management (EPM) platform to keep a lid on expenses, ensuring profits despite a high degree of volatility in the underlying business of running a storied baseball club.

Too Many Excel Sheets, Not Enough Insight

Ticket sales can ebb and flow according to where the team resides in the standings. Keeping a watchful eye on expenses can be crucial to ending the season in the black.

“We had maybe 100 or so different Excel templates that different managers would fill out. Those all linked into a mothership workbook and would ultimately serve as our reporting package when it came to the budget,” says Ryan Scafidi, Senior Director of Financial Planning and Operations for the Red Sox, noting the process was too labor-intensive to perform more than twice a year.

With limited infrastructure for gathering data from key departments in timely manner and tracking key forecast drivers, Scafidi says his team was forced to budget for worst-case scenarios. He convinced club executives to upgrade to Planful in response. Department heads took to the platform immediately.

Planful Unlocks $1 Million In Savings

“We have 57 users today. Because the solution is cloud-based, they don’t have to be on the network, they can do it from home. They can do it from the beach. They can get their stuff done on their own time within the deadlines that we set. It makes the process a lot more efficient,” Scafidi says, joking that compiling reports now takes “five minutes” rather weeks. “I’m being dramatic a little bit, but it’s not that far off.”

red sox logo.pngForecasts are now run monthly, with on-demand financial reports influencing estimates. Department heads can also drill down and review specific expense lines and adjust their needs as often as necessary. For example, members of the facilities team uploaded photos of fading paint and ripped seat cushions found throughout Fenway Park in Planful, part of a plea for extra budget that hadn’t been allocated. The extra detail in the system made real their pitch for added budget.

“Because we’re able to be more proactive and forecast over the course of a year we saved an additional half-million to $1 million in expenses that otherwise would have been water under the bridge in the old, Excel-driven world,” Scafidi says.

To learn more, check out the complete Boston Red Sox case study.

Download the Case Study

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