by Kyle Strong, Marketing Manager and Customer Advocate, Tradogram
Over the past decade, business functions have been forced to adjust the practices and tools used to continue accomplishing their objectives at pace and scale.
As a CFO, the critical role of managing a company’s most vital resource is no exception.
While the popularity and overuse of the broad phrase “digital transformation” has caused an eye-rolling response from many executives in recent times, an unquestionable necessity to focus attention towards adapting policies and keeping pace with evolving technologies remains.
Classic offerings from enterprise resource planning systems that include prestigious brands such as Microsoft, SAP and Oracle continue to offer alluring premium-brand atmospheres that promise all-inclusive management success in exchange for executive buy-in.
But savvy CFOs are opting for premium results without premium price tags. As the classic proverb says – less is more.
For mid-to-large organisations, roles responsible for spend management are updating their toolkits with lightweight, dedicated solutions found online, such as a standalone purchasing system.
The multi-source mentality
The “multi-source mentality” has seen adoption across business operations as a whole. This shift in mindset has been facilitated by a reduced cost of software development, a better understanding of service requirements and an influx of new competitors entering the market.
As the founder and CEO of one such software product used by purchasing and financial managers, Hani Abdou explains in an interview why the trend in executive decision-making is leaning towards a different set of core values.
Based on interactions with his customers, Abdou has noticed that CFOs are moving away from taking risks on single platforms with “all-inclusive and premium” offers in favour of surveying a large volume of tools prior to buy-in using a “simple, flexible and affordable” evaluation model.
The role of the future CFO
As technical specifications become more complicated across departments and the number of available suppliers increases each year, CFOs are becoming financial process architects – ensuring that purchasing procedures adhere to the objectives of effective spend management.
• Cutting costs: CFOs have always been responsible for ensuring that financial personnel are actively seeking to secure goods and services that are sourced for the best price, without compromising quality. As part of managing costs, CFOs must verify that clear communications between internal and external stakeholders are maintained, ensuring the development of trustworthy relationships. The unfortunate reality is that in the pursuit of cost savings, some industries have seen intentional and unintentional compromises in morality when it comes to supplier sourcing. For the future CFO, advocating social values and rewarding innovation while maintaining the pursuit of the best price is also a balancing act of rising importance for many organisations.
• Controlling the process: As businesses scale, the process used to acquire goods and services becomes complicated – and so too does the role of the CFO managing the process. In modern business, establishing and enforcing budget limits and streamlining purchasing through controlled approvals typically relies on the selection of effective fintech software. The selection of the right system for controlling the full scope of purchasing, including negotiation and accounting, requires a strategy inclusive to the needs of all departments. For the future CFO, empowering trustworthy individuals with the tools they need to execute the P2P process without compromising control requires attentive leadership and team building.
• Capturing and proving value: The traditional role of tracking and reporting KPIs related to financial processes is the same as it ever was for financial executives, but the emphasis has shifted in two major ways. Even with adequate systems for tracking purchasing, compliance with policies and practices related to data entry are critical to ensure accurate information between platforms. To make sense of the data stored on any system, analytical reports allow executives to extract and review important information before converting it to meaningful insight and informed action.
For proving social value and that effective CBA is taking place internally, software that provides archives of financial processes beyond just the numbers is of importance to the future CFO.
Kyle Strong is Tradogram’s Marketing Manager and Customer Advocate. Interested in future-proofing your approach to spend management? Visit tradogram.com to speak with an implementation expert today.