Views on future-proof finance from a modern CFO

In a recent PYMNTS podcast series about digital-first CFOs, Entersekt Group CFO, Erica Woods, shared her thoughts on adopting a data-driven mindset to ensure finance teams and functions are prepared for the future. Since Entersekt lives and breathes data – from engineering to marketing and even HR – we asked Erica a few more questions about leading Entersekt’s very own data-driven finance team.   
 
Modern CFOs set up their finance teams with the skills, processes, and tools to work smarter, automate core functions, and support the broader business. With their privileged, 360-degree view of performance across all departments, they can support the business with relevant insights, and strategic planning that drives growth.

Getting the finance basics right

For finance teams to be agile and responsive, their core functions must work like clockwork. When their basic processes are streamlined, it creates a strong foundation to deliver broader business support, particularly during uncertain conditions.

Critical functions, like statutory accounting, working capital management and managing cash flow, must be solid, Woods explained. And to ensure that, you need the right tools and the right people focusing on it.

"With their privileged, 360-degree view of performance across all departments, they can support the business with relevant insights, and strategic planning that drives growth."

The top two priorities that Woods chose to tackle when she joined Entersekt as Group CFO were cash management and forecasting. Forecasting is a data analytics process that helps businesses make predictions about future performance to guide decisions. For Erica, it was important to begin doubling down on forecasting and scenario planning to stress test their models. She also wanted to consider better ways to use these insights to support planning for the whole business.

Cash management was another fundamental area where she took the reins. She championed a culture of frugality and cash preservation to ensure the business would always be prepared for the unknown and to enable future growth. Woods also helped her team focus on streamlining the underlying processes like working capital management and procurement.

Automating core finance functions

Automating basic functions is the first big step in creating a data-driven finance team – one that contributes real value in a digitized business.

“The Entersekt finance team can add more value through analysis and driving data for decision-making than they can in processing journals and uploading purchase orders. My goal is to enable the team to use automation to free up more of their time and add that value to the business.”

To begin automating processes, the team needed to first look at what they were doing efficiently and what processes were less efficient to establish a framework for process optimization.

Woods believes they made a giant leap by moving to cloud-based accounting software. This established a single source of truth for finance data, and a technology architecture of financial and operational data as a rich basis for reporting. Plus, the team implemented systems and tools around accounts payable and accounts receivable to automate those processes too.

With automation efforts up and running, Woods could then focus on more strategic tasks like identifying threats, opportunities, and accurate forecasting.

“As finance, you want to constantly drive your team to a strategic value-add function. While there will always be day-to-day tactical work, you want to free up enough of their time and energy to add to the decision-making effectiveness of the company.”

Improving stakeholder collaboration through digital transformation

With Entersekt being a B2B2C company and working with large clients, many of them have already made good headway in their digital transformation journey. This has made it easier for Entersekt to work with its stakeholders. Typically, they already understand the benefits, like a reduction in human error, and improved collaboration that digitization and automation bring.

“We've got large enterprise clients that are used to digitization. They’re used to us saying ‘let’s make this efficient for us as well as you,’ as we improve this process for invoicing, collection and making payments, and procurement, for example. Many of our clients have been quite welcoming to that.”

Technology, skills, and mindset of a modern finance team

Woods and her team are embracing a digital transformation and digital-first approach by developing their data and analytics skills. They’ve begun using advanced business intelligence (BI) capabilities, like MS Power Query, to integrate data from a wide range of sources. Data Analysis Expressions (DAX) is another.

“We have an incredibly forward-looking team that is architecting a tech stack and delving into SQL queries on top of their day-to-day finance responsibilities. The finance team is bringing together many data sources, including hiring forecast data, operational data, and CRM data to forecast better and more accurately.”

It hasn’t been an easy journey for her team, she admits. But they understand the benefits of being future-fit! “Letting go of creature comforts is hard. And we are far from being where we want to be… this is a process. But the attitude of the team to picture the future state and slowly iterate to get us there is the key!”

Entersekt’s financial planning and analysis (FP&A) team is fundamental to this future state. “This team owns the finance tech stack, assisting other teams with automation. Importantly, they are using the data we have to drive metrics, analytics, and insights for the rest of the business.”

"The future of finance is in the convergence of all of the company’s data that we are privileged to hold and utilize for the benefit of all divisions in the company."

What’s more, the organization’s data team now also falls under finance. Why? “Because the future of finance is in the convergence of all of the company’s data that we are privileged to hold and utilize for the benefit of all divisions in the company. This includes product feature usage overlayed with ROI analysis, pipeline, and lead conversion overlayed with forecasting and scenario analysis, and transactional data overlayed with billing automation – to name a few.”

Aggregating data and sharing insights with the business

Entersekt is a data-driven business. And getting to that state begins with digitization. “[Y]ou have that data at your fingertips. So, as the CFO, you can really start to drive the business towards making better, faster decisions using data analysis.” 

The finance team aggregates and analyses data from across the business. But the process doesn’t stop there. The real value lies in sharing the insights with the rest of the organization and influencing decisions that stem from that.

“It’s not about the analysis we keep to ourselves, but about visualizing that data and presenting it back to the business. Otherwise, it’s worthless. It’s not about what finance can do with the data. It’s around what the business can do.”