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Next-Generation KPIs of Highly Successful CFOs
Steve Cox, Group VP, Oracle ERP & EPM Product Marketing, Oracle
However, the digital transformation has impacted the overall pace of business and has inspired a reevaluation of technology investments. With the cloud and advanced technologies like artificial intelligence, machine learning and others, CFOs must now meet challenges that come with a new collaborative business environment on top of increasing pressure to meet business goals and bottom-line financial performance. This, coupled with a growing competitive market, forces the need for finance leaders to become more agile, efficient, and strategic than ever before.
It’s not just about calculating hard figures anymore – it’s about more calculated thinking. CEOs are looking to their finance leaders to help drive wider business strategies. CFOs now need to shape their action plans based on the company’s short and long-term goals with a more comprehensive understanding of other business areas like HR, product development, customer service, and IT. As a result, traditional financial key performance indicators (KPIs) no longer apply.
According to research from the American Institute of Certified Public Accountants (AICPA), agile finance leaders are more effective at delivering forward-looking analysis that identify new business opportunities. A unified cloud suite that ties back office systems together provides CFOs the holistic view needed to uncover these opportunities. With more data at their disposal, their roles and functions are quickly evolving. They must now analyze new generation of intangible KPIs that provide better insight into company performance and lead to innovative strategies never thought of before.
So, what are the new business KPIs that modern CFOs must now integrate into strategies and plans to drive overall success in this modern business environment?
In today’s business environment, it is critical to consider a holistic view of the business with revamped KPIs to align with modern business operations models
An organization’s talent is its most important asset, which is why it’s imperative for CFOs and CHROs to have a strong partnership beyond just the cost of payroll. As finance and HR increasingly lead strategic organizational transformation, ROI comes not only with financial savings, but also from the new insights and visibility into the business HR and finance gain with the cloud. Together, the two can identify the most appropriate workforce KPIs for better collaboration to help drive the company’s overall strategy.
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Business Process Efficiency
The cloud and associated emerging technologies are pushing business to undergo a digital transformation to better optimize their operational processes. New technologies such as AI, machine learning, and IoT are taking over mundane businesses tasks and freeing up finance leaders to provide better, more strategic direction. With additional insights into new areas of the business and more detailed views into their own functions, CFOs can identify new areas to monitor and develop related KPIs to address issues or drive further business success.
Customer Experience (CX)
Customer satisfaction and loyalty are key drivers in the overall success of a business, so it’s important for CFOs to consider KPIs that keep customers in mind and support the customer experience. For example, access to more information across the entire organization can help deliver the insights needed for a CFO to analyze areas like customer complaints or product returns which can help determine where to make additional investments to improve on the customer experience.
Brand reputation has always been tied to company revenue. The digital transformation has now magnified the effect forcing CFOs to focus more on brand reputation metrics as non-financial marketing KPIs. In fact, according to a recent study by the American Institute of CPAs and the Chartered Institute of Management Accountants (AICPA/CIMA), modern finance leaders are 69 percent more likely than others to focus more on reputation metrics, and 48 percent can accelerate their business’ ability to take new products to market, often resulting in revenue growth. Modern CFOs can accomplish this through the cloud by having the same visibility to marketing metric data as the CMO. If a CFO can pinpoint data that uncovers potential opportunities, then the two can better determine the best ways to supplement marketing spend.
Gone are the days of siloed departments. In today’s business environment, it is critical to consider a holistic view of the business with revamped KPIs to align with modern business operations models. Given the central role a CFO plays, the modern CFO must take the lead and adapt to a new set of finance and business KPIs that better align the entire organization to fuel business growth and guide the future direction of the company.