At a minimum, finance transformation initiatives will 1) fundamentally change how the finance function operates and 2) significantly improve performance. Yet some organizations struggle to achieve even these modest goals. CFOs who don't seek to streamline, simplify, and optimize finance to have a meaningful impact on the business will quickly find themselves out of work.
To better understand what it takes to make a finance transformation successful, Katie Kuehner-Hebert spoke with Peter “Reyn” Holden, CFO of Qu, a commerce platform for quick-service and fast-casual restaurants. In the interview, the veteran finance executive discusses the benefits and pitfalls of transformation and why an integrated system and CFO visibility into operational and financial data are at the heart of any project like this.
You're leading the effort to drive financial transformation at Qu – what does this involve and what systems do you have in place?
As a CFO, you're always trying to get a quick grasp on what's going on within the business, identify if revenue is trending as expected, and pinpoint potential issues. Qu is a data-driven business, and data is essential for today's CFO. Without a good financial picture, you can't make effective business decisions or prepare for an IPO.
The challenge is to create a universal framework where systems can talk to each other, mitigate data inconsistencies caused by human error, and enable a single source of truth. That source of truth is built into dashboards across the organization. Dashboards provide real-time health checks, provide a data dictionary, and lay the foundation for AI. This is where I want to be in the long term.
To gain insight into revenue, we began implementing an effective ERP solution to provide system connectivity for control, scalability, and automation (i.e., a single source of truth). We updated our billing system to eliminate manual functions and automate revenue recognition, all communicating with our customer relationship management (CRM) system.
How has the role of the modern CFO evolved to become a key leader in finance transformation?
As a CFO today, I need to be more forward-looking and have near real-time visibility into where the business is going and what it looks like. CFOs need to develop long-term strategies based on metrics, but at the same time understand how different data sources, dashboards, and different systems work together. This is a move away from pure financial numbers and toward blending operational and financial across the organization.
What advice would you give on the data-related skills CFOs need for transformation projects?
We're moving into a world where CFOs are almost expected to have the skill set of a data scientist who specializes in various areas of finance, accounting, and economics. CFOs still need to know finance, but they also need to understand data. Understanding data provides the foundation for goal setting.
Data gives you insight into whether your organization is on track, it also allows you to drill down into your customers by segments (for example, their customer journey) and get a holistic view of how they are interacting with your business, and it gives you knowledge about what drives results and behavior.
But CFOs need to be smart and selective. CFOs and other C-Suite members can't drown in data. If the data isn't giving them anything, they shouldn't be tracking it. CFOs need to ask themselves which KPIs are necessary for decision making, which KPIs add value, and which are just tracked as vanity metrics.
Why are some CFOs unable to successfully manage their organisations’ financial transformation?
Most startups are fully focused on growth and raising their next round of funding, which can make them blinded by the tactical implications of the role. Additionally, many CFOs are tied to legacy systems that hinder their ability to move forward. Modernizing and consolidating your systems will make your organization more flexible and agile.
For growing businesses, we recommend starting with an ERP system. Then build a scalable billing system that works with all your CRM solutions. If your business still experiences fluctuations after defining the metrics and drivers, switch to Enterprise Performance Management to reduce human errors.
Finally, consider adopting an effective business intelligence tool that works across your organization. This creates a simple framework that eliminates the resources required for extensive training. Your team can get started right away with defined menu lists to pull out the dashboards and insights they need.
