Bridging the Gap: CEOs Uniting Finance with Business Operations

Stefano Maifreni, Founder and COO Eggcelerate

Integrating finance with operational strategies has become pivotal for success in the evolving business management landscape. This article draws insights from direct experience and sheds light on the transformative journey of modernising the finance function within organisations. It delves into the challenges, strategies, and outcomes of bridging the finance and business operations gap.

Navigating Initial Challenges

The journey often begins in a setting where the finance function is limited, primarily focused on tracking revenues and basic bookkeeping, with heavy reliance on spreadsheets. This traditional approach presents significant challenges, particularly for small businesses where the finance team might consist of the CEO, a co-founder, and an external accountant. The primary challenge is moving beyond this rudimentary setup to embrace a more integrated and strategic approach to financial planning and analysis (FP&A).

Over recent years, new tools and technologies have facilitated a shift towards a more integrated view of business operations. Tools allowing comprehensive tracking, reporting, and forecasting have become accessible, even to smaller enterprises. However, the transition is not without its hurdles. The main challenge now is the scattered nature of data across different formats and the lack of necessary skills to leverage these new tools effectively. Despite these obstacles, there’s an emerging opportunity for a more collaborative approach to planning and analysis, moving away from traditional finance-centric models to ones that involve broader senior management participation.

Strategic Alignment: Overcoming Data and Process Challenges

Addressing the issues of data silos, inconsistent data, and lack of flexibility starts with a comprehensive understanding of the organisation’s current state. The transformation journey gradually shifts towards a more structured and transparent financial planning and analysis process. This shift must be supported by a four-layer approach focusing on data and tools, skills, and culture.

The move towards digital integration in finance has unlocked several benefits, most notably establishing a single source of truth. This unified view eliminates confusion and saves time by providing precise, reliable data for decision-making. Enhanced data visualisation tools enable easier comprehension of trends and performance metrics, leading to increased efficiency, accuracy, and effectiveness in management decision-making processes.

Such an approach enhances the finance function’s efficacy and ensures its strategic alignment with the business’s operational goals.

Enhanced Decision: Making through Comprehensive Integration

Integrating finance and business operations under a singular strategic vision affords CEOs a panoramic view of their performance. This comprehensive perspective, enriched by real-time data and analytics, empowers leaders to make informed, data-driven decisions. It shifts the decision-making paradigm from one that is reactive to market changes to one that is proactive and anticipatory of future trends. Such a strategic advantage is invaluable in today’s fast-evolving business environment, enabling organisations to navigate complexities and seize opportunities for growth and expansion.

Efficiency and Agility: A Dual-Edged Sword

Efficiency and agility are the dual pillars supporting an organisation’s ability to maintain a competitive edge. Streamlining financial processes and operational workflows drives efficiency and imbues the organisation with the agility to adapt swiftly to market changes and emerging opportunities. CEOs play a pivotal role in orchestrating this streamlining, ensuring that the organisation is not just lean in its operations but also flexible in its strategic outlook. This agility is especially crucial in responding to unforeseen challenges, allowing companies to pivot and adapt in ways that sustain growth and profitability.

Cultural Transformation: Fostering a Culture of Business Partnership

To bridge the gap between finance and operations, CFOs must demystify the finance function and actively engage with different business units. By understanding and participating in the operational aspects of the business, such as managing the Operating Cash Cycle, CFOs can offer invaluable insights that support growth and operational efficiency. This approach positions the finance function as a strategic partner rather than a gatekeeper, fostering a more integrated and dynamic business model.

Encouraging the finance team to engage in managerial accounting and be involved in the operational aspects of the business is crucial. This involvement allows finance professionals to understand the business first-hand, build trust with operational teams, and establish the finance function as a strategic hub.

Conclusion

Integrating finance with business operations marks a significant shift towards a more strategic, efficient, and collaborative business model. While challenges exist, the path forward involves embracing new technologies, fostering open communication, and ensuring that finance functions align closely with operational strategies.

The key for organisations embarking on their modernisation journey is to start with a clear goal, mainly focusing on improving reporting processes. Understanding the source and format of data, coupled with active engagement with the business to comprehend its needs, lays the groundwork for a successful transition.

This holistic approach enhances decision-making and operational efficiency and positions organisations for sustainable growth in an increasingly complex business environment.

Stefano Maifreni, Founder and COO Eggcelerate Bio

Action- and delivery-focused “efficiency geek”, can anticipate the tornado caused in operations by a butterfly flapping its wings in sales.

Stefano has a background in ICT blue chips and FTSE250 companies, as well as in growing companies and start-ups in technology-intensive and innovative sectors (e.g., Manufacturing, Drones/IoT, AI, GreenTech, Insure/FinTech).

He launched Eggcelerate to help small B2B businesses experiencing flat-lined results achieve focus and sustainable growth.

Stefano is an Executive MBA graduate of the London Business School and a published author (Forbes, The Guardian, The Telegraph, The Times/Raconteur, and various SME-focused publications) on topics from Strategy to People and Operations.