Host Analytics CEO David Kellogg shared some of his experiences with corporate budgeting and planning, and collaborating with finance as a business partner during his presentation to Argyle's CFO membership at the 2017 Chief Financial Officer Leadership Forum in New York on November 14. In his presentation, "Finance Transformation – A CEO's View," Kellogg highlighted best practices in process automation and finance planning and reporting.
According to Kellogg, the traditional view of the CFO has changed. No longer can they focus exclusively on financial performance. Instead, a CFO must find ways to drive value across a business.
Today's CFO must maintain flexibility and agility with planning and budgeting. Otherwise, they risk missing out on opportunities to help a company optimize its time and resources and achieve its goals.
"If you think about planning and budgeting, a lot of our ideas are very old," Kellogg stated. "Traditional views about budgeting are getting long in the tooth."
In addition, a CFO must look closely at a broad assortment of data. They must be able to perform comprehensive data analysis to identify business strengths and weaknesses and help a company tailor its day-to-day operations accordingly.
"The best finance organizations try to be partners to the business."
Although data collection and analysis are paramount, few CFOs understand how to streamline their data management efforts, and often struggle to capitalize on all of the data at their disposal.
"In a perfect world, all of our numbers would automatically reset," Kellogg said. "All numbers should update automatically as departments change."
How CFOs are evaluated is rapidly changing as well. In fact, in some companies, CFOs now are assessed based on how they help their respective companies drive growth.
"We should reward people for growth, not for planned performance," Kellogg indicated. "This can be hard, because most companies don't do that."
Ultimately, a CFO is responsible for helping a company discover the best ways to drive consistent growth. If a CFO revamps his or her approach to budgeting and planning, he or she may be better equipped to provide business leaders across a company with timely, relevant insights.
"We should look at budgets and plans differently," Kellogg noted. "An annual budget is effectively out of date the moment that you finish it."
A CFO must be open to revamping his or her approach to budgeting. Rather than prioritizing a company's expenses, a CFO should consider planning and strategy to help a business get the most out of its time and resources.
"We're not going to start a budgeting process. We're going to start a planning process, we're going to make strategic goals and we're going to find ways to support those goals."
Planning and strategy can play key roles in a CFO's efforts. CFOs that help businesses identify both opportunities and challenges may enable a company to streamline its operations. As a result, the organization can increase the likelihood of accomplishing its immediate and long-term goals.
"We should drive planning and strategy," Kellogg stated. "We're not going to start a budgeting process. We're going to start a planning process, we're going to make strategic goals and we're going to find ways to support those goals."
Moreover, Kellogg said a CFO should focus on three areas to drive transformation:
With the ability to automate everyday processes, a CFO becomes more productive, efficient, and reduces the risk of costly, time-intensive errors.
"There's a lot of drudgery in finance … and automation helps you avoid [mistakes]," Kellogg pointed out. "You limit the probability of a career-limiting error [with automation]."
Effective enterprise performance management (EPM) requires a CFO to act quickly. If a CFO can discover ways to simplify and enhance everyday operations, this professional can accelerate business processes and partner with multiple business departments.
"In the EPM business, we actually create time for our customers. Because if you can compress the cycle time … we're compressing work to create time," Kellogg noted. "With that time, you can be a better business partner."
Overly-siloed departments drain a company of time and resources. Fortunately, a CFO who deploys consistent processes and systems can drive alignment across a business. This alignment helps ensure that all departments can work together to achieve the optimal results.
A CFO must constantly explore ways to drive business improvement. With a forward-thinking approach, a CFO can help a company make informed decisions. Perhaps best of all, a forward-thinking approach may enable a CFO to become a key partner within his or her company.
"The best finance organizations try to be partners to the business. To do that, these organizations need to look forward, not backward," Kellogg indicated.
Dave Kellogg has more than 30 years of leadership experience at high-growth companies.
His experience includes being CEO of MarkLogic, CMO of Business Objects, and member of the Aster Data Board of Directors. Dave also served in advisory roles to MongoDB developer 10gen, Hadapt, and Tableau Software.
Prior to joining Host Analytics as CEO, Dave served as senior vice president and general manager for Service Cloud at salesforce.com, overseeing one of the company’s fastest growing businesses. Previously, he spent six years as CEO at MarkLogic, growing the company from zero in revenues to an $80M run-rate. Before that, Dave led Marketing at Business Objects for nearly a decade as the company grew from 250 to over 4,500 people and from $30M to over $1B in annual revenues.
A recognized industry thought leader on topics ranging from venture capital and Silicon Valley culture to cloud, big data, and social enterprise technologies, Kellogg authors a highly regarded blog and remains active on Twitter @Kellblog.