Break barriers and grow your business with future-proof planning
Growing a business with a multi-million-pound turnover is a tough job. But those who are hired as finance directors or in other senior positions are selected for their roles due to their accuracy skills and passion for excellence: it’s certainly possible to put these skills to good use by firefighting on a day to day basis, or by thinking as far ahead as the end of the next financial year and ensuring that balance sheets are in order.
But for a more visionary finance leader, there’s a role to play in terms of developing strategies to help the organisation do well financially in the future. While AccountingWEB might have found in 2017 that only 2.2% of finance leaders said they performed strategic analysis in their job, that doesn’t mean to say it’s impossible. Thinking about and planning for what is a generally uncertain future is a great way to bring some strategy to the role.
Political and economic changes
With many political and economic problems in the news headlines at the moment, it’s hard to escape the conclusion that future-proofing has to begin with an analysis of the wider world. For some, the problem might be local or national. This was certainly the case for the 94% or so of international businesses which said, as recently as August, that they were unprepared for the cash flow aspect of Brexit. For others, and especially for larger firms with very high turnovers and a global reach, the ongoing trade battles between China and the US could be seen as a strategic threat to a business: with less enormous businesses in the US alone recently revealing their lowest levels of business confidence since 2017, it’s clear that fear about the established economic order is in place.
This is where helpful financial modelling software comes into play. By plugging the numbers into a smart tool which is able to present the likelihoods and potential consequences of several different outcomes, it’s possible to model everything from supply chain disruption occurring due to import problems at Dover to the impact of higher tariffs in the relevant sector. Human finance team members could do this kind of modelling if they were so inclined – but it would be time-consuming, and as a result, would also eat into profits. And there’s also the potential for mistakes to be made during the data gathering process if a human does this task: with a fully integrated, cross-departmental software package, this risk is reduced to nil.
Changing customer needs
Trends in the wider world are often mimicked in business, and it’s no surprise to see that the things people do in their personal lives (such as cloud integration and storage for their smartphone photographs, or the intermingling of location data between map apps and social media apps) are also finding their way into business, at least in terms of the infrastructure used. More and more, both business-to-business and business-to-customer clients are going to require that their suppliers provide centralised, accessible and mobile data solutions every time. They may want to see portals which integrate data from your product, finance and delivery teams to help them track their supply chains, for example, or they may want to tap into your analytics information to enhance their product offer.
The problem, of course, is that the will to change is not always there on the part of the business – and it takes innovative leadership to meet these new needs. 70% of leaders in financial services described technology as a “concern” in a survey by PwC, rather than embracing it: by implementing it and delivering customers a well-designed data solution, an FD can add real value and mark themselves out.
Future-proofing is a term on the lips of many savvy financial directors at the moment. It’s a great way to make sure that a firm can stand up to the vicissitudes of the uncertain years and even decades ahead – and it’s a way for an ambitious FD to mark themselves out as special and value-adding, too.