Ajay Kumar, Senior Director, Sales Consulting, Oracle shares his views on the emerging role of finance and how it can drive value for the organization.
Q: CFOs have long been considered as custodians of finance and accounts of any company. What possibly can they do in delivering great CX to the end customers?
Ajay Kumar (AK): The roles and responsibilities of a CFO have changed over the years. Catering to just the finance function isn’t enough. They are now taking a strategic role in the organization. It is now required for a CFO to develop skills beyond the traditional responsibilities, like business planning and address the challenges faced by the organization during crisis. However, in today’s competitive global economy, finance must collaborate with marketing and operations in the planning process to understand the market conditions from their angle as well. Long gone are days, when CX used to be the responsibility of marketing department alone. Now, the whole organization needs to come together to deliver a holistic experience to their customers, e.g., something as simple as giving access to past invoices and payment history seamlessly while registering a service request through any channel, mobile, chatbot, etc., can result in a great experience for a customer. The dynamics and competitiveness of today’s market require CFOs to constantly think about not only how to minimize the cost of operation by increasing efficiencies, but also how to effect steady revenue growth.
The finance department’s unique cross-functional perspective can be a key to developing strategies and performance metrics which in turn have a positive and far reaching impact on customer satisfaction score. To explain this with an example: A company’s contact center evaluated its representatives by how many calls they completed. They were meeting their KPI, but the number of complaint calls kept increasing. The customer service manager worked with finance to look at the data to figure out what was going wrong. What finance realized was that the KPI was driving the wrong behaviour. Customer agents were more anxious to close a call than they were to resolve an issue—which resulted in increased calls. The right measure was first-time resolution.
The customer must be at the heart of an organisation, and this must be true across all departments. To achieve this goal, look to finance as they can be the perfect ally for all functions to identify pain points and help the organization do efficient business. Technology is the only factor that can deliver this ability. Finance office can free up available bandwidth by automating most of the repetitive tasks and focus on analysis, providing better insight and service to other functions in the organization.
Q: How can you explain the partnership of CFOs and CMOs?
AK: In the emerging market conditions, it has become imperative for finance to understand customer expectations. Traditionally, this has not been their role. But to be a better partner internally, finance needs to understand the trends and challenges for their external customers. Often improving customer experience involves making big changes to business models, changes ranging from how products and services are produced, to how customers interact with the organization. Gartner predicted that by end of this year, many organizations will change their business models significantly to improve customer experience. Finance teams need to upskill themselves inanalytics and communications, to assist organizations in making well informed, strategic decisions.CMOs and CFOs have to work hand-in-hand with IT and finance teamsin order to deliver a higher return on marketing efforts. They will be increasingly seen as game changers as customer experience and data analytics take center stage in business operations.
Q: Should we expect to see more such cross-functional collaborations in near future?
AK: In emerging market realities, various functions of the organizations cannot afford to work in silos. There must be synergies between them to make sure that all the functions are working towards achieving the organizational goals. In these unpredictable times, CEOs are increasingly leaning on the CFOs to help with business planning and strategy. Organizations must continue to grow and evolve to remain successful, and with their unique understanding of performance across departments, there is nobody better placed to transform the company’s operating model than finance leaders. That said, an operating model involves much more than processes and outputs. The company’s ability to meet its goals ultimately comes down to its people, to the skills they contribute and to how efficiently they use their time. This is the domain of the CHRO.
HR and Finance are two pillars which provide the critical support that any business needs. Historically, the role of these two functions have always been intertwined, but today they are converging. Many companies run separate, disconnected HR and finance systems from multiple vendors. This not only leads to integration challenges, but to a lack of insight since each system has its own record of workforce-related costs, and the two don’t always reconcile. Better communication between HR and finance lies at the core of a modern approach to talent and resource management, and this includes closer alignment between both departments’ systems. By unifying these systems in the cloud, companies can gain a single reporting and analytics resource as well as a common data model across the board, not to mention a consistent user experience for all. Of course, this stronger relationship between HR and finance begins in the boardroom so it is up to CFOs and CHROs to lead by example.