La agenda del CFO

Publicado el Felipe Jánica

Coming back to my opinions as a columnist The “de-bureaucratization” of finance

After almost twenty months of being absent from my opinion as a columnist, I have decided to get back on track. Now from the Blogs of El Espectador. There have been many expressions of affection, but above all requests for points of view and opinions about the daily life of the economy and Latin American society. Paying attention, as my beloved Mother (RIP) taught me so much, I return willingly to share my opinions in the economic, financial, accounting, and business world.

In January 2021, more precisely on the 17th, my last column related to the importance of CFOs (Finance Officers or Vice President of Finance) in the post-covid period was published. in that column ( I shared that finances were going to be “de-bureaucratized” in some way. It emphasized the result of the survey performed by EY about the future of the CFOs function, as a result of it, it was concluded that the financial operating model would migrate to the cloud and be more interconnected.

After a year and a half of that column and reviewing what has been happening in the financial field, part of that vision has undoubtedly been fulfilled. Of course, some geographies have advanced more than others. However, the trend and mega-trends of global business indicate that the faster the CFOs and their communities get on the wave, the easier it will be to surf it. To do this, I will focus on global trends with application in Latin America. This is due to the empirical evidence that I have been able to collect and better still, that my network of friendly CFOs has been able to – generously – share with me. In summary, the «de-bureaucratization» of finances has become one of the main tasks to be carried out, being aware of what this implies.

But what is «de-bureaucratization» about? Financial processes have always required a staff of people that allow them to execute, control and monitor the financial performance of organizations. In addition to this, computer and technological resources are needed to facilitate the performance of the people behind it. This combination has led, for years, to people training and becoming experts in something special in the financial arena. This process has been documented and disclosed and certainly deserves an internal and external audit and control. Already at this point, we can infer that the cost of maintaining a financial structure in organizations is high and perhaps disproportionate if we review short-term performance through KPIs where Profit and losses (P&L) relates always be a fiscal period of twelve months or less. «De-bureaucratization» means being clear that financial and accounting processes are necessary, but also admits that they are not necessarily profitable and challenges the CFOs and the CEOs to rethink about them without losing control.

The technology and the tools available in the market, play and will play an important role in the «de-bureaucratization» of the financial function. For this, it is not unreasonable to think of the outsourcing of the financial function, if and only if there are high-performance professionals with this knowledge in the market and who, with technological tools, facilitate the financial «de-bureaucratization» of organizations. Of course, the CFO of an organization will want to have more time to focus on the financial execution that supports the execution of the strategy and in the process be more relevant in his position and in his professional growth. All of this can be possible if we think out of the box and finally begin to outsource some financial processes without losing control of them.

The future of finance is aimed at having accurate, easy and agile financial information to make better decisions. Thus, it is necessary that we consider seeking solutions in the market without losing sight of the fact that there should be a lot of talent willing to solve and monitor those business problems that often have no sufferers within organizations, no matter how bureaucratized they may be. I know that the proposal may be controversial and that it could generate fear, but let us remember that when fear exists, decisions are weak. I am convinced that the «de-bureaucratization» of certain routine financial processes, without losing control of them, will even contribute to the improvement of margins and other short-term KPIs that of course make the passage to the board less traumatic. I will gladly be attentive to comments and also very willing to provide recommendations or further expand the point of view shared here. On Twitter @JnicaV on Whatsapp +525513034061 and +573124491999.