In a dynamic, competitive business environment, every company is working hard to gain an advantage in the marketplace. Sometimes that opportunity comes in the form of an innovative new product or simply being in the right place at the right time. However, I’d argue that companies can gain a significant competitive advantage from a potentially unexpected source–their finance department.
"A strategic finance organization can help a company puncture the fog of an uncertain future with the light of its insights"
Last year, Unisys unveiled a new brand message built around the tagline, Securing Your Tomorrow™. While that tagline speaks to the value Unisys provides to clients, shareholders and associates, I think it also serves as a theme for how finance organizations can drive value within a company.
First and foremost, finance must fulfill its fundamental obligations, including accounting, statutory reporting, compliance, cash management, audit and tax filing. However, in today’s world, these are merely table stakes.
The recipe to success for strategic finance organizations is to build on that foundation of technical excellence and up-level those capabilities by deploying robotics process automation and machine learning and in doing so, establishing a new foundation to build upon. Furthermore, a strategic finance organization seamlessly blends three key ingredients: leading the company’s strategy process and aligning that strategy with the long-term financial plan, making investment decision tradeoffs to deliver the outcomes, and developing business insights that help company leaders be proactive and drive growth.
At Unisys, the strategy process is driven by the finance organization, and we take great care to ensure the process is designed in such a way that the business leaders feel clear ownership and accountability for the resulting strategic plan. This plan needs to be increasingly focused, not only on traditional approaches to looking at the strategy, but with a robust look at the financial strategy that helps shape business strategy. The days of free capital are behind us, and so the corporate strategy and capital allocations need to become one. Having finance lead the strategy process not only ensures finance has a seat at the table—it better integrates finance decisions with the short and long-term strategic plans for the business.
Similar to having the strategy process led by finance, a strategic finance organization also plays a critical role in the investment choices a company makes. Whether these are internal investments like research and development, or external investments like acquisitions or partnerships, finance should have a strong voice in choosing how and where to invest. At Unisys, our solution investments and corporate development teams are both part of finance, ensuring tight alignment between investment choices, the corporate strategy and our financial plan. Finance also governs the investments through the concept-to-retire lifecycle to ensure we’re making the right business decisions along the way and realize a return.
A Financial Planning and Analysis team that goes beyond traditional methods to provide predictive insights is a significant advantage. Using the latest data visualization technology, this team is an engine that creates visual and insight-laden analytics, complete with concrete actions and takeaways, and serves as business advisors to help senior leadership navigate today’s uncharted waters.
I view the three areas above as the most important elements to elevate the finance function and create a strategic finance organization. These extra responsibilities bring together all of the decisions a company must make to enable profitable growth and drive capital allocation. Only with this mandate can finance earn the right to be in the co-pilot and navigator seats.
Combining those three key aspects also enables more effective messaging to external stakeholders like equity investors, debt investors and analysts. These audiences all need clear, consistent and accurate communications and play a key role in the overall success and growth of the company as a whole.
In short, a strategic finance organization can help a company puncture the fog of an uncertain future with the light of its insights. This vision is all about integrating—either under one roof, or by tightly aligning groups across the business—to develop a holistic approach to business and financial strategy. That’s how you secure your tomorrow.