With the continuing evolution of finance function's contributions, many financial leaders are now tasked with balancing the traditional job requirements of accurate and timely financial reporting with new necessities, including setting the company's strategic technology direction, discovering insights in a deluge of data, and driving corporate performance through the use of technology. This evolution from balance sheet manager to strategic leader is underscored in the recent Gartner Financial Executives International (FEI) CFO Technology Study, which found that 39 percent of IT organizations currently report to the CFO. Clearly, as enterprises transform to embrace digital technology, it is often the CFO and finance leaders who must take a proactive approach to partnering with the business to drive this change.
An Evolutionary Example
Microsoft Finance experienced this transformation to digital as it evolved over the company's last 40 years. The first two decades of Microsoft Finance were defined by a centralized system focusing primarily on controllership and the fundamentals, an appropriate approach for a fast-growing and relatively small company. As the company's business became more complex from a product and geographic standpoint, the finance function was decentralized, moving finance roles into growing business groups and appointing new divisional CFOs.
Advancing into the second half of the 2000s, the complexity of the business increased exponentially. In addition to big product families such as Windows and Microsoft Office, there were new growth areas in products like Xbox, Bing, and Windows devices. Each product presented different business models and challenges for Microsoft Finance, which were complicated further by geographic expansion into new, emerging markets.
To address these new business realities, Microsoft Finance embarked on a journey. The finance department performed a self-assessment that exposed several areas for potential internal improvements. Like so many enterprises that experience rapid growth, Microsoft faced an abundance of data in multiple, disparate environments, and found that 75 percent of its analysts' time was spent simply collecting and compiling data. Reporting on this data was also complicated by inconsistent definitions, hierarchies, metrics and key performance indicators (KPIs), combined with hundreds of decentralized finance tools and systems. The result was that the teams often performed financial reporting in offline, siloed environments, and unnecessarily invested in a variety of redundant financial systems and applications.
As a company that prides itself on its long history of developing technology to help people maximize productivity and realize their full potential, a change was clearly required. Microsoft Finance decided to address these challenges head-on by embarking on a dynamic digital transformation.
"At Microsoft, Finance is very focused on driving impact so we can maximize shareholder value," says Marc Reguera, Microsoft director of finance. "There are two big steps in that process. The first step is examining our data, systems and standards to make sure...