Why Finance’s Expanding Role Is Good News For Growth-Focused Businesses

By Bruce Romney, Head of Finance and Risk Solution Marketing, SAP

Finance’s responsibilities are increasing as the pressure to play offense and defense in an ever-evolving economy mounts. And nowhere is this reality more deeply felt than in midsize companies as they expand their presence into new countries and markets.

While still concerned about financial solvency, existing competitors, and new market entrants, finance leaders from growth-focused businesses are also responsible for nontraditional concerns, such as cybersecurity, supply chain fragility, resource scarcity, and internal talent shortages. As a result, finance departments must rethink every function, from invoicing and financial management to regulatory compliance.

According to the SAP Insights research center’s survey of midsize companies, senior finance leaders embrace their expanding role to drive mission-critical improvements based on their requirements, operational gaps, and strategies. Survey participants shared their goals to improve business processes, including improved flexibility and adaptability to change (36%), optimized overall spending (36%), enhanced monitoring and analytics (35%), reduced cost of operations (34%), and increased automation (34%).

Rethinking the path to ongoing growth

Midsize companies can choose one of many different paths to fulfill their growth ambitions. Mergers, acquisitions, initial public offerings, private equity investments, and organic expansions – all these options and more trigger new scalability requirements and revenue opportunities. However, this is only the beginning of a much longer journey.

Read the SAP Insights report, “The Transformation Mindset: Expanding Priorities for Finance Leaders of Growing Companies,” and the mini Webcast, “Transforming Finance in Growth-Focused Companies,” featuring IDC.

Success for growth-focused companies must also consider other fundamental finance priorities for supporting today’s standards for growth:

  • Protect digital operations against cybersecurity breaches by improving access governance and threat detection
  • Improve the accuracy of reporting and disclosures with real-time data running on a single, integrated, and business-wide platform
  • Incorporate sustainability directly into their strategies and decision-making for driving revenue growth, increasing operational efficiency, and mitigating risk
  • Access evolving digital innovations, including process automation, artificial intelligence, machine learning, and predictive analytics

Unfortunately, finance departments realize that their legacy systems cannot scale to meet these milestones of fast growth. Simply put, they have outgrown the core capabilities of their current ERPs, simple accounting software, and other financial management tools. Instead, teams need more mature processes, integrated data, and company-wide visibility to fully understand current circumstances, mitigate emerging risks, forecast future changes, and seize new opportunities.

Changing gears to map an intelligent journey

WirelessCar Sweden AB is a prime example of a midsize, growth-focused company that responded to its finance team’s expanding role in its rapid growth with a dramatic shift in its digital strategy. After being acquired by Volkswagen AG, the connected car data company began modernizing its IT infrastructure in a more-secure cloud environment to help drive operational visibility and cohesive and fast financial reporting.

This decision enabled WirelessCar’s finance operations to run like a well-oiled machine, giving its two-person team full control over billing, cash management, account payables, and receivables. With automated and connected systems, the finance function can now complete monthly account closing processes in two days, a noted decrease from the three to four days it previously took. This 50% reduction in time used also freed up company resources to focus on other tasks.

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Moreover, carrying out price change updates can now be completed in only three to four days, while very few purchase orders are now raised manually, reducing the cost and time associated with purchase order processing. At the same time, the finance function can help ensure 100% of its workforce completes compliance-related learning.

As demonstrated by WirelessCar’s experience, moving from legacy systems to a cloud-based ERP system is the first step toward laying down the foundation for continuous innovation of intelligent processes, operations, and digital capabilities. Finance teams can then prepare their company for every phase of their growth.

For instance, finance teams can set controls that scale compliance and reporting standards based on their business’s size. They can help ensure routine adherence to existing and new regulations such as tax reporting, data protection, public company accounting oversight board requirements, or management of export and import compliance. More importantly, during times of new market expansion, mergers, or acquisitions, finance leaders can guide the management team with clear-eyed assessments of partnership, global trade requirements, and regional dynamics.

Shaping the future of business success

The economy may be turbulent and full of increased global risk, but finance leaders from midsize companies must prepare their businesses to act without delay when the opportunity to grow arises.

Achieving this level of adaptive success requires a personalized finance strategy and roadmap that includes a cloud-based ERP. It not only helps the finance function evolve its processes and operations but also innovate an ecosystem of modular and composable building blocks that enable a more agile and growth-focused business.

Explore research-based insights on how finance leaders from midsize companies address priorities, opportunities, and risks. Read the SAP Insights report, “The Transformation Mindset: Expanding Priorities for Finance Leaders of Growing Companies,” and our mini Webcast, “Transforming Finance in Growth-Focused Companies,” featuring IDC.

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