For those outside of the finance department, the phrase “innovation in finance” probably sounds pretty strange.
Were a bunch of new numbers discovered? Did a mathematician drop some new equations we should all check out?
But while numbers don’t change much, technology certainly does. And with new technology comes higher expectations from the rest of your organization, new potential for your department to take on a larger role—and, of course, new challenges.
Finance Innovators are focused on paving the way for a more efficient and effective way to generate insights. Their mission is to take existing processes and build on them, empowering the team to create something new and valuable for the business.
Innovators can forge a better way forward with the right skills, knowledge and initiative on board. If you’re ready to tackle the challenge, the rewards can be substantial.
Here’s how you can become an Innovator in your organization.
Develop Your Skill Set
Digital transformation in finance means forging a new relationship with data. From gathering data to analysis to reporting, it’s all about using the right insights gleaned from data to become an advisor to the business. In the case of Innovators, it’s also about backing your brilliance with finance technology.
Finance teams are used to working with numbers to create reports, which involves gathering data about expenditures and revenue and compiling results.
The next frontier for a finance Innovator is learning and adopting data analytics. Instead of focusing on surface observations one can make by looking at data, it’s about surfacing deeper insights with artificial intelligence and machine learning.
You don’t have to become a data expert overnight, but you should have a general understanding of how data analysis is performed and how to automate it.
Learn the Latest Tools
If your finance team hasn’t adopted new technology since Windows 98, it’s time to see just how far the tools have advanced. Cloud finance solutions provide a wealth of data management, analysis, collaboration, and reporting tools.
It’s worth dipping a toe into the financial performance management market to see what new processes—like workflow automation, for example—your team can adopt to free up time for more innovative pursuits.
Round Out Your Soft Skills
In order to rally the organization around your innovative ideas, you will need to use your data and insights to tell a compelling story. Anyone can make a slide presentation with charts and graphs, but it’s the narrative that will truly make your case. This is how Innovators can take an existing asset (data) and create something valuable (a comprehensive narrative).
Storytelling will continue to serve you and your department as you take on a more advisory role in the organization. After all, insights are only valuable if people are convinced to take action on them!
Communication skills are a critical part of driving change. “Innovators in finance need great leadership skills,” says Andy Burrows, Finance Leadership and Career Coach. “They need to be able to communicate a plan that links right into the heart of why we exist in the organization, and that inspires people to want to do better for the success of the business.”
Start with our presentation checklist to begin to hone those storytelling skills.
Adopt the Right Attitude
It takes flexibility and resilience to be a successful Innovator. “The one indispensable skill that finance Innovators need to have is the ability to persevere through changes, wins, and setbacks,” says Gabrielle Luoma, Co-Founder and CEO at Mod Ventures, LLC. “Persevere to a better tomorrow and don’t be phased by failures. This is the only way we learn and grow.”
It’s easy to become risk-averse in a finance role. But playing it safe and innovating are mutually exclusive. It’s important to be comfortable with experimentation, a little uncertainty, and even a few failures on the way to success.
Dig into Best Practices
What are the leading finance teams doing differently that puts them ahead of the curve? While there isn’t one singular formula for success, it’s worth evaluating others’ best practices to see if they make sense for your team. Here are three that our research has shown to be effective:
In upcoming our survey, only 4% of respondents said they regularly make time for scenario planning. But those who do carve out time are faster, more accurate in their predictions, and able to predict further into the future than their peers.
Between 19-25% of companies have implemented 12-month rolling forecasting. These organizations have reduced their reforecasting time, increased accuracy, and in general are more agile in responding to organizational change.
For larger companies, zero-based budgeting (ZBB) can provide substantial benefits in accuracy, efficiency, and forecast accuracy. If your organization has the time and resources to devote to ZBB, it’s a worthwhile step forward in your innovation journey.
These three best practices aren’t mutually exclusive, either; each can increase the efficacy of the others. All together, they help create a more agile finance department with supercharged capabilities for analysis, insight, and decision-making.
Innovation in Action: Mission Health
Mission Health Communities (MHC) provides services to senior living and skilled nursing communities, managing over 50 facilities in the U.S.A.
MHC’s finance team did most of its accounting and budgeting manually, using spreadsheets. This process was not only cumbersome and time-consuming, it actively prevented the kind of organizational data gathering and analysis needed to surface insights.
Mission Health implemented the Prophix platform over two months in 2019, using it to automate processes, enable communication and collaboration, and run advanced analytics.
In just 18 months, Mission Health saw a 110% return on their investment in avoided costs and increased efficiency.
Take the Initiative to Spark Innovation
Your finance team needs Innovators like you to help transform finance in your organization. Start by gathering support from your internal team by showing the benefits of digital transformation. From there, you can recruit stakeholders from across the organization and ultimately make the business case for your innovative ideas to drive new efficiencies, generate more relevant insights, and ultimately move the business forward.
Prophix is here to help you achieve your next transformation. Watch a brief demo to get inspired.