Luca Maestri is the most admired CFO from a Fortune 500 company. In a recent survey he topped the poll, followed by Charles Holley (Walmart) and Bob Shanks (Ford). Just in case you can’t quite place the name, Maestri is CFO at Apple. So it is possible that he is much admired simply because he happened to be in situ when Apple announced financial results for its fiscal 2015 first quarter (ended December 27, 2014) and its quarterly revenue of $76.4 billion set a new world record for a public company, dethroning Gazprom.
Perhaps the admiration has less to do with Maestri himself and more to do with Apple, which is a cultural phenomenon and the most admired company. Perhaps the admiration should have been aimed not at Maestri, who has been in post less than a year, but at his predecessor Peter Oppenheimer, who retired last year after being CFO during a decade when Apple’s annual revenue grew from $8 billion to $171 billion and its global footprint exploded. And if you would care to share your perspective on any of this, please pop over to the FSN LinkedIn page and join the debate.
In the survey (conducted by cloud revenue management specialist Model N), 55% of the respondents did actually cite Apple’s profits as the main reason for nominating Maestri. There is little doubt that his role will be significant to the future success of Apple; little doubt that the role of CFO is critical to the success of any company. Among the C-level executives who responded to the survey, 94% said that the CFO was one of the most important positions for companies today, with more than half saying that this is because managing financial risk has never been more important.
Not everyone can be CFO of a cultural phenomenon (Apple), a company that reshaped retail (let’s not forget Charles Holley at Walmart) or revolutionised the cars we drive (Bob Shanks at Ford). But if managing risk and delivering record-breaking profits are what makes a CFO successful in the eyes of others, what is needed to deliver this success? There are lots of possibilities, but for the purposes of this article, let’s consider whether that success might in any way, shape or form have anything to do with the software that is used by those in and around the finance function.
Could your choice of enterprise resource planning (ERP) software possibly be an influence? Elon Musk, co-founder of SpaceX, PayPal, and Tesla seems to think so. Rather than take the path of least resistance and opt for an ERP from one of the established giants, such as SAP or Oracle, Musk and his various CIOs have chosen to develop their own systems in-house for ERP and financials. (A future FSN article will consider whether this highlights a wider trend in complex systems development and if so, what the implications are for CFOs).
Meanwhile, back on terra firma, some set more store on the delivery model of an ERP and its connectivity across departments and with other applications such as customer relationship management (CRM) or corporate performance management (CPM). “Old style departmental boundaries where sales only use CRM and finance only use ERP need to disappear, to provide the full visibility employees need in this connected age,” says Kevin Roberts, GM of platforms at FinanciaForce.com, who also trumpets the benefits of using a single platform and a single database.
Forbes recently published an interesting article where CFOs in education, insurance, music, property and telecoms, wax lyrical on the benefits of using a cloud ERP which integrates with other applications, such as corporate or enterprise performance management (CPM or EPM). These particular CFOs are raving about the Oracle ERP Cloud and Oracle EPM Cloud and their tight interaction. “We were never able to get actuals to budget on a real-time basis. Now that data flows continuously each day, we can have much faster management reporting,” enthuses one CFO. Point made.
As the main reason Maestri and the other winning CFOs in the Model N survey were nominated as successful was the financial success of their businesses, it seems fitting to also consider revenue management – and the role of specialist software. Anaplan CEO Frederic Laluyaux says: “Forbes Global 2000 corporations and hyper-growth enterprises like Splunk (US: SPLK), Informatica Corporation (US: INFA), EAT (UK), Symantec (US: SYMC), and Zalora (SG) have embraced our in-memory platform because it allows their teams to plan, collaborate, and act in real time,” – and across not just finance, but operations and sales too.
“Anaplan plays a crucial role in our efforts to transform the applications and solutions that drive HP,” says Bob Slaby, VP for sales operations at the computer giant HP. “We’re using Anaplan for highly effective planning and scenario analysis, and we’re delivering goals to our global sales force faster than we ever have. The simulations we run in Anaplan give us insights into where we should focus our sales teams for the best results–impossible when the data sat in disconnected spreadsheets around the world,” says Slaby. So perhaps it’s not so much the software a company (or its CFO) chooses, but how this is used.
This brings us back to the Model N survey results. Nearly all of the executives surveyed (95%) said that revenue management – an end-to-end strategic approach of managing every dollar that impacts the top-line of the business – is critical to the growth and success of the company and agreed that it's crucial for CFOs to be included in the sales cycle. Clearly, CFOs are well positioned to drive growth and maximise the sales contribution to profitability. However, 74% of executives say that their CFO is not currently involved in the sales conversation, for reasons including: lack of experience, unfamiliarity with sales metrics, or lack of the software to help them understand it.
For Model N, the revenue management cloud specialist, these survey results are something of a gift. “Revenue management cloud solutions are the force multiplier that CFOs are seeking to drive visibility into every dollar that touches the top-line of their income statement,” suggests Shail Khiyara, SVP and chief marketing officer of Model N. Another of Khiyara’s assertions is less partisan. “Outdated spreadsheets, inefficient legacy business processes and lack of visibility leads to price erosion, revenue leakage, and impacts growth.” Perhaps software can help the best CFOs to succeed; the trick will be, deciding which software.