This continues a series of guest columns from practitioners and bloggers I respect. The category – The Real Deal – describes them well.
This time it is Karen Watts who is President and Founder of Corefino. CFOs have long nudged even pushed their peers in manufacturing, HR, IT, other domains to outsource but have tended to keep their own operations in-house. Karen asks why?
“They say the definition of insanity is doing something over and over again and expecting a different outcome, yet that’s exactly what happens year after year within the CFO community when it comes to running our accounting departments. I know, because until Corefino, I spent my entire career as a CFO and, like the rest of my financial executive brethren, was an all-too-willing participant in perpetuating what might be called “OFF” -- On-site Financial follies!
It works something like this: most CFO’s come up through the financial department rank and file as accountants, financial analysts, etc. and are used to collaborating and being surrounded by “the pack.” As we work our way up the management chain to controller and CFO, we draw comfort from cube after cube of head-down workers tirelessly crunching numbers, re-checking compliances and performing “routine financials.”
But here’s the wrinkle: three things changed that turned even the most conscientious, intelligent CFOs into anything BUT strategic:
· Technology Complexity – Accounting systems are now packaged within or integrated with multiple enterprise application source systems. These primarily on-site deployed systems are expensive to install, even more difficult to learn, and absolutely are impossible to change easily without additional cost and disruption;
· Workforce Complexity –Today, your most efficient accounting new hire is (at best) trained on one or two enterprise applications, which lasts only until the next version/ release. Those on-site employees need to be repeatedly trained at significant cost and time disruption. And, companies can no longer react quickly and easily to bad quarters by immediately excising redundant personnel based on current HR laws.
· Accounting Compliance Complexity -- Multi-national, multi-division, multi-currency accounting is no longer the exception, it’s the rule. Sprinkle in a good measure of changing local, state and national tax changes, a dash or two of changeable accounting rules and you’ve got a recipe for disaster if you aren’t up on every new edict. And that’s not even factoring in massive sweeping accounting changes – like the cut-over from GAAP to IFRS, or the growing proposed array of “green” laws carrying financial/accounting implications.
The once comfortable CFO paradigm of on-site technology and on-site accountants works now only under this scenario: if CFOs willingly enslave ourselves to the tactical, versus the impactful. The multiple millions of dollars that mid-market and larger firms spend on deploying and keeping their financial solutions current make the CFO accountable to ensuring these millions are spent right: picking the right vendor, involving themselves in key technology deployment decisions, etc. The people training factor makes it worse. That pulls us off (yes OFF – Onsite Financial Follies) of the strategic financial activist job, and makes us technology/people babysitters. And yet we doggedly repeat this on-premise model and expect a different outcome. That’s insanity!
I founded Corefino (out of desperation!) to provide an integratable, Best- in-Class solution for the “Strategic CFO.” It has three pieces: a People-Place-Platform paradigm.
First, I leveraged what hasn’t existed previously – the newest genre of sophisticated software-as-a-service (SaaS) financial solutions (like Salesforce.com-architected CODA 2go and Intacct). This removes the technology headache of performing a routine financial function on site – the same way that ADP perfected the routine payroll function.
Next, I focused on the people issue. Corefino’s business process outsourcing (BPO) model is second to none: a highly skilled, scalable team of off-site accounting experts, each selected for their skill in a particular expertise, each process passing from one expert to the next.
Finally, I spent three years building the Corefino Triple-C Platform™ …a three-part Connect-Correct-Comply vetted framework of more than 500 Best Practices and business process workflows. It’s patented, one-of-a-kind, and constantly updated. CFOs (and others) have 24x7 anywhere/anytime access via a convenient Web-Based portal.
All three of these pieces are available on a monthly, subscription-based model that saves most companies between 25-40% immediately.
All of us need to look no further than financial press pages to know that the CFOs role in business is evolving and under assault. One headlined blue chip firm in the financial sector just announced that it’s hired its third CFO in as many years. CFO magazine runs the CFO “Churn-o-Meter.” It’s time we start doing something different with our time/focus; it’s time we exit the technology/people babysitting and leave it to others.”
