27 septembre 2018
Alexandre CATTA, Consultant Senior Amelkis Business Plan.
Before talking about the digitization of the DAF function, allow me to quickly make an inventory of the priorities of the DAF of today and where they are oriented in terms of needs. Regardless of the size of the company, performance management far exceeds all other priorities of the CFO.
But today the performance as it is defined and understood by the directorates goes far beyond the purely financial aspects. Extra-financial elements and some times outside the company must also be analyzed. It is no longer a question of limiting oneself to the classic accounting situation. We must go much further.
The functions: HR, Production, After Sales, Quality, Logistics, Sales, R & D, and others ... must follow their performance indicators to ensure that they are in line with the strategy followed by the company.
How does this situation affect the DAF?
Simply because financial departments are often responsible for collecting and then returning all this data. It is common that the famous dashboard that summarizes and presents the different performance indicators of the company is produced by the management controllers. As has been said, the DAF is more of a business partner than a financial director. If there are still a few people who think that its service should be content to produce the accounting and manage the administrative tasks of the company, they are very clearly in danger of extinction.
Another very important priority of the current DAF is to plan. Why is this need stronger and stronger? Simply because today the business environment is unstable. No situation is acquired. The volatility of market dynamics has never been stronger. You have to constantly adjust your strategy and your resources. We therefore ask the DAF to provide for the company to anticipate the best and win in AGILITY. It is often this quality that allows the company to make a difference compared to its competitors. So of course, a DAF can not guess future events. On the other hand, it can give fundamental tendencies in terms of evolution of the result and cash. It must therefore be equipped with adequate means to meet this new requirement.
How does digitalisation enable the DAF to respond to its new challenges?
The DAF must produce financial indicators, extra-financial indicators, external indicators and calculate trends in terms of profitability and cash flow.
Well, digitalization brings the features that will allow to meet its requirements.
First, for financial indicators, there is no particular technological revolution. For a long time now the financial departments have been able to produce regular accounting situations in order to follow the evolution of their turnover, their margin, significant expense items and their WCR. What has changed anyway in recent years is that tools like Opera have democratized smooth rolling forecasting processes that were, 10 years ago, reserved for large groups. That is to say, today, a multi-activity SME can have a re-forecasting process that allows it to calculate its year-end landing entity by entity and in a consolidated way. Concretely its budget, its real periodic, its re-forecasts are embedded in one and the same tool that allows it to produce easily and quickly reliable financial information. These processes are fluid and efficient because they have been tested by hundreds of groups for decades now.
Where it becomes very interesting is that these small groups are now able thanks to these new tools to calculate also on the fly their landing balance sheet. And this perfectly meets the need mentioned above to forecast trends in terms of cash flow. It will be possible to anticipate at 12 or 24 months a fundraising need which, a few years ago, would have surprised everyone. Opera's BP module has been specifically designed to meet this requirement when we are in a multi-entity or multi-activity environment.
But it does not stop there, the digital revolution also brings a great fluidity and security in the collection of information. The fact that the applications are now on the "cloud" makes it much easier to put back the data needed to monitor the performance indicators. And this is even more true for extra-financial or non-business information that needs to reach many more people in the group and outside the group. Tools like Opera that are designed to collect information in SaaS mode on a multi-entity environment are de facto adapted to meet this new need. This is why we have developed the CSR module which is, no more and no less, a module for collecting extra-financial data adapted to the regulatory requirements of CSR.
Finally, a very important element in meeting the new challenges of the DAF is the ability of the tools to facilitate the return of performance indicators. Here again, computer progress has been important in recent years. The data extraction tools have not stopped improving and becoming more democratic. When Opera was created, Amelkis made a bold choice. It is to stay in a well known environment of the controllers that is Excel. And it turns out that it was a very good choice because today this software is still widely acclaimed by the financial departments. Today they have the possibility of building and supplying the entirety of the Opera reports directly to Excel. We see it every day, it's a real comfort for the users because they can change their dashboard permanently and thus stick to the concerns and needs of their management. If a strategy is adjusted, the dashboard must also be adjusted.