The CFO challenge: moving finance beyond a cost centre

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In a recent article I set out the KPIs that I think should be on a world-class CFO’s dashboard. These, I said, are the fundamentals that must be delivered by a finance function. One of the KPI areas which I singled out was Customer Satisfaction (where the ‘customers’ are the internal consumers of services provided […]

In a recent article I set out the KPIs that I think should be on a world-class CFO’s dashboard. These, I said, are the fundamentals that must be delivered by a finance function.

One of the KPI areas which I singled out was Customer Satisfaction (where the ‘customers’ are the internal consumers of services provided by the finance function). Why did I decide to pick this out as one of my key points? I believe it goes to the heart of the relationship between the finance function and the business. It shapes the way everyone else interacts with the CFO and their team, and what they expect of them.

The cost centre trap

If you contrast the relationship between the in-house finance function and the business versus a third-party professional services provider and the business, the differences can be stark.

I worked as a CFO for a long time. As the head of the finance function, it can feel like at the start of every year you are being asked to do more with less.

You’re expected to ‘add value’ and provide insight in a variety of areas, from analytics to compliance, tax efficient accounting and process improvements.

However, at the same time you’re under pressure to work with an ever tighter budget, uncover more efficiencies and, effectively, to strip back the team. After all, you don’t make or sell anything in your department; you’re a cost centre.

Does this sound familiar?

The ‘revenue earner’ mindset

About ten years ago, I began working in BPO, leading Capgemini’s Finance and Accounting Outsourcing team and helping to develop our client-facing propositions.

At that point my mindset changed. My team and I were growing and evolving our business to more than a simple ‘cost-out’ message. I became a revenue earner, developing a range of services to fit our clients’ needs – services which they would want to pay for. Of course, I was still expected to do ‘more for less’, but I also had the opportunity to do ‘more for more’.

This is the critical point. As a business services provider, if your clients are happy, and consider that they’re receiving a good service, why wouldn’t they want to buy more from you?

If you get it right, your business grows and you do even more work. Now, that’s a very different relationship to the ‘finance function as cost centre’ scenario that I describe above.

Where CFOs can work differently

If I were to return to my roots as a CFO, what would I do differently to rebalance the relationship? I would bring the same approach to the internal function. I would ask the team:

  • How can you get the basics of customer service right – how intelligently are you reviewing performance, and how often?
  • How does your structure align to your internal customers’ needs? Looking critically at the management and support roles within your function.
  • What internal pricing mechanisms could help you position the value of your services and encourage the right behaviours from your team and your internal customer?
  • How are you helping to drive the overall transformation of the business?

The important thing is to make sure there is a better balance of time and effort spent focusing on the present and future rather than just reporting on the past.

I would make sure that our SLAs and KPIs weren’t only designed to track performance against core business outcomes (cash balance, day sales outstanding, etc.). I would ensure that we were also tracking the satisfaction of our internal customers and addressing their specific needs. That is the key to checking that you are delivering what I described above as ‘services which they would want to pay for’ and acting as a true business partner.

To take one example, you can have the tightest procurement processes but unless you provide an intuitive service then your buyers will continue to complain and look for workarounds. (I showed in a previous post how business procurement can and should feel more like shopping on

Or in another case, you might be driving cash by sharpening your collections process but this could have an unintended side-effect of alienating an important customer segment. So the finance dashboard may be green across the board but the internal customers could be seeing red (the ‘watermelon effect’ – green on the outside and red in the middle).

I think finance heads are already getting better at asking and answering these questions, but I certainly think BPO also has a role in helping CFOs address these issues and improving them.

Whether you go it alone, or draw on third-party expertise and scale, by focusing on these areas you can legitimately steer the conversations away from simple cost reduction to the business value that you’ll deliver.

A final thought – the emotional impact (no, really)

I’ve stressed the importance of perceived business value here, but one of the other most important considerations is a more emotional one. Perhaps unfairly, finance professionals aren’t exactly known for our emotional side. However, I think we all got into our profession because we have a natural leaning to customer service – we get a buzz from helping our businesses.

We don’t just want to be a ‘necessary evil’, which is what the whole cost centre argument boils down to in the end. Being seen as an innovative team, valued by other parts of the business, makes a tremendous difference to morale and professional identity. This could be one of the most powerful benefits of all.

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