"The understanding of business, financial acumen, decisiveness, and collaboration with
stakeholders are key to successful budgeting in any company"

Driving Better Business Results

The budgetary challenges have been there for the finance leaders ever since the inception of commercial enterprises. However, with the change of time, the challenges, as well as, the opportunities have also changed significantly.

First and foremost, budget consciousness does not mean reckless cost cutting.  At a high level, there are two key drivers for profitable business growth, i.e.,
(1) innovation (to differentiate from competition), and
(2) a high performing team. In order to achieve these, the budgeting process should have the
following focus areas
• Collaborative Budgeting: The CFO must have detailed understanding of all business functions and should be able to connect the dots to demonstrate their collective financial impact on the business.
• Empowerment along with Stretch Goals: While pushing the leadership team to take stretch goals, the CFO should give empowerment, while instituting a transparent information ecosystem that provides visibility along with threshold- linked alerts.
• Cutting wasteful expenditure across the board, and re-channelizing the savings towards research and innovation, learning and development, increasing performance-linked pay, and contingency planning.
• Ensuring best-in-class standards of compliance and governance, progress reviews etc.
• Readiness to pull the plug on a project - before it's late - in close liaison with the concerned  stakeholders. However, at times this may require a CFO to take a dispassionate call, and  he/she must not hesitate to do so.

Easier said than done, but that's where an effective CFO plays the role of a business partner, sounding board, and the ultimate savior. The understanding of business, financial acumen, decisiveness, and collaboration with stakeholders are key to successful budgeting in any company.

Financial Transformations

In today's challenging environment, where growth, profitabilit y, innovation and agilit y have to move hand-in-hand, the CFO has no choice but to embrace technology as the key enabler. 

On one hand, it could be using SaaS for mundane functions, Analytics for better insights, etc, and on the other hand, it could also be the t ransfor mation of one's own IT function. At EMC Cor poration, the IT function transfor med itself into IT-as-aService, whereby the employees could avail  of  any service / tools /applications  on demand and pay for the same on act  al consumption basis.  Their  "Journey to the Private Cloud" yielded significant cost savings, as well as, reduction in global carbon footprint; but most impor tantly, it created a 'profit  enter mindset' within the IT organization, wherein they had to maintain best-in-class on-demand infrast r uct ure, and recover their costs while following the indust r y benchmarks on SLAs, cost etc. That's the kind of role a CFO needs to play in today's time, i.e., shifting IT  pend from plain maintenance to innovation, creating deeper insights for the leadership team, and bringing in agilit y and t ransparency for sustained growth.