In recent years, the world has gone through extensive changes in everything from global political conditions to rapid advances in technology and innovation.
Especially the technological developments we’re seeing are challenging many companies to rethink their working methods and find new ways to adapt and remain competitive.
The finance departments of the world are no exception. Finance teams – typically known as the ‘problem solvers’ of the company – keep track of the numbers, ensure compliance and keep the budgets in check. But times are changing, and this role is no longer enough.
It’s time for a new approach: for the finance department to emerge as a driving force for company growth and development.
Want to learn more about how finance teams can step out of the shadows and become a central driver of company growth? Read on and see how you can take the right steps towards creating a more strategic and value-generating role for your finance department.
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Key takeaways:
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A new reality for finance
The past year has brought a mix of challenges to test even the most experienced of finance teams. Geopolitical tension has created unpredictable market conditions while economic fluctuations and supply chain challenges have demanded constant vigilance and adaptation.
The result: a paradoxical reality where the need for caution exists alongside the need for innovative thinking.
In this new reality, we see a notable shift in the focus of the finance department. Where previously it was all about tight financial control and minimising risk, we now see a pressing need for identifying and supporting opportunities for growth.
This shift requires new competencies – and a fundamental change in how the finance department works.
Many finance departments are facing an interesting paradox: 44% report a rise in ambition, but 40% are still experiencing budget cuts. These figures are taken from The Finance and Business Synergy Report – a report providing insights from over 2,800 financial decision-makers across Europe.
This pairing of lower budgets with rising ambitions creates pressure to deliver more value with fewer resources – a challenge that can only be solved through innovation and strategic restructuring.
Breaking with the past
When it comes to developing the role of the finance department, one of the greatest challenges lies in the organisation’s internal understanding of the team. Figures from The Finance and Business Synergy Report show that a whopping 73% of businesses still think of the finance team as a back-office function responsible for admin, expenses and little else.
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This notion isn’t just antiquated – it’s directly harmful to the company’s ability to experience the full potential of the finance department.
The time is ripe to redefine the role of finance. Rather than working as reactive administrators and number crunchers, finance departments across the world must take on the role as proactive business partners contributing actively with forward-thinking analyses and strategic insights.
Watch Søren Westh Lonning, CFO of Pleo, talk about how he views the new role of the finance department. [Timestamp: 04.13 - 05.51]
Read more: ‘Why collaboration is the secret to better financial decisions’
Of course, it’s easier said than done. It’s a change that requires confronting and doing away with old habits and thought patterns within the finance department itself, as well as the organisation as a whole.
The switch from administrative controller to strategic sparring partner isn’t just about changing workflows – it’s about creating a fundamental cultural change within the organisation.
The finance department must evolve from saying ‘No’ to breaking the budget to saying ‘How?’ to new opportunities.
To achieve that, new competencies must be developed within business understanding, communication and strategic thinking – while maintaining the financial expertise that forms the foundation for credible financial management.
The road to creating strategic value
For the finance department to evolve and play a greater role in the company’s growth and success, certain crucial areas must be front and centre.
It’s about strengthening both skills, collaboration and the quality of decision-making processes within the organisation.
It’s not enough for finance to be number savvy and good at reporting – they must strengthen both the technical and the human aspects of the department.
This means becoming better at working with data, using advanced tools and making the most of technological opportunities. At the same time, they need to be able to collaborate closely with colleagues from other departments, understand their needs and communicate complex insights in a way that everyone can use in their work.
For finance to create strategic value, they must also build strong collaboration across the organisation. It’s about taking the initiative to create dialogue and working as a partner rather than just a control function.
When the finance team knows the challenges and goals of the other departments, they’ll be able to make better decisions and ensure the organisation’s resources are used effectively.
Finally, it’s important to focus on the quality of decision-making. Decision making in the age of urgency – a 2019 McKinsey survey – showed that only 34% of respondents experienced that the decisions involving multiple departments were made quickly and with high quality.
In other words, there’s room for improvement.
The finance department can play an important role here by ensuring transparent processes and by using data to make more precise and better informed decisions. When the quality of decision-making increases, both cross-functional collaboration and overall company results are strengthened.
How finance teams can create real change
It takes more than ambition for the finance department to become a driving force for company growth: it takes action.
Here are some concrete actions that will help you achieve that goal:
- Implementing data-driven decision-making
Once upon a time, getting your hands on enough data was the problem. Now, however, it’s quite the opposite. Data is available in abundance, and that makes it all the more important to use it right.
This is where finance can help the company by introducing decision-making processes based on (the right) data and analyses rather than guesswork. With real-time insights, you can react quickly and make decisions that are both precise and strategic. - Developing proactive partnerships
It’s not enough for finance to wait around for other departments to come to them with their questions and challenges. Instead, you have to be proactive and take part in the dialogue early.
You can do this through strategy meetings or offering budgeting advice or insights that can help drive projects forwards. By being an active sparring partner, finance can play an invaluable role for business success. - Balancing risk management with innovation
Traditionally, the finance department has focused on managing funds and minimising risk – and that’s still important. But if you only focus on avoiding making mistakes, you risk missing out on opportunities to drive growth.
It’s about finding the balance between managing risk while still leaving room for experimentation and new ideas. By staying flexible and being brave enough to try new things, finance can boost innovation without losing control.
With these actions, finance can take the first steps to becoming a central driver of company growth and not just the department that handles number crunching and reporting. It’s about creating value – and that starts with innovative thinking and strategic action.
5 steps: How to drive company growth through finance
Making the finance department a driver of company growth requires having a clear plan and focusing on what's most important first. It’s not about changing everything at once, but about taking small, but crucial steps that make a real difference – not just for finance, but for the company as a whole.
By focusing on the right areas, using the right tools and strengthening team competencies, you can create a positive development for the finance department and its role within the company.
Here are some concrete steps to getting started:
- Start with the essentials
Change can be overwhelming if you attempt to make it all happen at once.
That’s why it’s important to start with the areas where finance can create the most value. Identify which key processes make the most sense to look into – e.g. optimising decision-making processes or developing a better overview of your resources.
When you focus on streamlining specific, central tasks instead of attempting to optimise everything at once, you’ll see faster results that make a tangible difference within the organisation.
Not only does this highlight the value of the finance department – it also creates momentum for further change. - Automate routines
The time spent on repetitive and time-consuming tasks like budgeting, bookkeeping and reporting is one of the most significant barriers when it comes to change and development.
That’s why you should implement automation to take care of them. Through automation, finance can free up resources and focus on tasks that create more value.
Modern technologies, such as AI, can help minimise errors and reduce the time spent on administrative routines. This doesn’t just improve efficiency – it also ensures that finance can focus on strategic challenges rather than operational details. - Create cross-functional collaboration
If finance is to become an integral part of the company’s growth, it’s essential to strengthen the team’s collaboration with other departments. This requires a proactive approach where the finance department is involved in strategic projects and decisions early.
By building partnerships and actively participating in dialogue with management and other teams, finance can create a stronger connection between financial insights and business goals. - Develop new competencies
For the finance team to take on a more strategic role, investing in the team’s development is crucial. Competencies in data analysis and technology are particularly essential to be able to deliver deep insights and leverage the abundance of data available today.
At the same time, communication skills are vital for presenting complex financial analyses in a way that’s understandable and useful to the rest of the organisation. - Measure and evaluate success
Change isn’t made in one day. It’s an ongoing process, and it’s important to measure and evaluate progress along the way. Set clear goals for what you want to achieve, such as faster decision-making, improved collaboration with other departments or higher quality reporting.
Make sure to establish measuring methods that allow you to track progress and adjust efforts if necessary.
Evaluation provides more than just an overview: it helps ensure that the transformation stays on track and that the team can celebrate the results it achieved along the way.
Remember: change is a collaborative effort. It requires everyone in the organisation to be on board, and the finance department to show exactly how they can be a valuable partner.
It’s also a process that requires both patience and persistence. It’s not about changing everything overnight, but about taking one step at a time and building on the small wins.
Every little step forward – whether it’s automating routine tasks, improving collaboration or developing new skills – brings you closer to your goal.
