Ep. 31: Monisha de Quadros - Transforming the CFO Function

Contact Monisha:
https://www.linkedin.com/in/monishadequadros/
Sparkbox Group: www.sparkboxgrp.com


FULL EPISODE TRANSCRIPT


Adam: (00:05)


Hey everyone. Welcome back to Count Me In, IMA's podcast about
all things affecting the accounting and finance world. Thanks for
joining us today. I'm Adam Larson and this is episode 31 of count
me in for today's episode. We're going to hear Mitchell's
conversation with Monisha de Quadros, a former CFO in both the
public and nonprofit sector and now founder of her own outsource
CFO firm. Let's listen to Mona. Just take on the role of today's
CFO.


 


Mitch: (00:44)


What are the main differences in the finance function between
public organizations and the nonprofit sector? 


 


Monisha: (00:44)


So yeah, that's a really good question. there are very few
nonprofits today that have a proper finance function. Many times
what happens in a nonprofit organization is that the accounting
team subsidizes and doubles up as a finance team. And
unfortunately the skills required for an optimal finance function
is actually quite different than the skills needed for
accounting. So nonprofits can certainly train their teams for
financial modeling skills, critical thinking and analysis. But
it's challenging because the two functions actually a wired
differently. And then the hiring process is also a bit of a catch
22 because it's difficult to recruit finance talent in the
nonprofit sector and yet it is critical to the success of these
organizations. So having the right financial support and the
nonprofits helps drive profitability, grow revenue, stretch and
maximize each dollar expense, deliver valuable insights, and then
also create long term sustainable strategies. 


 


Mitch: (01:40)


Now with a perspective, from, you know, both sides of that
conversation, what is the greatest challenge you faced as a CFO
with today's changing finance function? Particularly with,
technology and digital age? 


 


Monisha: (01:55)


Yeah. You know I think it's two fold. Like one of the biggest
challenges the CFO faces today is transforming the finance
function from a cost center to a value creation center. The
second challenge subsequently is the evolution of the CFO role
itself. So both the finance team and the CFO are gatekeepers of
critical data required to support decisions and strategic plans
as they chart their journey through the digital age, the success
of one becomes more intrinsic in the success of the other. So
let's talk about the value creation center first. So it's safe to
say our environment is changing at a rapid rate and this is
probably the slowest pace we will see in our lifetime. So the
speed at which change is happening, it's forcing businesses to
evolve and transform at quicker intervals in order to stay
relevant and competitive. So factors such as disruption,
innovation, technology, consumer behavior, and globalization are
all contributing to this space of change. Without the right data
and financial insights, businesses will have a tough time making
intelligent business decisions compete in this environment. and
as a result it becomes increasingly critical for the finance
function to step up and equip the business with the right
financial insights for better decisions. So we need to evolve
into value centers. And what I mean by value centers as I'm
preparing to choose thoughtful analysis, predictive analytics
strategies, and most importantly actionable insights with respect
to the CFO. What's really interesting is that the rule is
actually sitting at the center of the digital transformation. So
we're seeing a greater need for real time data enabled decision
support to meet that need. The CFO is moving away from the
traditional activities like transactions. And reports to a more
strategic role. So they're driving business decisions and
preparing the business for the future. CFOs are being asked to be
leaders within this evolution, taking on advisory roles to the
CEO leadership team and the board. And the speed at which digital
transformation is happening is also producing a greater appetite
for business risk. And in turn, the CFO will need to be more
resilient and proactive in their strategies to innovate. We're
also seeing trends where the CFO is taking on additional
responsibilities like taking over the operations functions and
the it and technology functions. And some would argue that the
role is expanding and becoming increasingly more challenging. And
I would, I would actually agree, but I would also say it's
becoming more interesting. So the CFO has a wide perspective with
visibility across all business functions. They can act as the
bridge connecting and driving the business in a cohesive manner.
And then they have this ability now at this point and the
structure to influence leadership, to be change agents and impact
long term growth within the business. And lastly, they're in this
unique position to actually define their own path. In this
digital age. 


 


Mitch: (04:48)


Now let's go back to step one for just a second. What are some
ways the finance function can actually transition from this cost
center to this new value center that you mentioned? 


 


Monisha: (04:58)


Yeah, so I think we're the hardest, but probably most needed task
is to develop an agile analytical mindset within the department.
So agile is the ability to learn fast, adapt quickly, and
iterate. Often one of the ways CFOs can adopt an agile mindset
within their teams is to foster more creativity and curiosity.
It's about creating an environment where it's okay to innovate,
embrace risk, and sometimes even fail on the process. So just
remember to have a feedback loop in place for lessons learned
when you actually implement this process. Cause that's very,
that's a critical step. Some of the practical approaches
implemented today have been to create special projects with small
teams or rotate job functions within the department. And of
course offer continuous learning. Agile requires a different set
of skills and talents that I think the CFO is going to have to
either train or hire for. And these skills include digital
competency, predictive analytics, agility, and even the human
skills such as empathy and decision making capabilities. Another
equally important step in creating this value center is to to
emphasize collaboration across functional departments. You know,
interestingly enough, recent studies have shown that there's a
direct correlation between effective collaboration and the rate
of revenue growth. So in order for businesses to make better
decisions, there needs to be greater collaboration and the
continuous flow of information back and forth between the
functions. One can foster collaboration by developing a platform,
a mutual trust. And by this I mean a space where both parties
feel safe to share and constructively challenge each other with
the common goal to increase customer value. Lastly, spend the
time and resources to optimize current systems and improve
integrations like the long term savings and efficiency and
agility the business will see from doing these initiatives are
well worth the effort and costs upfront. And I cannot stress that
enough. Like the goal was optimization is to transfer data
seamlessly between systems like the ERP system and the CRM and
the finance system and enables finance function to pull clean and
accurate information on a timely basis. In today's environment,
finance team spent an inordinate amou...