Value Extraction and Value Creation
According to Andy Halls of Deloitte, the CFO of today is required to be more of a value extractor than a “backwards-looking number cruncher.” In addition to extracting value through data analysis to drive positive change that leads to greater value for money and less wastage from ineffective processes, the CFO today is responsible for value creation – the role today is more central, strategic and holistic than one purely focused on holding the corporate purse strings. Amongst those convinced that the CFO role today is more critical and central in the era of fewer C’ level executives and larger numbers at mid and senior management levels is Peter White, CFO of Hyperoptic. He believes the role of CFO is being positioned at the centre of the business with a 360 view of corporate affairs. White says, “CFOs need to ensure they get involved in all aspects of decision-making,” he says. “Using data and insight to support decision-making helps a business to achieve its goals, and ultimately this approach enables you to become a trusted partner who is invited to contribute.” So how are CFOs today being asked to add to the business?
According to Michael Raynor and Derek Pankratz of Deloitte,“Value Creation” refers to the creation of business strategies, products, and services designed to exploit the beneficial opportunities presented by climate change, or to the designing of mitigation and adaptation activities with a resulting commercial benefit in mind.” Climate change, they argue, is causing consumers and investors to seek out companies that are acting as responsible stewards of the earth. In addition to investors and consumers, employees, especially those of the ‘millennial’ generation, also make choices of where to work based on the values of the employer. Furthermore, they are vocal about the requirement to do more where possible. When penny-pinching takes precedence over prioritising initiatives that contribute to decarbonisation, the damage radiates across all business areas. There is no longer an option to avoid adopting initiatives that are more eco friendly and efficient. Showing that your business cares for its staff, its products, its customers and its community and environment are essential strands of day to day decision making. For CFOs, there are some particularly obvious ways to demonstrate their commitment to positive change.
Bigger, better, faster, cheaper
One or two of the above are usually sufficient to justify a change. When an initiative scores highly on all four and is not met with resistance from key stakeholders, it’s a jackpot. Touchless eInvoicing is such an initiative. It’s bigger than the company that adopts it. The initiative affects all its buyers and opens up possibilities for selling into other territories with a lower cost of entry and time to market. It’s better for customers and employees because it involves automation, clever workflow and reminders that make life simple, open 24/7 and easy to navigate and use the first time. It makes it faster to create and send invoices and collect receivables, and it makes it faster and easier for the buyer, too, especially if they are EDI users. Finally, it reduces costs in several ways, from removing the capital overhead of machinery and stationery, postage and staff time to print and post paper invoices. It has superior trackability and delivery times over PDF invoices sent by email. Not only does it tick all these boxes, but it is better for the planet, less paper, ink, carbon, data storage and carbon from delivery costs. EDI or portal based delivery has only a fraction of the carbon footprint of postal invoicing and collections. What is it? Cloud-based eInvoicing – using Corrivo, of course, the single platform for invoicing globally by any delivery method. One platform that meets all buyers’ needs now, and as they inevitably change to adopt the far more climate-friendly and cost-efficient method of invoice processing in their procure to pay cycle that eInvoicing delivers.
The smart choice for CFOs
While sustainability is not always the primary driver of change when a company adopts eInvoicing or upgrades its solution, choosing anything that doesn’t in some way contribute towards sustainability, or worse, represents a backward step, would be foolhardy and provocative. And although many companies take up eInvoicing due to market regulation and the mandated adoption of eInvoicing, they often sell it to their employees as a plus for their sustainability goals. As an initiative, they are proud to say is helping their company make greener, more socially responsible choices in the way they do business.
The feelgood factor
There is undoubtedly a feelgood factor to adopting eInvoicing when it saves everyone time, money, floorspace and headaches, and is one step closer to an efficient, paperless business system where employees are required less for mundane tasks and more for the insights, analysis and initiative they can provide to the business. This factor extends to investors, not just potential shareholders but also to fund managers whose careful selection of companies to include in ethical or sustainable funds to support anything from pensions to ISAs. In fact, oil companies, although screened out of many funds with stricter investment criteria, are often screened in when the company, in the way it conducts its business, shows high levels of responsibility, care and accountability in everything from its purchasing to its invoicing. The feelgood factor about eInvoicing also plays to the penny-pinching mindset, however, as its cost efficiency is as compelling as its sustainability, if not more so.