The difference in the nature of a traditional company and an emerging company completely changes the role of CFOs, both in relation to the rest of the company’s departments and in the time horizon they set for themselves. carry out projects and the need for continuous change. This has been one of the conclusions that have been exposed in the round table on ‘The new vision of the finances of the financial managers of the emerging companies’ that has taken place in the Conference of Financial Directors held this Thursday by elEconomista.es. Participating in this debate were Amine Saoudi-Hassani, Chief Financial Officer at Freepik Company; Joaqun Huesca, Iberia Financials lead Workday; and Teresa Gordon, Designit Global Controller.
Huesca stressed that there is a differential component between the financial team of a traditional company and an emerging one that goes through the focus where you look. In his view, traditional firms have a time horizon of three or five years to develop their strategy, while emerging they have a time horizon of two or three months to see where and develop their strategy, something that is conditioned by a “healthy volatility environment”. In fact, it affects that the finance departments of traditional companies look at the photo of the past, where they come from to seek explanations and understand the behavior of the business, while what new companies do is always look forward. “Finance departments look at the immediacy of four or five months,” she said.
Teresa Gordon, from Designit, assured that the company she represents has a startup culture, something that also involves the financial department. In her opinion, the main difference between a traditional company and a financial one is that the first one comes from a maturity with a more stable context and the second must always be waiting for the change and willing to change and the challenge of the CFO is to bring that agility from finance to the company.
Amine Saoudi-Hassani points out that the difference in roles in CFOs depending on the companies they are in is on the horizon. “In emerging firms, talking about five years is almost science fiction, when in traditional firms strategic plans are made with those deadlines,” she remarks. Saoudini-Hassani points out that financial directors in emerging companies look at what is immediate, how their traffic will evolve or what types of online fraud they may have two months from now. They look at the immediacy how to react quickly to add value both at the company level and to the end customer.
Among the characteristics that the three experts of a CFO in an emerging company stand out, Gordon assures that they start and develop the strategy from a blank piece of paper. “We have a large listed firm behind us, therefore external financing is not a necessity, but it is only necessary to build an agile department and that responsibility falls on the CFO,” he says. “You have a blank piece of paper to build a department that fits the company’s vision.. The role of the CFO is no longer just traditional tasks of seeking financing, paying taxes or having a good audit at the end of the year, it is having that vision to build a structure that accompanies the company’s strategy,” he clarifies.
For his part, Saoudini-Hassan, from Freepik, considers that the CFO, when seeking financing it no longer remains in a habitual role but rather serves as a catalyst and accompanies those responsible for the company to make decisions, such as giving priority to some projects over others if you see quick ways to find financing such as public aid or European funds. “Financing can be much more creative,” she says.
Huesca stressed that when it comes to seeking financing, whether traditionally or through a purchase, it has also become relevant the speed to have the information specifies what is needed for those operations, such as supporting a process of due diligence. That agility, he considers, can even form part of the value of how well a company is managed and how responsive it is. “The role of information preparation is a key aspect beyond the fact that the figure of the CFO should identify sources of financing,” he asserted.
importance of technology
The discussion table also discussed the role that technology plays in an emerging firm and how it influences the work of the CFO. Saoudini-Hassan pointed out that technology is a fundamental tool to process information in a faster and more reliable way and, therefore, it is a way to make decisions more quickly thanks to predictive models. However, he added that the use of technology should be considered as a strategy at the company level, not only at the level of the financial department.
Huesca focused on the importance of ERP (Enterprise Resource Planning), a technology that integrates the main data and processes of a company in a platform, which configures the backbone of companies and should be given a greater role than it is given. “There are very few financial departments that question the role of ERP in this area, but the nature of the information must be universal and accessible to everyone who needs it in the organization, it is a matter to rethink within companies and is key for the CFO to become a business advisor“, he said. In addition, he added, it is key that the financial information be able to be explained in business terms, “it is a pending issue”.
In this regard, Teresa Gordon pointed out that the choice of technology applied in a company must be accompanied by a team that knows how to design it and that adapts to the company’s needs. “Technology makes it possible to standardize processes and streamline them, but also to have all the data in a single place. It is a means to achieve the unity of the company”, he pointed out. In fact, he explained that at Designit, and thanks to the investment they made five years ago in a new ERP, they were able to go from having several local financiers in each of the 14 studios that tend to have 10 people centrally on a global level, most of them work in Spain and with options to do it remotely, because they have the entire system in the cloud and can use it anywhere.
Joaqun Huesca stressed that innovation is part of Workday’s DNA because they were born with a very clear idea that they wanted to design and develop a business application that would disrupt the traditional way of doing things with the people who use it in mind and offer a similar experience. to which the user is accustomed as a consumer of a mobile app. “We allow companies to be able to give more value to customers through innovation or to be able to deliver information more efficiently to their customers.” stakeholders. We have had it in our DNA since we were born and it is part of our model and value proposition to customers,” he stressed.
Finally, Saoudini-Hassan highlighted the importance of investing in human capital and training. From his point of view, it is not necessary to make people obsolete, but to self-criticize from the financial department, set an example and invest in human capital.