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Oct 28, 2024

CFOs must act as data, decision-making center: Pigment | CFO Dive

CFOs need access to a wide range of data to ensure they can react speedily to market challenges, Pigment CEO Eleonore Crespo says. Working to create the most accurate scenario planning or forecasts is

CFOs need access to a wide range of data to ensure they can react speedily to market challenges, Pigment CEO Eleonore Crespo says.

Working to create the most accurate scenario planning or forecasts is a familiar challenge for finance chiefs — but one that’s only gotten more complex in an age when CFOs are being tapped as strategic and not just financial leaders.

More and more CEOs are looking to their financial leaders as stewards of data and strategy, not just of the companies’ financials, making them “the center of decision-making between teams, said Eleonore Crespo, co-CEO and co-founder of business planning software provider Pigment.

“The CFO has to play this role of orchestrator...really designing and shaping the vision of the company,” Crespo said in an interview.

To fulfill their changing strategic role, however, finance chiefs need access to the complete breadth of their organization’s data — which means both implementing new solutions and platforms that can properly aggregate that information as well as working to ensure different teams across the company can properly coordinate.

Paris, France-based Pigment provides companies with tools including budget planning and forecasting solutions, FP&A, workforce and ESG planning tools, according to its website. Crespo, whose experience includes a three-year tenure at Google in financial and product analyst roles, co-founded the company in 2019 alongside co-CEO Romain Niccoli.

As they face a number of macroeconomic pressures — inflation, a tight labor market and geopolitical uncertainty, to name a few — the importance of being able to plan and respond quickly to market changes is especially critical for today’s CFOs.

“The number one thing that is a pain point, and that is very complex for CFOs, is the ability to react quickly and understand quickly…what are the potential scenarios that are going to lead to the next steps of their company?” she said.

That includes looming events like the outcome of the U.S. election, the lingering effects of the Crowdstrike outage, or past events like Brexit, where companies were forced to reckon with a wide-scale change that could have potentially impacted their businesses in multiple ways. In the case of an event such as Brexit, “it's not only about reacting quickly, but it's about being able to run five scenarios at the same time and being able to say, ‘Hey, in the worst situation, what will happen to my company?’” she said.

While a familiar challenge for CFOs, being able to successfully run those scenarios and implement any needed changes can be tricky due to the simple fact that typically, “you don't have [the data] in a single source of truth,” Crespo said. “It lies in between dozens of different models.”

Consolidating that data is a top challenge for today’s finance chiefs, especially as failing to do so can hamper already-slow and costly digital transformation efforts. As they look to implement artificial intelligence, many business leaders pointed to unstructured data as a top barrier, for example, CFO Dive previously reported.

As the need to have access to cutting-edge scenario planning sharpens, many financial chiefs are looking to replace the antiquated processes they have used for decades. While it can be costly and time-consuming to change or upgrade historic processes, maintaining legacy solutions can be equally, if not more expensive, Industry Dive sister publication CIO Dive previously reported.

Implementing new solutions can often be simpler than many finance chiefs think as well, Crespo said. For these tools to be put to best use, however, collaboration between different departments — with the CFO acting as a nexus point — is critical, she said. Bringing such tools into the business “in the right way requires some change management,” Crespo said.

That might mean upgrading an outdated process so it is no longer in the hands of only one or two team members, or upskilling staff so they are trained properly on new solutions.

“I think you have to be mindful of that, because you will have to get teams on board,” she said. “You will have to make sure that you understand exactly what makes sense in terms of process, because you will be doing things that you were not able to do before.”