CFO outsourcing

The past

In the past I have spent some time thinking and arguing about the CFO activities outsourcing, what it means, what it implies and what it brings.  A while ago I have spent some time with postings on TopCFO.ro that deal with the topic of outsourcing the CFO activities. Also on this topic I have written an academic research paper that can also be found here.

Sure it brings or it can bring tremendous advantages to outsource CFO activities especially when you need them.

 

The present  

I am coming back to this CFO activities outsourcing now because of a recent engagement at the big, well established and solid company that made me think about a new take on the topic.

Maybe the term CFO is a bit to pretentious used , CFO is rather the term that encompasses all the higher level activities in finance and that can be assigned to an role within the organisation.

In one of my consulting engagements at a respectable and big corporation, I was asked to re-set and to asses the finance activities from within the company.  The scope of the consulting mission was rather interesting and challenging and came with a lot of potential. The engagement was described as extremely important and very urgent. I thought that, OK they have an issue and want to tackle and solve it.

I have started the consulting mission with high expectations and with a lot of enthusiasm because I really enjoy this kind of topics. My first wake up call came immediately, suddenly the extremely urgent and important mission that I was called for was not that important and urgent anymore like mentioned in the preliminary discussions. I though OK, maybe something came up and shifted the focus. I was going on with my assessment of the scope of the consulting mission.

During the various discussions that I had with different great people in the company I understood immediately that they are willing and want to change things but they are hold back because of the very high inertia from within their company. Based on the discussions and findings on different issues relating to finance I have drafted a report that stated the issues objectively with accompanying remediation measures.  The report was send out for discussion with the involved decision makers. This was the point that triggered resistance to change and unwillingness to do something about the existing state of fact even though the mentioned topics have been recognised and acknowledged as true.

The report was designed to state the current status as given, it did not make any sense to spend too much time on past events, and more focused on the remediation measures some short term measures and some mid and long term that addressed the systemic issues. As an organisation you can not hide your own mistakes from yourself, you have to face them, understand them and act upon them.

Finance can not be seen as an subordinated and assimilated function that we do not want but that we need to accept. Finance plays a major part in the development of any business, especially in the 21-st century that is marked by globalisation and dynamism. Conservatory approaches can not be tolerated or accepted in an modern, fast moving profitable company.

Accept your flaws and be ready to act upon them.

The questions that remained open for me after this mission are :

  • why use external support if the feedback is not desired nor wanted ? Just because of formalism, just to justify to the boss remediation measures have been taken ?
  • if you get an report tackling current issues why hide them under the desk ? why not seeing this an opportunity to get better ?
  • can the client afford to continue without addressing the open issues ? major deficiencies are obvious to everyone ….

 

Maybe all of you have met similar situations before and know the approach and decision patterns already.

Looking forward to your opinions, experiences and suggestions as usual over FB, Disqus and messages.

 

 

 

 

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