Last night a gave a talk at a dinner for finance professionals hosted by the software company Prophix, who I’ve been working with for the past year to imagine the future finance function. You can access the various papers and tools we’ve assembled over at future-of-finance.com, but I thought the topic of last night’s talk might have wider interest.
My subject was the question of who owns the truth inside organisations.
Information is truth
By truth, I mean the most critical information, financial and not, that defines and quantifies an organisation’s performance. The finance function always used to own information. That’s why IT grew out of finance in so many organisations: computers were brought in to speed the processing of that information.
Those were the days when finance held the purse strings and the reins. But, in recent years, marketing and sales have led the charge in advancing the collection and application of information inside organisations. CRM, analytics and marketing automation: these have become the new sources of truth.
Automatic for the people
With growing automation and the streamlining of the financial interactions between organisations, the day to day mechanics of the future finance function will be much reduced. More and more information will be captured, parsed and presented automatically, closer and closer to real time.
Not only is the primacy of finance under threat from increasingly data-savvy sales and marketing teams, it is threatened by the rise of the robots.
What machines can’t do is interpret information and support strategy with that insight. What sales and marketing can’t be, is truly impartial: their interpretation of the truth will always be coloured by their own incentives.
Without wanting to underestimate the value of brand, honesty and personality, truth in an organisation comes largely back to the numbers. What flows in, and what flows out. One of the great lessons I learned in my last start-up was that the only way to really test someone’s intentions is to ask for their credit card details. Where money is involved, you get to the truth very quickly.
The natural home for truth — information — in an organisation is the finance function. But not the finance function that many organisations have today. It needs to be a place of insight and foresight, discussion and collaboration, not interminable data re-keying and spreadsheet wrangling?
Who owns the truth? Today it’s unclear, but the prize is there for the taking.