May 2018: What We’re Reading
News and insights to keep you up to date and on track—the strategic shortcomings of AI, grooming the next CFO, presenting data in context, and more.
We’re here to help you make your business spending more strategic, intelligent, and connected. Stay up to date and on track with recent insights from business strategy experts and fintech thought leaders.
Why Artificial Intelligence is the Anti-Strategy for FP&A
Michael J. Huthwaite for FP&A Trends | @mjhuthwaite
Artificial Intelligence is one of the hottest topics in the Tech sector, but relying on AI as a “strategy” is short-sighted. AI offers efficiency and speed, but the reams of data are no replacement for sound, long-term strategy.
“I’m worried that companies will sit back and begin to rely solely on AI to make short-term automated efficiency choices rather than focusing on making strategic decisions that require upfront investments in order to break down barriers or boundaries so that real progress can be made.”
How Good Eggs Came Back from the Brink—and Plans to Take On Amazon
Adele Peters for Fast Company | @adele_peters
This San Francisco-based food delivery service successfully identified a niche customer base and continually streamlined their processes to achieve growth in an extremely competitive business.
“From 2016 to today, the company’s average order size has increased 21%. The company has grown more than four times, even while competitors like Instacart and Amazon have entered the market.”
Read Elon Musk’s Latest Email to Employees on Tesla’s Big Picture
Johana Bhulyan for Recode | @JMBooyah
Demonstrating the importance of real-time financial fine-tuning, Elon Musk outlines a series of procedural and cost-cutting objectives to increase efficiency and meet aggressive new production goals.
“A fair criticism leveled at Tesla by outside critics is that you’re not a real company unless you generate a profit, meaning simply that revenue exceeds costs. It didn’t make sense to do that until reaching economies of scale, but now we are there.”
Process mining allows companies to make sense of large amounts of data in context, rather than as isolated data points.
“Big Data offers the enterprise a world of opportunity to improve processes and save money. But the aggregation of troves of data points is a monumental task – let alone sorting, analyzing and making sense of that information.”
CFO roles, once a heavily recruited position, are now being filled internally over half the time, indicating that comparatively few companies have clear succession plans in place. CFOs with aspirations for larger roles may need to actively focus on developing new talent internally.
“CFOs want to be in positions where they’re adding value as opposed to doing the day-to-day blocking and tackling.”
The cash flow statement is one of the three critical documents that financial professionals must prepare for company executives, but it’s a mistake to simply present the spreadsheet as is. Here are some examples for presenting the key insights more effectively.
“Distribute [the cash flow statement] in advance, and let them know that during your time with them, you will focus on the key items they need to know about and decisions they need to consider. This will make your time with them much more valuable and productive.”