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I am a voracious reader. I read books, blogs, reports and newspapers from every sector to give me a broad understanding of the business, economic and political environments as I can possibly gather. And I've just finished reading a fascinating report pulled together by Pleo some of which I will share.
The Finance and Business Synergy Report {LINK} gives a snapshot of how departments within a business collaborate–and zooms in on the dangers of silos.
It's intriguing to see that some of the findings of this report underline basic human traits. One quote I liked was [because of] “the sensitive nature of money and the business need for accuracy and accountability, finance often becomes a spiky topic between departments”. In my experience this is frequently the case.
Too often a conversation with the finance department is rather like a parent addressing a child telling them they can't have an increase in their pocket money. This has, over many years, created a degree of fear and mistrust in finance departments, which ultimately is a huge stumbling block to business growth, integration and efficiency modern organisations.
The report goes on to say that one way around this might be for finance teams to brush up on their soft skills. Whilst much of this might seem blindingly obvious, that doesn't mean organisations have acknowledged it and put in place a strategy to move forward.
What's interesting about this? All the data shows that we are presented with a fantastic opportunity for finance departments to evolve and become more of a strategic partner within the business, helping of the departments to spend their funds (increased funds in some instances) the wisest way possible.
Some of the report’s key findings that not only resonated with me, but reflect a lot of what I'm hearing when I speak to organisations, were:
- Across Europe businesses are feeling optimistic about the economic climate and have set their sights on growth - yet against this background 40% of businesses say that their budgets have decreased.
- Over 3/4 of businesses acknowledge that they need to spend money to make money. Yet it would seem that often this is not reflected in the budgets which are available and the complexity of procuring services from the right supplier at the right price
- 2/3 of companies consider improving in-house collaboration as a priority for this year. This has long been an issue. In fact, in my second book Smarketing I wrote about improved collaboration between sales and marketing departments, now of course the concept of a CRO is commonplace, but it was not always so. Now it is the turn of the finance team to more tightly engage with other departments. And it's not just me that thinks that this would be great because over 70% of companies interviewed think that this collaboration will lead to an increase success and resilience.
There were a couple of other things that I thought were worthy of mention and potentially addressing within the report too.
The first of these is the third of people across the organisation saw a risk in “strategic opportunities with uncertain ROI” – citing events with networking opportunities as an example.
Whilst these activities have been notoriously hard to measure in the short and medium term, I think it's fair to say that most people would recognise nonetheless that they are crucial things for organisations to still be doing
The fact that they may be difficult to measure in the short term makes them no different to brand marketing - which as you will know I’m not a fan of. But for organisations Apple, Google, BMW, IBM and the like, their brand is everything and ensuring that people are reminded of it regularly and what the brand stands for has been part of what has driven their enduring success.
The other point I wanted to make particular reference to what's the disparity between an organisations growth aspiration and how this is impacted by reducing the investment in their people. Pleo’s report shows that 87% of businesses have cut spend over the last 18 months. But that 50% regret making drastic cuts, and 65% believe that if they had better insights into other departments and had greater collaboration, they likely would have made better spending decisions.
Obviously, we all know many cliches about how organisations claim to be “people businesses” or how “looking after the staff means the staff look after the customers”. But be that as it may, many organisations see reduction in these expenditures as being an easy way of cost saving.
In both of these two examples, greater collaboration can create an environment where finance has clearer insight into the activity (and effectiveness) of other departments. This silo-less collaboration is absolutely crucial in 2025 and beyond if organisations want to be able to roll with the punches of disruption and global uncertainty–and meet targets for growth.
Related: GenAI: The Top Self-Guided Information Source for 89% of B2B Buyers