Where does digital transformation leave the CFO? That’s the question explored in this article on bloomberg.com. Social media isn’t the focus of the piece, but we would like to zoom in on a few key points in relation to which social business is extremely relevant.
“Today’s finance leader needs to work collaboratively to develop effective analytics that span everything from customer journey cycles to live supply chain logistics, and to apply market competitor analysis to the allocation of resources.”
Finance departments need insights that go beyond economic data, and social media is often where these insights are obtained. A study carried out by the European Central Bank found that Twitter is an “economically significant” predictor of international stock market sentiment. But beyond this, tracking how the company and its competitors communicate with customers on social media, how the latter respond, and what drives purchasing behavior, helps finance leaders to track and predict trends, and to make the most of economic opportunities.
“In the post-industrial age, it is intangible assets, like customer relationships, brand perception and human capital, that increasingly command attention. They are far harder to evaluate than physical assets, and the CFO needs to be an effective communicator capable of playing a strategic advisory role to leverage these assets.”
Social media data can offer insights into the products and services that are generating customer interest, by analyzing how customers interact with brand content, and what they say about companies on their own accounts. It’s essential for finance departments to listen to these conversations; to use sentiment and interactions – the “intangible assets” – as a way of evaluating and planning financial strategy.
“With many new sources of information coming from outside of finance, it is essential for the CFO to be able to work with non-finance functions.”
The fact that finance departments need data that goes beyond their own immediate activity means they need to team up with others within the company. Marketers track the impact of social media communication on new and existing customer audiences, sales professionals monitor how it drives lead generation and nurturing activity, and customer service teams evaluate the success of client support being carried out on social networks. All of this activity is linked to decisions that are made in terms of investment and revenue, which is why finance leaders must always be in sync with the social media insights being obtained by other teams within the company.
Social media is as valuable an asset for finance departments as it is for marketers, social sellers, recruiters and customer service teams. But it’s not all number crunching; one of the greatest advantages of social networks for finance teams is having the ability to analyze the audience sentiment that results from, and in turn influences, investment strategy.