Finance is the backbone of any business. Companies can only assert themselves in the market and bring their vision to fruition if they are properly managed. When it comes to marketing, however, it’s important to approach the financial side of things in a balanced way without excessive hesitation. The digital transformation in this area must also be factored in. Finance departments and companies around the world are facing major challenges. Their strategy – taking data-driven actions – is timeless, however, and it will be exciting to see how the area of finance develops in the years and decades to come.
Finance and controlling
Outsiders often perceive finance as a complex, difficult to understand process of aggregating numbers. And, in reality, it’s hard to analyze all the relevant company data and use it to draw the right strategic conclusions. In addition to straightforward figures such as company turnover, good financial controlling also collects data on long-term marketing activities and many other areas of the company that are more difficult to grasp.
Challenges in finance and controlling mostly arise when there is too little rather than too much data. That is because modern tools and applications can help us navigate through the jungle of information. Since finance decisions by people and machines are always (and should always be) made based on the data, however, a lack of information input is problematic for financial controlling and decision-making within the company.
Marketing methods vs. finance principles
When it comes to finance, the gold standard is to have as many data entries as possible, with clarity being a priority. This can lead to conflict with the marketing department, because although marketing activities are vital for all companies, marketing results are often difficult to demonstrate in precise figures. New tools are able to quantify the effectiveness of marketing campaigns more accurately and thereby improve marketing effectiveness. However, a certain gray area of measurability often exists. For collaboration and corporate success, it is important to think of finance principles and marketing methods in the same bracket: Figures that are as clear and reliable as possible should be used for decision-making, without losing sight of the benefits of soft marketing strategies.
Finance in corporate strategy
Finance plays a key role in corporate strategy. Corporate finance is the proverbial coal that keeps the stove burning. Finance in modern companies includes accounting and risk management. Here, again, creating a robust database is at the heart of finance.
Another aspect which finance experts in modern companies are at least consulted on is the pricing of products and services. A carefully considered pricing strategy is vital for positioning the company in the market and ensuring its success. The various options include a siphoning strategy, market penetration, and competitive pricing. Deciding on a pricing strategy can mean the difference between the product’s success or failure, which is why data-driven work in finance departments is so important.
Finance, blockchain, and cryptocurrencies
The finance world has undergone significant change in recent years due to the prevalence of blockchain technology. Cryptocurrencies in particular promote the democratization of the financial system. Payments using Bitcoin and other digital currencies based on blockchain technology are also becoming more widespread. The concept of finance has taken on many new facets, which can make it hard to keep track of everything. The coming years and decades will bring greater clarity regarding the possibilities for financial knowledge and technology in business, the economy, and society.
Finance: (R)Evolution through modern technology
Whether it’s intelligent algorithms, uncluttered dashboards, secure blockchains, new metrics, or even artificial intelligence, the world of finance is in a state of upheaval. The demands on finance departments are quickly increasing, right along with their opportunities. In the data age, reliable evaluation of information and resilient decision-making are worth their weight in gold. That is why finance departments in companies around the world are currently growing and developing at an astonishing rate.
In the 21st century, marketing can work with increasing amounts of data thanks to new tools, media, and processes. These can be used to plan campaigns with ever greater precision. Evaluating marketing activities is also becoming increasingly detailed and more complex. Nevertheless, marketing includes factors and results – such as maintaining or boosting brand awareness over a specified timeframe – that are often difficult to attribute to individual measures in the marketing mix. In the data-driven 21st century, modern companies must ensure that finance is always taken into account together with other corporate goals – because marketing is also relevant to business.
