As a finance professional who has worked exclusively in the music business, Steven A. Storch is a rare cross between left- and right-brained. From his first job in the manufacturing division of CBS Records, where he witnessed the transition from cassette tapes to compact discs, to becoming CFO at Sony ATV Music Publishing, which owns the rights to the Beatles' catalog, Storch has worked alongside creative types his entire career. Now as the CFO of Imagem Music US, he represents the songs of Elvis Presley, Pink Floyd, and Rogers and Hammerstein, among others.
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Over the years, Storch has honed his finance skills, but he's also developed a less common trait: a creative streak. In this Q&A, he talks about why creativity is a critical characteristic for finance professionals today, and how he effectively fulfills his roles as overseer of IT and business partner.
Why do you think creativity is an important skill for finance professionals?
Steven A. Storch: It's important in today's business environment to constantly come up with fresh ideas. Finance and accounting have taken on a bigger role in business over the last several years, [and] just like they're at the forefront of many other strategic decisions, they also to some extent need to be leaders in coming up with creative ideas. That's not discussed a lot because a typical finance and accounting person has gone through rigid and focused training education, and creative thinking isn't necessarily associated with concepts such as GAAP compliance. [But] I think finance executives, to be good business partners, need to bridge the gap with business leaders to help them be effective. Financial controls should still be top of mind, but creative thinking should be part of the daily routine as well.
Many experts say the role of the CFO is expanding. What has changed from your perspective?
Storch: I think No. 1 would be helping to drive corporate strategy. Now you're seeing CFOs as drivers of strategic vision as opposed to simply being consulted with on an after-the-fact basis. The business partner concept [is new] as well; a lot of companies are eliminating the chief operating officer role and combining that in with the CFO.
[Also], most CFOs I know are responsible for IT. And not just managing IT, but also strategizing about IT that's going to grow the business. One thing that's changed in the last several years from my standpoint is the concept of transparency -- both internal and external. We need to provide the best, fastest, most accurate information internally, but our customers want transparency as well, and that's not always something we've needed to provide in the past. But in order to be competitive now -- I know in my industry, and I'm sure in others -- we have to provide that higher level of transparency to our customers. I think IT initiatives that are forward-looking need to be part of the CFO's daily responsibility.
What are some forward-looking IT initiatives you're driving at Imagem?
Storch: The biggest thing is improving speed and transparency of information -- providing real-time information that helps us evaluate the business and formulate initiatives that increase our profitability. We're always dealing with the challenge of legacy systems vs. new technology and trying to figure out where we want to go. I'm very excited by cloud applications because the cost and time to implement is drastically reduced.
The other thing is transparency in the form of access. Even though we're using legacy systems, my company uses an ERP [enterprise resource planning] system with online portals that allow quick, easy access to the data both internally and externally to our customers. That's making a world of difference in effectively running the company.
What cloud applications does Imagem use?
Storch: We're just getting into that area. So far, we use Concur [for] travel and expense tracking. We're constantly trying to sign new writers and artists, so we do a lot of entertaining and travel, and that system has given me amazing control over costs. We're [also] using a system that's associated with Paychex, our payroll company, where we can track employees' hours and days off and benefit elections in a cloud-based environment. We were able to roll it out very quickly and it's saving so much time and processing. One that we recently started using is a CRM [customer relationship management] system, Batchbook. We're using it for a very specific initiative, but what I like about these systems is that you can roll them out to just a group of people for a specialized function and you're up and running at a very affordable price.
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What I'm seeing in the cloud is also the idea of empowering employees to use their own systems. You don't have to have these massive companywide rollouts anymore -- you can have one-off systems that are already being supported by somebody. With the software comes the support comes the backup.
The issue I have with the cloud is that our legacy systems are very customized. We use Microsoft Axapta [for ERP]. It's an excellent product, but we've customized it a great deal because we have unique revenue recognition policies. We've been able to create an online portal for [it], but it still resides on our servers.
Do you think the company will ever move to a cloud-based ERP?
Storch: I would assume that's going to be the next big move we make. The challenge is trying to determine how we can get the software to work exactly the way we need it to, and yet still have it in a cloud. We're not there yet.
Historically, finance professionals have been resistant to cloud-based financials because of security fears. What's your take?
Storch: We don't have any of our core financials in the cloud. But people used to be afraid to use their credit card numbers online; you have to get past some of those fears. At the end of the day, there [will] always be some risk of security breaches, but there's also a risk of keeping data on local servers. I think we're going to see a lot of midsize and large companies moving to cloud-based ledgers. Security's not going to be the defining decision maker.
How can the CFO be a good business partner?
Storch: As a finance person, my skills are in improving revenue and performance of businesses, so it's on me to help the business leaders to be successful. I don't necessarily wait for the business managers to ask me the right question -- I think it should be more of a proactive discussion where I'm sharing my thoughts and ideas. I try to be at the forefront; I'm looking at trends in our divisions and alerting management to internal and external business trends so they can do what they do best to bring about performance enhancements. It's the responsibility of the finance person to bridge the gap and explain things simply to business leaders and the CEO, as opposed to [being] the after-the-fact reporter of numbers.
How can finance professionals make financial data accessible to business leaders?
Storch: I think data visualization is very important -- it's easier when people see things in a graphical way. You always want to start out with the summarized, one-page conclusion. Behind that is the supporting documentation, so if the person wants to see the details, she can do that. I've been in meetings where if you don't come out with the answer in 25 seconds, you've lost the room. So, I've learned you have to get your message across quickly, and there's a creative aspect to that. You can't assume the person you're showing information to [is] going to understand it. Make it as quickly and as easily translatable as possible.