While the ways that digital transformation is shaking up the way that organisations work is well-documented, we hear far less about the role of the Chief Financial Officer (CFO) in this period of digital disruption. Yet with technological changes affecting a huge shift in how companies operate, today’s CFOs are increasingly called upon to be digital pioneers, too. To gain a better understanding of how CFOs manage technology, CFO Research recently surveyed senior finance executives. The findings revealed the extent to which IT has become deeply entrenched in the finance function.
“Finance is IT,” said one survey respondent. “They are no longer separate items. Without IT, you can’t do finance.”
Consequently, a massive 93% of the senior finance executives surveyed believe that the CFO of the future will need a much stronger technology skill set than is currently required for the job. As a result, 64% of survey respondents said that they have taken specific actions to upgrade their technology skills during the last year, with 80% of respondents planning to do this year.
Why is technology so important? When managed well, it connects finance with every function and informs every strategic decision within today’s organisations. This information can then be used to streamline and simplify internal processes; enable new products and services to be brought to customers; open up new markets; improve the efficiency and the speed of decision-making, and provide the data needed to predict future trends. It also highlights those areas where risk exposure may be greater, giving the opportunity to correct issues before they arise. And such benefits will never be more apparent, and attractive, than now, at the fiscal end of year, when many CFOs will be experiencing the frustrations of entire departments working in silos.
However, going digital is not just about creating particular technology channels, but implementing far more sweeping changes. To fulfil their potential, any new technology strategies have to be implemented across the entire organisation. This is where the CFO can be a real driving force; every day, they handle huge amounts of data that can positively influence the running of every single part of the business.
Presently, however many finance departments are finding that the systems they have access to simply aren’t up to the job in hand. As a result, reports are often run too late to allow the business to make timely, informed decisions based on that financial data. Instead, decisions rely on rudimentary software such as spreadsheets and ad hoc reporting based on last month’s data. It’s easy to see how many businesses fail to see the finance department as a catalyst for strategic change with many companies not fully exploiting the valuable information it holds.
However, by fully embracing technology, the CFO can delve into the detail and start extracting the figures to provide the business with commercially valuable data. This is often where financial analytics solutions can be deployed; to deliver the right information, precisely when it is needed, in a user friendly, understandable format.
As the finance department becomes ‘connected’ to what financial insight is required to ensure the business can act upon its information and operate more effectively, so it becomes a critical component of the way the business operates. Similarly, by connecting the front and back office from a systems perspective, you encourage a two-way flow of data that benefits the finance department by enabling them to easily drill into real-time information therefore supporting the sales, customer service and marketing teams to make better, more timely decisions based upon this information. Without this, you’re limited to making decisions solely on how things have worked in the past, putting the organisation at a distinct disadvantage.
And so we look to the CFO to step out of the back office and lead the way. The future environment presents enormous challenges for CFOs, but it also provides a great opportunity to create a more connected organisation which is fully equipped to take things to the next level.