4 Emerging Technologies That a CFO Should Embrace

The role of the CFO is continually changing and evolving, as new technology comes to the fore.

With Software-as-a-Service (SaaS) becoming increasingly popular, the solutions available to aid the CFO identify emerging trends and move the business in new and more profitable directions are also multiplying.

To keep up to speed with all of the latest technological developments, today’s CFO needs to keep a watchful eye on the technologies that offer the potential to lead the finance team to ever greater effectiveness and commercial awareness.

While a CFO must ensure that the finances of the business are in good order, providing relevant insights and reliable figures, the role has expanded to encompass the development and funding of business and organisational strategy, in addition to communicating with the markets, and any technology with the power to assist in these activities is sure to be welcomed.

Technologies to watch are Blockchain, Artificial Intelligence, Automation and Data Science, each of which I’ll briefly explore in more detail in this article.

#1. Blockchain

Blockchain first came to public attention as the technology behind Bitcoin and other internet-based currencies, but there is much more that blockchain has to offer a modern business.

The system of linear blocks of records, each ‘chained’ to its neighbouring blocks in chronological order, makes this a robust option for ledgers.

The information contained within a blockchain format cannot be tampered with or revised, and the inherent transparency of the records makes them highly appealing for business use.

The blockchain ledgers can be shared across departments and accessed by personnel who have the appropriate permission.

Blockchain appears to have as much potential as any CFO could wish for.

In particular, it seems set to completely revolutionise the function of the finance department, with its ability to streamline the enforcement of contracts, manage chains of extended value and even increase the security of an organisation’s IT systems.

#2. Artificial Intelligence (AI)

As the CFO comes under increasing pressure to find ways to increase profits, trim expenditure and predict emerging trends, the risk of burnout in the finance team is very real.

So the rise of AI is something that a CFO should welcome wholeheartedly, as it offers the ability to free up them and their team from laborious manual tasks while reducing the risk of errors that can so easily occur when the human mind operates under stress and fatigue.

AI systems can undertake many repetitive and mundane tasks, freeing up time while reducing risk and error rates dramatically.

AI simulated financial tasks, including account reconciliation, for example, can increase productivity across the finance function.

Another advantage is that AI systems can operate around the clock, providing a 24/7 service at minimal cost.

AI systems can also help the CFO to deliver improved business outcomes.

AI analytical tools can significantly enhance the supplier selection process and can even allow the CFO to improve cash flow management, for example by leveraging any excess funds towards early payments, thereby driving additional discounts.

Artificial Intelligence also opens up the possibility of providing valuable insights that highlight future growth prospects. For example, projections and forecasts generated by AI systems allow the CFO to make informed decisions based upon computer modelling.

#3. Automation

The automation of many financial processes allows for faster and more efficient handling of data.

Wisely chosen systems allow for the delivery of frequent reports, containing in-depth information that can be used by the CFO and the finance team to drive strategic planning.

The business can also benefit from automation within the finance department, which allows team members to focus more of their attention on data analysis and emerging trends, rather than spend hours tackling spreadsheets and preparing mundane or repetitive reports.

For the CFO, ensuring that essential information is of the highest quality, free from errors, timely and relevant is a crucial aspect of their role.

Rapid decision-making gives a company an edge over its competitors and with the help of automated systems, the CFO can ensure that management and leadership have access to relevant information far faster than would be possible using a manual approach.

Also, automation provides a clear and transparent audit trail since every single entry and amendment made to a document or report is automatically disseminated across all other relevant documentation.

This allows every stakeholder in an organisation to access timely data exactly when it is needed, secure in the knowledge that the data is accurate and uncorrupted.

There’s also a significant move towards cloud-based automation processes, as businesses come to appreciate the improved data security that this option offers.

Those companies who are wary of third-party providers are potentially putting themselves at a disadvantage, as cloud-based systems are continually being upgraded and refined to minimise security risks.

Cloud-Based automated services offer extraordinarily high levels of security since the CFO can easily categorise the files and reports that each person can access.

This removes any chance of documents being passed to unauthorised third parties, with changes and amendments easily accessible in case of any doubt.

#4. Data Science

The need for a more analytical approach in managing business finance means that data science will continue to be big news in the coming months and years.

The CFO must predict outcomes and calculate appropriate strategies accordingly, and data science provides invaluable assistance.

As new technologies continue to emerge, the CFO must upgrade both their and the finance team’s skill set and knowledge of the tools available.

Connecting with all available sources of data from across the business will give the CFO unique insights into the state of the organisation.

KPIs can be easily identified, and information can be broken down to provide high-quality, insightful data that can be used to its full effect when combined with advanced statistical analysis and computer modelling techniques.

The volume of data generated by today’s businesses is unprecedented.

The spread of technology and new systems means that the CFO can extrapolate data from production processes, supply chains, in-house operations and also from interactions with customers.

All of this data can be used to identify areas of concern and areas for potential growth, in addition to providing valuable insights into every aspect of the business, from pricing to inventory management.

Finance departments have always relied heavily on data, but new technologies have made access to data analytics and big data a particularly exciting prospect.

This growth in data science is spearheading the change in the role of the CFO from strategic decision-making to a far broader commercial role.

The tools at the CFO’s disposal make it increasingly likely that their role will expand to encompass decisions about price points on a day-to-day and customer-by-customer basis, for example, or decisions about products within the supply chain.

The ability to respond quickly to real-time situations makes the role of the CFO increasingly crucial across all facets of the business.

In Summary

For any CFO who wishes to remain relevant and at the top of their game in the digital age, a sound knowledge of these emerging technologies is essential.

Not every technological advance applies to every company, but the scope offered by these four key emerging technologies is something that every CFO needs to examine carefully.

With the right technological systems in place, the CFO will re-enforce their importance and contribution as a member of the senior leadership team.