Digital technology available to the CFO is accelerating at an incredible rate, bringing with it new agile ways of working, increased efficiency, more significant business insight and the potential for higher business growth.
Every function in an organisation needs to ensure that it is correctly harnessing emerging and established digital technology appropriately, to keep up with both traditional and new, disruptive competitors but none more so than the finance function.
While technologies such as the Internet of Things (IoT), big data, automation, artificial intelligence and the cloud all present vital opportunities for businesses, they also come with challenges. Not least is being able to identify which of these to invest in to deliver an optimum return on investment.
These are hugely exciting times in which to be managing a business, but also unchartered waters for many organisations, as new technologies are turning traditional business models on their heads.
Organisations need to be able to embrace technology to survive and thrive.
The Role of the Digital CFO
It is in this brave new digital world of emerging technology that the CFO’s role is rapidly evolving. Often traditionally seen as a transactional gatekeeper of accounts and funds, the advent of all kinds of technology has revolutionised both the part of the CFO and how they operate within organisations.
A Digital CFO must couple a clear financial vision, with insight into how to transform and succeed in the new digital landscape.
They also must be able to harness new technology to wade through financial data and spot patterns, inefficiencies and ways to streamline processes and spending.
They are still the guardians of funds and the managers of risk, but they cannot afford to sit behind closed doors, they need to be working smarter and more visibly, utilising new technology.
While it may sound a daunting task for any CFO, technological advancements mean that a CFO has a plethora of tools from which to choose to help them thrive in a digital world.
In this article, I summarise nine areas where technology tools can play a vital role.
#1 Workflow Management
There is a wide range of excellent tools available which allow CFOs to manage productivity.
Web-based tools can help busy CFOs, and their teams assign and track tasks across departments and even countries.
This is especially useful for large, multinational organisations, with in-country financial teams reporting into a central CFO.
#2 Internet of Things (IoT)
It is not an overstatement to say that this is a game-changer for CFOs.
One significant challenge for finance teams has always been to track expenditure on everything from printer ink to electricity accurately.
Using IoT, things – be that printers, air conditioning units, smart meters or even fridges in staff breakout areas – can communicate with each other about usage.
CFOs now have a more accurate view than ever before on usage including what, how and when across an organisation.
More than this, as data is available in real-time, patterns can easily be spotted and tracked to ensure that spending is appropriate and necessary.
It is also easier than ever before for CFOs to detect irregularities in any area of expenditure.
#3 Big Data
The proliferation of data is hard to describe and harder still to track and analyse accurately.
However, while it seems an impossible mountain to climb, being able to quickly and accurately capture and analyse data is incredibly important for CFOs, especially when it comes to risk management and fraud identification.
Cloud-based analytics tools go hand in hand with big data when it comes to a CFOs ultimate toolkit.
There are analytics tools available that can make wading through reams of data a faster and simpler task, pulling data from various spreadsheets, data sources and platforms across an organisation.
As artificial intelligence and machine learning continue to develop and become more commercially available, analytics tools become ever more efficient, as smart machines will be able to take minutes to analyse what would have usually taken days.
#5 Predictive Analytics
Taking analysis one step further, today’s CFO’s are taking data from across an organisation and then using this as the basis for making future predictions.
Again, emerging artificial intelligence tools will be able to make a big difference here.
This kind of analysis can then be used to model various scenarios and help businesses with more effective financial planning, in addition to giving insight into the financial impact of, for example, entering new geographic territories or acquiring another business.
While some tasks will always need a human touch, many can be automated, and this is especially true when it comes to finance and accounting.
By automating key processes, it is possible for CFOs to streamline further and improve financial processes and free up time for their team to focus on strategy and supporting management.
#7 Cloud-based Solutions
Cloud-based accounting software is already transforming how CFOs work, enabling access from anywhere, including through mobile devices.
It allows greater team collaboration and sharing and can be integral in growing a business, especially in terms of expanding overseas.
#8 ERP Systems
Enterprise Resource Planning systems are not necessarily cutting-edge technology as they have been around for a while; however, they are developing to take advantage of cloud-based and shared services platforms to break down silos of information across organisations.
It is easier than ever before for a CFO to have a centralised, accurate, up to date view of essential elements such as eCommerce, sales, payroll, inventory, stock and accounting.
For fast-growing and ambitious businesses, an ERP system is a must-have that further adds to a CFO’s ability to streamline and control costs.
While cybersecurity might be viewed as the tech team’s responsibility, it can have a massive impact on the CFO.
Not only can any data breach have a catastrophic effect on a company’s share price or profitability, but hackers are also increasingly blackmailing organisations by threatening them with online viruses.
As the CFO generally has overall responsibility for financial risk and also holds vital, sensitive financial data about a company, it is in their interests that cybersecurity is as robust as it can be.
There is a wide range of security platforms available, and the CFO needs to work closely with peers in IT to ensure that the organisation has an effective and up to date security plan and processes in place.
The modern Digital CFO has their work cut out for them in a way that their predecessors perhaps did not.
The role is certainly more multifaceted than ever before, with new challenges on the horizon, driven by a combination of new technologies, working practices and agile competitors.
No CFO can afford to sit back on their laurels, but instead should continuously be looking at how they can better harness digital technology.
In doing so, they can compile the ultimate CFO toolkit of technology that can help drive productivity and business growth, in addition to remaining mindful of security threats and fraud risks.
A CFO may have more elements to consider than ever before, but they also have more tools in their arsenal.
The key is to pick the right ones and combine them in a way that works for the whole organisation.