By a standard definition, a Chief Finance Officer (CFO) is the highest-ranking financial professional in an organization who is responsible for the company’s financial health. But today, while the fundamental aspect of the role is the same, the approach towards achieving financial stability has metamorphosed. Technology has been acting as a catalyst in the adoption of sustainable methods to achieve the financial stability of businesses and evolving CFOs using it as a tool. During and post-pandemic, especially, technology provided the discipline for finance teams to help companies get back on the horse without losing pace.
According to research, Asia-Pacific saw the largest leap in digitization in 10+ years, where before the pandemic a 3-year average use of technology was around 30% and during the pandemic, it jumped to 54%. The inclusion of technology in making financial decisions have helped companies achieve a breakthrough like never before.
Traditional roles and duties of CFOs and their teams are a thing of past
Once upon a time the sole duty of finance officers and their teams was mostly taking care of the company’s purse and monitoring the coins that were pulled out of the purse or added to it. Today they are not just decision-makers setting targets and instructions for various departments keeping in mind the financial health of the organization, but also responsible for acquiring the right technology tools for their department and the organization, fusing their duties with that of CIO/CISOs and the IT teams as there are financial implications for any incorrect technology decision. A survey of 300 CFOs, controllers and F&A professionals says that 61% are now in charge of all technology budgeting, spending and approval, while 28% reported that they at least supervise IT and software. Also, 69% of CFOs and controllers stated their corporate technology responsibilities are increasing due to the transforming business approaches. This provides a clear picture that CFOs can no longer work in silos, but must also fuse their skills and monitoring radius to other departments.
But for those who are still uninitiated about the in-depth use of technology, here is a list of tools that will come in handy for sound financial decisions.
Automation: Automated reporting and analytics allow more time to be dedicated to forecasting and predictive analysis. The ways in which automated tools can change the current landscape around finance and accounting are nearly endless. CFOs will have to develop and maintain a strong understanding of the capabilities of current automated tools and those under consideration, then ensure staff have the skills that are not yet replicated by machines. This can involve everything from encouraging current employees to develop specific skills to working with human resources staff to find new hires to fill critical roles.
Artificial Intelligence & Big Data: CFOs have traditionally dealt with data by tracking cash flow and analyzing performance. Big data and artificial intelligence, when combined, will allow CFOs to obtain a predictive analysis of the company’s financial data. This mode of operation necessarily implies a stronger collaboration with the IT departments. This relationship will then facilitate the extraction of the most relevant data from the immense quantity that AI and Big Data can manage.
Data Science & Analysis: Data Science is a tool for CFOs as it helps provide research and analysis for the past and the future of the organization’s business scaling, purpose and vision based on all the available data. By applying prescriptive and business analytics, which are a part of data science and analytics with business intelligence a CFO can make clean, profitable and transparent financial decisions.
Other Digital Transformation Tools: Robotic Process Automation (RPA), hyper-automation, blockchain, machine learning, data and cybersecurity, cloud-based tools and applications, Enterprise Resources Planning (ERP) tools, Internet of Things (IoT), various SaaS tools, etc are the tech tools that will not only help CFOs revolutionize their work for better, accurate and well-informed decision making.
The best aspect of CFOs involving technology in their day-to-day operations is they can choose what tech needs to be given priority and when it can be implemented. Most of these technologies don’t come at affordable prices, especially for smaller organizations to even think of using them. But post-pandemic, however, there have been many tools and applications that have been developed where a complete technology solution needn’t be bought, instead, customization can be done, like a cocktail of tools and applications, which can at a later stage be modified as needed. These options and availabilities only showcase that CFOs only need to plan how to utilize technology to build stable businesses.