the next generation CFO
95% of CFOs say that their role has changed significantly in the past five years. The next-generation CFO either wears lots of new hats or at least must engage collaboratively with the other professionals in these roles. Either way, the CFO’s responsibility and influence continues to increase…
FIND OUT WHICH ROLE YOU PLAY AS CFO IN THIS INFOGRAPHIC:
The CFO and the finance team continues to gain more and more importance within companies. In a highly volatile economic environment with increasing global competition, the need for high-quality planning, budgeting, forecasting and negotiation is growing. In addition, a stronger involvement of the finance organisation in the development and design of strategies for digital transformation is necessary. This makes CFO’s and their teams the architects of value creation for companies. The finance function must face three key challenges in particular: Better cost control, focus on new growth and sustainability.
ARE YOU READY TO FACE THESE CHALLENGES?
Digital technologies are helping finance take on a new role within businesses, breaking down traditional work processes, driving employee change and providing new insights. The digital transformation is also causing a role shift and an expansion of competences in the finance organisation. In addition to the original tasks of the finance function, the CFO and his or her department are increasingly seen in the role of a driving force for value creation in the company and thus also as a driver of digitalisation.
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If you’re a CFO preparing to lead your company into digitisation, no transformation is more important than making customers’ experience with your organisation better.
Nearly half (46%) of CFOs are facing increased demand to provide overall business counsel. Additional factors driving the changing CFO role include the availability of real-time data and increased compliance and regulation requirements, as well as the expansion of the role beyond financial management to include functions like IT and cybersecurity.
The enthusiasm behind introducing new innovations is, in part, being driven by the benefits finance leaders are already seeing. Approximately three-quarters (76%) of financial decision-makers currently drive digital transformation in their business. In addition, more than nine in 10 (94%) agree that financial management solutions are helping their teams optimise operations, while 92% believe these efforts can help automate and streamline the compliance process.
Here are four steps CFOs can take to ensure the digital transformation they lead creates value rather than simply cuts costs:
Examine the business model to understand what you’re providing to the customer
Any transformation that doesn’t keep the customer at the centre is a wasted exercise. Ultimately, you will digitise your processes, but be clear on intent. It must be about transforming your customer experience, the way the customer does business with you, and consumes your product or services with the latest tech.
Finance transformation on its own won’t produce impact, results or value if you’re not fundamentally changing your customer experience. You might automate, and you might make back office processes better, but if it doesn’t involve customers quickly getting information at their fingertips and finding your company easier to deal with, then it’s cost reduction, not value creating.
Examine finance, accounting and legacy processes
Upon examination, re-engineer them to fit the business model. Don’t adapt technology to your processes, which does not add value. Rather, change your legacy processes so you can leverage the power of new tech. The modern CFO is evolving from being a backwards-looking number collector to a trailblazing strategic leader who uses data and emerging technologies, like artificial intelligence and predictive analytics, to create a vision for the future of their business. The digitalisation of business is changing the way finance leaders work and embracing technological evolution will separate the leaders from the laggards in this new era. However, a lack of cultural readiness in the office of finance may slow adoption of new technology and hinder achieving optimal results with any digital transformation.
The enthusiasm behind introducing new innovations is, in part, being driven by the benefits finance leaders are already seeing. Approximately three-quarters (76%) of financial decision-makers currently drive digital transformation in their business. In addition, more than nine in 10 (94%) agree that financial management solutions are helping their teams optimize operations, while 92% believe these efforts can help automate and streamline the compliance process.
Right people, right skills
Use the right people, with the right skills, to understand tech and data, so they can analyse it and provide insights. A CFO must have all of these skills. You don’t need to make your finance people data engineers or scientists, but they need to understand and leverage data science within your function so you’re taking the maximum advantage and leveraging the new capabilities. What finance needs to know is the art of the possible. If you don’t understand the breadth of the available new tech, you can’t leverage the power new tech can provide.
Collaborate across teams
Build your capabilities around human skills by creating a function that’s able to collaborate with the rest of business, operate cross-functionally, and understand the needs of other parts of the business. Be able to influence, impact and change behavior based on clearly communicated insights.
The CFO and the office of the CFO are both positioned to look across the business from the front seat. They know, because of their involvement in numbers and reporting, that they understand the cross-functional impact. They should be driving that enterprise-wide transformation from that vantage point.
To do that, you need people with those human skill sets around collaboration, being able to problem solve, and think critically. These skills, widely talked about in the finance profession, are critical in today’s environment.
These are the four essential building blocks to successfully transform your enterprise, and how finance can play a pivotal role in driving that transformation.
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Sage has published a Total Economic Impact (TEI) report on Sage X3 created by Forrester. The seventeen-page report uses the standard TEI methodology developed by Forrester to analyse the benefits, costs and risks associated with using Sage X3 in a global mid-sized composite company based primarily in the US and EMEA. The findings are based on nine in-depth interviews with companies that have used Sage X3 for more than three years.
The financial benefits
The report looks at the quantified financial benefits across a range of departments. In total, the composite organisation realised a risk-adjusted present value benefit of $2,366,986. This was broken down further by function with the top three benefits by value as:
- Sales Management – sales discount savings $559,542
- Purchasing – materials and productivity savings – $528,456
- Inventory Management – reduced inventory levels $367,059
The report then breaks down each of these savings analysing how they were achieved and justifying the figures used. The Sales Management discount was calculated from the benefits that Sage X3 delivers through a centralised discounting approval process. With a centralised control of discount approval, organisations can ensure that guidelines are followed, and local discounting does not breach guidelines. This is perhaps the hardest number for Forrester to justify. Discounting can adversely impact baseline sales (Kopalle, Mela and Marsh).
Forrester is basing the figure on annual revenues of $125 million with discount avoidance levels of 0.2%. There is no reflection on if the more uniform discounting impacts revenue. It is also not clear from the report whether this saving is based on any statistical model or just an assumption. Did Forrester simplify the composite revenue number to show no growth over three years? A similar TEI report (registration required) about NetSuite indicated significant growth for the composite organisation across three years.
The savings for purchasing are better evidenced, though Forrester still uses some assumptions. Global pricing that Sage X3 can help manage and a reduction in FTEs annually make up this figure. Inventory Management benefits are probably the best quantified. The organisation saw a 12% reduction in average inventory levels (for some inventory) and a reduction in headcount. The report is comprehensive, yet when analysed, deeper does not seem to fully evidence all of the findings.
While the main focus is the financial benefits, it is the qualitative benefits that may hold greater interest. These benefits include:
- Workflow Automation enables the creation of alerts and notification that enable employees to work by exception. It makes jobs more efficient, as employees do not need to spend so much time reviewing and can spend more time taking actions and thereby make a difference
- Streamlining document management with documents ingested into Sage X3 means employees across an organisation can see the same version of a document quickly. This reduces paper costs and decreases error rates. There is no financial saving analysis of either of these in the report.
- Highlighted but not investigated are the benefits of Sage X3 working on mobile devices and the benefits of a centralised solution through M&A activity. There are several other benefits mentioned but not expanded upon in the report.
For example, benefits from implementing the manufacturing module include: “accessing manufacturing transactions and inventory in real-time with more accurate inventories and production schedules”. Other benefits also accrue from this simple statement: time saved from not having to do the monthly stock take, efficiency savings from using an online system rather than paper-based, both in terms of time and accuracy. One of the problems of taking a generic organisation is that some companies will adopt bar code scanners and mobile technology to drive greater savings. While some of this technology is mentioned, its use is not analysed.
Costs and Risks
The report also analyses the costs associated with deploying and maintaining Sage X3. As an aggregated example, it is interesting in that it shows the potential costs of deploying and maintaining an ERP solution. While the total NPV amount is $756,397, this will vary considerably. The sample organisations interviewed ranged across different industries and employee numbers from 50 to 900. Forrester calculates that an ROI is delivered within the first six months with a total ROI over three years of 213%. It caveats this by noting that most organisations would expect to receive payback within six to 12 months.
Paul Struthers, Executive Vice President for Medium Segment, Sage, commented: “For industries that typically operate on low margins, technology investment must come with a rapid and significant ROI. As businesses navigate the new normal, they will increasingly seek ways to make their operations more agile, optimised, and efficient – Sage X3 is an ideal foundation for just this.
Disappointingly Forrester only highlights the risks associated with its financial analysis. There is no separate category that looks at any risks associated with the project and whether these were mitigated.
Enterprise Times: What does this mean
The TEI methodology does provide a uniform way of analysing the benefits of ERP solutions. Without further details of how Forrester reached all of its numbers, it is hard to challenge or validate many of the figures used. However, the high-level findings from the report appear valid. Costing savings due to a reduction in FTEs is more straightforward to validate than some of the savings used.
The report also highlights some of the competitive advantages that Sage X3 offers. Notably the ability to deploy on-premise or in the cloud. One customer, a technology manager, noted: “The biggest advantage with Sage X3 was additional flexibility and on-premises installation, whereas other vendors were pushing for cloud services. On-premises was our preference, and Sage X3 was instrumental in its support.”
This also means that savings as a result of a cloud deployment are not analysed. The world is likely going to adopt cloud more fully in the coming months, partly as a result of the pandemic and lockdown. In virtually ignoring it, Sage has left itself open to criticism from other vendors. The diverse nature of the companies involved in creating this report is also a weakness. While it demonstrates the flexibility of the Sage X3 solution, it also makes the findings less relevant.
Prospect of Sage will find some findings interesting. It includes understanding the possible savings that they could achieve and the likely costs of any solution. Most importantly, what functions areas they need to consider as part of any project and what changes they can make. This latter point applies regardless of whether any ERP solution is implemented. Tighter control of discounting is an issue for many companies apparently. If there are savings to realise there, perhaps sales and finance need to first validate whether they have an issue.
The right partner is key for successfully implementing and supporting your Sage X3 solution. Whether you’re looking for a new ERP solution or migrating from another platform we’re here to help. If you’d like to find out more about how we can help you contact a member of our team on email@example.com or you can complete the contact form on the contact us page and we’ll come back to you shortly.
SOURCE: Enterprise Times: https://www.enterprisetimes.co.uk/2020/07/23/sage-x3-can-deliver-a-213-roi-within-three-years/
Is cloud financial reporting a key component for you and your finance team?
Reporting is crucial in any finance department. And CFOs have always focused a lot of their attention on analysing these reports. This is a critical part of any modern business and an important measure to understand the business performance of a company.
Whether CFOs are compiling these reporting statements themselves or assigning others to create them, their role doesn’t stop with the handing over the numbers. CFOs are charged with producing reporting that is useful to leadership and key stakeholders.They will understand the performance metrics, indicators and targets that need to be hit for the organisation to move forward.
Traditionally, CFOs have been limited to looking backwards through a rear-view mirror. They would be reviewing financial reports and balance sheets that will create the state of the business at the end of a period.
The world has and is very much changing.
Financial reporting is still highly important. However, technology and the availability of data has made it possible for businesses to get real-time information about company performance – and even how the business can perform in the future.
What’s been the problem with financial reporting?
Financial reporting has always been challenging and time-consuming. End-to-end reporting means carrying out a number of complex tasks, which have to be done to supreme accuracy. Mistakes in the process could make the entire effort invalid.
Your business might be reliant on multiple spreadsheets for financial reporting. But there’s a good chance that errors could creep in, while hours of effort are likely to be spent on maintaining and keeping spreadsheet reports up to date.
However, it’s not just a spreadsheet issue, though.
With legacy IT on-premise infrastructure, the increasing complexity of the business can put pressure on systems. This can slow down processes and cause performance to suffer. The IT team might have to do a lot of firefighting, leaving a lengthy backlog.
Financial reporting is crucial to a business. It is needed for areas such as regulatory compliance and investor relations. As a result, there are pressures that CFOs and their departments could be feeling from the business when it comes to getting better control of financial data.
According to CFO 3.0: Digital transformation beyond financial management, a research report by Sage that looks at how CFOs can move from historians to visionaries within their companies, decision-makers are still spending as much time collecting and preparing data as they are analysing it, due to unwieldy legacy systems.
As a result, 70% of CFOs said administration has a significant impact on team productivity.
Why cloud computing can help
The benefits of financial cloud solutions are already well documented. Research and advisory firm Gartner describes the major benefits as:
- The ability to keep up to date with new releases
- More consumer-like features
- Improved analytics
- Improved agility through faster introduction of new functionality
- More emphasis on finance staff managing applications, with less reliance on technical staff
And with the cloud, you have the opportunity to make financial reporting a much more streamlined, accurate and less time-consuming process. It offers error-free reporting, a single version of the truth, and tools that don’t need constant watching and manual maintenance.
How working in the cloud can make finance teams more effective
The role of a CFO and the finance department has changed. Instead of simply being thought of as financial leader, the CFO now needs to actively drive business change through finance.
Thanks to cloud technologies, they have access to a variety of tools focused on predictive analytics and intelligence, with machine learning and artificial intelligence potentially changing the game even further.
Cloud technologies help to create a nimbler and more cost-effective finance function. It minimises the need for hardware and storage, providing more scalable and easily automated processes. You can enable a connected operating environment that provides greater automation and advances in real-time insights.
Automation is a reliable way to improve the quality of financial data and increase the productivity of financial/accounting staff.
Instead of being tied up in time-consuming transactional tasks and gathering data, automation offers an alternative.
Automation can allow businesses to:
- Minimise the manual intervention needed in financial and accounting-related tasks, such as ledger entries and reconciliations
- Reduce the potential for human error
- Improve the use of staff time through a reduction in manual processes
- Increase and expedite turn-around.
Through automation and the use of integrated business systems that serve as an auditable system of record, CFOs and their departments can make use of technical capabilities to make them more effective and useful for the business.
This includes automated financial reporting with narrative analysis. Financial data with context and a clear story can be very useful. In addition, you have access to:
Real-time updates to financial metrics
Real-time metrics improve the quality of related data and the efficiency of prepared reports. Having inputs uploaded in real time rather than batch processes reduces reporting turnaround time and helps to avoid financial data gaps.
This allows multiple codes to be used to generate models and charts from compounded sets of data. It allows data and analytics from various transactions to be aggregated.
Future-proofing the finance function means more automation. More than nine in 10 (94%) businesses agree that financial management technology will play a crucial role in tomorrow’s finance function.
Conclusion on using cloud financial reporting
According to the CFO 3.0 research, 55% of financial decision-makers are responsible for data privacy, digitisation and technology investment. It might be down to you to add value and shape the future strategy of your finance function.
You could well be central to making sure your business makes the significant investments it needs on tools and systems to expand your capabilities, which may need you to move to financial cloud management software.
Moving to cloud-based financial management software can help break down data silos and accelerate the way you do business.
The right technology platform can provide a consolidated view of your financial data from across the business. It can also provide the integrated business analytics functionality to deliver the data-driven insights that a new breed of CFO needs to drive broader business transformation beyond financial management.
By monitoring and understanding this data, you can make better decisions and uncover more opportunities in areas such as cost reductions, process waste removal, customer cross/up-selling, and the delivery of new products.
Not only can analytics find you ways to cut budgets in the right areas, it can help you find suitable ways to expand.
To move forward with Industry 4.0, acquiring and rolling out digital capabilities across your company are all-important. You will need top management commitment and a realistic budget to guide this move forward.
In this article taken from the Global industry 4.0 survey published by PWC. Here are six practical steps your company needs to take to lead tomorrow’s competitive digital landscape.
Map out your Industry 4.0 strategy
Your Industry 4.0 strategy will shape every further step you take on the path towards becoming a fully digital enterprise, so it’s important to take the time to clearly define your vision.
Evaluate your own digital maturity now and set clear targets for your businesses over the next five years.
Many industrial capabilities have already begun digitising their business, but often the process has started in organisational silos, rather than through a holistic approach. Take the time to evaluate your maturity level in all areas of Industry 4.0 so that you understand what strengths you can already build on, and which systems/ processes you may need to integrate into future solutions.
As you start to think about where you want to go in the future, take the time to consider what you could gain by collaborating with customers, suppliers, technology partners and even competitors, without limiting your vision based on current constraints. Move your focus beyond technical details and consider what impact new applications could have on your value chain and your relationships with, and access to, your customers. Your roadmap will need to consider future changes in customer behaviour and how your relationship with them will change.
Create initial pilot projects
With so much riding on the outcome of Industry 4.0 projects, companies will need to work hard to overcome initial challenges. It can be difficult to secure funding and stakeholder buy-in, as the economic benefit case of digitisation is not always easy
to calculate. And initially teams will only be able to provide very limited proof of concept and demonstration of technologies.
We recommend targeting a confined scope, but highlighting the end-to-end concept of Industry 4.0.
Possible options include vertical integration within one or two manufacturing sites including digital engineering and real-time data integrated manufacturing planning. Horizontal integration with selected key suppliers is another option, e.g. by installing track-and-trace devices on your shipments, helping to create end to end visibility. Or you could consider installing sensors and actuators on critical manufacturing equipment and using data analytics to explore predictive maintenance solutions.
Define the capabilities you need
Building on the lessons learned in your pilots, map out in detail your enterprise architecture and what capabilities you need. Include how enablers for Industry 4.0, like an agile IT infrastructure, can fundamentally improve all of your business processes.
The most successful approaches look at which capabilities are needed to enable new digital business models or internal digitisation. To implement a new capability, you’ll need to consider four strategic dimensions: organisation, people, process and technology.
Fine-tuning your organisation
New organisational structures could include:
- Incubators to protect and grow a new business idea which won’t be influenced by the legacy organisation
- Pods or Centres of Excellence to enable temporarily self-organised teams without any formal hierarchy to solve problems or develop ideas in an interdisciplinary team setup
- Ideation Labs to provide an inspiring, creative, and hierarchy- free working atmosphere where a trial-and-error culture is feasible
Focusing on people
Develop strategies for attracting people with the right digital skills. Your success with Industry 4.0 will depend on skills and knowledge. Your biggest constraints may well be your ability to recruit new employees or train existing ones who can put digitisation into place. You need to introduce new roles in your company, like data scientists, user interface designers, or digital innovation managers. And you’ll probably need to update existing job profiles to take into account new digital skills.
One of the most important changes is to focus on an end-to-end process perspective. That will foster new collaboration models. Strong user interfaces are very important to meet growing expectations and enable consistent user experiences across different channels.
There are also a number of changes needed to build digital trust. These include processes to prepare data security approaches, access rights control and setup standards in managing sensitive customer data, and compliance processes. You’ll need to establish information assurance compliance to oversee and evaluate security requirements. Your goal should be to ensure information security and trust in a collaborative environment by providing an end-to-end management of risks, threats and security issues.
Implementing new technologies
Not surprisingly, new technologies will be core to Industry 4.0 pilots. One of the most important will be to develop an agile IT function, or working with a suitable tech partner, that can respond flexibly to business demand. By focusing on creating working solutions and responding to new requirements in an agile approach, an agile IT function helps you continuously improve services.
The other core technology capability is likely to be internet of things (IoT) management to monitor, control and orchestrate large amounts of diverse devices and provide central IoT services. This includes providing functionalities (via software upgrades), communication standards and connectivity and to ensure an appropriate level of security.
Become a data virtuoso
Identifying and gathering the right data, deploying it for the right purposes and effectively analysing it will be critical to make the right Industry 4.0 decisions.
Defining and developing an effective data analytics strategy will require a focus on:
- Predictive analytics and forecasting
- Prescriptive analytics
- Business-driven decision-making
- Automated feedback to the organisation and connectivity to employees
Consider how you can best organise data analytics; cross-functional expert teams are a good first step. Later these capabilities can be fully embedded as a standalone function in your organisation. We recommend the Sage Data & Analytics platform as a key component for building an effective data analytics strategy.
Transform into a digital enterprise
Lack of digital skills and transformation culture top the list of the challenges identified by survey respondents. We
have already highlighted how important strong data analytics capabilities are, but Industry 4.0 calls for other technical skills as well.
Many industrial companies will need to develop digital skill sets around creative digital strategy design, technology architecture and design, user experience design, or rapid prototyping capabilities.
Cultivating a digital environment can only happen with committed leadership. Some organisations task the CIO with leading the digital transformation, while others appoint a CDO or other executive to lead the effort. Some companies establish a digital council that actively manages the development of digital enhancements, products, and services from the idea stage through to the rollout in operating units. A digital council can support cross-functional teams in proactively managing a digital pipeline.
Actively plan an ecosystem approach
Industry 4.0 needs to extend far wider than horizontal and vertical integration within your own organisation. First movers achieve breakthrough performance by going a step further to understand consumer needs and use digital technologies to create and deliver value to the customer in an integrated, innovative solution.
Fundamentally this is about developing complete product and services solutions for your customers. Companies
can evolve their market offering across four layers moving from a traditional, physical core product to a comprehensive digital ecosystem play. In the earlier stages, use partnerships or align with platforms if you cannot develop a complete offering internally.
As the value of an ecosystem is driven by the number of involved partners and the intensity of their relationships, the biggest challenge is to set the right incentives and find suitable benefit sharing models that compensate everyone fairly for his contribution. The most basic business model in an ecosystem is a marketplace, which brings together multiple sellers and buyers capturing value from commissions on the transaction value.
You may find it difficult to share knowledge with other companies, and you may prefer acquisitions. But look for ways to bridge this gap – perhaps with technical standards – so that you can profit from being part of digital ecosystems, even if you don’t fully control the entire value chain.
The PwC Global Industry 4.0 Survey is based on research conducted between November 2015 and January 2016 with over 2,000 senior executives from industrial products companies in 26 countries across Europe, the Americas, Asia Pacific, Middle East and Africa.
The majority of participants were Chief Digital Officers or other senior executives with top-level responsibility in their company for Industry 4.0 strategy and activity.
What are today’s CFO challenges? Well, the role of a CFO has changed for good. No longer simply thought of as some just in charge of the numbers, you now have the tools and technology to become a visionary, plotting the course for the future of your business.
Already an essential member of the C-suite, you as the CFO have strategic business decision making as a key responsibility.
Alongside that are numerous challenges that you have to face. Below, we go into more detail and offer advice to help you solve them.
1. Dealing with Brexit (and other global legislation)
According to a Sage research report, CFO 3.0: Digital transformation beyond financial management, where we took the views of 500 senior financial decision makers, 44% expected Brexit to increase regulatory burdens.
With the UK having already left the European Union (EU) and with discussions going on over a trade deal with it, you’ll already have assessed and prioritised the risks and potential opportunities that Brexit will bring in.
As well as currency fluctuations, you’ll also need to deal with what a proposed trade deal will look like, covering, for example, how your business raises finance in the future.
2. Tackling admin and productivity
The CFO 3.0 research says 70% of senior financial decision makers agree that admin hurts productivity. Your business will look at to find ways to fix this, and the answer is technology.
You should look at cloud-based financial management software, which can harness the power of automation for daily accounting tasks. In essence, 87% of financial decision makers are already comfortable with the use of automation for these tasks.
Essentially, future-proofing the financial industry is going to require technology innovations to provide even more automation.
Businesses understand the impact that financial management technology has in enhancing productivity. More than nine in 10 (94%) agree it will play a crucial role in tomorrow’s finance function.
Beyond the benefit for the finance department, it will also lay the foundation for better use of critical data and insights.
3. Coming up with new ways to help the business with financial matters
More of than half of financial decision makers (51%) say thinking of new ways to improve the business with financial issues is the most challenging aspect of their job.
Your role might be less about traditional accounting, with 94% of financial decision makers deciding their role has expanded over the past five years, and is no longer about fiscal responsibility.
They have better data tools at their disposal, such as real-time data, predictive analytics, immediate data access and a variety of information sources.
These tools provide you with new ways to quickly determine the immediate and mid-term commercial opportunities for the business, allowing you to adapt faster, take opportunities and effectively manage operations.
To achieve superior visibility of business performance, finance teams must have the tools and flexibility befitting the fast-paced, always-on era. Only then can they dovetail with all other facets of the business and collaborate as growth occurs.
Digitalisation provides advanced analytics to improve decision making, automation to improve processes, and metrics for improved real-time financial information.
Increased efficiency offers valuable insight into business operations to uncover growth opportunities.
4. Building a case to invest in financial management tech
The need for improved financial management tools is a catalyst for digitalisation. Indeed, more than two thirds (70%) of CFOs have full responsibility for digital transformation, a relatively new responsibility.
There are numerous pain points and an ever-expanding role in mastering – such as new data, technologies, and managing employee and stakeholder expectations. They are understandably concerned about how to bed down into their new function.
Also, 77% of financial decision makers will be unable to provide insights if they do not invest in financial management technology. And more than three quarters (78%) of finance leaders agree that if emerging technology is going to be transformational, they need the knowledge and resources for a successful deployment.
CFOs have become both the gatekeepers and king-makers to digitalisation. You must embrace your role as a leader of emerging technology, taking your place on the boardroom table.
You could witness a surge in progression that reverberates across the business. Don’t leave your business in the slow lane.
5. Tackling fraud and cybersecurity
The evolution of the CFO means you now have an integral role in data governance, data flow and cyber security, which means you’ll need to be active in performance analysis and innovating the business model.
This new remit will become key to unearthing cyber security and fraud. In the face of increasing cyber security attacks, it’s no surprise this is a priority.
Fraud, cyber misuse and data privacy protection now increasingly fall under your remit and the finance function.
What financial decision makers don’t always realise is that emerging technologies decrease the risk of data breaches.
Using the cloud creates enhanced levels of verification, securing data more comprehensively, as well as unearthing new commercial opportunities.
6. Lack of digital skills
As a finance leader, you should look to develop the skills that are essential to the future of your department and imperative to the changing industry. The task for the next generation of financial leaders is to manage a new landscape. You need the training and workforce to lead the charge within your organisation.
Delivering data-driven insights is another worry that keeps financial decision makers awake at night.
More than three quarters (78%) view technology literacy skills as essential to the future of their department, increasing to 86% in the financial sector.
More specifically, up to 31% are concerned about their lack of digital skills. The skills gap is felt keenly among finance professionals, especially with their enhanced responsibilities.
As such, two-thirds of CFOs (70%) still make decisions based on gut feel rather than data. Skills training is undoubtedly a factor for most CFOs, especially with the changing dynamics of the job.
You need a full complement of business, analytical, and data skills in your team. The need to harvest data rests on your team’s shoulders, so there’s an increasing requirement to upskill and use digital tools and cloud-based services.
Don’t estimate the change. But with the right systems and skills in place, finance teams will be able to operate more strategically to drive the business forward.
7. Dealing with concerns around automation
There is unease from financial decision makers who worry automation may replace their jobs (61%).
Finance maybe needs to rethink its traditional mindset. Rather than recruit finance professionals and try and upskill them with IT and data knowledge, they may need to look at non-traditional avenues.
It may be easier to hire data scientists and provide them with financial training. The skill-set should be closely aligned to allow a smooth transition and may also bring new blood and much-needed diversity into the profession.
Conclusion on CFO challenges
Emerging technologies, such as automation and artificial intelligence, are set to support the finance function throughout the digital transformation phase. This includes the creation of new jobs that will enhance the quality of working life.
Half of all respondents in the report (50%) agreed that emerging technologies would positively impact efficiency and accuracy. The most significant effects will be on data governance (48%), strategic and financial planning (48%) and efficiencies (47%).
Despite the challenges facing financial decision makers, the tools are emerging to help you tackle them.