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HOW CAN CFO’s THRIVE AND NOT JUST SURVIVE IN THIS BRAVE NEW INTELLIGENT WORLD?

DIGITALISATION IS TRANSFORMING BUSINESS

Everything that we do leaves a digital footprint: a data record in the vast data pool that humanity is creating. Human societies are living, and benefiting from, a life based on electronic footprints. Businesses talk of automation of the factory floor and the call center, replacing the people with robots and intelligent tools that can perform tasks with increased efficiency and reduced cost. This creates opportunities but also challenges the basis of our traditional ways of working.

GRASPING THE OPPORTUNITY

Any business leader needs to appraise these trends. To react. To innovate. Leaders need to understand how competitive advantage can be obtained from the insights that the data now available can reveal through effective enterprise performance-management processes. How is the business performing against strategic goals? How can this performance be measured through effective key performance indicators. A failure to take control will result in potential loss of competitive position. It opens the door to disruptors, allowing them to gain market share. Today’s business environment is as much about using data to create and sell complementary services that the existing customer needs as it is about growth from extending the customer base. Whatever the size of the business, technology change is having an impact. In this corporate race for future relevance, recognizing the opportunity is essential. The revolution has started and adaptation is critical.

THE CFO IMPERATIVE

In this race for corporate relevance, the opportunities for finance that digital presents are outstanding, but if it too wishes to remain relevant in this fast changing world, it must also embrace technology. Forward thinking CFOs grasp this reality, and see the opportunities for influence at the heart of the organization. They appreciate that they need to:

  • understand how to use the information available to them to provide strategic insight in real time;
  • think forwards not backwards and maximize the use of technology to do this;
  • ensure they have in place effective and efficient processes that satisfy the overall business requirements of finance, and
  • capture, measure, report and predict future performance in a much more agile manner to support better and quicker decision making.

The CFO who fails to take advantage of the opportunities could be removed from the strategic decision-making process and marginalized at the leadership table. This is not to say that there is one approach; no single model fits all finance teams but there is an overall direction of travel. A failure to follow that direction could risk marginalizing the finance function and make it less relevant. Few would be comfortable with a finance function that reports historic information too late to be of use in a dynamic world: perhaps one in which robotic automation and artificial intelligence have replaced the people. ‘It’s not enough to become more efficient. ‘Finance has to help the business make decisions on the basis of the right data. We have to play a much more operational role in making our businesses operate faster and more decisively. Many of the tasks that currently take up so much of our time will be covered by Artificial intelligence (AI) and automation’.

CAN TECHNOLOGY ENABLE FINANCE?

In part yes. CFOs and finance leaders need to understand how technology can enable them to transform the finance function through the provision of brilliant, timely decision insights for business stakeholders in addition to its existing stewardship and reporting roles.

Yet technology on its own is never the answer to any question. It is always the enabler. It enables us to improve and streamline processes, to improve efficiency and data quality, to provide greater insights in the moment and to look forward as well as back.

Technology provides data but using this will always need people to exercise judgment and provide insight. To turn data into relevant information. The failure to use technology’s benefits will leave organizations vulnerable and finance functions potentially failing to achieve their potential. No one technology on its own can transform a business: that requires combining relevant technologies to address the unique requirements of each business.

Investments may often be staged according to business need yet it is essential to have a robust roadmap that is inclusive of a comprehensive, yet flexible future vision. While we can appreciate today’s technology landscape, the pace of change of technology is such that we cannot foresee tomorrow.

‘Companies that embrace emerging technologies will be better positioned to gain competitive advantage, providing more opportunities to acquire, consolidate and become a larger player’.

WHERE TO START?

The core of any successful business transformation is alignment to the overall organizational strategy and the development of a robust business case. By understanding what the business needs from the finance function, it is possible to develop a strong case for investment in automation to allow finance to develop the additional capabilities needed while retaining the emphasis on recording and reporting, but with an enhanced degree of data accuracy. ‘Clinging to the things that have made them successful while disregarding how things are changing around them is one of the biggest risks for a CFO’. To achieve the goal of transforming the finance function, the CFO needs an understanding of the emerging technologies and the opportunities available. The CFO must ensure that there is sufficient governance of the data sources, be these internal or externally generated, to provide insights based upon ‘one version of the truth’.

In realizing the finance technology strategy, it should be remembered that this is often a partnership between the Information Technology (IT) teams and the finance function. As business partnering has affected the relationship between finance and its customers so the same process can be replicated in the relationship between finance and IT.

Executives interviewed for this report claimed that an increasingly fruitful relationship was being developed and while some technologies, such as Robotic Process Automation, can be implemented by finance they still require a partnership with the IT team to be effective.

Awais Mumtaz