The role of the CFO is changing, with technology firmly driving this
With the constant growth in technology within finance functions, comes real-time access to data that is more readily available than ever before. CFOs and finance teams are reducing the administrative time spent aggregating and collating historic data and increasing their focus on analysing data, identifying trends and ultimately supporting business decision making.
With evolving technology, companies are advancing to not only capture core transaction information, but also large volumes of supporting material; beyond the standard date and value of a transaction, data analysis can include associated marketing campaigns, user journeys, location when purchasing, device used to purchase and many other data points.
Businesses that have led the way in the adoption of such information capture exercises have accumulated large volumes of data, which, coupled with the advance in capability and accessibility of analytics software, has given them significant competitive advantage.
New digital technologies and processes have already made significant changes to the culture within finance departments and forecasting processes. Historically, finance functions have consisted of paper-based processes, accounting systems and spreadsheet models – and are only now making the move to incorporating bespoke and cloud-based data analytics platforms. This is supporting finance departments in making the shift from data aggregators to data scientists. CFOs are increasingly finding the value in historic information as an input into predictive analytics tools – benefiting from advances in data science, data analytics and machine learning techniques – to support forecasting.
Those making this technology shift are finding it easier to attract talent with the skills and experience to carry this drive forward. The resulting combination of data, tools and skills is an extremely powerful one, placing the CFO at the forefront of growth strategies and business critical decision making.
There are many ways in which advances in technology have also improved the operational landscape within businesses. Software platforms, whether custom developed or a configured cloud package, add formality and rigour to financial modelling approaches, both in terms of how these are developed and, equally as important, how they are maintained.
Technological breakthroughs have enabled finance teams to move away from spreadsheet-based model development. Although flexible these can carry risks of people starting from blank canvases, complex calculations often only understood by one individual and little or no audit control around changes and versioning.
The digital transformation of the finance function introduces more formal processes around the management and processing of data. The adoption of software platforms and packages are providing higher levels of automation which in turn reduce manual error, introducing workflow and data validation that enable issues to be identified early as well as avoiding arduous reconciliation tasks.
With many new technology platforms adopted being cloud-based, the increase in capability and trust enables smooth outsourcing of difficult tasks such as disaster recovery testing and load testing to providers with inbuilt cloud tools, such as AWS & Azure.
Separately, CFOs are increasingly aware of both the risks and work required when adopting and integrating existing technology platforms as part of a company’s acquisition strategy; especially where the outdated platforms exist with limited integration or migration capability and poor data quality.
About the Author
Philip Rashleigh is Technical Director at Audacia. Audacia is a bespoke software development and systems integration company with offices in Leeds and London. Audacia works with a broad range of national and international organisations across many sectors including manufacturing, maritime, construction, agriculture and utilities.
Featured image: NOPPORN
