How CFOs Can Take Strides with Technology: Expert Interview
An interview with technology enablement expert Ankur Mittal outlines ways that the office of the chief financial officer (CFO) can use technology to modernize organizations and realize new potential by elevating the finance and accounting function.
Where should CFOs focus to ensure success with their IT and business goals?
Modern CFOs have broader functional responsibility and are expected to do more with less. CFOs are focused on financial planning and analysis (FP&A), management reporting, and controllership/accounting as the top three core functions they would like to improve using technology.
Learn more on the six elements of modern finance.
How is technology helping CFOs reshape the FP&A function? What strategies or tactics should a CFO mobilize first to strengthen FP&A?
Most organizations are not mature in their FP&A capabilities. Often, FP&A activities are managed manually using Excel. This makes it extremely difficult to collaborate and manage large volumes of data within Excel. Organizations are relying on CFOs to help with the long-term financial and people planning. CFOs need to identify the key FP&A processes that are highly manual and take lot of time to manage and collaborate; they can then leverage technology to eliminate and replace manual processes with corporate/enterprise performance management (CPM/EPM) tools such as OneStream. Prioritizing real-time integrations with the source systems while implementing the FP&A toolset will help reshape the FP&A function.
Regarding management reporting, what is the best way to approach technology to align reporting to business goals and to help companies realize new possibilities?
It is important for CFOs and other leaders to remember that management reporting goes beyond finance, and that operational and profitability metrics are fundamental to the organization. Joining the company’s financial data with operational business data helps connect the dots. Technology can help bring data together from a company’s enterprise resource planning (ERP) and other systems, and it can provide access to business insights that can fuel the growth of the enterprises.
Given the complexity of technology implementations, how should CFOs modernize the accounting function and manage change while still “keeping the lights on” when it comes to typical compliance, reporting, and audit needs?
Due to the time-sensitive nature of the accounting function and the need for accurate information, access to data and consistency of data become very important. A lot of our clients struggle with situations where necessary information is located within multiple systems, and they have to reconcile information manually each month. Integration technology can help address some of these challenges without completely replacing the underlying system, which can be time consuming.
What other relevant technology approaches should be top of mind for CFOs?
CFOs require fully integrated technologies to help the business move along smoothly from “record” to “report”. Here, ERPs are just the starting point, and CFOs today require a broad suite of integrated tools to manage the various business processes. This transformation journey should start with an IT strategy and roadmap. Additionally, CFOs should consider process rationalization and optimization before considering technology enablement. Leaders and advisory teams can start by identify areas where there are repetitive manual processes. These are usually good use cases for automation.
Have you observed any pitfalls that CFOs should watch out for when trying to automate a process?
Thinking that technology can automate everything, or thinking that process automation can eliminate humans, are probably the most common pitfalls. Also artificial intelligence (AI) should not be confused with automation. Further, automation solutions need maintenance and should be periodically reviewed to ensure things are working properly and align to business goals.
How can CFOs and their teams avoid these pitfalls of automation and ensure success?
Common pitfalls can be avoided by understanding the extent of automation that any given solution can provide. Also, CFOs and their technology advisors should enable a level of automation that is appropriate for a specific enterprise.
For example, accounts payable (AP) automation is not just about scanning of incoming invoices and enabling an approval workflow. Instead, it is about touchless processing from receipt to payment, and ideally this occurs within the ERP without any human intervention. This not only saves on manual processing time but also unlocks savings that might be available due to discounts and early payment terms.
Technology should help elevate the role of humans in the workplace, allowing people to focus on the right type of work. As a general rule: if a task needs a human touch, leave it to a human. Otherwise, leave the tasks to software bots.
Many businesses are exploring how to modernize their organizations using technology – what practical impacts do you think these types of initiatives can have on accounting and finance functions?
Finance transformation or technology modernization can enable quick access to business insights that can help finance and accounting organizations make decisions that help create meaningful and sustainable enterprise growth. CFOs are adding data analytics and forecasting skillsets within their teams to support the increasing demand on data-driven insights.
When reshaping a company and anchoring it more directly to data-driven insights, what are some ways that CFOs can obtain “quick wins”?
Start small. For example, if a company identifies sales planning as a key area for automation, it can evolve the sales planning by implementing a sales forecasting model with limited assumptions that can give CFOs and their teams immediate success. Then, the implementation team can evolve the model over time, instead of complicating the implementation process by starting with countless assumptions. When making changes, a ”big bang” is usually not a good strategy to deploy. In addition, CFOs and their teams should stay committed to the process.
