In today’s evolving digital world, CFOs are clear that corporate finance has to keep up with the constant transformations around them. Alterations in consumer technologies, new regulations, and an influx of millennials into the workforce are forcing enterprises to adapt. Organisations that fail to keep up with these rapid changes will run the risk of becoming extinct.
During conversations with customers, partners, researchers and subject-matter experts, there are five things that have emerged as key focus areas for global CFOs in the present year.
1. Start building tomorrow’s finance, today
Emerging technologies—such as artificial intelligence, machine learning, blockchain, IoT and more—are poised to revolutionize work practices. Technology has become all-pervasive in our daily lives, especially with digital natives who were born in the Internet era. We ask questions to Siri or Alexa, and the more we use them, the smarter they get - this is where finance is heading.
Even if you’re not going to be doing anything in particular around AI or machine learning in the next year, you should be planning for it—because your competitors already are. Deloitte forecasts that businesses are likely to double their use of machine learning technology by the end of this year.
Tomorrow’s finance function will achieve higher levels of automation using these emerging technologies—for example, using intelligent process automation to perform most of the manual tasks. AI-enabled finance applications will report exceptions as they occur, learn from those exceptions, and then make recommendations to resolve similar issues in the future—eliminating delays and speeding up the process.
The goal is not to replace finance-related tasks with emerging technologies. The goal is to offload the tasks that they spend too much time on. Finance professionals have excellent analytical and critical thinking skills, and every CFO could benefit from putting those skills to better use.
CFOs must also consider the implications of blockchain, both for its potential to disintermediate certain transactional processes and to reduce costs. And they can optimize their supply chains using IoT, augmented reality and embedded AI processes like automated demand sensing.
All of these emerging technologies are enabled by the cloud, because the cloud provides the sheer scalability of computing power necessary. If the pace of change forced you to look at replacing your on-premises ERP systems last year, the pressure will only become greater in 2018.
2. Deliver meaningful insights & a single-source of truth
The average business is doubling the amount of data it manages every year. Yet even with reams of data, organisations are often still in the dark. The goal of finance technology projects should be to turn a flood of information and reports into meaningful insights—to board members, senior executives, and other stakeholders.
The average finance function might be able to run thousands of reports, but they spend an inordinate amount of time analysing those reports, reconciling the numbers, and ensuring that they are getting consistent results across lines of business. A critical focus of CFOs needs to be knocking down data silos in their organisation so there’s a single source of truth.
This also means providing modern, easy-to-use and easy-to-understand reports that finance teams can access quickly—whether that’s on their laptop, tablet, mobile phone, or other device. Millennials, in particular, want apps that improve personal productivity and effectiveness—similar to the tools they use in their personal lives.
3. Close security gaps
Not a day goes by without a report of a business dealing with a cyberattack or security breach. Large or small, any organisation is a potential target, whether the hacker’s goal is to steal confidential company financial data or demand a ransom. CFOs are realising that the security safeguards in their current finance systems aren’t enough.
With finance applications in the cloud, none of this is an issue; the systems are always up-to-date with the latest security measures. Organisations already using the public cloud consider heightened security to be one of the main benefits.
But in an environment with multiple cloud solutions, security depends on multiple providers, making it only as safe as its weakest link. Thus, CFOs looking at a move to cloud need to look at potential providers and ensure that they can provide security across all layers of the stack, from applications to infrastructure.
4. Comply with global data protection regulations
The cost of non-compliance has brought GDPR to the attention of boardrooms not just in the EU, but globally. The potential magnitude of fines are significant: 4% of an organisation’s global revenue, or €20 million, whichever is greater. There’s also the potential damage to the reputation of any company that fails to comply with breach notification requirements.
GDPR compliance is a long-term commitment, and investment in implementing a cost-effective supporting infrastructure will prove to be valuable in the coming years. It might even represent one of the biggest opportunities to accelerate digital transformation in recent years.
5. Be ready to transform—and grow
The engine of any company’s business is its financial systems. But if those systems make it difficult to shift gears into new business models or expand into new regions, your company will find itself further and further behind competitors.
For example, many manufacturers are starting to sell their products as subscription services; banks are partnering with fintech startups; automakers are becoming information-service and entertainment companies. All of this requires more than the right technology. It also requires the right people and skill sets, access to the right data, the right culture, and the right processes in place.
While it’s fairly easy to change your IT infrastructure, it is much more challenging to try to change the culture of a company. That’s where a CFO’s leadership is critical.
Adjusting to an accelerated pace of change is not a one-time thing. CFOs and their finance organisations need to become agents of continuous change—so that their organisations are agile, adaptable, and ready to shift gears to compete with any challenges the future holds.
-The author is the Senior Sales Director-ERP at Oracle India