Finance leaders need to understand how technology will improve existing functions, and integrate technology strategy into business.
17 April 2017
CFOs are increasingly taking on greater organisational responsibility. Do they also need to be experienced IT managers in order to implement technology in their domain?
Not necessarily, thanks to smart finance solutions that will empower the function and give it a more proactive role.
A growing list of responsibilities
Whether chief controllers or leaders of the treasury function, CFOs have seen their role evolve hugely over the years to include remits far beyond their traditional duties.
According to a report by McKinsey, an average of five functions other than finance now report to the CFO, including risk management; regulatory compliance; M&A transactions and executions; and IT and investor relations.
Protiviti's 2016 Finance Priorities survey, in partnership with the Financial Executives Research Foundation, meanwhile concluded that CFOs and finance professionals continue to address a large and growing set of challenges while economic volatility intensifies in the region.
"Our findings suggest CFOs and their teams are also focusing efforts on many different priorities, including but not limited to earnings performance, cybersecurity risks, strategic planning, financial and profitability analysis, enterprise performance management, forecasting, and organisational leadership," the survey said.
Modernising existing functions
Not only are finance leaders expected to be more versatile than ever in a fast-changing macroeconomic context, they also need to have a much better grasp of technology than their predecessors.
That the CFO may, one day, compete with the head of IT is out of the question. CFOs will not have to code, write algorithms or be data scientists - but they must understand how technology will improve existing functions. They will find themselves deeply involved with the decisions related to the adoption of more modern practices and systems and oversee their implementation.
"They need to be technologically competent and able to integrate technology strategy into the business," said the Association of Chartered Certified Accountants (ACCA), the global body for professional accountants. ACCA was referring to the CFO's responsibility to develop innovative strategies to drive expansion, modernisation or product development.
Data management key to performance
There is another phenomenon affecting the finance function that represents both a challenge and an opportunity for businesses in the Middle East and beyond.IDC predicts that the volume of data we produce will increase 10-fold globally to 44 zetabytes by 2019.
Yet the Protivity survey revealed that finance leaders want a "single, real-time version of the truth - more accurate and timelier data collection, data analysis, reporting, budgeting and forecasting capabilities."
Cloud-based ERP systems provide a practical answer to this challenge. Agile and scalable, they allow finance leaders to gather data in the same place and access this information in real-time so it can then be shared with the rest of the senior management team.
Easy and immediate access to data will allow the finance team to spend more time analysing and interpreting this information, helping their organisation react quickly to a range of current business complexities, be that changes in market conditions or security issues.
The cloud's pay-as-you-go, Software-as-a-Service (SaaS) model means there is no need for investment in large IT infrastructure and certainly no requirement to be an IT wizard to reap the benefits. There is no need to install and maintain the software and multiple users can share the same software and database.
Headhunters in the GCC are increasingly witnessing a need for CFOs to have good technology expertise. This is because firms in the region know that the forward-looking CFOs who deploy smart finance models like cloud and predictive data analytics will gain the competitive upper hand in a world increasingly divided between those who embrace new technology and thrive, and those who stay put and risk being out of business.
© Oracle 2017