The role of the CFO has evolved through three defined cycles in line with modernisation of business.
Through the first cycle, the CFO was a historian of past performance, focussing on the company’s financial data and past performance to make decisions for the future. Through the second cycle, the CFO used modern finance tools to begin automating the finance function. This CFO uses real-time data and dashboards to provide analysis of the business to improve performance and boost strategic activities.
While there is still a place for these approaches within a business, neither CFO 1.0 nor 2.0 is capable of accurately forecasting business performance and acting on issues ahead of time to accelerate business growth.
Becoming the future-forward CFO
We are entering a new era governed by technological advancements, artificial intelligence, and machine learning. With this new phase in technology comes a new phase for the finance function and a necessity for the CFO to evolve further into a third cycle, acting as decision maker, driver of strategic change, and a visionary of the future.
Technology is a driving force behind the evolution of the modern-day CFO. However, while technological advancements provide scope for drastic growth and improvements within a business, the true extent of these developments is dependent on how willing the CFO is to embrace them.
Being tech-savvy is vital for a finance leader to lead the business efficiently and effectively towards long-term success. But how does one become a tech-savvy, future-forward CFO?
A tech-savvy, future-forward CFO must keep up with developments in the tech world, especially where these can impact the finance function. It is important that finance leaders understand how advancements such as automation can help the business, and which aspects of the business would benefit from it.
Embracing automation in the finance function results in streamlined processes through accounting, recordkeeping, and reporting, shifting focus and allocating time and resources to activities that need it.
Balance risk with caution
Many finance leaders are weighing up the benefits and drawbacks of maintaining their on-premises financial management solutions compared to implementing a cloud solution. For some, having full control of their solution is key, while others see the attraction of automated updates that require no down-time, unparalleled security, and unconditional access.
The difference between a good finance leader and a tech-savvy, future-forward leader is knowing whether cloud solutions can improve the business, and to what extent. A responsible finance leader evaluates all options and components that affect the decision, ensuring that they understand the solutions, have assessed their values, and have considered their uses and features in relation to the business’ requirements.
A future-forward finance leader knows that a solution that is incapable of keeping up with business growth and evolution is the wrong one.
An agile leader is an agile business
- Finance leaders simply cannot think only of the here and now; it’s their job to think long-term.
- A finance leader must always be future-ready and agile.
- Agility in the approach to strategy – consistently analysing all available options – keeps the business agile and allows for continuous growth.
- If a finance leader has these qualities, the business does too, and an agile business is a competitive one!
Value your people
A successful business is driven by the people within it and a business cannot see results through the efforts of just one person; instead, a business needs to be able to pull from a range of talents, knowledge, and skills across the organisation.
When hiring, finance leaders should look for a person or persons that possess qualities required to fill gaps within the business to improve overall output and become a proactive organisation, using insights and your teams’ knowledge to implement the right actions ahead of time.
Use of the right tools for accessing deep insights is key to being a tech-savvy, future-forward finance leader. With the right data, and the right knowledge of how to read and manipulate it, a successful finance leader can pinpoint problems and their origins and create plans to ensure they can be avoided in future. But most importantly, a successful finance leader can take problems and mistakes and turn them into opportunities for growth, progression, and success.
Your journey to becoming a future-forward CFO
Whether you are already embracing emerging technology and driving digital transformation in your organisation, or you’re at the start of your journey, there is always room for improvement.
Start by assessing the finance function and ensure you have a digitalisation strategy in place. If you’re unsure of where to start, follow these five steps: increase capacity, draw up your strategy, make data-driven decisions, consider the cloud, and close the skill gap.
Conduct a thorough audit of your team’s processes, identifying areas and tasks where significant time and resources are used but provide little ROI. These tasks – often repetitive and transactional – may include data input, reporting, and month-end close. A successful audit will provide you with invaluable insight into how your finance function operates and where you can free up time and capacity for your team to work on tasks that add more value to your business.
Draw up your strategy
With your audit completed and a plan of action in place for increasing capacity and output, you can establish your wider priorities for a digitalisation strategy across the business. It is important to identify which of these priorities needs to be addressed urgently, and which can be addressed over time – prioritise your priorities!
Start with those that can be addressed quickly while providing significant ROI. For example, if one of your team spends most of their time on data entry, consider digitalising this first.
Make data-driven decisions
Access to real-time data is vital to your finance function’s ability to pro-actively and accurately forecast and plan for the long-term. For many businesses, this will require digitalisation in the form of implementing cloud-based finance software which can automatically synchronise data across the platform to ensure everyone has access to it. Being data-driven in your role is vital to the success and competitive stance of the business.
Consider the cloud
That brings us on to considering cloud-based software. As requirements change within your business, your finance team will need to be up-to-date with developments to ensure they are as productive as possible.
Finance leaders often struggle to decide where budget for investments should be allocated in the business; it is important to remember that without the right technology, your business will struggle to remain competitive and viable. Cloud-based software makes your business future-ready and provides an unparalleled level of security in comparison to on-premises options, greatly reducing the risk of a data breach.
Close the skill gap
The need for digitalisation of systems and processes has left many finance functions with a skill disconnect. Many more experienced team members will find the digital switch daunting, having grown accustomed to manual processes, while newer recruits with less experience will lack knowledge in some areas.
It is important that your digitalisation strategy includes an evaluation of digital skill gaps across your business, and a plan of how you will address them to allow all departments within the business to grow, develop and progress together. You should also consider ease of set up and use when implementing a new solution within the team to minimise disruption.
Finding the best financial management solution for your business
The process for finding the best financial management solution for your business can be long, time-consuming, complex, and frustrating!
If you’re looking for a true cloud solution voted by users as #1 for customer satisfaction, which can increase business productivity by 65%, save you up to 40 hours on creating reports each month, and cut data provide a 250% ROI, Sage Intacct is the solution for you. If your organisation is complex with multiple international entities, opt for Sage Intacct.
If your business is small but rapidly growing and requires core financial management functionality to accelerate progress, Sage Intacct Starter Edition is what you need.
For more information, or to discuss which solution is right for your business, call Acuity Solutions on 01932 237110 or email firstname.lastname@example.org.