In this era of digital first, the role of finance must evolve too. To thrive in today’s business environment, in a world with growing complexity, organisations are increasingly relying on the technological and strategic prowess of their financial leaders. Today’s finance professionals must navigate a range of new challenges and responsibilities, reporting on the past, managing the present and creating the future.
Finance’s involvement in IT grows.
Over the past decade, one of the most visible additions to the CFO’s responsibilities has been the management of technology across the business. This should come as no surprise given the growth of technology in all aspects of the corporate world. Today’s businesses spend an average of 3.28% of their annual revenue on IT and in some industries, such as banking and securities, this rate can be twice as high.
Due to the financial demands technology has created, both as a major expense and as a capital asset, it is more important than ever for CFOs to have a comprehensive view of these large financial line items. But technology is now more than just a number on a balance sheet, it’s the lifeblood of many organisations, presenting new risks and revenue opportunities that will determine the future of the business. As technology becomes a critical component in the financial success of an organisation, finance has taken a more significant role in managing technology, particularly in the areas of risk management and investment.
Finance takes on technology risk management
You don’t need to look hard to find examples of companies who have been impacted by technology failures or data breaches. in 2017, the average cost of a data breach was $3.62 million; and with an average cost of $141 per lost or stolen record, this number escalates quickly for large businesses. In a recent survey by IBM, 48% of CFOs listed cyber risks as a major rising trend transforming the business landscape. As a result, finance leaders are taking on greater responsibility in helping their businesses better manage this large financial risk; 57% of CFOs report that risk management will become a critical part of their role in the future, a number that jumps to 66% among CFOs of companies with over $5 billion in revenue.
CFOs lead business transformation
Today’s industry leaders are leveraging technology in exciting new ways to transform their business models. With technology leading this transformation, in their newfound role as a technology leader has also pushed CFOs into the role of transformation leader; evaluating technology investments, overseeing product development and leading strategic planning for the organisation. Accordingly, nearly 70% of CFOs reported plans to increase investment in digital transformation, with 40% planning an increase of more than 10%. And with 56% of senior leadership identifying digital transformation as critical to longterm success, CFOs’ involvement in this area will continue to grow.
The COO role continues to disappear
Finance leaders are increasingly involved in operations. In a recent survey, 64% of CFOs reported being asked to take on broader operational leadership roles beyond finance. many companies opted to eliminate the COO role and divide these responsibilities between the CEO and the CFO. While the distribution of tasks between these two executive leaders varies by company, often the CEOs, with their strong operational backgrounds, assume responsibility for manufacturing and the supply chain, while CFOs take over procurement and IT oversight.
Finance leaders become strategy leaders
CFOs increasingly find themselves serving as strategic advisors within their companies. One key factor driving this shift has been technology’s proliferation across all aspects of a business. Where technology spending was once primarily consolidated in the IT department, today’s technology budgets are generally distributed across the entire organisation. In fact, an early 2018 survey found that only 54% of technology investments are actually controlled by IT departments. With software and analytics solutions making up an increasing percentage of technology spend, the average CMO now wields as much technology spending power as a CIO.
While CFOs may not be able to code a website or set up a database, like technology, CFOs have also become ubiquitous throughout the organisation. This is because CFOs possess a deep understanding of both the organisation’s technology and its operational business units and they are a natural fit to drive corporate strategy. And with a background in finance, CFOs possess a unique ability to apply a systemic and objective lens to business decisions. While CFOs remain saddled with a reputation for being penny pinchers and number junkies, the shift to a more quantified management approach provides an essential counterbalance to the gut instinct style of previous decades.
Get more done
CFOs and finance professionals are moving from number crunchers to strategic leaders. To make this transition, finance teams must work faster and smarter. As a Microsoft Dynamics Partner, with over 30 years of experience and +500 successful installations, we are empowering finance professionals to do more with tools that streamline processes, provide greater visibility into operations and deliver actionable insights.
Streamline operations – Transitioning to strategic work requires that finance professionals spend less time on routine accounting tasks. From productivity tools, like Office 365, to workflow automation capabilities in Dynamics 365, we can help finance teams get more done, freeing them up so that they can spend more time on high-value strategic work.
Get greater visibility – To effectively guide their organisations, finance leaders require visibility into all areas of their business. By combining unified data in the cloud with powerful data visualisation tools, like Power BI, we can support finance leaders with a single source of visibility into their organisation – from a high level down to a transactional level – so they can make more informed decisions.
Be more proactive – To grow their businesses, finance leaders must look beyond the past and into the future. We can empower leaders with tools to help them identify emerging trends, predict outcomes and automatically optimise workflows so that organisations can become less reactive and more proactive with their business strategies and operations.
Want to close books faster, deliver robust reporting, increase profitability with predictive intelligence and ensure global compliance? Call our team of experts on 01628 660600 to learn more about how Microsoft Dynamics 365 can elevate your financial performance?