Advances in digital technology mean CFOs have new options in data management

August 2, 2022 | 5 Mins Caitlyn Simons

The financial operations function and the office of the chief financial officer is a hugely important part of any multinational company today. This is the section of the company that keeps a handle on all the finances and ensures that any investment spending is well considered and aligned to the overall business strategy of the multinational.

Due to the explosion in technology advancements in the last decade, the CFO office can now leverage new digital technologies to help them carry out their duties. Data management, analytics and a general understanding of key business metrics has always been core to the finance function and initiatives for implementing digital tools or new technology stacks that can improve finance leader’s understanding or ability to digest this crucial information will always be welcome.

In this article, we will look at some of the ways in which advances in digital technology have created new options in the field of data management for CFOs.

Cloud tools

Companies who choose to move from on-premise applications over to a cloud environment usually find themselves taking advantage of the latest digital tools. These tools can be very useful, especially in the field of real-time reporting, data analytics, and predictive analysis.

Chief financial officers and members of the financial operations team will always need to understand data from around the business and be able to extract bigger picture insights around what this data means in terms of the overall financial health of the organization, as well as the future path that it might take. Data always exists within the business, increasingly in very high volumes. But a common problem over the years has been how to extract it successfully from multiple disparate systems and then repurpose it into digestible formats so that business leaders and key stakeholders around the organization can make sense of it, and subsequently, make informed business decisions based on the data.

The cloud environment lends itself much better to extraction and analysis work, this is good news for the finance team and the office of the CFO. The CFO will be interested in any digital tools that allow them to easily extract reporting from any business unit, filter on specific areas that they want to look at and compare figures and costs where necessary. Cloud tools usually come with more advanced and innovative visual displays, with a great deal of flexibility in terms of how the data is displayed. This will allow the CFO to filter out data that they don’t need and only focus on what they want to prioritize.

Linking data from connected departments

Another big challenge faced by CFOs down through the years has been around finding the best way to extract, connect and understand data on a consolidated level when it is coming from separate yet interconnected departments.

CFOs might want to understand a range of costs associated with connected departments but find that the data informing on these costs are buried in disparate systems that are not integrated and essentially don’t talk to each other. In a situation like this, the process becomes manual, and the CFO is forced to extract the data from each individual department, then attempt to compare it all manually. This is slow, cumbersome, and unsatisfactory, especially in 2022.

Advances in digital tools and integration capabilities means that there is a solution to this. The technology now exists to align, standardize, and extract data from multiple connected departments and deliver it as consolidated, and joined data, into one specific area for viewing and analysis work. This can be a huge time saver and is a far more effective way to analyze and understand core business data.

An example of connected departments would be global payroll, human resources, and the financial services team. Bi-directional data flows will always be needed between these three business critical units. Advances in digital technology and integration functionality means that there is scope for these three departments to share data in a seamless, standardized and streamlined way. This would enable a CFO to get a clear understanding on the data that exists in all three departments and find out how the data between all three is linked. Deeper understanding and bigger picture awareness will follow-this is leveraging digital advancements in technology to improve understanding of business data.

Risk management

Global compliance and risk management are also areas of focus for the CFO and the finance team. The CFO will always need to know what areas of the business are vulnerable in terms of cost expansion and overspending.

To understand fully, the data management process needs to be tightly controlled and leverage the latest digital advancements in technology. Anything that supports the building of a clearer picture and more comprehensive analysis is welcome. Cloud digital platforms and advanced innovative tools have a major role to play here. All CFOs should be looking to leverage digital technologies in the data management space to help them assess risks and act on them by applying specific controls where needed.

Artificial intelligence and machine learning can really help when it comes to predictive analytics; advanced modeling and risk protocol assessment can be incorporated into all decision making thanks to extremely powerful and hugely innovative tech associated with AI and machine learning. These tools can identify risks and areas of concern months in advance based on the analysis of previous data within the system. This kind of speed and power really is a game changer when it comes to digital tools and cloud-based technology infrastructure for data management.

The technology is out there, and a CFO has the opportunity to engage both internal and external expert stakeholders to advise on which kinds of innovative smart technology are best suited to deliver the kind of data management results needed for comprehensive data understanding, analysis, and reporting.

 

CFOs are a crucial part of every multinational company and digital tools that can help make the finance department and the role of the CFO more efficient and effective should be implemented. Digital technology can significantly help with important data management for the CFO. Having access to detailed reports and bigger picture insights can be achieved through the use of cloud tools and help the CFO to gain more clarity and insight.

 

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