Why CFO’s need an innovative tech strategy to stay ahead in business
The newly emerging role of the CFO in the modern business model is a composite of traditional competencies and new skills needed to be successful in today’s business landscape. One such new competency is that of technology experts and strategists. Modern CFOs must be aware of the importance of new technology to drive the finance function. They must leverage digital transformation to the benefit of the finance team to improve departmental performance.
We are entering a new digital age. It will be an era of rapid growth when it comes to finance operations. This new wave of digital technologies will pick up where Enterprise Resource Planning (ERP) innovations left off to achieve three important end goals for finance leaders.
Primarily, digitization serves to reduce costs within the finance organization. The second goal is to manage risk. And the final aim is to increase insights to assist business decision-makers.
So, what are the key areas of digital advancement for finance transformation and what do they offer the strategic CFO?
Robotic Process Automation (RPA)
One of the fastest ways to reduce costs and add value to the finance operating model is with RPA. These machines have no overhead costs, are quicker than humans and can complete repetitive tasks without errors, whilst providing a full audit trail.
Business leaders have more control over business operations, they can cut waste, become more flexible, standardize data management and eliminate unnecessary bureaucracy.
An example of RPA in action is the use of a global payroll software provider. They offer a fully integrated system that allows for payroll automation on a global scale, as well as consolidated financial reporting for global payroll costs. That means instead of finance employees filing monthly payroll data, everything is taken care of more cheaply, accurately and quickly.
As well as automating financial transactions such as payments and reports, the systems are designed to spot inefficiencies and provide faster, better quality finance processes with audits.
Jawad Jamil, CFO at Gulf Healthcare International, noted that automated processes improved efficiency and productivity in his company. ‘It has allowed us to be more customer-focused and allocate resources towards growth,’ he says. ‘It has led us to pursue projects that previously would have required a higher degree of investment costs.’
Secret to success:
Whilst Robotic Process Automation is a useful tool, it’s important for CFOs to balance the technology with human resources able to maximize the technology’s potential.
Advanced Data Analytics
Our planet faces growing uncertainty as climate change takes hold, political unrest escalates, natural resources deplete and cyber-attacks become more frequent. As businesses expand across borders, it becomes harder to escape the effects of this instability and the business challenges they present.
It will be essential, therefore, for CFOs to improve data insights for their business. In particular, those which are forward-looking. These are known as predictive analytics. They are an important way in which technology can help enhance business performance by enabling more accurate future financial planning. As real-time predictive data takes over in decision making, historical data becomes less important and has less of a role in financial services strategy.
The use of advanced data analytics means that big data platforms are reviewed by computers using machine learning to predict future outcomes. They can combine structured data with unstructured data (for example, from social media) to identify fraud and improve cybersecurity.
‘Machine learning is the next logical step to liberate finance professionals from redundant, low-value work,’ says Thomas Zipperle, CFO of SAP South East Asia. ‘Finance teams can build trust with the accuracy of automated data analysis. It also means we can focus on value-added activities that AI can’t easily replicate.
Data scientists spending less time collating and reviewing data have more time to conduct advanced analytics of their own. In a growing organization with a global staff, a payroll services provider uses machine learning and advanced data analytics to allow CFOs to monitor headcount and spend and predict future issues.
Secret to success:
CFOs reimagining the finance function with a technology need to recognize the potential challenges that come with data analytics. These may include integration with legacy ERP systems, applications and non-integrated software. Finance executives need to build a function that is agile and scalable for the future success of the business.
Artificial Intelligence (AI)
One step on from advanced analytics is Artificial Intelligence. This is when computers learn how to react to statistics, patterns or events in an almost human way, with nuanced multi-step processes.
For example, AI can manage taxes. This would include updating the system when new regulations are issued and automatically informing relevant employees of any changes. This technology is also very important as part of a cybersecurity strategy as it can identify and react to fraud.
Secret to success:
As with any technology, AI needs skilled and capable human capital to manage the problem-solving function and mitigate potential bias risk.
Cloud and SaaS
CFOs looking to update old, unintegrated systems are looking to Cloud and SaaS technologies in order to achieve their digital strategy.
The benefits of these digital technologies include streamlining procedures. Everyone can create and access the same data no matter where they are. This real-time data sharing and updating allow for faster decision making in line with modern finance needs. This also helps to reduce costs as companies are reliant on fewer back-office systems which require less maintenance. Finally, finance organizations are more flexible. The new technology is scalable according to current needs.
Global payroll technology offer a Cloud-based service that promises improved integration, real-time data updates on a global scale and increased data security.
Secret to success:
With Cloud and SaaS, it’s important that CFOs mitigate the potential risks of data security compliance and breaches. This will involve training team members. Services such as Payslip provide global data compliance as standard.
As businesses store more data and conduct more business online, it’s important that CFOs remain vigilant to the risk of attack.
Cybersecurity technology as part of a holistic risk management strategy allows CFOs to build a strong defense against breaches and secure fast and reliable remedies in case of an attack.
Secret to success:
A strong cybersecurity policy is a foundation that allows for growth in other areas of technology. CFOs should seek to work with suppliers who offer cybersecurity as standard.
Social media might not seem like it falls within the remit of the CFO. However, in the modern business landscape, CFOs are required to step out from behind their desks and deliver an improved customer experience within the business and to board members.
As a technology, social media can help in that task. It allows finance teams to develop interpersonal skills and improve communication between themselves, other business silos, and business partners. This creates a collaborative and innovative work culture within the business.
Secret to success:
CFOs must ensure that their cybersecurity policy is in place to protect from exposure to hackers.
Blockchain is a digital database that is held across a network and updated in real-time. It allows teams to enable, record and secure more transactions than ever before on a global scale.
For CFOs, the benefits include improving IT security. Data is encrypted to protect against fraud and hacking. For businesses with a sizeable supply chain, blockchain allows for records to be managed constantly and securely between the various business units. The improvement in user experience for vendors builds stronger links between partnering companies. Blockchain can even be programmed with contracts that activate as products or services move through the buying funnel.
Secret for success:
Prepare a dispute resolution process. Bring the various business functions and suppliers together to decide what will happen in the event of contract breaches or irregularities.
Regardless of your technology strategy, what is crucial to its success is how the onboarding process is managed.
How to onboard new technologies
The CFO must establish which technologies are of use to the finance department and what the goals are in integrating digital transformation.
Invest in new technology too soon, and the likelihood is that mistakes will be made and bumps in the road more frequent. However, invest too late and your business will lag behind the competition and miss out on critical advantages in terms of savings and insights.
CFOs must decide the best way to roll out new technology. Should they make time for a test run first or implement the change department by department?
As with any change, managing directors and business leaders will need to be sold in. In legacy-heavy companies, this may prove more of a challenge, in which case a trial run may be helpful in changing their minds.
Change must be accepted at every level of the organization to take root. Surrounding yourself with the right team is crucial for the CFO who wishes to see their changes shape the future of the business. Seek technologically-minded staff who are agile and possess the social skills needed to disseminate the updates throughout the organization.
Because ultimately, the success of any implemented technology in the future of finance relies on the strength of the human team around it.
To learn more about how Payslip integrates with technology across the entire digital ecosystem contact us today.
For more information on reporting and analytics available on the Payslip Platform contact us today!
Using Payslip, we can manage all our payrolls across nine in-country vendors on one platform. When the global Covid-19 pandemic arose, it was not an issue from a payroll perspective, and critically getting everyone paid. The Payslip platform enabled continuity for our international payroll service including the fast and seamless implementation of the Payslip Employment Self Service during this time.
Payroll Manager, LogMeIn
With business and employee growth rates of above 50%, we rely on our vendors to deliver on time, every time. Payslip’s workflow automation, enables Phorest to manage our payroll provider process – data driven, real time and transparent. Payslip saves us time so we can focus on our business growth.
International Payroll Manager, Phorest