The office of the CFO is an important finance function inside multinational companies, and it will always need to operate to extremely high standards. To do this, it needs to operate with a technology stack capable of meeting changing and evolving priorities.
The role of the chief financial officer has changed significantly in the last decade and is likely to undergo even more changes in the next few years partially due to the changing business landscape brought about by the coronavirus pandemic.
The pandemic has shifted the landscape and strategic thinking at the highest levels in many organizations in the business world - the CFO, together with their team of financial operations professionals now face new challenges and are tasked with helping other members of the C-Suite team to define what this new landscape might look like.
Right now, is a time of genuine opportunity for CFOs and finance leaders everywhere- it is therefore of crucial importance that they have a technology stack that corresponds to their strategic ambition while being capable of moving with speed and agility.
In this article, we will examine how new technologies can help enhance service delivery in the financial operations department, so that the office of the CFO becomes one that leads the way in terms of business change, priority management and task execution.
New demands mean new tech stack for the CFO
It is understandable and to be expected that any department being faced with new and pressurized demands needs a technology stack to help them meet these demands in an efficient and optimized manner.
The office of the CFO will need new technology for operational efficiency -this could take the form of digital tools for secure data access for finance professionals located across a range of different countries, but ultimately answerable to one individual, the CFO.
Transactional execution and analysis, automated invoice generation, general ledger calculations, forecasting and periodic company reporting are also things that can benefit from a significantly upgraded and digitized technology stack.
The CFO will likely have been keeping a close eye on the technology developments deployed in other departments such as sales, marketing and product development. They will feel that a justified business case exists for similar levels of innovation and digitalization within their own department. They will no longer consider such an investment to be a luxury, they will deem it a necessity and in many cases, will have supporting data to confirm the reasons why such technology should be in operation in their department. New demands mean new tech is required and there will be a recognition that slow decision making or hesitant activity could have long term consequences.
More and better reporting
The finance function is widely known for delivering mandatory year-end financial services related reporting. Annual reports, official company accounts and compliance related disclosure reporting are major assets produced in finance departments across multinational organizations around the world.
With the explosion in big data and a general increase in business transaction activity in the last decade, this reporting has become more nuanced, comprehensive and complex. An increased need has arisen for digital tools that enable better and more detailed reporting.
Clearer metrics are needed to help with things such as enterprise resource planning, budgeting and expense management
The CFO has a keen interest in the operation and cost activity related to business-critical services within the organization such as human resources, global payroll, information technology, cyber security, compliance and procurement. The CFO is therefore going to need advanced reporting that provides facts, insight and actionable business intelligence from these departments to facilitate decision making, financial planning and spend management.
Better and more innovative digital reporting tools are needed today for the finance function - reports need to be able to drill down into detail at a much more granular level than legacy technology permits. Comparison reporting, particularly in the area of global payroll country cost comparison reports can provide crucial insights, is now much more in demand as the CFO and other members of the C-suite leadership team look for comparative analytics in order to view the big picture.
Technology innovation and digital functionality is required to gather and extract all the relevant data needed for this reporting and also to ensure that the reporting is delivered in a timely manner as well as in a digestible, easily understood format.
Integrated technology
CFOs today are also facing up to the new realities surrounding an unsatisfactory gap -namely, the lack of system and technology integrations between the various software solutions within their own department and others.
It might seem strange in 2021, but many financial services, tax and accounting teams are still operating with a spreadsheet driven process for key business services like accountancy, planning and budgeting along with reporting. Most of this spreadsheet driven software is on premise instead of the more agile and responsive cloud environment. There is an over reliance on legacy tech and systems applications more than a decade old.
The consequences of continuing to use these outdated methods is starting to catch up on a lot of finance departments and CFOs are searching for technology solutions that can integrate systems, share and transport data in a secure way, and facilitate detailed and comprehensive reporting & analysis.
A lack of integration means a lack of cohesion which ultimately means a lack of progress. The CFO does not want to be held back when it comes to seizing opportunities and certainly does not want to head up a department known for operating technology that is behind the curve. Legacy tech and the old way of doing things make it practically impossible to do more with less- but this is what many CFO's are being asked to do, as financial constraints and budget tightening due to the ongoing effects of the global pandemic continue to be a problem.
What a strong tech stack looks like
Finance and accounting teams need to leverage innovative tools and cloud platforms to digitize their processes and optimize their service delivery. Key elements of a financial services technology stack that will help them to do this include:
Cloud computing
Digital file sharing access in a secure data sharing environment.
Automation
Repeatable and recurring processes and workflows such as monthly invoicing should be automated where possible to enable finance professionals to focus on priority tasks.
Mobile applications
Professionals should have anytime, anywhere access to the folders, documents and data they need to do their jobs.
Digitized calendars
Everything from service deliverables to key compliance dates should be accessed, tracked and monitor via digital calendars.
Integrations
Digital tools should integrate with core accounting and ERP systems but also with HR and global payroll technology stacks.
Reporting software
Reporting tools should grant self-service access to key stakeholders and offer detailed, granular, real-time and consolidated reporting for a range of business and financial needs.
Global payroll platform
Payroll is often operated form the finance function, who should use a digital platform to calculate and manage payroll.
Accounting and Expense management software
For the optimization of billing, invoicing, payments activity and cash flow transactions
While there may not be a perfect one size fits all finance technology stack -there are always a number of core systems like those outlined above that will provide long term value to financial operations and a CFO office.
Due to the complexity and nuances of modern financial services, each individual CFO office may need to customize their technology stack in a way that meets their current and future needs. When deciding this, it is important that a chief financial officer give strong consideration to the number of integrations any technology stack will require - the office of the CFO is now deepening their connections to business-critical service departments like human resources and global payroll, so compatible software and technology is essential for the future, particularly when it comes to comprehensive and consolidated reporting.
Ultimately, every business wants to scale and grow so they can develop new revenue generating opportunities across international locations. The technology stack in play within the finance department needs to be able to facilitate this level of growth while moving with speed and agility. Right now, is the time that financial executives and leaders in financial operations need to be thinking strategically about their technology stacks while also looking to evaluate, test and implement different digital tools and platforms that will prepare them for the future.