Reading Time: 4 minutes
Evolving the finance function
We’re in the 21st century, where everything already is, or soon will be, digital. Digital will end up controlling almost every aspect of our lives and the way we live them. This could be from buying groceries and clothes to the way we consume information. It’s no wonder that it is already transforming organisations, businesses, and our job roles. Industries are being sculpted in preparation for a new tomorrow that will empower companies to do business in an entirely different way.
Business leaders around the world now have a wide variety of opportunities to reimagine their businesses, thanks to the intersection between technology and human interaction. The nature of business is changing. Employees, technology and the availability of tools are changing rapidly.
Research has shown that 70% of CFO’s have in fact used their gut instinct to make decisions for their business, rather than using data. However, they no longer need to do this, as data is changing and it has altered the dynamics of decision making. Most modern businesses now will use some type of artificial intelligence (AI) and automation to help enhance connections with employees and customers.
Businesses are constantly coming up and thinking of new ways to fuse human needs with technology. Business leaders are starting to play catch-up and are encouraged to move with the times because these new businesses that are being built from the ground up are advancing so much faster than companies that have already been around for decades. Digitalisation is the key to transition.
“Today the primary driver of digital transformation in mid-size businesses is the finance professional, with six in ten financial decision makers driving digital transformation in their businesses.”
What’s worrying finance leaders?
Cybersecurity and fraud still remain the number one challenge in the UK. This was a concern felt by as many as 62% of financial leaders in London. It’s no surprise that this is a priority, considering that there has been a huge increase in the number of cybersecurity attacks over the past year alone. Financial decision-makers don’t realise that emerging technologies decrease the risk of data breaches. Therefore, by utilising the cloud, it creates enhanced levels of verification and it secures data so much better.
Delivering data-driven insights is another worry that keeps financial decision-makers awake at night. Over three quarters feel as though technology literacy skills are essential for the future of their department and this increases to 86% in the financial sector. Up to 31% are concerned about their lack of digital skills. The digitisation skills gap is felt amongst finance professionals, especially with their enhanced responsibilities. Like I mentioned earlier, 70% of CFOs still make their decisions based on gut feelings rather than data.
It is crucial that finance leaders are well equipped to lead digital change within their organisations. Decision-makers are spending just as much time collecting and preparing data as they are analysing it. This is all down to a lack of automation and unwieldy legacy systems, which needs to change. Because of this, it just means that there is a half-hearted approach to data collection and in turn, is limiting overall productivity. As a result of this, 70% of CFOs agree that administration is having a significant negative impact on team productivity. One of the top aims for businesses is to invest in new technology to try and drive efficiency improvements. Research has shown that new financial management technology is a priority for 86% of in-house financial decision-makers.
“51% say thinking of new ways to help the business with financial matters is the most challenging aspect of their job.”
Cloud technologies help to create a more cost-effective finance function. It minimises the need for hardware and storage and provides more scalable and easily automated processes. Yet, the wider consideration for CFOs is how cloud technology fits within their existing business infrastructures. This is where financial decision-makers can be most effective.
Despite the number of challenges facing financial decision-makers, the future is bright. Emerging technologies, such as automation and artificial intelligence are set to support the finance function throughout the entire digital transformation phase. This will include the creation of many new jobs that will enhance the quality of working life. As CFOs lead the way to drive digital transformation, they’ll play a massive role in cybersecurity, data governance and data flow, as well as other business priorities. Finance leaders are the visionaries of the future. Welcome to CFO 3.0.
In this CFO 3.0 Whitepaper, it explains all the challenges that CFO’s will have to face and looks at the roles and disciplines a CFO will need in the future. If you’re wanting to read more on this, you can download the Whitepaper here!