Why the CFO is the true tech pioneer in modern business

Over the last 20 years, the role of the chief financial officer (CFO) has witnessed a seismic shift, from being primarily a financial gatekeeper to becoming more technology-focused, with a move towards cloud-based platforms, as digital transformation reshapes financial management. 

The need for this technology focus is due to businesses generating vast amounts of financial and operational data. This requires CFOs to use technology to extract insights and forecast trends to make better business decisions – and becoming a strategic partner to the CEO in driving revenue generation and cost saving across the business. 

With this challenge of using data to their advantage, I want to highlight how CFOs are pioneering the use of technology to improve business operations. In addition, I also want to offer advice to CFOs wanting to implement new technologies into day-to-day operations. 

Using Artificial Intelligence to better predict revenue trends

It would be remiss of me to discuss CFOs in the tech age without kicking off with the hottest topic in business today – the use of Artificial Intelligence (AI) to improve operations. 

Personally, I am very excited about the potential of AI. I feel that the CFO must be at the forefront of the insights this technology can offer us, so we can adapt to the changing role of the CFO. 

Why do I hold this view? I believe AI will act as a better decision-support tool for faster and more data-driven financial planning. It will not replace human judgement, but it will allow for a wider range of financial scenarios to be reviewed and tested. Historically, these outcomes could not be as easily or quickly captured by traditional financial models. 

In practice, AI should give greater insights into the metrics CFOs truly care about, such as revenue trends, cash flow fluctuations, and EBITDA each month. This technology can also help improve budgeting and forecasting; CFOs can use AI to build a base level model for this activity. Then, if you feed into this model customer or client buying behaviour, you could then have a better forecasting tool, leading to better revenue predictions. 

In summary, everyone in business including CFOs are somewhat scared of AI, but we have the chance to be at the cutting edge of utilising this fascinating technology. I think AI will also attract younger people to work in our profession as they see the potential of how it can enhance their careers. 

Analytics shaping better business decisions

Alongside AI, the use of analytics can help a CFO make more informed and proactive decisions that enhance the company's financial performance. For example, the analysis of revenue trends and pricing models can be performed more efficiently by analytics. This enables the creation of more profitable strategies, whilst also improving revenue forecasting. 

Analytics can also help pinpoint inefficiencies, identify cost saving opportunities and optimise resource allocation. Another good example is the analysis of real-time inflows and outflows of cash, enabling the identification of shortages and optimisation of working capital.

By using data visualisation or ledger reporting tools, the CFO is able to better access data on transactions and processed cash balances via a dashboard. This enables better communication with clients - especially if they need chasing to pay their invoices. Having this real-time data can also help the CFO close the books earlier than month end. This is beneficial, as senior management have better access to information needed to make quicker business decisions – as opposed to waiting until the last day of the month. 

Improving financial reporting with ERP technology

Key to every successful CFO's operations is accurate financial reporting. Technology has already started to shift the role of how a CFO gatekeeps a company's financial information to more strategic members of executive teams. The availability of enterprise resource planning (ERP) software integrations is so fast that CFO's have the opportunity to extract a host of data in numerous ways to help them isolate areas where improvement or scale back is required. 

The faster this data analysis can be done, the more options that are then available for performance improvement, as potential problems or opportunities can be isolated earlier when they have the largest potential benefit.
 
The role of the CFO is to use technology to direct their organisation into capturing this data in a way that allows for powerful analysis. This can be seen most clearly when thinking of cost optimisation. Ensuring which products or services are being provided, and how these costs are allocated, is crucial. In this situation, by using the right technology, this data can be collected and analysed in the most seamless and efficient way. 

Advice on adding new tech solutions for CFOs 

Whether the decision is to implement new AI, analytics or ERP solutions into your business, my advice to CFOs is to start by ensuring new technology investments align with the company's objectives and bring the desired efficiency and growth.

It is always wise to prioritise scalable solutions that enhance decision-making, streamline financial processes, and increase operational efficiency.

Lastly, I would encourage fostering a culture of digital adoption by upskilling the finance team and encouraging cross-functional collaboration. In this situation, the CFO must argue the case for new technology solutions to drive the business forward. 

Looking ahead

In terms of the future, CFOs who fail to leverage new technology will face slower decision-making and potential extended periods of inefficiency. Therefore, the need for CFOs to integrate more technology solutions is fundamental to remaining competitive. In short, we need to continue to be the tech pioneers in the boardroom. Let's work together to embrace this tech future - and help each other to implement it.