4 Reasons Why the Modern CFO Needs to Be Technology Focused
In order to successfully transform a business, today’s chief financial officers are expected to be well versed in technology while navigating an increasingly complex and fast-moving digital world.
As experts in providing support to CFOs and identifying the right technology solutions to help them reach their goals, we’ve outlined the top reasons why the modern CFO needs to be well-versed in technology.
How has the role of the CFO changed over time?
The CFO role has traditionally included management of company financial operations, planning and reporting with a focus on protecting critical assets and analyzing company performance.
Today, the CFO role is becoming increasingly complex, including new responsibilities of setting and executing strategy while scaling the organization to meet growth goals and drive business transformation.
Why CFOs Need to Be Technology Focused
- More controls are being built through technology
- Various software tools can be utilized to provide real-time insights & conduct strategic analysis
- Business transformation is increasingly digital
- New technology brings new security risks
1. More controls are being built through technology
In order to mitigate risk and drive scalability, many business leaders are turning to technology systems and solutions to develop automated internal controls. For example, today’s business leaders choose to integrate cloud-based software to keep all their data centralized, accessible and secure.
Automated controls are often a lot more reliable than manual controls because they are programmed in an IT system, thus reducing the potential for human error.
By developing automated controls and configuring systems to perform certain tasks (such as identifying fraudulent activity, forcing workflows or approvals and backing up critical data), it becomes easier to identify issues before they arise while saving time and fostering collaboration.
Today’s CFOs must work closely with their technology and risk teams to identify which systems provide automatic control capabilities that the company needs and which control processes are best suited for automation — and then find the right IT experts to help integrate them.
2. Various software tools can be utilized to provide real-time insights and conduct strategic analysis
IT systems generate substantial data which can drive insight to company performance trends. Being able to quickly identify risks and opportunities is an increasingly important role of the CFO.
Risks range from cost controls, competitive incursion, and misplaced investments while opportunities could include new market opportunities, pricing power and product optimization.
Determining the right data variable, tool sets and reporting parameters is critical to identifying these risks and opportunities, quantifying them and developing response options. This is an evolution of the CFO’s KPI reporting to help the company better understand it’s current operating position.
There are hundreds of options for utilizing various software tools to conduct specialized finance and accounting activities, such as keeping track of inventory and payments, conducting enterprise resource planning and centralizing customer information to ensure data privacy, to name but a few.
As there are so many options available, it can be incredibly challenging to identify which are most effective for improving company performance, mitigating risk and taking advantage of new opportunities. providing a deeper understanding of financial data and fostering efficiency.
Today’s CFOs must switch their focus to integrating technology solutions that helping them streamline operations and achieve business goals – or understand when it’s time to turn to a trusted IT implementation consultant to help them out.
3. Business transformation is increasingly digital
One of the main duties of a CFO is to drive business transformations. HR, sales, CRM, ERP, logistics, and so many other areas of business are now being conducted from within a system or software.
When leveraged correctly, these tools not only permit a CFO to gather real-time information but also provide specialized capabilities for analyzing data in order to drive timely reporting across multiple functions and departments.
CFOs must have a solid understanding of which emerging technologies and systems will best allow them to drive continuous evolution and differentiate their business from competitors – whether that’s big data, automation or machine learning.
4. New technology brings new security risks
With more technology solutions and systems, there’s also a greater opportunity for a cybersecurity attack to occur.
Today’s most common cybersecurity threats involve attacks on cloud configurations, business email compromises and phishing scams, and malware and ransomware attacks. There’s also a risk of data being leaked to competitors, employee misusage of data and the potential for a company to inappropriately use technology and infringe on another’s intellectual property.
CFOs need to understand where and how these threats occur and implement measures to safeguard their networks, devices and data from malicious activities – and make sure their team is properly trained as well.
As such, developing a comprehensive data security and training plan and conducting audits to ensure compliance with third-party tools and algorithms is essential.
How CFOs Can Be More Tech-savvy Today and Beyond
In order to be tech-savvy in today’s world and beyond, today’s CFOs must:
- Increasingly be aware of emerging technologies and the impact on their company, competition and industry
- Seek novel ways to leverage technology to drive the business and
- Understand and mitigate information risk to protect company assets and trade secrets.
Since this can be quite the challenging and time-consuming endeavor, it’s often beneficial for CFOs to turn to a trusted partner who takes the time to learn about their business goals and needs before offering a roadmap for integrating the solutions that will work the best.
Need Support Growing Your Business?
Bridgepoint Consulting‘s interim CFOs are here to provide full-time and fractional executive support for your company in times of transition, change or rapid growth. Whether you are an established company looking for guidance with large-scale financial strategy or an emerging-growth business seeking to streamline your internal processes, our dedicated team of seasoned executives will provide the financial guidance you need exactly where you need it.
Contact us today or learn more about our CFO support services at the link below.
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