The technology-centred, open economy is changing at light speed and finding a sustainable competitive edge is an ever sterner test for the business community. Clients and data are becoming companies’ most important assets. This in turn has significantly redefined the role and area of responsibility of the chief financial officer.
A survey conducted in cooperation between Grant Thornton LLP and CFO Research, All Systems Go: CFOs Drive Path to a Digital World (2019) [ 1485 kb ], notes that the time for holding discussions and plans on the point of investing into new technologies is past. More and more companies not only are channelling large amounts of money into key technologies but also developing the organisational culture needed to drive and continue the changes. The highest-priority investment areas are automation and business analytics.
Business intelligence covers all the applications, infrastructure, methods, and skills that transform business intelligence data into information that enables leaders to make wise management decisions in a timely fashion.
The study found that 38% of respondents invested into analytics solutions at the time of the study, 29% planned to do so in the next 12 months and 21% in the next 2 years. Thirty per cent of the respondents are investing into machine learning, 27% into optical character recognition and 24% into artificial intelligence. A noteworthy increase can be seen in these areas compared to the 2018 results.
The CFO’s new roles in the age of technology
A total of 378 CFOs from companies with a turnover from 100 million euros to more than 20 billion dollars were surveyed. The responses reflect key trends in regard to the changing role of CFOs in enterprise in the digital era.
- In prioritising tech investments, CFOs have a chance to be the drivers of change. Close to half of the respondents said they believed technology would start impacting their company’s business model and workforce structure in the coming years. A total of 87% of respondents agreed with the statement that technology was having a direct influence on how their financial unit operated. Many envision use of technology increasing in the next year for strategically important functions: e.g. financial planning and analysis (30% of respondents), financial reporting and control (28% of respondents), treasury/working capital management (29% respondents).
- The role of CFOs is increasingly trans-organisational offering units analytical support and taking responsibility for the big picture. It includes cooperation with heads of business units and mapping, collection and interpretation of all operationally and strategically important data. The CFO can be presumed to have the best view of the company’s data infrastructure, due to which the CFO is poised to be responsible for building a data-centred organisation. More than one-third of the CFOs surveyed said their non-financial reporting function has increased by 10−25% in the last two years. Thirteen per cent of the respondents reported a 50−100% increase and close to 22% of respondents, a 25−50% increase.
- CFOs have a vital role in directing a company’s innovation strategy. Being responsible for capital allocation, CFOs have the duty of ensuring that IT resources and other funds are invested effectively and the company has enough resources to continue its innovation programme. Most of the CFOs surveyed (95%) agreed that financial units should have an active role in planning resources necessary for innovation. Forty-seven per cent of CFOs agreed with the assertion that their company’s CFO actively supports the company’s innovation culture and 46% of them agreed completely with the statement.
The new era requires new skills
Keeping up with technological advances and implementing them is not an easy task. CFOs must be open-minded, quick and receptive to experimentation. Building a data-centred organisation requires cooperation and active communication.
Acquiring new skills is inevitable if the aim is to understand the big picture and make informed decisions. The CFOs surveyed saw data analytics as the most critical of the new skills needed – over one-half (55%) of the respondents said they wish to develop this skill. Other priority skillsets for CFOs were business strategy (40% of respondents), management of business operations (35%), acquisition of technology (33%) and innovation/enterprise (31%).
These positions will definitely start playing a role in recruitment, training, remuneration and motivation of employees.
Grant Thornton Baltic supports its clients’ digital innovation
Grant Thornton Baltic has not been untouched by these trends and supports its clients in implementing these technological solutions to make their business more efficient and find new growth opportunities.
Our business analytics solution relies on Tableau, software that allows valuable information for making business decision to be mined by visualising and analysing data. We use our clients’ accounting, customer management and other business software as data sources.
Our reporting solution enables the following, among much else:
- measure, track and forecast sales and financial indicators
- get an overview of the customer portfolio and customers’ profitability
- track effectiveness of marketing campaigns
- gain an overview of revenue and expenditure and comparison with budget
- prepare future forecasts and monitor fulfilment
- optimise processes and business activity
- increase the company’s efficiency
For a more detailed overview of business analytics service and contact details for our experts, visit Grant Thornton Baltic’s Business Intelligence (BI) service page.