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Data and the Changing Role of the Tech-Savvy CFO

01/08/2019

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Today’s chief financial officers (CFOs) are being expected to become data scientists to some extent. Decision makers are relying on CFOs to strategize for the future, tackle open-ended questions and problems, uncover new business opportunities, and save the organization money by spotting hidden patterns.

Big data offers big opportunities for CFOs. Today’s CFOs need to understand how finance can capitalize on technology to broaden their roles.

Traditional Risk and Business Controls

Technology allows CFOs to mitigate traditional risk and implement business controls. In the area of planning and forecasting, data sets augment and enrich a company’s forecasting. These additional data sources can help make CFOs’ models more accurate and more robust against unknowns.

Tech-Savvy CFOs can use technology to apply strategic financial management. For instance, the CFO can advance data visualization techniques to make dashboards and score-carding easier to understand for all levels of users. It also allows the CFO to think beyond a static report, providing additional depth and the opportunity to incorporate new meaningful data types.

Today’s technology allows a dashboard to track both leading and lagging indicators to give a more accurate view of the future, not just the past. Data also enhances the tech-savvy CFO’s monthly financial closing since statutory reporting now frequently incorporates the requirements for internal and external data. New technologies can integrate data in a cost effective manner.

Predictive analytics and visualizations make this new data easier to understand, allowing for quick action.

New and Emerging CFO Roles

These technological capabilities are facilitating developing CFO roles. Competition is increasingly based on process excellence and knowing the customer. More than ever it falls to the CFO to help the company navigate the rapidly changing external environment. This is done by continually evaluating and recommending the right strategies, and by executing those strategies with precision and a customer-focus.

Big data technologies and analytics empower CFOs to constantly monitor and recalibrate predictions. This is based on the enhanced ability to understand and analyze internal processes, competitive pressures, and customer response.

Analyzing and acting on big data findings leads to growth and innovation. The same capabilities that evaluate efficiency can also offer up suggestions for opportunities perhaps in adjacent markets or complimentary products and services.

Big Data enables deeper and broader insights through analytics that can be the difference between successful and unsuccessful acquisition and business development strategies.

In addition, traditional valuation techniques based on discounted free cash flows can be greatly enhanced with a clear understanding of a customer’s lifetime value. Big data and analytics offer a path to better understanding customer behavior, buying patterns, and wallet share which can be aggregated up to customer equity measures.

Become a Tech-Savvy CFO

How do you get started to become a tech-savvy CFO:

  • Do your homework: Learn the essentials of analytics.
  • Talk to experts: Huddle with CIOs to develop a strategy to manage and leverage big data for a competitive advantage.
  • Know what’s at stake: Harness the analytics avalanche and don’t leave valuable information along the roadside.
  • Educate others: Ensure your finance and FP&A staffs have the proper skills to interpret, analyze, and communicate critical data to business units.

Empowering the Tech-Savvy CFO

While our ERP experts have worked with many tech-savvy CFOs already well versed in today’s financial solutions, many tend to be risk averse by nature. This often translates to these people being late technology adopters. 

However, today’s more demanding business landscape—how customers evaluate and choose products, the volume of real-time data available to provide insight regarding business trends, and the mobile access employees have to critical systems – is forcing even the most technology cautious to evaluate new solutions.

The same technology driving this shift can also be the current that propels CFOs forward, some more willingly than others. Today’s CFOs are becoming increasingly tech-savvy strategic decision makers who enjoy learning ways software can make them more productive and their jobs rewarding.

Modern accounting software has changed accounting. Tech-savvy CFOs need new ways to slice and dice all financial data; looking at customers in aggregate, or through a single segmentation (like geography) is not enough. Today’s leading executive needs real-time access to the critical information they care about most, in order to make timely, actionable decisions. They also need flexibility to scale and adapt as the business changes, speed to meet the pressures from above, below, and all around, and technology to manage it all.

No matter how talented or tech-savvy a CFO is, he or she must have the proper enterprise resource planning (ERP) software in place to make the most out of the colossal amount of data available. LBMC Technology Solutions offers Intacct, a cloud-based ERP software solution.

Are you ready to become a tech-savvy CFO?

Read our White Paper.

Then, contact LBMC Technology Solutions to get started with revolutionizing your finance department. 

Posted in: Technology Services