The economic uncertainty of the late 2000s forced many CFOs to define and lead organization-wide cost containment and cost reduction programs, many of which were IT-enabled. Combine that with the growing impact that CFOs can make using data-based insights to boost profitability, and it is not surprising that modern CFOs are often viewed as technology evangelists by their finance teams, business units and other functional leaders.
Accenture recently partnered with Oracle on a survey conducted by Longitude Research to examine how the finance function—and CFOs in particular—are using new technology to provide data-driven insight and forward-looking guidance to help support the business. The findings show how the role of finance continues to evolve and what’s in store for the future.
In order to understand the CFO’s role as a technology evangelist, we first need to consider how the function has changed. Finance no longer is concerned solely with reducing costs and reporting on historical results. Rather, there is a new emphasis on delivering data, using analytics and supplying a view of operations that will help management decide where to invest to drive innovation and growth.
One of the ways the CFO is providing better, more actionable data is through the use of cloud-based financial applications. Nearly a quarter (24%) of executives surveyed claim to have adopted a cloud-based system for core finance in some part of their organization, and close to half (45%) are developing a roadmap for doing so. Even higher proportions are adopting cloud-based budgeting, planning and forecasting systems.
This is a big change from just a few years ago when these functions were conducted primarily through traditional systems or spreadsheet-based processes. Survey respondents reported that investments in cloud-based solutions help to accelerate return on investment for new IT-enabled finance capabilities. As a result, finance professionals are delivering better insights through advanced analytics and business intelligence, superior service through new tools and functionality, and improved operational efficiency through the automation and digitization of finance processes.
Another trend we are seeing within the finance function is the ability to act as a service-oriented strategic business partner that is able to identify threats and opportunities based on facts, rather than opinions or instincts. Our survey found that finance and non-finance respondents gave the finance function high marks for collaborating with the business, with 80% rating it as “excellent” or “above average” in this area. Business partners, however, are expanding their expectations of finance, especially in higher-growth companies—and this is something that technology can help with. The research findings show that finance functions are embracing the latest social, mobile and collaboration tools to enable deliver insights faster and enable the modern finance organization.
Looking to the future, finance organizations need to continue to push for more efficient systems and operations. This is particularly relevant to the number of disparate financial systems used. Financial reporting tends to have a particularly high number of systems in place, with 58% of respondents saying they are using more than five. This is something that organizations certainly will need to address in order to improve efficiency and provide better analytics to the management team.
CFOs also will need to address larger issues. One important consideration is establishing a common finance language spoken by everyone in the organization. This can be enabled through a standard reporting architecture and a common framework for financial metrics, as well as a standardized set of tools and processes that everyone can use to analyze structured and unstructured data and make better, more informed decisions. To do this, firms also will need to understand what data matters and when it is needed.
Finally, modern finance organizations are embedding finance professionals into various lines of business. This helps finance interpret the numbers with greater efficiency and analyze profitability initiatives more effectively. Embedded professionals—often with operational experience and/or sales and marketing expertise—can also help uncover new profitable growth opportunities in a timely manner.
CFOs, once skeptical about technology due to budget overruns and project delays, are now among its biggest supporters within the organization. With new data insights and collaborative ways of working, CFOs and the finance function are helping management look forward, providing guidance on where to invest for innovation and growth, and helping boost profitability along multiple dimensions.
Scott Brennan is managing director – Accenture Strategy, Finance and Enterprise Performance. He specializes in large-scale finance transformation programs, end-to-end process improvements, enterprise performance management programs and associated information systems implementations.