Technology is in the ascendency again, opening up fascinating possibilities for new products and services as organizations strive to make the most of meager opportunities for growth. But the same technologies (cloud computing, social tools, mobile communications, and big data) are transforming organizations on the inside as well. And increasingly, it is CFOs that are at the epicenter of these changes, both within and beyond the organization's borders.
The notion that the CFO's remit is limited to financial stewardship and operational efficiency has well and truly been consigned to history. The role is clearly shifting from governance to guidance, and, in the process, the modern CFO is increasingly viewed as an influencer and business catalyst with a major role to play in strategy development and overall business success. Underpinning all of this is the effective application of technology.
This gives rise to an interesting dilemma. The modern CFO, who is increasingly trusted with making technology decisions, has to walk a tightrope between overseeing investment in emerging technologies to deliver new services to customers and leveraging new technologies to support the business on the inside. But this unique positioning also gives CFOs exceptional visibility into technology advances and how they can be used to accelerate change, especially around the way that the modern finance function supports other decision makers, functions and stakeholders. So what are the technologies that are redefining the modern finance function?.
CFOs see immediate advantage in mobile computing. In a 2013 global survey of 930 CFOs commissioned by Oracle and Accenture, mobile technology ranked as the number one investment priority for CFOs over the next three years.
The opportunities afforded by mobile technology are undeniable. They range from pure convenience, i.e. the ability to retrieve information from corporate systems at any time and from anywhere on an at-hand mobile device, to a more data-rich society in which important decisions can be made on the fly. We are approaching a new era of mobile BI (business intelligence) in which Gartner says the mobile device is not just seen as the "endpoint" of an information flow, but can equally be considered a data generation point-using location-specific information and images to enrich corporate information about people, customers, suppliers, products, and personnel. Mobile capability is moving beyond simple information delivery to offering workflow and approvals, as well as simplified data entry for tasks such as sales forecasting and OCR scanning of receipts and expenses, with a mobile phone as part of modern travel and expense management processes.
Big data also offers the prospect of improved forecasting. For example, the combination of unstructured social analytics and financial forecasting could lead to a new generation of forecasting techniques in which forecasts are informed by customer sentiment about products, customers, and campaigns. The pharmaceutical, financial services, retail, and agricultural industries are leading the way and already learning to master the implications of this new capability. But the key to big advances from big data will be the ability to meld the ease of use of traditional BI with the new technologies necessary to manage such large volumes. Nevertheless, big data is a phenomenon that CFOs cannot ignore.
Cloud computing (in all of its guises—public, private, hybrid) is proving a valuable addition to the CFO's armory, providing much-needed business flexibility, helping organizations respond to market volatility, restructurings, acquisitions, and even to dip a toe into higher-risk markets.
The cloud is also promoting a more productive way of working. Processes such as business planning, performance management, and financial reporting benefit from a more collaborative way of working and greater organizational reach, improving the quality of forecasts, assisting the CFO to get buy-in to plans, and reducing time to decision.
The use of social tools is still relatively low down on the CFO's list of priorities—possibly because in some minds social tools are equated with the leisure use of Facebook and Twitter—without realizing the profound impact that they can have on collaboration. When asked separately about collaboration, CFOs rate this as a high priority. Stand-out areas include crowd-sourcing ideas and knowledge sharing, for example, around strategy development, enterprise performance management, setting accounting policies, process improvement, and delivery of value to internal customers. Social tools also offer fertile territory for better engagement with analysts, investors, and other interested readers of financial information.
Social tools can also be used to improve the user experience and productivity of personnel using core financial systems—especially the younger generation of finance executives who are used to accessing social tools on a daily basis. For example, social tools embedded in the user interface of ERP and other financial systems raises the possibility of greatly improved access to information and collaborative problem resolution when things go wrong.
So the modern finance function is faced with almost limitless possibilities for making profound changes to the way it supports line of business functions. The challenge for CFOs is balancing what comes first on the inside with all the exciting possibilities on the outside.