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How CFOs are using technology to improve business processes

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In the past, the CFO role might have been more comparable to someone focused on crunching the numbers, rather than the C-suite figurehead we know now.

CFOs were more focused on history – generating reports about the past through business processes.

Today, if you are in the CFO role, your business needs you to focus on strategy, analysing both current and future growth prospects.

You need to have a more holistic view of business operations and market development, being in tune with customers, products and services, all the while increasing value.

But how can you deal with these increasing demands both now and the future? With technology.

Technology is what you to transition from being the manager of finances via a view of the past to becoming the person in charge of unlocking of the most valuable future opportunities.

Technology is integral to modern businesses.

Without technology, digital transformation is impossible, and your finance function won’t be ready and equipped to meet the challenges both now and one, five and 10 years down the line.

You need to embrace innovation and arm your finance team with the right tools to improve and increase effectiveness.

According to PwC, finance leaders agree that technology is the top way to improve the effectiveness of the finance function.

So what should you be focusing on when it comes to using technology to improve your finance processes? We cover some key areas in this article.

Data quality and data science

What is it?

Data science, as applied to finance, is where you build systems and processes to extract data, which allows you to draw insight you can use to predict the future, and make evidence-based decisions and suggest improvements.

Why should you adopt it?

According to executive search firm Leathwaite, 51% of finance functions are already using data quality and data science, while 36% are planning to use it.

With data science and better data quality, you can better understand customer needs and dig out patterns that help you know where you should put your investment.

Steps to take to adopt it

To put data at the heart of long-term business success, professional services network EY says you should focus on six areas:

  • Make a case for data as integral to the business strategy by identifying proof of concept projects
  • Align the analytics capability and delivery with priority business requirements
  • Help instil the right leadership and culture
  • Provide training to help individuals recognise decision biases – the psychological assumptions that often lead to poor decision-making
  • Provide easy-to-use tools for users of data
  • Transform the analytics-based insights into actions, and align incentives, rewards and measurement accordingly.

Automation

What is it?

Automation, as it relates to finance, is the use of cloud financial software to automate tasks such as accounts reconciliation and preparing financial statements and reports, without the need for humans to spend lots of time doing so.

Why should you adopt it?

Automation can relieve your finance team of menial and tedious tasks, allowing you and your team to spend more time on more strategic tasks.

Steps to take to adopt it

1. Understand what kind of automation you need

Every business is different, and it’s crucial to get the best value for the automation you implement and the best for your business needs.

There are different types – from variations that help businesses automate daily tasks, to more advanced types that combine with machine learning to perform more complex actions in response to human interaction.

2. Start automation in the right departments

You’ll know from a bit of analysis which tasks automation would help. Automation could undoubtedly help in back-office processes in the finance department.

It could automate processes in areas such as marketing, legal, sales and the supply chain. Aim for quick wins allowing you to visualise a future roadmap.

3. Ask if automation makes economic sense

When looking at the opportunities for automation within departments, you should question how economically viable these opportunities are for the business.

For instance, you should investigate the return on investment. Get the relevant stakeholders in from the departments in question and try and create a business case.

4. Get management buy-in

You need to get information straight from stakeholders on what they understand when it comes to automation and how it would be able to benefit them.

You and other members of the leadership team should help the wider business understand what automation can do and how it could make their working lives more comfortable, letting them focus on more critical, less repetitive tasks.

5. Work at the right speed

The IT team can provide technical expertise and to make sure the implementation runs smoothly and at the right pace.

The technical leadership need to adopt a strategy of starting small, getting the business used to the technology, and expanding it out when the company gets used to the changes.

AI/machine learning

What is it?

Artificial intelligence (AI) is an all-encompassing term that covers all technology that can mimic human intelligence and has been in development since the 1950s.

A type of AI, machine learning allows systems to learn and improve through experience, without needing to be explicitly programmed.

Why should you adopt it?

Machine learning means computers can handle new experiences through analysis, self-training, observation and experience.

It allows computers to learn automatically without human intervention or assistance through complex algorithms so you can analyse massive amounts of data.

According to Leathwaite, 21% of finance teams are already using AI/machine learning, while 46% are planning to use it.

Steps to take to adopt it

Initially ask these fundamental questions:

  • Can the application of AI/machine learning make your business run more effectively and efficiently?
  • Can AI/machine learning solve your business problems?
  • Can AI/machine learning make your business more profitable?

The likelihood of AI solving some of your biggest challenges grows as the technology gets closer to maturity. You must have a clear focus on what AI/machine learning can do to achieve your business goals – this must be the driving force.

If you’re thinking about practical AI/machine learning business applications, you could look at how computers process and identify patterns in data.

They do this much more effectively and efficiently than humans, allowing much better insight.

Standardised, ‘off-the-shelf’ AI/machine learning services might address simple scenarios such as image recognition and voice to text.

But advanced predictive scenarios that provide more business value require much more sophisticated and customised solutions tailored to their specific business and operational needs.

The Internet of Things

What is it?

In business, the Internet of Things (IoT) refers to the connection of different devices to the internet, such as cars, healthcare equipment, and kitchen appliances.

IoT is exponentially growing, with more and more devices connected, allowing people to interact with technology in new ways.

Why should you adopt it?

IoT can give you a competitive advantage because it adds connectivity to components. IoT uses the data collected by physical things, such as components within machines in the production line to optimise manufacturing processes.

The more information these can gather, the more you can optimise and make your business processes more effective.

IoT connectivity can create value through better quality and control, while algorithms applied to large amounts of historical and real-time sensor data can increase prediction accuracy and analysis.

Steps to take to adopt it

Start small and identify a business objective that will result in better customer service and higher revenue.

A manufacturing company, for example, could start by managing inventory and using the IoT to optimise logistics, maintain stock levels and detect theft.

Have a clear vision of how you can align your IoT initiative with your customers’ needs and your strategic objectives and work backwards from there. You can avoid unexpected difficulties and ensure you choose the right solution for your business need.

The planning phase is the most time-consuming and will set you up for success – or failure. Some questions to answer:

  • What are the metrics and project timelines?
  • What is the budget?
  • What skills do you have available, where can you upskill and where should you outsource?
  • How will you deal with unexpected issues and scope changes?
  • What data can you access and does it relate to the business goal?
  • Where are the gaps in processes, policies and infrastructure, and how will they be plugged?
  • Can you scale?

Once you start realising the business value presented by the IoT, you’ll quickly identify other areas of the business that can be optimised and automated.

As a relatively new technology, IoT networks and devices are always improving, so you need to build scalability into your infrastructure that allows you to upgrade as new technology becomes available.

Scalability also will enable you to expand into new markets and capitalise on new revenue opportunities.

Adopt use tech to be more effective

As a CFO, you’re in the prime position to oversee the technology needed to support and grow your business, drive digital transformation, and commit your company to change.

Of course technology by itself won’t lead to improvement – that’s why you’re there to set clear goals and make sure the right tools are used in the right way.

Support your business in investing in the right technologies through your knowledge of what they can do to drive your company forwards.

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