In most enterprises, the CFOs’ responsibilities extend far beyond finance. They play a proactive role in decision-making. Their position allows them to understand the enterprise-wide implications of different choices.

Despite their strategic role, CFOs also face many pain points in their work. These include overcoming cost pressures and finding a solution to the skill shortage. However, the biggest pain point CFOs experience in 2024 relates to prioritising technologies. In today’s digitised business environment, the CFO has an increasing stake in digital leadership.

The Increasing Obsolescence of Traditional Tools

Traditional tools, cutting across functions, are becoming obsolete by the day. Today’s business environment requires flexible and adaptable platforms. These platforms have to integrate at scale to meet the demands of unpredictable workflows.

Most legacy software comes with limited functionality. These tools, designed for a bygone era, lack the flexibility or the ability to scale up to match today’s business needs. Data silos make them unable to leverage analytics. Slow, manual processes and delays stifle employee productivity. The software may well have undergone several improvements over the years. But in most cases, they do not evolve fast enough to match technological advancements.

With such legacy tools, the enterprise cannot deal with the uncertainty and disruption that has become a way of life now. They become inefficient and uncompetitive.

Many enterprise work teams, frustrated with these legacy systems, subscribe to piecemeal tools. The enterprise ends up with a hotch-potch of incompatible tools. Shadow IT sets in as well as huge inefficiencies. Such tech fragmentation increases costs and security risks and degrades the user experience.

At some point, the CFO has no option but to invest in new tools and technologies. Failure to do so risks leaving the enterprise out of today’s interconnected digital ecosystem.

But throwing money to purchase and set up new tools is not enough.

The Pressing Need to Overcome Data Silos

 Businesses rely on data to make intelligent predictions on what their customers want or are likely to do. For instance, streaming sites use behavioural data and history to make relevant recommendations. Real estate companies use machine learning to value a house based on location and customer preferences. Computer vision leverages visual data to deliver 3D home tours.

Legacy enterprise systems cannot break through data silos to make accurate predictions.  The latest cloud-based tools break through silos and offer access to complete enterprise data. Automated systems help these platforms co-opt transactional and operational data. Intuitive APIs integrate and pull data from legacy systems. 

The free flow of data across all enterprise systems leads to improved visibility and accurate analytics. Eliminating manual import and reconciliation of data delivers a huge efficiency boost. 

Platforms such as Workday offer a single source of truth for all enterprise data. All users can access real-time insights and make better data-driven decisions.

The Indispensability of Scenario Modelling

Traditional platforms have limited functionality, if at all when it comes to running models. These tools take a long time to model a scenario. Users working under severe time constraints cannot explore more than a few scenarios. Technical guardrails on the number of dimensions limit functionality. Also, it requires technical experts to use these tools.

Such a limited and reactive approach does not work well in today’s fast-paced world. By the time the business users get the insight, the opportunity will have passed.

The latest purpose-built and cloud-first platforms make modelling scenarios a routine, daily activity. These tools refractor data in many ways and in multiple dimensions. They empower business managers to run sophisticated what-if scenarios and make data-driven decisions. For instance, financial tools co-opt budget and forecast scenarios. Sales tools can model the impact of winning a major customer account. The HR tool can model the impact of a planned restructuring on organisational performance. Such insights enable business managers to understand the potential implications of their actions.

The role of the CFO

So, what stops the CFO from orchestrating the roll-out of the next-generation enterprise systems?

Financing the cost of the new technology is the easy first step. But even here, the CFO’s approach can make a big difference to the outcome.

Reactive and subdued CFOs consider new tech adoption as a risky investment, and make the minimal investment and upgrades to get by. But best-in-breed CFOs approach new technology adoption as an investment in the company’s future. They approach the adoption of new tech as an opportunity to boost efficiency, cut costs, and unlock new business possibilities.

Prioritising New Technology Adoption

A big pain point the CFO faces is identifying the technology that delivers the best impact from many choices. The tech fragmentation leads to the proliferation of software tools. There are only subtle differences among different tools. Investing in the wrong technology or tool can turn the investment into a dud.

The obvious choice for the CFO is to strike partnerships and collaborate.  Insights from the operations teams help identify pressing business problems or inefficiencies. The CIO and the IT team can help with the technical aspects and viability of the different options. It also helps the CFO be aware of the latest tech trends.

Platforms such as Workday offer end-to-end solutions, making the job of the CFO easier. Workday’s adaptable architecture makes it easy for businesses to pivot fast and adept to the fast-changing business conditions. 

Establishing Key Performance Indicators

An associated pain point faced by CFOs is identifying KPIs to measure effectiveness and success. Without clear-cut KPIs, the rank-and-file employees remain unaware of the specific objectives. The investment may become a costly experiment without tangible outcomes.

Best-in-breed CFOs work to establish clear and measurable key performance indicators (KPI). They work with operations, IT and other relevant teams and devise KPIs that link to the business strategy. Common KPIs include return on investment, cycle time reduction, customer acquisition cost, and more.

CFOs also need to review and adjust the KPIs to align it with changing business conditions and priorities.

Selling the Transformation

New technology will not deliver results without the support from the rank-and-file employees. Half-hearted adoption leads to productivity dips and efficiency losses.

Smart CFOs lead from the front through effective communications and setting examples. For instance, they:

• Apply data-driven decisions in financial planning and analysis, inspiring other departments.
• Make explicit the financial implications of the upgrade and the expected return on investment.
• Work with the CIO and HR to offer training and support to help employees adapt to the new technology.
• Convince the employees the benefits of the transformation. They articulate how the new technology will streamline tasks and improve work-life balance.

Digitisation is the flavour of the season. Enterprises opting for digital transformation gain immensely. But success depends on effective leadership. CFOs that go beyond finance and offer proactive leadership drive significant value creation. Powerful platforms such as Workday enable CFOs to walk their talk.