Leveraging tech and building better processes are the top undertakings of finance officers able to reach their goals.
Editor’s note: This article is adapted from the report, The Strategic CFO in a Rapidly Changing World
CFOs may not always be the most publicly visible executives compared with CEOs and other senior leaders, but in a rapidly changing world full of new challenges and risks, finance executives can be the stewards who guide companies toward growth, according to a study of more than 500 chief financial officers and senior finance executives conducted by The Economist Intelligence Unit, commissioned by Coupa Software.
In particular, leveraging technology and implementing better processes tend to be the top strategies for CFOs who say they’re most able to meet their goals, so more CFOs need to analyze how they can make these changes to better execute their strategies, find the authors of The Strategic CFO in a Rapidly Changing World.
The key findings of this report include:
1. Strategic CFOs break down silos to gain visibility across departments.
To overcome industry and economic challenges, CFOs need to work closely with other departments and break down information silos.
In terms of how organizations can change so that other functions can help execute corporate finance strategy, 76% of survey respondents cite leveraging new technology or improving processes. Removing barriers between finance functions, departments, regions and other divisions helps finance executives gain a more complete picture of their organizations and align with other decision-makers on strategic goals. This collaboration can help overcome the fact that over 60% of finance executives surveyed for this report say they have do not have complete visibility over the transactions within their organizations.
2. Technology and process improvement are central to risk, capital and cost management.
To break down silos and enhance business performance, surveyed finance executives often look to improve processes and leverage new technology. These strategies are often linked, for example, by implementing more automated processes and data analysis capabilities, helping assure that the right information gets into the right hands. Doing so then makes carrying out risk, capital and cost management duties easier. Specifically, 67% of survey respondents see investing in new technology or implementing new processes as the most important steps for organizations to take to better manage increased risk. In addition, 60% of survey respondents see deploying new technology solutions or automating and improving inefficient processes as the most important tactics they plan to use to contain costs over the next two years.
3. Business performance risk is the top financial threat over the next two years.
CFOs need to stay plugged into industry and economic changes that could affect their business models. Indeed, surveyed finance executives most often say that in terms of financial impact, business performance risk will be the type of threat that increases most significantly over the next two years. Similarly, finance executives most often say that business performance risk is a top obstacle to managing capital effectively.
Improving in these areas tends to require upfront internal investment in terms of both time and cost. But those who focus on these issues appear to be at an advantage based on survey results. Better processes and collaboration, which technology can facilitate, help finance executives gain a clearer picture of what’s happening across their organizations, thereby decreasing the chances that they miss information vital to meeting their goals.
Going forward, as the world changes more such as with the advancement of new technologies like AI or the increasing digitization of businesses, CFOs need to position their companies to be able to adapt to whatever comes their way. Ultimately, organizations that leverage technology and break down silos in ways that create internal alignment will be well placed to succeed.