Are today's CFOs ready for the finance of tomorrow?

The CFOs of bygone days were often stereotyped as back-office scrooges, worried only about the company’s bottom-line. Extremely frugal, protecting the company’s wallet unwaveringly. However, the stereotypes are now being rapidly dismantled. The modern day CFO, though equally conscious of the bottom line does not think this linearly. They are more open to risks, place their bets on innovation and are spurring their companies to increase capital spending on R&D and future centric projects. All thanks to the rising and all pervasive influence of technology.

A recent white paper from Accenture states that automation, minibots, machine learning and adaptive intelligence are becoming part of the finance team at lightning speed. In fact, 30 to 50% of traditional shared services roles, including those in finance, will disappear over the next five years thanks to them.

This means that the CFO’s role in the next 5 to 10 years will change radically. The Finance vertical of any business has historically been very data-centric. Going forward they will not only become more and more automated, they will be backed by data insights and real time analyses. CFOswill be heading fact based decisions centers for their respective organizations.

Therefore, what should the CFOs focus on today to create a better tomorrow?

Invest in new technologies: As per 2017 Forrester Research study, 49% of companies are still using spreadsheets as primary mode of insight followed by performance analytics (42%), machine learning (28%), predictive analytics (28%), and artificial intelligence (19%).  Accurate data insights can only come if the CFOs are ready and willing to invest more in the latter technologies. AI for instance, will enable finance organizations to eliminate many routine tasks, freeing professionals to focus on more strategic areas - enabling businesses to optimize marketing, customer support, sales or identifying new opportunities.

Enable Automation: According to a survey conducted by theInternational Marketing Association (IMA), as many as 47% of the CFOsadmitted that end-to-end automation does not exist in their enterprises. This increases the threat of data leakages in the current times of digital transformation. The global average cost of data theft stands at a whopping $3.6 million (2017 Cost of Data Breach Study),and it’s the CFO’s responsibility to minimize such costs. Enabling automation in other areas such as expense management is also beneficial in the long run. As the IMA survey states, CFOs are now placing equal priority on expense management. 64% of CFOs expect expenses to increase and are looking at strategies to minimize extravagance and reining in expenditure.

Tighten Security and Compliance: As technology advances, there is a subsequent increase in complex and ever-evolving security threats.  Many CFOs have realized that the current security safeguards on the financial systems aren’t enough.Gartner predicted that by 2020, 60% of companies looking at mergers and acquisitions are likely to consider the target company’s cybersecurity as a critical factor in their due diligence process. Investing in the right tools as well as ensuring security compliance are crucial areas for CFOs to focus on.

Financial systems are the backbone of any company’s business. Keeping pace with the accelerated rate of technological change is a long term strategy. CFOs need to lead theirorganization by example by spearheadingsuch changes. Their leadership is essential in today’s times.

The author is Managing Director, India and SAARC SAP Concur