As FP&A is at the core of business decision making, the importance of the CFO role cannot be overstated. To perform well, CFOs need to be able to use reliable and consolidated information to guide the critical decisions they make. That said, their team down the chain of command, which collects the data, must have access to the best tools available, and of course be well versed in the use of those tools.
The future of FP&A will be defined by increasingly sophisticated high tech methods of gathering, consolidating, and presenting data. High tech resources have proved to be an effective solution to a number of the problems finance professionals encounter; these tools will continue to be proliferated in the years to come. It is in a CFO’s best interest to be aware of the most common issues in finance, and how tools like cloud based software can provide effective solutions.
What CFOs Say is Holding Them Back
A lack of efficiency and quality of work are both issues experienced by finance teams. A 2021 survey by SaaS providers found that 90% of CFOs have experienced poor efficiency in their organization due to slow manual work, and human error by their FP&A teams.
Prior to the pandemic, finance and accounting departments relied on manual processes, particularly when it comes to close. They lagged behind other business units in technology adoption, which resulted in time-consuming remote work set-up.
Omar Choucair, CFO of Trintech, elaborated on the issue as such; “A virtual financial close is more challenging when you rely on dated and siloed technological infrastructure,” he said. “When data comes from disparate sources and is manually processed, opportunities for delay and error increase. Add to that a team working in entirely different places, and there is a particular challenge.”
How Can CFOs in Contemporary Finance Find Solutions to These Problems?
Considering the aforementioned problems, it is clear that the adoption of more sophisticated technologies is at the core of what CFOs must do to improve their organization. Furthermore, the cultivation of their team’s ability to use such technologies is of equal (if not greater) importance.
The criticality of a reskilled workforce in a high tech landscape was well described by Deanna Mulligan, retired CEO and chair of Guardian mutual insurer, in her book “Hire Purpose: How Smart Companies Can Close the Skills Gap”.
According to Mulligan, CFOs have two valuable roles in adjusting their workforce to high tech. First, as leaders of the finance organization, they can demonstrate the value of reskilling their own finance talent. Secondly, as company leaders, CFOs can champion the business case for these workforce development policies. CFOs can look at the learning and development budget and find ways to channel some of that investment toward retraining for more tech-savvy skills needed for changing job descriptions. FP&A software is among the effective and new tools finance teams should familiarize themselves with. CFOs can lead the effort to educate their teams about this tool.
“If the CFO is not leading the way for a digital transformation, the ‘fire-fighting’ mode will continue, [which] frustrates staff and eventually leads to losing valuable talent.” - Omar Choucair, CFO of Trintech.