The changing role of financial directors and finance officers in data-rich era
DUE to a more global approach to business and a shrinking world due to digital communications and technology, the role of management accountants or chief finance officers (CFOs) will change dramatically in the next five years.
There are of course exceptions, but by and large, there is a difference in the level in understanding of CFOs in high-tech industries and those in the more traditional industries, regarding how to develop digital technologies to enhance their business and develop a future strategic route for the company to travel along.
These days, our home life is almost saturated with digital technology – even to make a cup of coffee. The CFO of the future will need to become more digitally sophisticated and tech-savvy in order to grasp and understand the latest innovations.
These include such technologies as cloud and big data to data analytics and virtualisation, in order to advance their departments agenda and build relationships with other departments of the business.
Finance departments, in our top companies, could well be defined by the way they’ll use innovative business tools and applications that leverage technologies like mobility, data storage and data analysis, possibly even social media.
These technologies will drive business efficiencies, identify emerging business opportunities and identify risks up ahead, so the businesses can alter course of its strategic journey.
An example of the latter is when, using the “real-time” data capture of a manufacturing company, it is constantly analysed to predict a business model of probable outcomes, rather than looking at historical data, as was the case in the past.
This would allow finance departments to produce accurate revenue predictions based on actual demand, rather than previous year trends. This will be the type of significant value that companies will expect, to compete in an ever increasing competitive world.
Today, accounts departments have already accumulated enormous silos of data. This data will only multiply in the coming years when it will be even more accurate and easier to collect.
The challenge for CFOs and their teams, will be how to transform this data into something that provides valuable business insights and trigger important actions.
To do this, CFO’s will need to be more strategic in their thinking and outlook. They will need to have one eye constantly on the bigger picture and help their organisations to embrace a more digitally and demanding world.
That will include developing a strategic capital investment plan and the metrics in which to measure the benefit of allocating funds to that plan, obtaining its digital objectives and measuring its technological success.
CFOs may need to stand in the often lonely place of the catalyst rather than taking the more comfortable stance of the strategist.
The first thing CFO’s should be addressing should be to map out a plan of what business management want technology like data analysis to help answer. They should follow this by figuring out how to collect and store that information.
Of course this all means, that senior staff in the accounts departments will have to alter their approach to their work. The business will then need to re-focus the finance talent agenda to be bring to the department, the people who have the skill sets to retrieve this data, interpret it and use applications that will transform the insights into a story that’s both strategic and easily understood.
These are exciting times for those accountants and chief finance officers who are willing to fully embrace the ever changing world of IT for themselves and for their organisations.
:: Trevor Bingham (editorial@ itfuel.com) is business relationship manager at ItFuel in Craigavon. Follow them on Twitter @itfuel