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Finance Trends for 2019, Part 1: The Role of Today’s CFO Has Changed


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There has been a big shift in the business landscape from 2008’s recession. Changes in the workforce, the pace of innovation, and the major role technology plays in every business mean the role of finance has also changed. They in the middle of the action, connecting the entire organization by using technology and data to guide strategy while managing risk and the bottom line. This is the first in a series of blogs on how finance is changing in 2019.

 

Part 1: The new role of today’s CFO

In recent years, the role of a CFO has changed considerably. The CFO is now ultimately responsible for anything impacting a company’s bottom line. But as any CFO will tell you, everything impacts the bottom line. In other words: the CFO’s responsibilities have never been more varied and all-encompassing.

Gone are the days when a CFO was simply tasked with managing a company’s financials. Now, it’s not unusual to see a CFO taking a leading role in IT, product development, and even staffing. Particularly when it comes to IT, though, CFOs are finding themselves involved in managing the way that technology is integrated with various business processes. Different technologies can have a major financial impact on a business, and this is something CFOs have to stay on top of.

 

The latest tech is incorporated into a company’s warehouse management, HR, sales, marketing, field operations, manufacturing departments, and more. Each of these departments has a budget, and that budget needs approval from the company’s CFO. In order to determine whether or not various expenditures are warranted, the CFO needs a solid understanding of how various technologies work, as well as whether or not those technologies will actually improve profitability.

 

In other words, CFOs are now expected to engage in cost-benefit and risk analysis when it comes to adopting new technologies. There are countless examples of this.

 

Over the past decade, ecommerce has given companies access to a larger market share and greater distribution potential. At the same time, ecommerce brings with it various risks, including customer identity theft, credit card fraud, and so on. Is expanding a company’s potential market share worth the risk?

 

With the evolution of the Internet of Things (IoT), field service personnel can now monitor product installs and put in a service order before a unit starts to encounter problems. But this kind of remote access also opens products up to the risk of hacking, which could expose valuable company data. Again: is it worth the risk?

 

Automation is on the rise, and in many cases, this means improved productivity across a number of company departments. But what happens if an automated system fails? Can it be quickly restored? What about viruses and security? How is data backup managed? Are these systems susceptible to attacks from hackers? Smart financial decisions will require an understanding of all these details.

 

These are just a few of many such examples. When a CFO approves a budgetary expenditure connected to a particular technology, they have to understand the risks that the technology brings with it -- not just for the company itself, but also for the company’s customers and investors.

 

The statistics clearly demonstrate just how much CFOs have to juggle when it comes to these kinds of tech-related responsibilities. A 2016 report from Ernst and Young showed that 64% of CFOs were taking on operational leadership roles in addition to their traditional roles as financial managers. More recently, IDG Communications reported in 2018 that only 54% of tech investment is actually overseen by IT departments.

 

Gone are the days when a CFO’s duties were limited to crunching numbers and generating financial reports. Their role now overlaps with tasks traditionally reserved for COOs, product developers, and IT managers. CFOs now routinely oversee compliance, security, audits, and other tech-related tasks. And, of course, all of these new duties are in addition to their traditional responsibilities.

 

With technology playing a bigger role in finance, it’s as important to have the right technology partner as it is to have a good attorney or accounting firm. Find a partner who understands how to leverage technology to help your finance team meet new challenges.

Stay tuned for the next blog in the series, which discussed changing customer demands and what the finance team needs to do to adapt. To read more about finance trends, download this Microsoft whitepaper, 2019 Finance Trends Report.

 


ABOUT AKA ENTERPRISE SOLUTIONS
AKA specializes in making it easier to do business, simplifying processes and reducing risks. With agility, expertise, and original industry solutions, we embrace projects other technology firms avoid—regardless of their complexity. As a true strategic partner, we help organizations slay the dragons that are keeping them from innovating their way to greatness. Call us at 212-502-3900!

 

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