Chief financial officers (CFOs), are the financial wizards in the company and have a pretty complex role and job scope. It is not just about maintaining budgets and keeping track of revenues and expenses in order to maintain shareholder value; a CFO also has an important voice in decision-making processes. This includes business transformation and growth strategies, largely due to the operations, cash flow knowledge and expertise that CFOs can provide to the organization’s stakeholders. In my previous blog, I wrote about how CFOs and CSOs can collaborate to drive and maximise business performance. Here, we will discuss how technology can help CFOs formulate strategies that benefit the organization as a whole.
Leveraging big data
Before an organization follows through with a decision, it is crucial to make use of any relevant data and research that has been gathered to provide valuable insights about the company’s current situation. Here are some questions one should ask:
- What is the business currently trying to achieve?
- How well is the company performing?
- What is their future direction and why?
- Are there sufficient resources to sustain the organization?
- Is the CFO fully optimizing the financial budget to achieve the highest possible ROI?
Most of the answers to these questions lie in the warehouse of big data that’s barely utilized productively. It is important to note that when used correctly, big data can be a powerful tool for organizations to gain a competitive advantage.
The responsibility of the data-driven CFO is becoming increasingly important. Organizations often require the CFO’s input, if a specific campaign is suitable and in line with their financial and operational capabilities. This means that CFOs are required to have a deep understanding of what the organization and its stakeholders need, and how they can maximize financial gains from the budget that has been set aside, whilst bearing in mind the organization’s vision and mission.
Smarter data insights will result in smarter corporate decisions for any organization. That being said, deriving meaningful insights from the large amounts of data collected is easier said than done. With more data being collected each day, technology is the only efficient way that CFOs can carry out their duties properly.
Technology to the rescue
Decision-making has never been an easy process and human beings can only process a limited amount of information each time. With strings of numbers and data to scrutinize, it is important for CFOs and their teams to have the right technology platforms and systems to help ease their pain during the decision-making processes.
The most common analytics platform that CFOs use to perform advanced, high-speed data processing and analysis is the Hadoop software. Hadoop is an open-source software framework for storing massive amounts of data, which allows the processing of large datasets across clusters of computers. It provides a massive storage for any kind of data and is able to handle 'virtually limitless concurrent tasks or jobs.' Other platforms include Spark, Cassandra and Storm.
These platforms are easily accessible and can run analytical algorithms which, in turn, help an organization to make informed decisions and discover new opportunities. Large amounts of data can be analyzed in real-time, allowing quicker reaction to users’ needs and preferences, giving a competitive advantage for the organization.
With technologies such as Hadoop, the modern CFO will now be able to make more effective, high-level corporate decisions through the generation of greater insights that might have otherwise been overlooked. CFOs can achieve convenience and better accuracy in tracking an organization’s cashflow while, at the same time, predict and prevent negative fiscal issues that could easily result in detrimental consequences.
Most importantly though, technology helps to organize big data and drive visibility in the organization’s spending, providing a clearer picture as to what directions or streamlining processes the organization should take.
Some people call them ‘chief future officers’ and we cannot deny that demand for CFOs’ input in corporate decision making can be daunting. As they are responsible for their company’s growth, appropriate tools and technologies should be rightly leveraged on in order to maximise the business potential.
If you are interested to find out more about the modern CFOs and their roles as well as the implications of big data in today’s corporate world, do join us for the CFO Rising Summit in Singapore on the 29th and 30th of this month.