CFOs have had a tough time acclimatizing to the digital age, and they’ve long been unsatisfied with the return on their investments in technologies that are supposed to be helping them.
It is, of course, in the nature of CFOs to be unhappy with returns on their investments, as returns can always be better. Technology, however, is proving to be a real thorn in their side. Robert Half Management Resources recently surveyed more than 2,200 CFOs from 20 of the largest US markets. In the poll, 41% cited keeping up-to-date with changing technology as the greatest pressure that their accounting and finance teams face. Technology changes were considered more important than regulatory compliance (24%) and recruiting and retaining skilled staff (16%).
This could be said to largely be because technology can help deal with the other two. Cloud technology and Big Data tools, in particular, have come in over the last few years and can help greatly with dealing with compliance by automating processes. They can also have a tremendous impact on lowering costs and speeding up processes in the finance function, as well as allowing staff to work remotely, and helping to crunch the massive amounts of financial data companies now accumulate and leverage it for insights which it would have been unlikely the human-eye would have spotted.
However, building a modern FP&A operation is expensive. It needs investments in systems, data, people, and new functions and processes — and the initial outlay of time and resources many not slow down for some time as the team discovers new ways to use the technology for their benefit. For example, one recent CEB, the corporate research and advisory firm, study of 99 companies found that spend on analytics actually went UP 10% in 2015 over 2014.
CEB have also made other claims. They looked at a number of empirical studies and qualitative interactions with CFOs and FP&A directors, and argued that these showed the way a large majority of companies go about FP&A to be all wrong. The found that investments in FP&A were actually going up as more data becomes available and companies seek to unlock its potential value with top-notch analysis. That they are still having to invest in improving their analytics teams suggests that either it is not working, that they are doing it wrong, or that their expectations of what it has to offer are simply too high.
Failure stay on top of disruptive technologies leads to lost profits, loss of competitive edge, and possibly even total collapse. Much of the stress Robert Half Management found among CFOs regarding technology arises from a lack of awareness and education, both from them and their staff. Companies need to ensure that they are employing accounting and finance staff who are proficient with enterprise resource planning systems, can automate financial processes, and can utilize business intelligence tools to mine data they can turn into strategic guidance. They must also ensure closely that they are working with IT departments, and listen to their suggestions. The CFO should be partnering with the CIO and taking their advice, rather than just seeing them as someone who’s trying to spend all the company silver on frivolous and unnecessary projects.