Top 5 Tech & Analytical Tools a CFO Must Know!
“To help realise organizational vision, the contemporary CFO needs to have deep skills and technology tools in data analysis, planning & structuring and risk management. No longer is their job just about costs and controls but about how the CFO can partner with other functions and play a role in expanding bottom-line and scaling-up the business sustainably!”
As disruptive technologies change business models, and new asset-light data driven businesses take over, the role of a CFO is evolving fast. Today’s Finance leader needs to understand and adopt technology and work hand in-hand with the founder / entrepreneur. CFOs who understand finance, coupled with technology can create a huge competitive advantage for an organization today. Here are quick 5 tools that the CFO must know!
1. SaaS ERPs & Function-Specific Applications
An accounting software typically is not useful for tracking and automating non-accounting workflows. Large-scale ERP solutions like SAP, Oracle, Navision, Microsoft Dynamics, Sage, have been around for decades. However, recently, lot of industry-specific, cloud-based ERP offerings have become available. These are SaaS (Software as a Service) offerings and quite affordable.
Further, there are function-specific tools – E.g. Zoho, Slack, Hubstaff are for Project & Time management. Receivables Management software is Numberz. Zoho, Freshdesk and Salesforce are examples of CRM software. Lastly Happay is used for Petty Cash Expense reimbursement systems.
These tools allow not only automation of workflows for specific functions but also ensuring clean and consistent data available for analysis and planning at the organizational level.
2.Analytics & Data Science for Decision Making
“Data is the oil of 21st Century and Analytics is the Combustion Engine” – Peter Sondergaard, Gartner
To truly harness the potential of data, today’s finance leader needs good understanding of data science. The growth of an organization depends on sticky customers, performance of its products, robust processes and delivery mechanism, productive human resources. Its success is driven by ability to raise & judiciously utilize the resources this growth.
With Business Intelligence and Analytical tools, CFO can analyze massive datasets from multiple departments, build customized KPIs for tracking, slice and dice various KPIs and dig deeper into reasons for under-performance or over-performance, ultimately driving better decision-making.
A wide range of BI Solution is available to choose from. Examples include Microsoft Power-Bi, Tableau, Google Data Studio, SAP Business objects, Zoho Analytics, etc
3. Blockchain
Based on the Global blockchain survey conducted in 2018 by Deloitte, about 74% of the large organisations witnessed a compulsion of introducing blockchain technologies.
Blockchains are decentralized, shared ledgers where all transactions are recorded securely by encryption in near real-time and are immutable (incapable of being altered or deleted). Blockchain offers the potential to create continuously updated, incorruptible accounting ledgers.
The potential impact of disruption being ushered by blockchain across financing, payments, verification and audits, compliance, supply chain is extremely huge. Blockchain will completely remove the subjectivity caused by human interventions and bottlenecks caused by physical or manual movement of documents in these processes.
One promising application of blockchain is with contract and document management— digitizing and moving the governance of paper certificates, warranties, and contracts into a blockchain—which can automatically update the documents when a triggering event occurs. For example, a blockchain can connect ledgers from across an organization’s supply chain—supplier, manufacturer, distributor, shipper, retailer, and end-consumer—to make tasks, like tracking a product’s journey, much more accurate and efficient.
Today’s finance leaders must understand blockchain and the possibilities offered by this disruptive technology.
4. Task Automation Tools
Gartner reports that 56% of companies were already investigating AI as a means for automating part of their finance operations as of late 2018. This number is expected to grow further. Automation through AI is expected to boost profit by about 38%, which, in turn, will increase the gross value added (GVA) by a whopping $14 trillion within 2035.
Task automation tools like Google sheets, Power Query, etc., help automate repetitive calculations or data-transformation tasks. They are much user-friendly experience and reduce dependence on Software Coders or erstwhile Excel macros (VBA). Additionally, tools like Microsoft Task Scheduler, Robotic Process Automation (RPA) can be leveraged to automate tasks outside Excel or spreadsheet environment.
These tools largely eliminate human error and provide accurate results. CFOs can uplift their decision-making strategies with automated, readily available reports.
PowerQuery in MS Excel
5. Basics of Data Security Tools
According to a recent study, 55% of CFOs report that enterprise risk management is part of their role, and 33% of CFOs claim responsibility for managing cybersecurity risks. With the rise in usage of cloud storage, the data breach has also been on the uptrend. A basic understanding of mechanisms to protect organizational and user data and prevent cybersecurity risks is required for a CFO.
A firewall is one of the most trusted and frontline defenses for an organization. Whether implemented as a standalone or an integrated system of protection, firewalls are known to enhance cybersecurity primarily. Cloud security providers who offer Security as a service (SEaaS) is one highly efficient tool for CFOs in today’s world, where the risk of data theft has left no organization untouched.
In the post-pandemic world, the role of technology in business has become even more prominent. Finance leaders who understand technology deeply, have an important role in building industry dominating businesses and create substantial value for their stakeholders.
