The finance function in businesses has changed quite a lot and more financial managers are embracing new technology. Automation of processes has allowed CFOs to better handle duties across departments and has helped them to work on even more tasks than they could before. Coupled with proper planning, new technology has propelled most businesses to higher heights in the business world. Technology has generally changed the nature of the financial departments and is offering a new approach through which companies can handle problems easier and at a lower cost.
Research shows that each company is in a rush to digitize operations, especially internal finance operations. However, this has not offered the desired results since there is lack of skilled professionals who can effectively apply new technology. This translates to additional costs for training and maintenance of the staff, or for additional IT staffing, before they can be considered fit to handle the new technology.
Reasons CFOs are investing in technology
The digitization of financial operations is a necessity that any serious investor should not dare overlook. Digitization helps the business to remain competitive because it helps to enhance internal operations, which in turn leads to increased efficiency not only in the financial function, but also for the business as a whole.
Business analytics and performance management
For a business to remain relevant in the market, it is necessary to first understand how it is faring compared to what the playing ground requires of it. There are many factors that control the market and satisfying each means the business stands a great chance at competition. Business analytics offer financial managers a chance to have a picture of how the business has been faring over a period of time and what to expect if the current settings are retained.
Having information about what the market needs at a certain point and what the business is able to offer allows the management to optimize their activities to fit within the demands. Many CFOs find new technology ideal because unlike traditional methods, they are able to get real-time analytics that show how the business is performing. Most of the information that is obtained during these analytics can be used to restructure the system and come up with better plans that will guarantee performance.
With technology, CFOs can have greater visibility and insight about financials. They are able to now gain previously impossible to see insights. This does not just transform the office of the CFO alone, but cuts across all departments by ensuring there is a seamless flow of data.
Speed in information processing is a vital element when it comes to managing a business. Technology beats human capability and offers accurate information that cannot be replicated in case of human engagement. Keeping abreast with unfolding events and getting real-time statistics about the market helps the managers to plan in time about the next action.
Bringing investment costs down
By rationalizing and consolidating departments, companies are able to eliminate fragmentation in the financial system, something that will definitely improve on efficiency. With improved efficiency, running and maintenance costs that would be incurred in the absence of technology are also eliminated, thereby bringing investment costs down. New software and machines have replaced traditional equipment and processes, which would cost a lot to keep running.
Offering relevant and tailored service
Businesses are embracing news technology to keep in touch with partners, vendors, suppliers as well as third parties. Streamline processes have impacted on the relevance of the business to the market by ensuring they act accordingly to match the competition available at any given time. Amending processes to beat competition requires regular information updates and that’s what technology has been taken to offer.
Are there challenges in implementing these initiatives?
Although technology has come in as a handy tool for businesses, there are few challenges that might take some time before the system gets a complete transformation. Organizational and operating models cannot just be scrapped immediately. The transition needs to be smooth lest there will be the ripple effect, which could cost more than expected. First, before the system is introduced it is vital to educate each person about the procedures of handling the new system and its benefits as well. It takes some time to change people, so you should not expect immediate results after embracing technology.
Finance leaders also have the challenge of finding individuals who have the required skills to operate and interpret the system. They also have to identify growth opportunities as well as cost efficiencies that will bring about advantages when the system is installed. However, since supply outweighs demand, businesses are facing challenges attracting skilled interim and permanent professionals in accounting and finance. Shortage of skills in this area has forced businesses to opt for interim professionals so they can prepare the future of the finance function.