With digital transformation impacting businesses of all sizes, CFOs are being urged to embrace technology in the finance function or risk being left behind, in a new report from ACCA (the Association of Chartered Certified Accountants).
The report, titled “Race for Relevance: Technology opportunities for the finance function”, looks at the key technologies impacting finance and how they can be leveraged to support an organisation’s wider goals.
Maggie McGhee, Director of Professional Insights at ACCA, said that CFOs should realise “with these technologies it is often better to fail fast and be able to move on, rather than to not try at all.”
Digital disruption is transforming the role of the CFO, and the report warned that CFOs who failed to harness the opportunities created by technology may be “removed from the strategic decision-making process and marginalised at the leadership table.”
McGhee urged forward-thinking CFOs to “develop a roadmap that enables them to recognise the short-term benefits and the longer-term gains.”
The report outlined the following steps to infuse businesses with digital transformation.
Build the business case for incorporating technology
First, the report urged consideration of how technology can support a business’ ambitions and identify the business case for adopting new technology.
According to the 50 finance and industry experts surveyed, 70% agreed that using technology in the finance function can improve productivity. However, before taking the plunge it is imperative to robustly assess the options available and make an informed choice as to which tools and solutions will best suit the business.
ACCA has encouraged CFOs to appreciate the value of data and explore how data analytics can be used to provide timely insights and allow companies to be reactive and proactive.
The report described the three-stage journey most companies go through with analytics; from extracting data from core accounting and operational systems to using cloud-based software, which allows individuals to access and visualise data remotely and immediately.
Organisational impact and people training
Before technologies are implemented in a business, it is necessary to understand and manage the organisational impact they will have, and it is crucial to equip individuals with the skills needed to use technology.
Digital transformation may seem daunting to those who feel vulnerable to the effects of technological change. However, the report explained that “technology on its own is never the answer to any question. It is always the enabler.”
Technology will always need individuals to oversee, exercise judgement and provide insight, which is why the report has emphasised the importance of investing in people to develop the skills needed to thrive in the digital age.
In the final part of the strategy, CFOs should assess the impact of technology on governance and risk management and ensure that any risks created by the introduction of technology have been properly monitored and controlled.
The process of incorporating financial technology will often consist of a partnership between the IT teams and the finance function.
While embracing the digital revolution may require adjusting mindsets, ACCA has urged CFOs to recognise the importance of understanding emerging technologies and how they can be harnessed to improve finance operations.
James Noonan, vice president finance, CRH Plc, commented: “Companies that embrace emerging technologies will be better positioned to gain competitive advantage, providing more opportunities to acquire, consolidate and become a larger player.”
To those who resist the change, Gerry Penfold, former partner, technology risk, KPMG in the UK warned: “Clinging to the things that have made them successful while disregarding how things are changing around them is one of the biggest risks for a CFO.”