CFOs are looking to invest in technology
In the last 12 months, CFOs, particularly in the UK, have tightened the purse strings due to political and economic uncertainty. As we move into 2020 we expect, or at least hope, that we will have more clarity. With this comes spending – CFOs will look to spend funds they have been holding back over the previous year and will look to invest in areas that will help their company thrive and grow. This likely means investment into innovative technologies.
The subscription economy will drive the merger of CX and FS
We are seeing organisations fundamentally change how they charge for services. Rolls Royce customers can pay for aircraft engines per flying hour, for example. In the business-to-consumer world we are used to this subscription business model, with the likes of Netflix, Spotify and Amazon dominating markets. However, as we enter 2020 more and more B2B organisations will be adopting similar models. This means that companies will need to implement back office solutions to support this organisational change.
This will likely lead to the customer experience and financial proposition becoming combined – enabling one to inform the other. The success of a subscription model relies on tailoring the service to the uniqueness of the customer, and businesses will, therefore, need to link data on the customer with their financial history.
Data will become a gold mine to scrutinise investment opportunities
With more data at their fingertips than ever before, CFOs will look to scrutinise any potential spend in greater strategic detail. We expect finance teams to use predictive analytics to help them generate greater insight into potential investments. They may also use this technology to measure the performance of their assets and to earmark when investment may be necessary.
For example, IoT technology can be used to gather data on machinery used by a manufacturer. By analysing the data captured, they can better predict when maintenance should be scheduled or new equipment ordered.
The finance team, as a whole, has more access to a broader range of data than any other department. This means that the modern CFO is in a unique position. The finance leaders who make the best use of this data will be the most successful in coming years, and will be the most likely to become a co-pilot to the CEO, playing a vital part in strategic decision-making.
CFOs react to the global tax headache
Across the globe, companies are coming under increased scrutiny for the amount of tax they pay, or do not pay, within each territory where they operate. A major headache faced by CFOs, therefore, is how to deal with the issue of tax in an increasingly joined-up and online global economy. How far can legislators go to force tax to be paid where revenue is generated, versus where costs arise?
For this very reason, more and more businesses will be turning towards cloud-based back office solutions to manage their tax affairs. These enable them to respond more rapidly and to be more transparent on transactional movements – they can link tax affairs to source information, and can more rapidly update their systems and processes to comply with changes in legislation.
The rise of strategic business partnering
Business partnering is the development of successful, long-term, strategic relationships between different business functions and their internal customers. It has been a term that has been around for a long time in the finance world, but, for finance it has often stopped at the point of providing information and deriving insight.
However, as the CFO uses data and predictive analytics to become a key strategic advisor to the board, the role of their team will also change. This means those operating in a finance function will be increasingly using technology like automation, machine learning and predictive analytics. This will free them from mundane tasks, such as data entry and reconciliation, to enable them to bring more strategic value to the business. The business partner conversation with their internal customer will start from a position of a single version of data, rather than a debate about the source of quality of data. They will be free to identify options for improvement and make recommendations – thereby influencing business decisions and, ultimately, impacting business performance.
By Nick Jackson’s, Director of Finance & Performance Innovation at Oracle