Workday’s recent CFO-CIO Indicator Study found that 54 per cent of CFOs say their ERP systems aren’t flexible enough to meet the demands of today’s business environment.istock.com
No longer just tracking value, today’s chief financial officer (CFO) needs to drive value through their tech-savviness, to help simplify day-to-day operations and shepherd their company through supply chain issues, inflation, increasing global demand and volatile market conditions.
The role of the CFO is now forward-thinking, in particular due to the introduction of technology and more reliance on non-financial data to inform business decisions. CFOs are being pushed to deliver value in unexpected ways, with emphasis on agility and flexibility.
“Recent surveys show us that – as we continue to move beyond the pandemic – the role of the CFO continues to expand in strategic areas such as investor relations, M&A (mergers and acquisitions), divestitures, and enterprise transformation,” said Barbara Larson, CFO at Workday, a leading cloud-based enterprise company whose clients include 50 per cent of the Fortune 500. “Layer ESG [environmental, social, governance] on top of that, and the role of the CFO has become very demanding.”
Sometimes it’s the technology itself that can hold financial teams back, not to mention other parts of the business, if their digital systems are outdated and rigid. It has become critical for businesses to have enterprise resource planning (ERP) systems that are adaptable and capable of running business operations both, in-house and remotely.
However, many haven’t made the necessary jump.
Workday’s recent CFO-CIO Indicator Study, which surveyed 1,060 senior finance and IT leaders about the state of digital finance transformation and its impact on these sectors, found that 54 per cent of CFOs say their ERP systems aren’t flexible enough to meet the demands of today’s business environment. Yet, while more than half (53 per cent) say they know these systems need to be changed, they don’t believe their teams have the time.
Part of the problem is that, while CFOs have common objectives with chief information officers (CIOs), they often speak different languages. When asked about the top barriers to digital finance transformation, CFOs cite a lack of financial literacy skills in IT. Ask the CIOs, and they say it’s a lack of technology and data skills within finance.
With legacy ERP, data is kept siloed in rigid systems, and employees aren’t empowered to drive change. Outdated technology doesn’t just complicate workflows for employees at your organization; it can also have a significant impact on hiring and retaining new talent, which is already a challenge for today’s CFOs.
“If you aren’t giving your employees access to modern technologies that enable them to do their jobs more efficiently and effectively, freeing them up to focus on solving important business challenges, then they may begin to look for those tools elsewhere,” explained Ms. Larson.
“What that means in practice is that CFOs need to deploy user-friendly technology that provides their finance teams with intuitive, app-like interfaces that can reduce the complexity of the financial reporting process, as well as automating manual, routine tasks.”
Automation also frees up employees to do other, more critical work, says Charlie Steel, CFO at Babylon, an online healthcare provider.
“Automation is a great enabler to scale, and it’s great from a compliance perspective because computers don’t make mistakes in repetitive tasks,” said Mr. Steel, who participated in the study. “It also massively increases employee retention and satisfaction because, unsurprisingly, humans don’t like doing repetitive, boring tasks.”
Workday’s cloud-based platform provides users with access to all the planning, human capital and financial resources in one system, which means better communication, collaboration and ease of use. Managing budget, staffing, and even project billing can all be done through Workday’s Professional Services Automation software. By taking those low value tasks off the to-do lists of high value employees, it allows them to spend their time tackling more challenging and useful projects, which is good for the business and the employees.
Despite the clear advantages, 57 per cent of CFOs in the Workday study say they don’t have the technology that next-generation finance talent expects them to have, which will cost organizations in the long run.
And for today’s CFO, it’s not only critical to have the right team, but also to have the right data. Without up-to-date, accurate and secure information it can be difficult for financial teams to navigate the current environment, despite them being at the centre of their organizations’ change management strategies, explained Ms. Larson.
“CFOs today are required to provide more than just financial insights,” she said. “They’re required to provide insights that can drive operational change and guide business strategy, and ultimately provide long-term value to stakeholders.”
Right now, half of the CFOs respondents say they are making financial decisions based on their “gut instinct”, which could pose a serious risk in today’s market, because they don’t have access to the right data when they need it. More than half (53 per cent) say that even when they have data, it’s outdated or limited, which means they can’t make accurate forecasts.
When used effectively, data can give companies an edge in the market and insight into their customers and workforce. Enterprise management clouds like Workday that collect all data under one virtual roof are vital for ensuring there’s an easily accessible single source of truth that CFOs and other decision makers can use to develop strategy with a competitive advantage.
The future of business is all about agility, and organizations of any size feeling capable of navigating anything that’s thrown at them. “And to do that, you have to cultivate a finance team that is willing to reimagine everything, every day,” said Larson.
“Most importantly,” Larson added, “we need to provide our teams with the tools and technology that enable them to be agile.”
For more information on how to go beyond the boundaries of legacy ERP, visit Workday.
Advertising feature produced by Globe Content Studio with Workday. The Globe’s editorial department was not involved.