CFOs know they need to apply technology in new ways. Some are starting to speak publicly about what that looks like.
We all know what “analog” means — working with paper, or cameras that use film, or phones that plug into the wall. Defining “digital” – especially as it pertains to the finance department – can be a little trickier.
In ‘What Makes A CFO Great,’ CGMA Magazine published research that showed 58% of a group of CFOs surveyed said they need to better understand digital technologies and data analytics. In this case, the research specifically called out things like Blockchain, a sort of distributed electronic ledger system, and robotic technologies that automate some of the more manual things we do today.
Those kind of bleeding edge, next-generation technologies may not be the biggest priority, however. Dataquest suggested CFOs simply have to look at their business imperatives and ensure they’re investing in things that will improve operations today in ‘What Does A Modern Finance Organization Look Like.’ To do otherwise, the post argued, might almost be considered a dereliction of duty.
“CFOs who continue to allocate their company’s capital to tangible assets while utilizing previous generations of technology in a supporting capacity are putting their company’s management and shareholders at serious risk,” the post said. “The result is the generation of lower levels of performance and enterprise value, while their digitally and big-data-savvy counterparts are spending their organizations’ resources on building and mining intangible assets powered by today’s technologies.”
Maybe a more specific example would help. Forbes recently sat down with several different CFOs to discuss what “digital” means to them and their organizations. One of the best comments came from Honeywell’s Tom Szlosek, who reflected on some of the opportunities (and problems) brought on through some 90 acquisitions over the past 15 years:
Today, we have over 150 different ERP platforms in Honeywell, which can prove to be challenging in terms of being able to aggregate data and see it in a transparent way. In response, the Finance function had taken the lead to drive better analytics and have built a plan to reduce the number of platforms from its current state to roughly 15 in the next five years. We are partnering with IT and other functions to drive standardization of the analytics tools and techniques across Honeywell, which we think is going to serve us very well into the future.
CFOs, in other words, need to identify where digital technologies can bring consistency, efficiency, and other forms of increased value where the finance department needs it. It’s not so much a question of what digital is, but what digital can do.