Finance teams are still spending too much time in ‘excel hell.’ Every hour spent grappling with spreadsheets, pivot tables, and pie charts are hours that could be spent helping make better business decisions. And yet, astonishingly, top finance functions are still devoting 75% of their time to data analysis, according to a recent PWC study. Eugene Hillery, Senior Director of International Operations at Tableau, offers Finance Monthly his thoughts on the issue and why it should be turned around.

Spreadsheet drudgery isn’t just frustrating and inefficient, it’s outdated. There is a huge range of intuitive, interactive and highly visual data software available – what some call ‘visual analytics’ - designed to help knowledge workers see and analyse the data that matters to them, faster.

Delivering insight from data should be the core competence of finance – not spreadsheet navigation. Yet, research from Sage shows two thirds of CFOs (64 %) are still unable to make data-driven decisions to drive business change. Here are five reasons to kick-off an analytics overhaul:

1. You Can Work (And Collaborate) From a Single Source of Truth

Conventional spreadsheets are capable of handling many tasks, but real time collaboration has never been their strongest suit.

Inconsistent version control, restricted server access and unnecessary duplication are a drag on far too many finance teams. When there are multiple sources of ‘truth’, hours of time are needed to make sure conclusions are built on accurate and up-to-date data. The longer this process takes, the less value you can claim from any time-sensitive data.

With more advanced analytics products, finance teams can bring diverse data sets together from across an entire organisation, allowing everyone to work from a single source of truth. This offers a holistic view and saves time especially when everyone, whether from AP, AR, Tax or Purchasing can collaborate on the same data in ‘real time’.

Inconsistent version control, restricted server access and unnecessary duplication are a drag on far too many finance teams.

2. You Can Get Insight Overnight

More than ever, the ability to connect to offices around the world is a business necessity. The power of a rolling international handover between knowledge workers using accurate, up-to-date data, is tremendous.

For example, if daily sales or staff performance data is be collected at the close of a business day in London, it can be turned into insight by teams in the US literally overnight. This means recommendations for action land on desks at the start of the next day in the UK, and issues can be resolved faster.

If a coherent view of your accounts means drawing information from data sources in China and the US, for example, trying to reconcile them through different spreadsheets will only bury insight. Quick answers are critical for teams operating across different time zones, as for any business that needs an accurate overview of what’s going on in a hurry.

When diverse data sources are unified in a single interactive dashboard, drilling into the numbers can be done by anyone, wherever they are.

3. You Can See Both Granular Detail and the Big Picture

Managing business expenses is a never-ending task, but it’s another area where working smarter beats working harder.

Data analytics software helps uncover the kind of hard to spot correlations that can be invaluable in finding new ways to keep costs down. Dashboards should make it easy, for example, to see which employees are in the habit of booking flights well in advance (saving the company money) and those who rack up huge bills by making last minute purchases.

A faster understanding of data outliers is also valuable in the quick response to business challenges that may exist. Instead of questioning ‘what’ is happening, conversations are led with ‘why’ it is happening. Data analytics makes it easier to uncover cost drivers and make predictions about cash flow. This equips finance teams to identify the source of a challenge faster than ever and help drive the solution.

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 4. You Can Put Your Focus on the Future

Access to an organisation’s accounting full history means the finance team is best placed to offer predictions for its future. In general, the richer and more diverse the data that underpins those forecasts, the more accurate and useful they become.

With data analytics, finance teams can use a cash flow summary dashboard to help management understand the outlook in aggregate. They can ask useful questions like “what are our balances by currency, subsidiary, country, banking partner or geography?” The ability to reveal and answer these is fundamental to supporting other financial processes like preparing for audits and SOX compliance.

Combining effective data analytics and artificial intelligence support allows teams to compile and comprehend far bigger data sets, and even help present larger, more evidence-laden projections. This level of authority is what enables finance teams to play a more strategic role in the boardroom - advising CEOs, boards and investors, not to mention staff or customers. In fact, eight in 10 CFOs in the UK (78 %) say their role has changed recently and they are focusing more time and effort on business-wide operational transformation, according to Accenture.

Access to an organisation’s accounting full history means the finance team is best placed to offer predictions for its future.

The best visual analytics software make comparisons between external data sources like economic trends, and internal sources like operational numbers or sales figures. This in turn empowers finance teams to be more efficient and intuitive, making better recommendations with longer lasting impact.

5. Investing in Your Money People

The pace and scale of digital transformation is something finance teams understand better than most. After all, they are the ones processing payments for every major IT investment a company makes.

It’s not surprising then that it is so frustrating to see finance teams often overlooked for technology investments which could in fact create efficiencies that drive business forward.

Of all business areas that stand to benefit from the ongoing revolution in data analysis, finance departments have the most to gain. Gartner research shows that the number of finance departments deploying advanced analytics will double within the next three years. Visual and AI-empowered analytics can untap the insight and creativity currently locked in finance teams across the UK – but only if they can look up from their spreadsheets and see them.

Impact on employment

More than a third of CFOs (38%) expect big data to have a significant impact within the financial sector, particularly on aspects such as job opportunities, with 36% of CFOs seeing big data as a threat to employment. Trends such as robotisation and Artificial Intelligence (AI) are also on the radar of financial directors, with 42% of CFOs expecting AI to have a major impact on employment opportunities and 30% of CFOs seeing robotisation as the biggest threat to jobs.

Marieke Saeij, CEO, Onguard commented: “I’m not surprised that CFOs expect to be completely dependent on big data within such a short timeframe. Big data can help them, as well as finance professionals within their organisations, with the execution of their work. Finance professionals have a great deal of information from both internal and external sources that is of added value for both the performance of the organisation and customer service. The more information that is available about the market and customers, the better finance professionals can advise customers. Thanks to big data, risks can be assessed more accurately and it is also possible to predict in real-time whether and when customers will start paying so as an organisation, you can properly anticipate this. This development will require finance professionals to develop new skills, such as greater analytical capacity, as a necessity.”

Over a third of CFOs see big data as a threat to employment.

About Onguard:

Over the past 25 years, Onguard has grown from a specialist in credit management software to a market leader in innovative solutions in the field of order to cash. The integrated platform ensures that all processes in the order-to-cash chain are optimally linked and that critical data can be shared. Intelligent tools which interface seamlessly combine to provide an overview and control of the payment process and help build lasting customer relationships. Users in over 50 countries worldwide work with the Onguard platform on a daily basis to achieve successful management and tangible results in Order to Cash and Credit Management.

Read more at http://onguard.com/

According to Dominic Buch, Co-Founder and Managing Partner at Caple, in order to support that growth, many CFOs will be expected to examine and recommend suitable funding solutions.

Finding an appropriate form of finance is more complex than it used to be. For most of the twentieth century, business lending was based on the value of a company’s assets such as property, stock or invoices.

To help firms access funding, finance directors have therefore developed a good understanding of how lenders would assess their company’s physical assets.

However, today, companies are more likely to be investing in intangible assets such as data, software or a strong brand than tangible ones.

This investment in intangible assets has spurred growth and innovation. But using them as collateral to borrow against remains difficult. Although value is built in intangible assets, finance is raised against tangible ones.

Without a new approach to funding, finance directors, especially in asset-light sectors such as professional services, technology or media, may struggle to find suitable funding for their business.

The growth of the intangible economy

As most finance directors would recognise, companies now build and grow through investment in intangible assets, alongside a continued focus on human capital.

We can see this from the businesses that succeed today.

Airbnb is valued at $35bn because of its network and data, not because it owns apartments. Google has become a global behemoth because of its algorithms.

These companies are valued so highly because of their intangible assets, including the skills of the people that develop them.

The same is true of many smaller but growing businesses too. Service-based businesses contribute around 80% of UK GDP and more than £160bn in annual exports.

For instance, growing financial firms, technology companies and media businesses rely on intellectual property and brand to stand out from their competitors.

But because financial standards have not kept pace with these changes, finance directors may struggle to accurately value their asset and their business.

The challenge accessing capital

Intangible assets present a challenge to traditional lending models based around recoverable security such as property or machinery.

If a company with physical assets goes out of business, a bank can recover its money by selling those assets. Lending decisions can therefore be centred around the value of the assets, rather than the performance of the business.

Intangible assets are less transferable, they cannot easily be recovered and sold to a new owner.

As a result, businesses with intangible asset bases find it more difficult to access debt finance, regardless of the strength of its operations and the associated cash flows.

When asset-light service-based businesses sector are such a vital part of the UK economy, this puts a brake on growth.

How unsecured lending can help

Traditionalists will say equity funding through venture capital or private equity is the solution. Often that holds true.

However, as finance directors will know, third party investment, does not suit every sector, firm or business owner. It also dilutes ownership.

Instead, asset-light companies can now benefit from unsecured lending, based on an understanding of the future cash flows generated by the business, rather than the value of physical assets.

Working with external advisers such as an accountant or business advisor, finance directors often play an important role in helping their business access the right funding.

Both by identifying suitable lenders and in supporting the development of the forecasts and business plans central to a credit process based on future cash flows.

When expanding businesses are important for both jobs and growth, we need to do all we can to help fund them.

We need a new approach to lending where finance directors can help their firms access the right growth funding for them.

Dealing with risk is a part of running any business, but CFOs can plan ahead to minimise any impact. When it comes to Brexit, they need to start planning for potential outcomes as soon as possible to be on the front foot. Simon Bittlestone, CEO of financial analytics firm Metapraxis, shares his tips on how to prepare for what’s to come post Brexit.

 Synonymous with uncertainty

Brexit is throwing up so many unanswered questions - will Britain stay in the customs union? Will EU workers be allowed to stay in their UK-based jobs? How will leaving the EU impact profitability? C-suite executives, especially CFOs, are responsible for paving the way for a smooth transition and mitigating any potential negative impacts on the business effectively.

To do that, they need confidence in their decisions more than ever, and this is where technology can step in. Risk-taking will always come as part of the job description for business leaders and nothing can replace the instinct of an experienced leadership team. But amongst such high levels of uncertainty, and when negotiations with Brussels take a different turn every week, technology can help instil confidence that instinct is leading to the best strategic decisions.

Brexit or no Brexit, financial planning starts with target setting.

Planning pitfalls

Brexit or no Brexit, financial planning starts with target setting. Historically, businesses identify and outline their overall goals for the year in line with the business objectives. Keeping these targets realistic is vital for success, and doing so means understanding the importance of historical data. If the board can see performance trends within the context of the market, there is a far better chance of setting achievable goals from the start. Additionally, building a better picture of the company means management teams can understand all the business nuances and can better mitigate risk from the outset.

For finance to achieve data-driven success, it needs to overcome its greatest foible: Microsoft Excel. Though it can be customised to some extent, the tool cannot accurately reflect the complexity of an organisation with scale and agility and leaves the business vulnerable to human spreadsheet errors. It’s time to take advantage of financial analytics. Political and socio-economic factors are making markets more uncertain, so CFOs need to be far more agile when it comes to financial planning. The ability to run quick ‘what-if’ scenarios and see the potential impact of them is invaluable, and it’s just not possible with Excel.

Practical and proactive

With so many uncontrollable factors in the mix, companies need to retain an element of flexibility in their business planning. It’s no longer sustainable, or indeed sensible, to run a one-off annual planning session that cannot be tweaked throughout the year, as different factors come into play. If businesses want to keep achieving their set goals, they need to identify potential future uncertainties, risks and changes now, and be able to react to them on an ongoing basis.

It’s no longer sustainable, or indeed sensible, to run a one-off annual planning session that cannot be tweaked throughout the year, as different factors come into play.

Financial analytics can map all the key performance drivers across the business and build up a comprehensive picture of the history of the organisation, including how performance is affected by certain external events. In doing so, the business can effectively undergo scenario modelling – a game-changer when it comes to the endless questions and possibilities associated with Brexit.

Modelling the different possible outcomes of hypothetical situations will allow finance teams to better understand their potential impact. This can be done for both internal structural changes and external events to give invaluable insight to inform better strategic decisions. It’s possible for all this to happen in real-time in the boardroom: saving time, money and increasing chances of success too.

In the past, management teams could afford to be more insular in their approach – there was no need for anything other than internal factors to be taken into account, and planning was entirely focussed on the business’ own financial year. Now, it’s very different. There are so many uncontrollable factors impacting the market and contributing to financial uncertainty. CFOs don’t have to resign themselves to being unable to plan for this, they just need to have the right technology in place. Financial analytics and scenario modelling will allow CFOs to implement rolling plans that can adapt to fluctuations in the market. This agility is the key to weathering the Brexit storm.

These very questions are why more leaders, and in particular, CFOs, are turning to smarter technology solutions for help, specifically ERP platforms with embedded AI. CFOs find themselves with ever-expanding job responsibilities, all the while being asked to continue leading the extremely vital finance teams, but they have the same number of hours in a day as everyone else – so something has to give.

Therefore, automating manual processes will enable CFOs to regain precious hours, dedicate time to critical decision making and apply themselves to driving a competitive business.

They need to focus on big-picture decision-making based on strategic insights, rather than simple but time-consuming tasks. Technology enables this shift: AI or chatbot assistants built into ERP applications that handle less strategic work can be a game-changer, helping CFOs focus on driving results.

CFOs are ambitious by nature, they wouldn’t be where they are if they weren’t. However, they do need to keep the finance function up and running. If the majority of their hours are spent doing this, their ambition is not able to reach its full potential. Requisitions, purchase orders and vendor invoicing are not going anywhere. But using cloud-based ERP with embedded automation empowers CFOs with intelligent financial management capabilities that can handle the routine duties that are holding back potential productivity. This frees up the CFOs to focus on innovating and proving to the CEO exactly how valuable an advisor the CFO can be.

CFOs find themselves with ever-expanding job responsibilities, all the while being asked to continue leading the extremely vital finance teams, but they have the same number of hours in a day as everyone else – so something has to give.

The time is now to invest in this technology. CFOs are part of a unique group of people within a business who have access to data from every department, from sales to HR and marketing. In light of increasingly strict regulations and compliance laws, compiling data from all business units can be difficult as teams try to ensure they comply. CFOs are therefore in the unique position where they have complete oversight of the connected data and processes in an age where businesses are driven by data. This is a very important function for a business, and CFOs should be dedicating their energy to driving strategic business decisions from this position of insight, dedicating their productive hours and decision-making to the data they have at their disposal. At the end of the day, these insights translate into valuable guidance CFOs can give the CEO to help drive the business forward.

Becoming a strategic adviser to the CEO and the board by tapping into this ambition and reducing lost productivity can manifest itself in many different ways. For example, Football Club RCD Espanyol implemented a Cloud ERP platform to automate its financial processes. Joan Fitó, Financial Director, saw his finance team become infinitely more flexible by automating repetitive tasks. Productivity went up by more than 20%, while reporting time was reduced by 50% and there are over 25% fewer errors committed by his finance team. The team can now spend time focusing on analysing Club data in real-time to become more strategic in its efforts to become a globally-recognised name in the football world.

80% of an organisation’s transactions are processed in the back-office, the home of the financial team. So, as seen at Football Club RCD Espanyol, the opportunity is there for CFOs to lead the way to digitally transform and change operations for the better, with a clear path to make the most of being data and automation driven. This will make CFOs even more central to business operations, which is why they must be ready to make this jump now. It is an ideal time to showcase their ambition in combination with intelligent process automation to handle the energy-intensive tasks and take full advantage of the opportunities presented to drive the business forward. Taking the leap and implementing an ERP Cloud with a strong automated financial functionality is exactly the way to do this. It will ultimately enhance productivity and agility, allowing the CFO to be laser-focused on making the decisions that really matter – growing a successful business.

In this new model, decision-makers not only have to make strategic choices more quickly but also need instant access to the right information to ensure those decisions are well-informed.

For CFOs, this means being able to make agile investment decisions but with so many potential ways to go - how can we gather fast, accurate insight to ensure we make the best choices? And, just as important - how can we understand where we’ve made the wrong decisions so we ‘fail fast’ and move on? Halvor W. Stokke, CFO of Confirmit, answers these questions.

Moving beyond numbers

Those outside the finance department often still believe that all that keeps us awake at night is numbers. Of course, the reality is that the finance function has evolved just as much as all other aspects of our organisations in recent years. Numbers are just our route to information - they are passive and only provide part of the story. They’re certainly not the objective of a CFO’s role. Or at least, they shouldn’t be.

To do my job properly, and to make the best decisions for the company as a whole, I need insight – just as any other business department does. And that means being able to understand the bigger picture of our organisation, taking into account external forces such as market trends and the competitive landscape, as well as the broader economy. There is also a host of internal factors to consider spanning product, service, operations, employment and customer practices.

But failing fast in decision-making and investment choices is actually about creating long-term success – by learning from the knowledge we gather at every decision point and adapting our future choices as a result.

This bigger picture which brings all of these elements together simply can’t be gained from numbers alone. It relies on a careful combination of insight gathered from across the business and presented in a way that tells us, based on clear evidence, how the investments and finance decisions we make will affect our strategic goals and our specific business KPIs.

Insight gathered at speed

But we don’t only need this holistic insight. We need it quickly and continuously. We need to be as agile – if not more so – than the market we serve and the competitors within it.

As a software organisation, we’re used to the fail-fast approach that’s long been associated with agile product development. We know that speed of delivery is often more important for success than first-time perfect delivery. Being agile in this way means we can continue to perfect our product while it’s already in the marketplace and deliver value to customers. It also means we’re much more likely to align with the changing needs of those customers.

The modern role of the CFO needs to follow exactly the same approach. Gather as much insight as we can, as accurately as we can, and then make the finance and investment decisions that we believe will have the greatest positive impact at that moment in time.

Our decisions may not always be perfect, but because we can be agile, we can make new decisions more quickly – offsetting the potential impact of previous wrong choices. We also gain the knowledge we need to pull investment more quickly when needed, rather than continuing to invest time, money and resource into a route of poor return.

Integrated data from across departments provides the additional benefit of linking cause and effect, giving department heads the evidence they need for future investment requests.

Failure is an option

Of course, no one wants to be associated with failure. It’s human nature to want our decisions to succeed, and the fundamental goal of a business’s senior leadership team is success and growth. But failing fast in decision-making and investment choices is actually about creating long-term success – by learning from the knowledge we gather at every decision point and adapting our future choices as a result.

Rather than failing fast, I call this ‘knowledgeable speed’. That’s because we’re making immediate informed, data-driven choices to maximise our chances of long-term ROI. This means the modern CFO role is now much more aligned to strategic business development than to fiscal calendars and quarterly reports. Of course, financial and accounting processes and procedures will always be adhered to, but they are part of our reporting suite and no longer an end goal in themselves.

Harnessing the best sources of insight

With such a focus on agility and speed, it may seem odd that we’d see investment in long-term, continuous Employee Experience and Customer Experience programmes as a critical component of an agile corporate strategy. But that’s exactly the approach we advise.

That’s not only because employees and customers are the most valuable asset for any organisation. It’s also due to the fact they are the most accurate barometer of market trends, providing the leadership team with a view on the pulse of a market in continual flux.

Used in the right way, the insight gathered from these two groups can be the catalyst for highly profitable organisational transformation. Not only can it help to predict changing behaviours and inform new strategic direction, but a continual, two-way dialogue with both customers and employees ensures that they are on board with change as it happens.

This is not just a ‘touchy-feely’ approach to management, but a real driver of success, since change driven by everyone is much more likely to lead to long-term results than initiatives led by an individual’s ‘vision’.

A cross-functional approach

It’s this approach to embracing wider business and market insight that sets forward-thinking leadership teams apart from the crowd. When CFOs work with other functions to understand the challenges and opportunities that exist around the business, it’s more likely that we’ll make informed investment decisions. The wider effect of this is that can simultaneously improve a range of KPIs and positively impact the bottom line.

For example, if we work more closely with CMOs, we’re able to create an accurate picture of how the customer experience we deliver impacts financial performance. Similarly, linking our work with HR heads gives us better insight into how employee engagement may be affecting sales, customer retention or service levels.  Individually, we can’t make this correlation as, naturally, the data we gather is departmentally siloed.

Aligning data and leadership culture

Integrated business data and insight can only work, however, if we have a closely aligned leadership team. Working cross-departmentally supports our holistic, ‘fail fast’ approach to decision-making because we all understand the fuller business picture and can better identify opportunities for change and growth – regardless of where initiatives begin.

What’s more, each department can prove their individual impact on KPIs, giving a greater understanding of the improvements or changes needed to enhance both departmental and overall business performance.

Integrated data from across departments provides the additional benefit of linking cause and effect, giving department heads the evidence they need for future investment requests.

A continual evolution

Of course, just like the industries in which we operate and the markets we serve, our own roles are continually evolving. While a CFO is still accountable for the financial health of an on organisation, we’re also contributors to a much wider range of decisions than we were five years ago.

Our roles will continue to change as the lines between ‘ownership’ become increasingly blurred. We’re no longer owners of the balance sheet, just as sales is no longer the owner of customers – that’s a responsibility that falls to every employee in a truly customer-centric business.

So, if as a CFO I need to drive financial success in an agile, ever-changing industry, understanding numbers is no longer enough. Understanding everything about my business is now the minimal requirement for staying ahead.

About the author:

Halvor W. Stokke joined Confirmit as CFO in 2017 and holds responsibility for the company’s financial stability and growth. In this position, he focuses on the long-term strategy for Confirmit, including both organic growth and all merger and acquisition opportunities.

Website: www.confirmit.com

A CFO, by their very nature, is better at holding the purse strings than anyone else, but they’re not always affordable. You might think you have a tight grip on your finances, but without the necessary expertise, time, and visibility, you’ll run into serious problems later on down the line.

 So, what can you do if you can’t afford a full-time CFO? Darren Upson, VP Small Business Europe at Soldo, knows the answer.

The concept of the ‘virtual CFO’ was created to answer that question: they work remotely – seldom on a full-time schedule, and effectively act as an outsourced finance head. Virtual CFOs also benefit as they can deploy their strategic experience and services to a diverse set of clients, without ever setting foot in the actual office.

It’s a service that accounting firms are actually best placed to offer. Most good ones are equipped with the skills and the experience to take on financial administration without the overhead of a full-time finance lead; in fact, we’ve found that many of Soldo’s accounting partners effectively perform this role for clients already.

If you’re running a small business, you might be wondering if you require the service of a virtual CFO. Here are some key signs to look out for.

If you’re struggling to make the right calls, or if you don’t have the information to do so, virtual CFO services can help remove some of the fog around your numbers.

You need better insights to make better decisions

Data-driven decision-making is essential – and CFOs have the expertise to make these informed choices. After all, trusting your gut is high risk and can have unfortunate consequences. At worst, you can lose serious amounts of money; at best, you’ll fail to unlock the true value of some of your decisions. It becomes all too easy to focus on what has happened rather than what could happen in future – making it equally easy to miss the corrective actions that could align performance with strategic objectives.

Transparency and insight are key to making confident, responsible, and proactive (rather than reactive) choices. Virtual CFOs are often experienced accountants and can solve this problem by giving businesses clarity around their finances: helping them make sound, rational decisions.

If you’re struggling to make the right calls, or if you don’t have the information to do so, virtual CFO services can help remove some of the fog around your numbers: delivering meaningful insights into the trends affecting your business – and the opportunities that could be available to it.

You’re struggling to budget and forecast appropriately

This is a huge issue for startups and high-growth SMEs – especially those looking for that all important next round of funding. You need to prove to your investors that you’re on strong financial ground, and that means demonstrating a strong grasp on your budget, your goals, and your forecasting.

Your small business is no doubt full of brilliant people. But it’s probably not full of people who are excellent at financial planning. A permanent CFO might not be a hire you can make right now – but through an accounting firm, a virtual CFO can provide essential longer-term forecasting and analysis.

A permanent CFO might not be a hire you can make right now – but through an accounting firm, a virtual CFO can provide essential longer-term forecasting and analysis.

You’re growing – but your processes aren’t

The bigger you get, the more complicated finances can become. At the most fundamental level, the busier your business is, the harder it is to dedicate time to managing finances. Yet a growing number of employees, agencies, vendors, clients, and other components of managing your books can make the process of getting your accounts in order exponentially more difficult. This is especially true if you’re using manual processes, or if your financial technology isn’t particularly scalable.

So, if your bookkeeper alone can’t handle it, a virtual CFO probably can. Again, as experienced accountants, they can often provide much-needed advice on investing in a technology setup that can support growth – helping you navigate periods of substantial expansion with systems that can bear the weight of your new requirements.

You’re spending, but you don’t know how you’re spending

It’s depressingly simple for expenses to spiral out of control: when employees claim more than they should, it adversely affects your finances; when they claim less than they should, it affects their morale and financial wellbeing.

 This can only be avoided with clear policies around expense management and spending, and that, in turn, requires scrutiny, control, and visibility into incomings and outgoings. Your team should feel empowered to spend when they need to – but with the right limits in place to ensure that they’re doing so within the company’s means.

This spending can sometimes spiral out of control to the point where businesses can struggle to maintain profitability without quite knowing why. If you can’t empower your employees to spend, you can actually stifle growth: when budgets are throttled, staff can’t buy what they need to maximise revenue-generating activities.

A virtual CFO can help solve these problems: advising on measures and technologies to put in place to prevent these issues – as well as creating best practices for how to spend which funds properly.

You might not be ready for a permanent CFO just yet: a small business will struggle to justify the expense. But don’t ever think you’re too small to manage your finances properly.

Machine learning and AI can have huge benefits to the financial department and could allow companies to create and tailor their models based on the data they have collated. This technology can dissect the data inputted and try to perceive the deviating patterns in this – a good example already prevalent in the financial industry is the analysis of payment behaviour in fraud detection. Machine learning is able to signal that someone is making payments from two completely different locations in a short period of time, which can indicate a fraudulent purchase. Though this is a common example of machine learning in finance, there are a huge amount of other significantly beneficial ways that AI and machine learning could be implemented – so, why are European firms not applying this as eagerly?

Well, there are a number of reasons as to why this could be the case, the most common being that there is simply a lack of know-how in this area. Accountants and finance professionals, of course, have extensive knowledge and expertise in the field of accounting standards, risk management, investment analyses and controlling, but not in the area of emerging technologies, machine learning or AI. Therefore, those in the finance department are not able to simply implement this technology and must look to external parties to help this transition – which can be timely and also a deterrent. But this is unjustified, as many CFOs could quickly master the basics of machine learning through training and not necessarily take on these roles themselves, but at least understand the technology.

Many CFOs could quickly master the basics of machine learning through training and not necessarily take on these roles themselves, but at least understand the technology.

Not only is there a lack of know-how, but there is also a lack of time for a CFO to implement this technology, or find a partner who is able to do so. A CFO’s job role usually focuses on value creation and protection, and transactional tasks too. Only once less time is spent on these is there the possibility for CFOs to focus on strategic tasks, such as implementing new technologies. CFOs tend to be extremely time-pressed individuals, until they free up time to focus on these strategic areas, or employ someone in the finance department to do so, it is likely that the option of applying these technologies will not be possible.

Infrastructure, company culture and the risk and governance surrounding implementing this technology can all have a profound effect on the possibility of companies doing so too. Not every company has the designated ICT infrastructure to store, analyse and structure data, and of course, the extra computing power and server capacity that are also required to do so. In a company where the financial department culture is not data-driven, it may be hard to convince the necessary actors of the importance of implementing data in financial practices; the management needs to support this area of focus. The risk and governance related to data issues is also a major concern for companies, whether it be related to security, GDPR or compliance, which means that many firms may be reluctant to pursue this avenue.

All these barriers that a CFO may be faced with when trying to implement data analysis and AI into their practices can, however, be overcome. Whether it is redistributing money to focus on technology in finance, employing external firms or internal actors with knowledge of the technology, or investing in software and infrastructure which can facilitate data analysis, these all are worthwhile tasks for a CFO to implement in order to benefit from this new technology.

In this pursuit to apply AI in the finance department, the CFO should continue to play an overarching role in the company, but also add advanced automation and machine learning to their list of tasks.  There is a need to have employees that excel not only at accounting and financial knowledge but also at the ability to work with new technologies, including AI. A data-driven finance department will better position itself as a strategic business partner.

In this pursuit to apply AI in the finance department, the CFO should continue to play an overarching role in the company, but also add advanced automation and machine learning to their list of tasks.

In fact, there are four concrete applications of AI that could be seen currently in the finance department. For example, these technologies have the ability to quickly evaluate potential investment opportunities, by scanning and consulting annual reports and management reports of the companies on the list of their potential investments. This can help companies to quickly understand possibilities of profit growth in these investments and allow them to come to a much quicker decision on their potential investments.

Machine learning and AI can also be implemented to analyse mass social media messages regarding the company’s practices, products or services or current prices. This will help companies gather mass opinions of them in a short space of time and give them the ability to understand how to better streamline their financial services and offerings in the future too.

This technology can also predict future business issues as well, by mapping the network and history of potential suppliers and collaborators. AI can provide a specific and sophisticated understanding of a company’s public image, which could help the company avoid aligning themselves with companies with the potential to have a negative image, and therefore save them money in the long-term by maintaining their positive brand image.

Every company looks to gain insight into the profitability of its customers, this AI technology can also help companies with predicting the potential reaction to new services and products that they are looking to offer. Therefore, companies are able to understand whether or not these will be financially worthwhile in the long-term, and whether customers will be likely to consume these.

New technologies such as AI and machine learning will have a profound impact on all business areas, including the finance department, and CFOs who look to embrace this as soon as possible will be one step ahead of their competitors. For the future of finance, it is important that the training of financial students and current employees includes a greater focus on technology - how to implement this and its impact on finance. This is something that education institutions like Vlerick Business School have adapted to, offering more and more technology-focused modules in their finance programmes and ensuring that the next generation of CFOs has a strong knowledge of both accounting & finance and technology.

Finance Monthly hears from Colin Rowland from Apptio who asks the question: “Is this a trustworthy way to manage spend that is often billions of dollars across thousands of vendors and contracts, hundreds of employees, and more?”

Since the spreadsheet was popularised in the 80s, it has become the tool of choice for CFOs managing data and tracking costs across businesses. But in today’s digital age, spreadsheets are too cumbersome, slow, complex and constantly changing, to provide truly comprehensive oversight of costs and data in business.

Nowhere is this more evident than in managing technology spend, and it is abundantly clear that the IT department needs to upgrade its approach in order to properly provide CFOs with the monetary direction necessary to make smart, informed and strategic budgeting and investment decisions.

CFOs are required to oversee budgets across the whole business, yet while sales and finance have a wealth of tools such as CRM and ERP to assist them, there has been no purpose-built system for the technology department. With Gartner predicting that by 2022 businesses will be spending more than $3.9 trillion on IT, there is a huge level of pressure on finance professionals who need to track and manage these outgoings.

CFOs are required to oversee budgets across the whole business, yet while sales and finance have a wealth of tools such as CRM and ERP to assist them, there has been no purpose-built system for the technology department.

Kickstarting the culture change

To kickstart a move away from managing spend in static spreadsheets, organisations need to implement a culture change when it comes to technology, tracking spend, and understanding value of investments. Once viewed as simply a running cost of the business, technology is now a key deliverer of business value and revenue generation. That means the way investments are tracked, managed and communicated needs to be clear, open and transparent between IT and the business in a way that was previously unnecessary.

One method some organisations are adopting is the discipline of Technology Business Management (TBM). It focuses on providing a practical framework for finance and IT leaders seeking to manage and communicate the value of technology spend. It encourages translating IT usage and cost data from a list of bills into a source of business intelligence that can drive digital innovation. This allows the CFO to make more informed decisions when it comes to IT spending.

However, legacy tools simply don’t provide the added value needed to enable the communication and discussion needed around technology costs. It’s effective for data input and manipulation, but that’s no longer enough when complex technology costs need to be given to finance leaders in a digestible manner. Where this budgeting data is stored in various spreadsheets that are all siloed from one another, it can be nearly impossible to settle upon a single source of truth for the overall figures.

Spreadsheets do not enable actionable insights and cost analysis needed in the modern technology landscape for several reasons: they’re clunky, they’re rigid, and they’re slow.

Managing technology costs using… technology

This is where custom tools come in. They can provide additional capabilities and processes that enable businesses to not only accurately track their IT costs, but analyse them quickly and effectively, providing insights which are intelligible for those not well-versed in technology. And the more advanced technology solutions will be able to leverage machine learning to make this automated and free up employee time and resources for more value-additive work.

IT and finance leaders can then work together to drive forward business strategy based upon this knowledge. Spreadsheets do not enable actionable insights and cost analysis needed in the modern technology landscape for several reasons: they’re clunky, they’re rigid, and they’re slow.

Take the complex nature of public cloud spend, for example. A pay-as-you-go costing structure generates masses of data in by-the-minute billings that need to be tracked; meaning there is no guaranteed regular monthly spend to budget against. Even the most finely-tuned spreadsheet would struggle to track the thousands of lines on a cloud bill from separate business units, especially when many businesses are now embracing cloud services from multiple vendors.

The agility that disciplines such as multi-cloud bring also means that businesses must be prepared to adapt their cloud strategy quickly to suit their needs. Approaches that work now may be obsolete in three months’ time, and it is necessary to have a solid framework and the right tools to allow such changes to progress smoothly. For example, using Apptio’s TBM solutions, Unilever was able to move away from legacy infrastructure to cloud and increase the company’s digital innovation budget by more than 20% to provide consumers with an ‘intelligent’ buying experience online and in-store.

When it comes to technology, using spreadsheets to track and manage spend is holding businesses back.

Another complicating factor is the staffing cost associated with manning spreadsheets. Consolidating various spreadsheets to get a transparent view of IT spend can be a painstaking task, taking many hours and potentially resulting in human error. Custom tools can work to streamline and speed up these processes, while ensuring that errors do not occur. This allows IT teams to spend their time more effectively elsewhere, improving the overall efficiency of the department.

When it comes to technology, using spreadsheets to track and manage spend is holding businesses back. While custom tools may necessitate an upfront investment, they are undoubtedly worthwhile as a flexible long-term solution, providing agility, speed and clarity where spreadsheets cannot. By using such tools in conjunction with the principles of TBM, CFOs and the IT department can move away from spreadsheets and work towards a partnership in which insights into technology spend form a key part of the business’s ongoing strategy.

The answer is that they are so much more. In a study released today, Dun & Bradstreet revealed data that uncovers the changing role finance leaders play in stewarding their organisation’s customer experience, a mandate traditionally viewed as one of the chief marketing officer. Because positive business results are often fuelled by great customer experiences, chief financial officers are increasingly using data and analytics to become customer-obsessed to ensure their organisation’s customer strategy is rooted in insights that will drive favourable outcomes.

The Customer-Obsessed Finance Leader, a study commissioned by Dun & Bradstreet and conducted by Forrester Consulting, found:

• 36% of company finance executives surveyed were identified as customer-obsessed Leaders, making customer-focused initiatives a top priority this year and reporting increases in customer acquisition, retention, and satisfaction.
• Customer-obsessed finance Leaders reported year-over-year increases in revenue, profitability, and cash-flow at a rate of 10 to 30%age points greater than their less advanced peers.
• Data and insights-driven companies are 39% more likely to report year-over-year revenue growth of 15% or more.
• 79% of customer-obsessed Leaders indicated that their organisation will likely increase spending on technology applications to support customer engagement.
• Implementation of a customer-obsessed strategy requires mastery of seven data competencies that must be aligned across people, processes, and technologies.

CFOs, with their leadership position, cross-organisational perspective, and ability to understand complex sets of data, are uniquely positioned to implement insights-driven behaviours and processes within their organisations. Investing in the right tools and technology, as well as augmenting internal data with third-party data and analytics are some of the key actions leading finance executives are taking.

Challenges to becoming truly customer-obsessed persist; disconnected strategies within the organisation, disparate data, inconsistent metrics, and a lack of investment in technology are among respondents’ most cited obstacles.

The study further outlines seven critical data competencies to master, qualities and resulting metrics that set customer-obsessed finance leaders and followers apart, and how-to strategies to focus efforts around using data and analytics to become a customer-obsessed organisation.

The survey, fielded within North America, Europe, and Asia Pacific in February 2017, included feedback from 250 finance executives (CFOs or EVPs of finance) from companies in multiple industries generating $150 million or more in revenue.

(Source: Dun & Bradstreet)

Executives from finance, marketing, sales, logistics, and other departments and business lines play an increasingly central role in the evaluation, purchase and use of technology solutions, according to a new report released by CompTIA, the world's leading technology association.

"CIOs and information technology (IT) teams remain involved in the process, as their expertise and experience are valued," said Carolyn April, senior director, industry analysis, CompTIA. "But business lines are clearly flexing their muscles. It's another strong signal that technology has shifted from a supporting function for business to a strategic asset."

Among the 675 US businesses surveyed for the CompTIA report "Considering the New IT Buyer", 45% said that ideas about technology come from different areas of the organization; and 36% said more executives are involved in the decision making. More than half of respondents (52%) used business unit budget to pay for technology purchases in the last year.

Lines of business are also staffing their departments with technology-oriented job roles, from data scientists and business analysts to software developers and social media managers. Executives cite the need for specialized skills, faster response times and better collaboration as some of the reasons why they are staffing up on technology-oriented job roles.

"This isn't a case of rogue IT running rampant or CIOs and their teams becoming obsolete," April said. "Rather, it signals that a tech-savvier workforce is populating business units and job roles."

In the CompTIA study, 21% of chief financial officers said they have dedicated technology roles in their department, including data scientists, business analysts and software developers. More than half have created hybrid positions that are partly technical- and partly business-focused.

Technical job roles in marketing department are also on the rise. Social media managers and digital marketing managers are the most often mentioned positions. Systems administrators, data analysts, web analytics specialists, marketing technologists, and database administrators also made the list.

Within logistics and sales teams, the most common tech-related job roles include project management specialists, data analysts and database administrators.

Much of what business lines are buying today are cloud-based software solutions, which can be self-provisioned quickly within a department. For that reason, technology vendors, distributors and channel partners need to package what they sell differently.

"They need to speak the language of business because this new generation of buyers doesn't want to hear about the technical implications of their purchases," April explained. "Channel partners need to position themselves as consultants and service providers who can help customers make informed decisions about what they buy."

(Source: CompTIA)

An independent study commissioned by Dun & Bradstreet has shone a light on the complexities of the modern Financial Leader role – highlighting a community under intense pressure to balance traditional accounting tasks with more strategic revenue-generating activities.

Of the 200 UK Financial Leaders surveyed, almost three-quarters (71%) believe finance teams are under too much pressure to be business protector and growth driver and 56% believe their board has unrealistic expectations.

Exploring the evolving nature of their role, almost all (97%) financial leaders surveyed say their responsibilities have changed over the last three years. Most pointed to a growing emphasis on strategic responsibility, with 59% revealing their job now includes more risk and compliance responsibilities.

Dun & Bradstreet’s Tim Vine, head of Trade Credit for UK & Ireland, explains, “The role of the financial decision maker has transformed over the last few years and, while many (74%) financial leaders feel this has been a positive shift overall, it’s still a major challenge. Suddenly, teams who have reduced in size now have to manage a complex dual role – business gatekeeper and revenue creator.”

Yet despite their expanding role, 60% of respondents say their team has decreased in size over the last three years. As a result, 53% admit reduced resources increase the risk of serious mistakes being made. Almost two-thirds of respondents (59%) suggest their organisation sometimes rushes through the compliance process to support revenue-generating activity and 55% reveal they feel uncomfortable with the extent to which their business sometimes gambles on risk management.

To meet the expectations of their businesses and fulfil their roles effectively, the majority of respondents (45%) believe data is “extremely important” to make smart decisions and forecasts. The biggest data benefit cited by 43%: helping collate customer intelligence. However, 57% of financial leaders admit their business lacks the ability to access accurate and current data. The biggest barriers respondents see are: a lack of skills (23%), lack of investment in technology (21%) and inaccurate data (20%). As a result, almost two-thirds (65%) admit it’s difficult to find and capitalise on strategic opportunities.

“The UK’s financial leaders know how powerful data analysis and smart use of technology can be in helping them meet business expectations in their new joint role as business guardian and revenue driver,” continues Vine. “Despite the challenges they clearly face, these two roles are not opposites. Protection and growth can go hand-in-hand, but only when they are underpinned and supported by the resource, tools and data to allow for smarter decisions that will grow the business. If financial leaders are to fulfil this duel objective, they must gain support for the data and analytical capabilities needed to empower their insight.”

(Source: Dun & Bradstreet)