CFOs – what to look for in technology to drive your agile business
2020 – Time to Turn On to Tech
Much has already been written about the biggest challenges facing CFOs in 2020, but what about the biggest opportunities? Where do they lie? And how can they be exploited?
Certainly, those at the top of the finance ladder have a lot on their plates right now. There may be a greater sense of optimism than at this time in 2018 – given things have settled down on the UK political front, but CFOs remain faced with a wider remit than ever, ongoing geo-political shifts, increasing investor scrutiny and pressure to support growth, whilst reducing costs.
We know that cost reduction comes pretty high up the to-do list for today's CFO. According to recent figures from Deloitte, 89 per cent of CFOs have cost reduction as a priority.
But this is balanced against a growing demand for finance functions to continue broadening their ‘business-partnering’ responsibilities. They are expected to provide real-time insights that can help business units with strategic decision making and enable companies to be ultra-transparent, in an age of increasing accountability.
Thankfully, technology continues to evolve, which can help to identify where costs can be saved, whilst generating rich, easy access data for businesses to use to their advantage. Coupled with advancements that free up resource and reduce error, through automation, this tech can enable CFOs to nurture the type of agile, efficient and insightful businesses needed to thrive in this new decade.
At Barcanet, we're really excited about the opportunities these innovations can bring, but we know from experience that businesses, and particularly their CFOs, remain wary about committing spend to new technology. Knowing how and where to invest is vital. Here are three of the key areas I believe are worth exploring now:
Advanced Data Analytics
In recent years, a new type of business analytics software and service has surfaced. Platforms that readily digest huge amounts of data, across different sources, in multiple formats - centralising and ‘normalising’ data.
They contain powerful analytics tools, allowing users to configure reports relevant to their roles. Most extend to visualising the insight in simple dashboards. Some embed workflow processes and collaboration tools enabling users and decision makers to make quick, simple and effective data-driven decisions.
Yes, ‘data is the new oil’ and analysis has been shown to increase revenues up to 8% and reduce costs of business by 10%, (https://bi-survey.com/big-data-benefits). Without a process and platform for collecting, managing and interpreting data, businesses cannot take advantage of the insights on offer. But above all, knowing the challenge(s) you want to address from the outset, is critical to getting the value out of the data that you want and need.
You don’t need wildly expensive ERP systems and armies of internal data analysts to tap into this value, though. Technology and services businesses can do the work for you, providing the means to gather all financial, operational, sales and other information from disparate sources, then analyse the data and present it back in simple visual formats which are easy to interpret and understand.
From a cost perspective, data analytics can give budget holders and procurement professionals complete but simple visibility of who, why and on what money is being spent, making it easy to identify where significant savings and efficiencies can be made and where opportunities are being lost. And working in conjunction with Artificial Intelligence, data analytics have even greater potential to transform a business.
Artificial Intelligence (AI)
The term AI is already over-used and abused. I explain it as the ability of a machine to learn and adapt without any human intervention. So, in the data world, we have machines providing the means to mine huge amounts of data, learn what story this data tells and unearth all important insights that humans simply don’t have the capacity to do. And as the machine learns, it can make predictions for the future based on past performance and a range of influences you want to apply.
Using statistical and machine learning algorithms, AI can pool historic data from across datasets and help to identify trends and outcomes. To a CFO, the cost savings potential is enormous, with AI facilitating everything from predicting how customers will react to a pricing change, to identifying client payment behaviour, highlighting supply chain inefficiencies and managing money laundering risk.
AI, and its partner in robotic process automation, can also play a part in removing the tedium and resource strain associated with extracting, collating and manipulating information from ERP systems, sales data, shipping documents, invoices and so forth – by doing in seconds what might take hours for a whole team of people. This can free up valuable, and often costly, talent to focus their expertise elsewhere.
We're likely to see natural language generation coming to the fore in 2020. A type of AI technology, natural language has enormous scope to support finance departments and limit the resource cost of producing reports and turning data into meaningful, digestible business intelligence.
Siri, Alexa, Cortana, Hey Google are all natural language applications – they understand what you are saying or typing and provide a response (don’t underestimate what needs to happen in the back-end, these companies are spending £bn’s on developing their solutions). Applying this capability to your data, tailored to a broad range of audiences, is making data understandable and accessible in a way that it's never been before.
Imagine asking Cortana to show you a live report of sales across your operation, or how much you spent with IT contractors in the last quarter and receiving an instant report. Well the technology already exists to realise this. It is drastically reducing the amount of time spent by finance departments on producing reports, not only generating cost savings, but enabling the organisation to be more agile and make better, quicker, simpler decisions…live.
Powered by technology the modern CFO has a wealth of tools at their fingertips to help them reduce costs, whilst placing them at the heart of the business decision-making process. The key is knowing where to start with your investment. At Barcanet, we advise a targeted, phased approach – start focussed and scale-up, to minimise disruption. Take a look at some of our products. Getting expert advice on how to leverage technology to your company's greatest advantage is essential.
Ian Yates – Director, Barcanet
To talk to us about any of the information in this blog, please contact firstname.lastname@example.org. We’d love to hear from you.