Business leaders of today find themselves in an environment where the world continues to change faster than ever — a state we’ve all been experiencing for years. Now, nearly two years after the mother of all changes, macroeconomic forces continue to impact our everyday lives at work and at home. Staying ahead of change is more important than ever.
The chip shortage is closing factories, reducing supply, and increasing prices of everything from Teslas to televisions. Shortages have pushed the price of building materials up by more than 30% so far this year. Worker migration and uncertainty have driven home prices to record levels. Global freight shipping prices have risen more than 350% in just the past year. These and other economic challenges pushed inflation rates to their highest levels in more than a decade.
In the realm of finance, CFOs are facing the reality that preparing for the future looks very different. It’s up to the CFO to drive decision velocity in order to keep pace. By creating data-driven, finance-forward cultures, companies are able to accelerate internal collaboration and align to modern technology to accomplish this. The timing to prioritize this approach is now, and here are three things leaders should keep in mind.
1. Begin digital transformation by defining a “future state” vision for your organization
Many companies go about digital transformation by considering their current pain points and looking for technologies that can solve them. Instead, I would advise beginning with the future. Where do you want to be in 10 years? What will the Office of the CFO look like in the future, if your company has multiple subsidiaries, various entities to report on, a much larger workforce and other changes? These are the types of questions that will better serve your business. Digitally transform your enterprise — especially financial planning and analysis — with the future in mind, not the present.
It's also important to build out a vision for the future of how your organization operates. Meet with your teams and develop a vision state where you align your values and together create a plan for where the business is going in the next decade. What are the goals you’re looking to achieve within that decade and how will you work together to get there?
You can take the steps to envision your future state now and likely realize it faster than you thought.
2. Adopt world-class technologies to course-correct faster and more often
It’s important to recognize there are better ways of conducting technology implementation these days, thanks to best-of-breed solutions. With best-of-breed solutions, there will always be specialized functionality and more opportunity for real-time innovation because they are laser-focused on solving the specific problem of the end user and doing it quickly.
Take artificial intelligence and machine learning (AI/ML) in finance for example. The application of AI to technology used in the Office of the CFO will become increasingly important over the next five years and into the future. AI already enables companies to improve their planning and decision-making by identifying prediction signals that can massively improve forecast accuracy or quickly spot anomalies in plans.
AI and ML are already saving finance professionals thousands of hours of manual effort each year, and it doesn’t take a data scientist to use these programs. Given recent reports showing a shortage of 250,000 data scientists in 2020, immediate and easy-to-use technology solutions are necessary. This is where built for purpose, native AI/ML applications for finance will prove their true utility and value. For example, Planful Predict, a portfolio of solutions we launched last year, aims to give finance teams who are not trained data scientists those specialized, user-friendly technology solutions built not only for what they need today, but what they will need tomorrow and beyond.
3. Throw away the notion that adopting new software is slow and costly
If you are a CFO with bad memories of the long, costly implementations of new software, it’s time to let those go. Modern, cloud-based systems can be implemented quickly, securely, with agility and minimal IT involvement. It’s easier than ever for a company to have a single source of truth for their financial and operational data, and to accelerate the end-to-end financial planning and analysis, consolidation, and accounting close processes.
We are now in the golden age of the CFO. The Office of the CFO has quickly evolved, thanks to the rapid advancements in technology and modernization in the workplace. Those who have already accelerated the digital transformation of their financial data and moved to a cloud-based, automated, dynamic planning technology will be the early winners.
CFOs can now plan continuously and in an agile way, but leveraging a cloud-based planning technology offers transparency that stops costly mistakes before they become a company crisis. These efforts from the Office of the CFO will not only help businesses generate more revenue, but will also help meet the needs of the end-user.
One of our customers, a Vice President of Finance at a major global clothing manufacturer, recently said about our platform:
It’s a lot more thorough than a human performing a manual process. I hate making mistakes and things are just going to slip when you’re dealing with data from multiple years and departments. Having them flagged really improves the accuracy.
The opportunity to make mistakes is only growing, as data proliferates throughout the business world and some finance professionals cling to siloed systems. If you’re one of those people holding on to antiquated systems and processes, why wait? Adopt a finance-forward culture. The time to accelerate the implementation of modern technology, and to give your team the ability to spend more time on meaningful tasks, is now.