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The Rise of the Modern CFO: A Leader for the Information Age

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Adam Zoucha, Managing Director, FloQast EMEA

 

Financial management is one of the oldest professions in the world, and for most of that history, it was essentially applied mathematics – number-wizards keeping track of the financial figures and making sure everything tallied up when it was supposed to. However, ever since digital technology made its way out of the world’s laboratories and into its offices, the role of finance teams has been steadily changing.

Number crunching remains the foundation of accounting in the 21st Century, but for senior finance managers and CFOs in particular, job responsibilities — and expectations from within the organization — don’t stop there.

 

Commercial Leadership

As digital technology automates manual processes, CFOs have been freed up to focus on delivering more analytical information and insights. The business landscape is continuing to shift quickly and agile companies need to make strategic decisions that are informed by real financial data to pivot and survive. That means the modern CFO needs to be able to provide commercial leadership, feeding into business development and growth plans from a foundation of rock-solid financial data.

This is a major opportunity for added value. Although most CFOs have years of experience making tough financial decisions after analysing data, few have been working closely with the operational side of the business. Senior leaders across all industries are asking their finance teams to enable truly intelligent, up-to-the-minute decisions – so what skills do they need to make the most of that opportunity?

 

Adam Zoucha

Combining Strategic Leadership with Technological Improvements

Financial leaders are adept at aligning tech smarts with financial know-how however, having the know-how without the tools is counterproductive. To deliver on the promise of data-driven strategic leadership we need to pair this combination with the right technology for optimal results.

As accounting software becomes more sophisticated, automation is being used to eliminate repetitive tasks. This means financial controllers are able to assume responsibilities that were once the domain of the CFO and the CFO can focus on strategic initiatives that drive the business forward, while their teams are unburdened from having to perform highly-manual, time-intensive assignments.

But it’s not enough for CFOs to simply plug in the new, shiny tech, hand the keys to the controller, and wait for the actionable insights to roll in. They need to have an intimate understanding of the systems their teams are using, so they can ensure they’re actually aiding productivity and bringing results. Not all software is created equal, but good automation should reduce stress and friction.

CFOs need to be able to identify tech that’s made by accountants for accountants – not just built by software engineers with no on-the-ground experience. Is it making it easier for teams to organise their workflows? Is it giving them greater visibility into progress and outstanding tasks? Is it helping them standardise paperwork and reduce time spent chasing lost receipts? Or is it simply adding steps to a process that was already burdening staff quite enough, thank you?

A crucial part of financial leadership in 2022 is the ability to ask and answer these questions and to support your team in building a technological foundation for accounting excellence.

 

Reframing Financial Knowledge in an Actionable, Operational Way

Once that foundation is in place, CFOs need strong communication and analytical skills to translate financial data into real-world strategies, collaborating effectively with the CEO, sales and marketing, and other departments.

Put simply, it’s not enough to know how cashflow looked at month-end without broader contextual data about annual and five-year trends, the state of the market, unusual costs or income, and extenuating circumstances (like a global pandemic).

If the company excels in any given month, is that cause for bullish investment? Or a blip to be passed over? If the figures are beginning to sink, is it time to break out the oars, or is the ship likely to right itself in time? These are the kinds of questions CEOs are asking, and if the CFO is to provide confident answers, clean, on-time data is essential.

This brings us back to the question above: Is the technology their team is using designed by accountants who understand the challenges finance teams face? Does it provide the insights they need to answer high-level questions? Does it provide CFOs with the tools they need to cut through the noise and see the underlying story? If they’re to deliver strategic value, those tools are essential.

Finance teams are facing a huge amount of pressure in a fast-changing market, and many accountants are leaving the profession as a result. But with the right combination of intelligent automation, deep visibility, and genuinely people-centric collaboration tools, those stress levels can be brought down – and the CFO can be empowered to confidently advise their C-suite colleagues on overall business strategy.

Business

How can businesses boost employee experience for finance professionals?

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By Martin Schirmer, President, Enterprise Service Management, IFS

Over the course of the last year, The Great Resignation has seriously impacted organisations across the globe. Staff are quitting in huge numbers, leaving companies unprepared and struggling to fulfil their workloads. In fact, mass departures are happening at all levels of the labour market, as employees attempt to adapt to the hybrid working model and growing socio-economic uncertainty.

In light of this, optimising the employee experience (EX) to attract and retain talent has become a top priority for employers. Organisations have come to understand the necessity of taking immediate steps to drive employee engagement and reshape workplace culture.

The financial services (FS) industry is no exception to this trend. From increasing employee burnout to growing career dissatisfaction, the pandemic has exacerbated the need for transformation across finance teams. This is exemplified by recent data from Spendesk, which found that approximately 40% of finance professionals are willing to leave their roles or already have concrete plans to do so.

Organisations looking to get ahead of the competition must put in extra efforts to retain their existing workforce. The fact is that employee expectations and requirements have irreversibly changed, with more workforces becoming increasingly distributed. Today’s hyper-connected workforce values flexibility and simplicity, and it is organisations which offer these experiences that will succeed in the long term.

As part of this process, finance companies must look towards the power of technology to create seamless user experiences across devices. From automating workflows to improving overall efficiencies, Enterprise Service Management (ESM) can help organisations to boost user satisfaction and go that extra mile for their employees.

How poor EXs are driving finance teams to quit

With over 40% of employees spending a significant proportion of their time carrying out mundane, manual tasks, it is not surprising that poor EXs are having a detrimental impact on job satisfaction. Finance teams in particular have been slower to digitise core processes, leading to a heavy reliance on manual tasks. This not only increases the amount of time spent on each task, but also impacts the engagement levels of finance professionals who cannot focus on more strategic aspects of their roles.

As a result of the pandemic, flexibility has also moved to the forefront of finance teams’ desires. Given the fast-paced nature of this industry, the conversation surrounding work-life balance has increased rapidly. Failure to offer flexible working policies, coupled with a lack of technology to facilitate this flexibility, has led to poor EXs across the board.

Most notably, the overarching move to omnichannel, digital-first approaches has dramatically reset both customer and employee needs. Finance is the third-slowest running corporate function behind legal and IT. Operating in a competitive environment, 73% of finance operations are facing pressures to speed up, improve efficiency, and prioritise automation.

Mitigating the problem using technology

ESM, an offshoot of IT Service management (ITSM), is the cornerstone of smart digital transformation for organisations. It can help finance teams to streamline and automate routine processes, such as monitoring the status of service requests, approving expenses, sending invoices, and tracking payments. In turn, this will free up employees’ time, reducing the burden of manual tasks and enabling them to focus on the more strategic tasks.

Another advantage ESM can offer finance teams is the ability to adapt to each department’s minimum requirements for data privacy. Accounting, for example, needs additional layers of compliance built into the system.

ESM can also facilitate cross-departmental collaboration, helping finance professionals to communicate with the wider business and perform tasks more effectively.  Organisations can use ESM to incorporate all internal services into a single platform, offering employees a well-rounded view of the business and promoting a sense of community across all levels of an organisation. This will boost productivity, whilst enhancing visibility and control.

Ultimately, the current job landscape has brought with it a new set of challenges. Organisations in the FS industry looking to navigate the storm and retain top talent must refocus their efforts on bolstering the EX. Embracing a new era of technological innovation that empowers employees and boosts engagement is a critical step in this process.

 

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Finance

The penny has dropped – the finance sector needs Data Governance-as-a-Service

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By Michael Queenan, Co-Founder and CEO at Nephos Technologies

 

In our data-driven world, the amount of data is growing exponentially and it’s predicted that the amount generated each second in the financial industry will grow 700% this year. Leaders of financial services organisations have realised two things since the start of the pandemic – that data on their customers and services is their greatest asset and that they must embrace technology to make intelligent business decisions to grow successfully and outperform competitors.

Since the financial sector holds arguably the most valuable and sensitive information, organisations must do more than just store this data. They need to ensure its security, integrity, and governance so that it’s useful in improving the brand’s customer experience, innovating products and services or predicting future trends to improve risk management.

Yet without a robust data governance model – a strong set of rules and processes for what data means, and how it is categorised, owned, accessed, stored, and used – data is worthless. Only when an effective data governance model has been established, will data meet regulations and be secure. Data leaders must shift gear in their data processes to avoid hefty compliance penalties and unlock potential value from their data assets.

 

The data governance challenges faced by financial sector organisations

The barriers for achieving ‘good governance’ are many and varied. Ignorance of the benefits of data governance is a major hurdle for developing a governance strategy. Many financial firms have invested – at significant cost – in data governance tools, but struggle to deliver the benefits they are looking for. Many don’t have the right skills and resources to maximise or set the right metrics to measure the business value. Some are compromised by unoptimised gaps in their approach.

With many different elements to master, data governance is complex – from identifying the right tools to managing the challenges presented by encryption, all whilst ensuring that data quality is sustained and data is managed responsibly.  The negative impact of misplaced investment in ineffective data governance strategies can be significant, for the short and long-term.

 

Why data governance matters

With the acceleration of digital adoption in the financial services industry, it has become crucial to deliver seamless, intelligent customer experiences. Data governance is the key to managing data flow, ensuring compliance, and scaling up. Proof that data governance matters is evident in the Master Data Management Market growth prediction, from $16.7 billion in 2022 to $34.5 billion by 2027.

Data governance is a comprehensive methodology for ensuring the quality and security of the company’s data. The various benefits of an effective data governance strategy include minimised risk, coherent policies, metrics and processes, and better implementation of compliance and enhanced data value. However, for financial services, there are significant advantages as a result of the following:

  • Data governance saves the company money by increasing efficiency. Precious time can be saved by having good quality data and a single source of truth, with less duplication of data, and less time needed to correct data errors.
  • Good data governance gives the business confidence in having accurate and trustworthy data, the holy grail for delivering outperforming customer experiences.
  • A data-driven culture can also be introduced to your business through good data governance. With the ability to gather critical customer and market insights that can guide the direction of your business, data governance allows financial institutions to drive innovation and gain competitive advantage.

 

Bridging the governance gap with Data Governance-as-a-Service (DGaaS)

Increasingly organisations are turning to the ‘as-a-Service’ model to bridge the gaps in their data governance capabilities, as well as ensure critical alignment between objectives and results. This dedicated approach aims to minimise the risk of investments and delivers the strategy and proven technologies required to ensure data governance success.

DGaaS can be applied across each major component required to deliver good data governance. First, it uses software tools to scan all data within a typically complex financial services data infrastructure in its data discovery and classification phase. Without this detailed insight, organisations can’t always identify their data assets, any data mishandling and the level of risk generated.

The next part of the process is creation and documentation. This means organisations can drive their governance objectives through to execution, while removing the operational and recruitment overheads, which means they can purely focus on value created from data. In doing so, organisations can convert the raw outputs from the toolsets into meaningful business outputs.

With a holistic approach, DGaaS allows financial services organisations to focus on the transformational potential of data while critically staying compliant.

 

Reaping the benefits

Data is a vital asset to enable financial sector organisations to build the right capabilities to deliver their services and remain competitive. With a robust data governance model, financial firms can assess risk, predict trends, and seize market opportunities based on data-driven insights. Only data-driven processes, built on high quality and effectively governed data, will enable them to build outstanding customer experiences. It’s essential that leaders realise data governance is a fundamental discipline, not a luxury, and establish an effective model to formalise processes and responsibilities before their data lets them down.

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