5 Trends for a Leading CFO in a Post-Pandemic World
Since the onset of the COVID-19 pandemic, CFO’s and their respective financial teams have been forced to digitally transform at unprecedented rates, whether prepared or not. Behind this imposed digital transformation lies new opportunities for corporate leadership and financial teams who oversee day-to-day business operations.
What exactly does this massive digital overhaul mean long-term and how can today’s CFO’s better leverage AI and Natural Language Generation (NLG) technologies? Here are five emerging trends today’s CFO’s should look out for in 2022 and beyond.
1. Harnessing real-time data key to drive an effective strategy
COVID-19 has highlighted that as companies attempt to forecast budgets, timelines, and strategize to the best of their ability using data, unforeseeable elements will always cause disruption. By transitioning to a more agile rolling forecast approach, companies can utilize real-time updates and readjust to any circumstances that may arise.
As the sheer volume of data increases year over year, CFOs have taken on a new role as data gatekeepers. Data enables finance departments to generate detailed analysis, help decision-making, and above all speed up the decision-making process. A new role of the CFO is now to harness this information, frame it, process it, and present it to make it fully usable.
2. Breaking down enterprise platforms silos to improve overall performance
With the convergence of Enterprise Performance Management (EPM) and Enterprise Resource Planning (ERP) companies can centralize their data under the same banner. This allows a single point of management and gives a better glimpse into the entire data lifecycle including interactions, modifications, and implications.
The development in cloud solutions saves time thanks to simplified access to data and accelerated decision-making. For CFOs, EPM, and ERP supports the management process to improve how they evaluate profits and overall performance.
3. Digitizing processes to keep pace with new regulations
In many cases, new regulations and requirements require the use of digitization. By July 2024, Europe will implement a reform to simplify the relationship between the supplier and buyer. Digitizing the billing process will allow better cash flow management and control over payment deadlines.
Ultimately, the state hopes to limit VAT fraud and better identify it when it happens. This will also allow standardization of invoicing between companies, which will naturally simplify and speed up the invoicing process. By 2024, companies will have to comply with green ESG regulations which aim to integrate CSR criteria into their performance indicators. When measuring overall company performance, the addition of the CSR criterion allows financial teams to make more strategic investments by taking into account these new guidelines which will be regulated and eventually standardized long-term.
4. Empowering people to successfully digitize
There are many projects for finance departments in 2022. First of all, digitization allows them to automate certain tasks and better manage company data. Automation, digitization, and AI implementation are all an integral part of the larger strategy of both national and international development finance institutions (DFIs). The goal of these three elements is simple: to put people back at the center of the company and allow them to focus on higher-value tasks. By putting humans at the center of organizations, CFO’s can become the much-needed business partner we have been talking about for years.
5. Augmented finance teams will help reach full potential
The problem many organizations face today is how to interpret large amounts of data to make it truly valuable. Understanding data cannot be limited to a team of highly trained data scientists. Insights must be unlocked across an organization. Being able to explain the analysis and reasoning behind a recommendation is key to broad organizational success.
For CFO’s, tomorrow’s finance teams must be automated, agile, and predictive. Above all, they must be able to implement powerful technology to process data in real-time for better and more strategic decision-making. The automation part of finance might be the least rewarding of tasks, yet financiers will be able to focus on more strategic subjects enabling their knowledge and expertise to be highlighted. The goal of automation is not to replace them, but rather to help them by turning them into augmented financiers.
So, what’s next for the future of finance? Thanks to powerful Natural Language Generation (NLG) technologies, CFO’s can update and comment on published forecasts in real-time. This way, comments are based on all the available data, which allows for ongoing analysis and therefore up to date in all circumstances.