In the digital age, the way companies operate has undergone profound transformations. This has made the role of CFOs is expandingFor example, today, in addition to financial management, they have strategic responsibilities throughout the company, including decisions about technology.
These changes do not come without challenges. And to overcome them, the first step is to understand them well.
Below, you'll find the 4 main challenges for CFOs in the digital age. Check it out!
1. Going beyond financial management
In the digital age, and because of all the transformations it implies, it is vital that CFOs invest in their own careers, keeping up-to-date with the latest trends and improving their most recent skills.
While most of the traditional skill set of CFOs will remain relevant, the addition of new, more strategic skills is also expected.
Examples include developing an affinity for digital tools and technologies, expertise in data analysis, and proficiency in managing agile teams.
2. Keep up with technological advancements.
As mentioned, today's CFOs must not only be experts in financial management, but also possess strong technological acumen.
In fact, a large part of business activities, including finance and accounting, utilize technological tools. Therefore, it makes perfect sense for CFOs to be involved in decisions concerning this topic.
Moreover, accounting and finance are particularly well-suited to advanced technologies, benefiting from process automation, advanced analytics, machine learning, and artificial intelligence.
These technologies analyze data in real time and offer valuable business insights—which can provide windows to improve business performance and continuity.
They also free employees from error-prone manual tasks and allow CFOs to focus more on strategic activities.
In this sense, the challenge for CFOs can be divided into two aspects: First, it is necessary to choose tools and technologies that are within budget and that provide payment forecasting that favors cash flow.
On the other hand, it is necessary to invest in effective solutions that offer the best resources to enhance productivity. Furthermore, it is also essential to consider the longevity of the solutions adopted.
Given the rapid pace of technological advancement, some tools can become outdated in a short time, requiring new investments. To prevent this from happening, many decision-makers have opted for cloud solutions, since, among other benefits, they generally offer... constant update.
In fact, according to Gartner, by 2025, 51% of IT spending will migrate to cloud-based technologies., some of which may include finance and accounting software.
3. Managing a distributed workforce
The Covid-19 pandemic accelerated a strong trend in the labor market: the decentralization of work.
Today, many companies have employees working remotely or in hybrid arrangements, which presents new challenges for CFOs. Beyond people management, they need to focus on process standardization, communication, information security, cost reduction opportunities, and cash flow impacts to adapt to the constant changes these models require.
In this sense, a centralized management system, such as a ERP solutionUsing this system, employed by all employees, can help CFOs better manage their distributed workforce and ensure the accuracy of everyone's work.
Many ERP systems include workflow tools to monitor bottlenecks, eliminate data silos, and provide insights into a team's workload and productivity.
Again, it's worth drawing attention back to cloud-based systems, since, in addition to allowing access from anywhere with an internet connection, they help increase the security level of remote connections.
4. Unlock the potential of data
For effective financial management, CFOs need access to accurate information and the agility to complete tasks efficiently.
However, today, this is not a very easy task, since companies are collecting data in record quantities.
According to projections by McKinsey & Company, by 2025 the amount of data in the world should reach 175 billion terabytes – a 66% jump compared to 2018. This exponential growth is full of opportunities, but managing it to gain a competitive advantage can also be a challenge.
CFOs have the responsibility to help guide the development of the organization's data governance and data strategy, as well as apply insights to financial planning, asset deployment, liquidity management, and much more.
Some ways to improve data accessibility include standardizing processes across departments, adopting a flexible layered architecture that keeps pace with business needs, and deploying technologies like machine learning to cleanse and produce higher-quality data.
In this sense, a centralized system that integrates all departments of the company helps to optimize data flow.
Furthermore, this integration can automatically capture financial and operational data into a single solution, which becomes a single source of truth for analysis and decision-making.
Conclusion
Today, CFOs are being challenged by a variety of factors – rapidly evolving technology, new business models, increasing amounts of data, changes in skill sets, and much more.
Therefore, they need to qualify themselves to go beyond financial management and master these new roles.
To avoid overload, in addition to knowing how to delegate tasks, CFOs need modern tools that allow for the standardization and automation of processes, data centralization, optimization of team work, and much more.
In this way, equipped with cutting-edge financial management tools and data, they will be well-positioned as strategic business leaders, capable of driving the company to better results.
