In financial directors recently released annual survey, CFOs from a variety of industries were asked which of their functions could be made easier by advanced analytics, cloud technology, or automation. While respondents agreed that there is value in collaborating with IT leaders to leverage technology for things involving accounting and bookkeeping, their responses varied as to exactly where their organizations are on the technology implementation timeline. .
According to the survey results, less than half (47%) of respondents said their organizations are at least implementing new technology concepts in their solutions. Of this subgroup, only 45% (21% of total respondents) said they have fully adopted a solution and are actively using it.
Delays in investment in technology
When asked about the biggest challenges they face, one answer may indicate why many CFOs’ focus is not technology-centric.
“The biggest challenges I expect to face are having reliable access to growth capital in an environment where valuations are far from certain and changing supplier/manufacturer/retailer power dynamics,” one CFO respondent wrote when discussing current challenges.
“When all parties operate under increased business model pressure, historical norms fade quickly,” the respondent continued. “If we’re not careful about how we manage relationships, the trend could quickly shift from a strong business partnership framework (eg, shared success) to an each person for himself mentality.”
Technology doesn’t seem like the immediate answer to many of the challenges CFOs face. While it may work by automating certain aspects of the accounting process or analyzing data, even the best technology can’t fix supply chain problems or curb inflation.
Impact of inflation on business investment
As C-suites across industries look to brace themselves against a potential recession, investment in areas outside of operations or IT is being sidelined. Respondents indicated that areas such as marketing (7%), sales (9%), human resources (7%), and research development (8%) would be affected.
“The biggest challenge will be managing really unknown economic headwinds,” one respondent wrote. “[There] they seem to be mixed signals like never before. Pressure to increase wages to match the inflationary environment while facing a slowing economy. The uncertainty is higher now than any other time I can remember in the last 20 years.”
Although the majority of CFOs (73%) believe that the effects of inflation will not last more than two years, 78% of respondents said that inflation will have a negative impact on their company’s future growth prospects.
Where CFOs think technology is having an impact right now
Outside of finance, 46% of CFOs said operations would receive the greatest focus on technology, with only IT trailing behind with a significant number of responses at 21%.
As CFOs are now major players in FP&A in the C-suite, those leveraging technologies appear to be using them to free up their time to fulfill those duties. CFOs who are not tied down by data analysis and accounting tasks can focus on forecasting and strategic planning of the organization from the perspective of a number, a key component of the modern CFO.
The approach to bringing technology into operations and IT can also help ease ongoing employment issues. Automation can fill staffing gaps, increase strategic employee engagement, and generally increase productivity by eliminating redundancies in support staff workflows.
When asked about supply chain issues, one respondent cited employee retention and engagement as a major issue. “Add to that the challenges of hiring and retaining staff,” said the respondent. “Especially in the specialty trades, and we are striving to provide the excellent customer service that we are known for.”