CFOs have long been challenged by the value proposition of capital technology investments, often requiring in-depth analysis and reviews before making the plunge. While the lower monthly costs of cloud-based computing may overcome this inertia in some instances, CFOs are understandably nervous about committing to “rentals” of software or services that don’t have an extended life beyond the end of the subscription. While the CFO may not be reviewing each purchase for IT fit, they are likely intensely interested in whether they are getting the expected value from any technology purchases that are made. The CFOs leaning may help influence purchases for quite some time, making it vital to ensure that your CFO fully understands the benefits of moving to the cloud so you can break through their paralysis of analysis. Here are 4 of the sticking points that are pushing CFOs away from adoption of a more agile, extensible model for technology.

1. Communicate Key Risk Factors for Adoption

Like any technology, cloud platforms are only truly valuable if you gain widespread adoption throughout your user base. CFOs may have been burned in the past with projects that had an extensive upfront cost, yet didn’t deliver the expected business value after an extended implementation period. CIOs and other IT leaders can help mitigate this risk by addressing the root causes behind the poor adoption rates. Cloud solutions can be particularly challenging to sell, simply because they are predicated on the concept of continual change — something that is a struggle for many organizations.

2. Reassure CFOs That Technology Will Be Analyzed and “Rightsized” for Cloud

Financial business leaders are rarely happy with having assets on the books that aren’t being utilized, but legacy technology has a way of hanging around long after its useful life has been expended. When you reassure CFOs that you won’t simply be transferring efficiency problems to a new type of infrastructure — that you’re first resolving and appropriately sizing the solutions for your future business needs — they are more likely to be open to the conversation about a move. Gaining efficiencies and improving operations are always topics near and dear to the heart of CFOs. This could manifest in a variety of ways such as analyzing server and peak memory usage, looking for system vulnerabilities that can be addressed and reducing overall software licensing requirements.

3. Yes, There Are Ongoing Variable Costs — But They Are Balanced by Added Value

Traditional software models include an upfront purchase cost and an associated ongoing maintenance fee to obtain upgrades. Over the life of a contract, maintenance fees can increase and there may be charges over time for significant upgrades that aren’t covered in your service model. Newer options are introduced to the market on a regular basis, but a high sunk cost in a particular platform serves to discourage new investments in other platforms. With cloud-based platforms you may still have a multi-year contract, but once that time is over it may be significantly easier to shift to a new platform. Granted, there are likely integration costs and training and general disruption to your business to consider, but you may be able to recognize compelling benefits by changing to a new cloud-based service. Plus, most cloud software has the benefit of regular releases that will provide enhanced usability, resolve bugs and create a more secure computing environment. The financial equation becomes slightly more difficult to sell to your CFO if your usage is expected to vary considerably from month-to-month, as it can make cash flow more difficult to project.

4. Cloud Performance Has Improved Dramatically in This Decade

Sure, there are still some platforms that are not fully optimized and don’t run as quickly as they would on a local server — but we are no longer in a world where “cloud” equates to poor performance, latency and a lack of security. Ultra-fast connections throughout the country and the world and high-performance data centers offer a new level of service deliverability. While it’s still important to carefully review contracts to ensure that SLAs and reliability levels are up to your expectations, these should no longer be used to deliver a no-go decision on moving to the cloud.

Having an honest internal conversation with top leadership helps determine which — or all — of these concerns are holding back your CFO from approving cloud-based projects. While financial considerations are often top of mind, there are other risk factors that need to be openly addressed in a way that communicates the overall value to the organization.

Organizational structure is something that is hotly debated at businesses around the world, but one of the biggest mysteries is where it makes sense to have the technology teams. IT has both a strategic thread as well as a day-to-day operational focus, making it a solid fit for the office of the CEO or the COO — yet IT often lands with the CFO, especially if there isn’t a CIO in existence. Businesses tend to organize around the functional strengths of their leaders and their business operations. If you are researching where IT makes sense in the structure of your business, see why organizations around the world continue to closely align IT with the finance department.

“We’ve Always Done It That Way”

Historically, IT has been aligned with finance due to the original reason technology was introduced to businesses: to aid in digitizing accounting functions. The highly detailed work that is performed by both finance and technology teams worked in lockstep, as finance executives leaned on IT for financial computing initiatives that would help make the organization more efficient and effective in their financial interactions. Over time, the original need for digitizing accounting morphed — yet the reporting structure still made sense. CFOs needed to have a tight handle on the burgeoning budgets that the technology teams needed to support the needs of the business. Many businesses find themselves locked into this aging structure for one of the worst reasons of all: “We’ve always done it this way”.

Aligning Departments Around Business Functions

At first blush, IT may seem to have more in common with operations than with finance. There are plenty of moving parts in both operations and technology, but that is where the parallels break down. Maintaining the daily execution of tasks is quite operational in nature, but the far-reaching strategic nature of IT is where the power truly lies for the organization. Hiding IT within the office of the COO could reduce the overall effectiveness of IT and may also lead to the team being a target when there is a need for budget cuts. Without a strong seat at the table for technology as it relates to the future of the business, both finance and operations Chiefs may reduce spending without seeing the longer-term impact of their decision.

Shifting Business Strategy

As more CEOs consider IT initiatives as strategic imperatives, the structure of organizations will continue to shift. CIOs — although they are “Chiefs” — have not always had a place reporting directly to the CEO of the organization as other chief officers do. Instead, they are relegated to second-string status by reporting to the CFO or COO, especially if there is a perception that the CIO is not comfortable enough working through complex business problems as well as providing technology solutions. The shifting business strategies that are caused by exceptional levels of innovation and competition in terms of technology make it more likely than ever that CIOs will be raised to the level of the CMO and CFO in terms of organizational structure.

There are no perfect or “right” structures for your organization. As technology leaders continue to expand their knowledge outside the scope of the technical realm, they are less likely to be reporting to the CFO and COO and more likely to be able to earn representation at the highest levels of the organization. This evolution of IT may feel uncomfortable for some organizations, but will ultimately help boost the visibility of technology projects that are often core to the success of the business.

CFOs & Technology

The CFO role continues to evolve. CFOs used to be considered fairly powerless scorekeepers or merely chief bean counters, but today the role has taken on more responsibility as well as prominence.

Of course, any CFO will tell you that the old role is not unimportant, and it has not gone away. The expansion of the CFO into strategy, decision-making, and even IT oversight creates a capacity problem. How can the CFO meet all the new responsibilities without neglecting the old? Technology can assist in a number of ways.

Before we dive into how technology can assist CFOs in their expanding job functions, let’s look at what some of those expanding job functions are. Depending on where your organization is in its digital transformation, you may have already taken on some of these. If not, this overview will give you insight into what may be added to your plate in the coming months and years.

New CFO and Finance Responsibilities

The CFO has traditionally focused on finance and accounting, and these responsibilities remain both significant and important. New areas of responsibility are developing, though, including these.

Technology

The CFO role has an increasing responsibility for overseeing technology decisions and spending, along with the CIO. The entirety of the business is dependent on technology, and good choices in this area lead to dynamic transformation. Bad choices can have catastrophic results.

Future Focus

CFO and finance responsibilities are evolving from sole focus on the past (compliance and reporting) to include a future focus. CFOs are partnering with managers around the company to improve operations, and they often work with the CEO and the board to help plan company strategy.

Financial data and analytics have helped in this aspect of transformation. Another team may be responsible for analytics, but when it comes to the financial aspect of analysis, the CFO and finance team are an essential part.

Partnering with CEO

Today, CFOs partner with CEOs to develop strategy more frequently than they did in years past. While the roles remain distinct, the line is more blurry than it used to be, and the level of partnership and collaboration is much greater.

Partnering with Division Leaders

It’s more frequent than it’s ever been for the CFO to partner with division leaders or line-of-business leaders. These leaders necessarily have other focuses than finance, and they may need or seek guidance from the CFO. This guidance is sometimes finance-related and other times more generally related to business vision. The CFO also plays a role in teaching division leaders to accept financial guidance from the finance group.

How Technology Can Assist Today’s CFOs

Savvy CFOs will leverage technology to assist them in their expanding capacities. Here are a few technologies empowering CFOs and finance teams.

Big Data and Analytics

Data is more powerful than it’s ever been, and CFOs will benefit from technology solutions in this area. Powerful customer data can drive major insights into financial trends as well as business trends. Use analytics to make better-informed predictions on the future of sales. You can often get a better picture of what the customer wants by analytics than you can by traditional means like focus groups or customer surveys. These are powerful tools that can solve many problems and speed up many tasks for the CFO and the finance team.

Embrace the Cloud

Cloud-based apps can lower IT infrastructure spending as well as the need for maintenance. Many if not all the major IT applications needed by the finance team are available in cloud format, including ERP and CRM systems as well as planning and reporting systems.

Using cloud-based applications and systems allows your company to expand without having to consider infrastructure improvement. With the cloud, you’ve outsourced the infrastructure completely.

Finance leaders and CFOs are sometimes wary of the cloud, and this is understandable. Cloud-based services have had their fair share of highly publicized leaks and breaches. These have led some to question whether the cloud is really the right solution for sensitive data, whether financial or privacy-related.

The answer to this concern is twofold. First, the track record of these cloud apps is astoundingly good. Second, take a step back and review the landscape. Do you really trust that your in-house IT or infosec team is as skilled in protecting you from an internal breach as the team at a cloud service is? Your business is broad, and IT infosec is only one small component. For the cloud service, it’s nearly everything. One breach and they’d be out of business.

Mobile Technologies

While mobile technologies are most visible on the sales force and other customer-facing services (like your website), mobile can improve the quality of life for the CFO and finance teams, too. Selecting cloud apps that allow for mobile access gives additional flexibility to where and how work is done and data is displayed.

Need A Great IT Company Who Works With Top CFOs

This is just the surface of what technology can do to empower CFOs in their expanding roles. For more, or for help implementing solutions, contact us today.

If your organization is large enough to have a CFO, it surely has some kind of backup and business continuity plan in place. Do you understand how this system works? More importantly, is the system your business has in place actually sufficient to protect you in the event of a disaster? These are questions every business needs to ask, and you as the CFO need to be a part of that conversation. To get prepared, here are a few of the top questions CFOs have regarding backup and business continuity, answered.

 

Aren’t Backups Enough?

The short answer is no. The longer answer gets into the wide range of backup formats. On-site backups are a part of the solution, but they don’t protect against natural disasters or physical site breaches. Off-site backups have their limitations, too. The farther away the site, the more logistically challenging data transfer and physical storage can become. On the other hand, if the off-site backup is just down the street, it may be just as vulnerable to the natural disaster that hit your business.

Is the Cloud the Answer?

Cloud backups are a great new innovation in the industry, but they alone won’t save your business, either. Restoring from a cloud backup takes serious bandwidth, and bandwidth could be an issue following a catastrophe. Consider that not all business disasters are natural. If your business suffers a crippling cyber attack, cloud backups may complicate the restoration process.

What is Backup and Disaster Recovery?

Backup and disaster recovery, sometimes shortened to just backup disaster recovery or BDR, is the term for a comprehensive system that includes both data backup and a disaster recovery plan. These two components are designed to work in tandem, allowing a business to remain operational through or quickly restart operations following a disaster. Having a strong BDR plan is the real solution for backups and business continuity.

Backups in BDR

The backup component of your BDR plan should be multifaceted. Most companies benefit from having at least two forms of backup: on- or off-site as well as cloud backup. With backups, redundancy is a desirable feature, not a place to cut costs. Storage drives (whether at your location or in some server farm far away) can fail without warning.

Disaster Recovery in BDR

The disaster recovery component is just as crucial as the backup component. This is security planning, in a nutshell. If your physical office building gets wiped out by a natural disaster, you need more than your data. You need replacement computers, servers, and networks to use that data on, not to mention a place to do that work. Your disaster recovery plan finds the solution to these problems. Develop a recovery time objective, a measurement of the amount of time you’ll need to resume operations. From there, build out a plan for sourcing equipment and facilities.

Your disaster recovery plan is closely tied to your business continuity plan, which outlines how essential functions will keep running or be restored.

What Does a BDR System Accomplish for the Business?

Implementing an effective BDR system has many advantages for your business, including faster recovery time, lower risk, and lower costs.

Faster Recovery

Your business’s recovery time will be much shorter if you have both a detailed plan for what to do in the event of a disaster and a complete, usable backup of all critical systems. There’s no real way to put an exact figure on it, but working a plan is always going to turn out better than winging it, especially when in disaster mode.

Lower Risk

Every step you take toward a well-planned BDR system lowers your business risk. Having an on-site backup is safer than having none. Having on-site paired with off-site is safer still. Adding cloud backup to the mix does the same. Similarly, the more thorough your disaster recovery plan, the lower your risk.

It may sound overly simple, but “be prepared” is a pretty great motto. No business can completely mitigate all risk, but implementing a BDR system lowers your business’s risk profile greatly.

Lower Costs

Companies implementing BDR systems often contract with managed services firms to create and/or execute those systems. It’s worth taking a look at what’s available. You may find that your costs with a managed service provider are lower than the costs of building a BDR in-house.

Even if you determine monetary costs aren’t lower, there’s also an opportunity cost to consider. How confident are you in your in-house plan (or the team that built it)? Is that team made up of dedicated experts, or is everyone involved working just a bit outside their expertise? There is a real opportunity cost to not getting this right. Contracting with a quality MSP reduces the risk of missed opportunities due to an overly long outage or recovery.

Conclusion

If you haven’t yet implemented a BDR system, it’s time to do so. If you need help developing or implementing a BDR at your firm, contact us to get started.

It’s always been important for the C-suite to understand the cost benefits and value associated with technology projects, but today’s complex infrastructure needs are requiring greater levels of input from financial executives, in particular. Technology spends are increasing dramatically, and there’s a need to balance the shorter-term benefits of specific tactics with the long-term strategies that will help move the organization forward. The days of technology teams making do with the funding that they are allowed are over, as technology becomes more tightly intertwined with business strategy. It is crucial that the big dollars invested in technology and innovation are tied to true business value in a way that can be communicated throughout the organization — making the CFO an integral part of the decision-making when it comes to determining the IT spend.

Funding Sustainable Growth

Technology is advancing at an unbelievable rate, with new software applications and methods of reaching customers coming at breakneck speed. Making several poor decisions around technology can create a miasma of problems that can take years to resolve, but that risk is mitigated when financial leaders work closely with technology teams to ensure that there are adequate measures and milestones in place. CFOs must ensure that the organization has the funds available to budget for items that are critical for continued business operations that support corporate strategy and sustainable growth initiatives. This has to be balanced with the additional risk that can be assumed by waiting for “something better” (an application, a way of controlling data or reduced legislation) to come along. According to Gartner, worldwide IT spending is set to reach $3.8 trillion this year, with ongoing increases in spending attributed to IoT, shifting on-premise computing to the cloud, software applications and maintenance fees. With this shift comes a fundamental change in the way technology dollars are budgeted: from capital expenditures to a SaaS model that is billed as an operating expense.

Aligning Technology Spend with Strategic Initiatives

Starting with the strategic initiatives of the business and slotting in technology where needed may be the way CIOs and CTOs are familiar with budgeting, but the new paradigm requires additional work. The risk potential of having business systems vulnerable to a cyberattack is an ongoing concern and one that can require a significant amount of spending in any given year. Data silos are being broken down and consolidated as older legacy systems reach their sunset years. This tension between supporting an often-aging infrastructure and providing a stable base for the future creates a need for creative budgeting throughout the organization. Having the CFO work with technology executives can help bring greater visibility to the IT needs of the organization and how they align with specific strategic initiatives.

Constantly Examining Technology ROI

Part of the budgeting process involves being intentional about determining business ROI for the various technology initiatives and being unafraid to boldly cut or fund projects based on the changing needs of the business. New threats occur on a regular basis — as well as new opportunities to seize dominance in a particular market. Having the flexibility to pivot and create revenue may require a continual review of the various projects as well as a fundamentally different approach to what have traditionally been multi-year IT projects. Vigorously defending projects that no longer provide business ROI can put a major drain on limited organizational resources, especially in light of changing features and functionality for even the most stable business platforms.

Now more than ever, CFOs must have a solid understanding of the business value that IT projects plan to deliver and a solid review of milestones. This shared responsibility with CIOs and CTOs creates not only a greater accord in financial decisions but also a deeper understanding of the value that various projects have for the entire business.

Opportunities to spend on tech are endless these days. But your budget isn’t endless. Your company needs to invest in technology, but you need to do it in a way that’s smart and strategic. Check out our CFO’s guide to smart investing in information technology. We’ll show you how to prioritize your technology investment so that you can make smart decisions and stay on budget.

The Problem

The problem with smart investing in information technology is the sheer number of choices available. Hardly a day goes by without a new B2B information technology product hitting the market. You can’t possibly purchase them all, nor does your business need them all.

As the CFO you may or may not be involved in specific purchasing decisions, depending on the size of your business and the size of the purchase. You do, however, bear ultimate responsibility for setting your purchasing strategy. With so many IT investment options available, you may be overwhelmed trying to cut through the noise and decide what’s best for your organization. The lower your comfort level with technology, the worse the confusion gets.

Understand the Importance

The first step toward solving this problem is to engage with it. Understand that in many real ways technology is the future. You can’t afford to sit on the sidelines or to keep doing business as usual. Your competitors aren’t, and you’ll be left behind.

Simply put, picking the right new tech and integrating it successfully into your business can give you a competitive advantage over competitors. Therefore, in concert with your business’s technology team, you and the financial team must evaluate new IT developments, selecting and implementing the trends that will keep you competitive.

A Framework for Evaluating Emerging IT Innovations

Typically, companies receive far more internal requests for new software or hardware that can be approved within the current budget. To add to the problem, B2B sales efforts come from every direction. These promise to solve one problem or another or to give you that competitive advantage over your competitors. Never mind that the salesperson is trying to sell the exact same solution to those competitors.

What’s needed is a framework for evaluating emerging IT innovations. The questions below can help you decide which internal requests and outside sales pitches are worthy of your attention . . . and your money.

Question 1: How does the tech improve the group requesting it?

Many businesses receive countless technology requests from within. You and the finance team likely can’t approve every one of these, nor should you. The easy questions to ask are “does an employee want this software?” or “Will this software improve the employee’s situation?”, but those aren’t the right questions. Instead, ask “how will this piece of software improve this department or the whole company?”

This strategic question can help you prioritize your technology spend. Software A may very well improve life for that one person in sales, but if Software B realizes far more gains for a 30-person division, it ought to rank higher in the budget.

Question 2: Would this investment disrupt our existing IT deployments?

Sometimes blowing up the status quo is just what you need to succeed. Other times, though, wisdom is to leave well enough alone. If a new technology investment isn’t going to play well with your existing systems, you want to find this out before signing off on the purchase.

Neither internal requests nor external sales pitches are immune from this danger. Work with your technology teams to discover how a new investment will interface with your current system. Don’t spend the money until you’re convinced that the new tech will integrate into your current systems.

Question 3: Would this investment disrupt our workflow?

This is similar to question 2, but it focuses on the human component. A shiny new piece of software may well speed up Step 4 in a complex process in your business. Maybe it even cuts the time in half. Sometimes, though, there are trade-offs. You need to know if it’s going to make Steps 1 through 3 an absolute pain to complete, or whether it will add time to Steps 5 through 8.

Avoid facing an employee mutiny by fully vetting the impact the new technology will have on your current workflow. Be sure it’s a true net step forward before you commit.

Question 4: What are the returns on investment we will see by implementing?

With question 1 you’ve already established how the product will benefit one or more departments. Now, take it a step further and look at your ROI. How greatly will this investment increase sales? What estimate can you place on the productivity or quality-of-life gains? Is the cost worth the advantage you’ll gain over competitors? Answering questions like these gets you to a more specific understanding of the true worth of a proposed investment.

Conclusion

Navigating the new technologies available will always be a challenge for CFOs. By asking these 4 questions, you can prioritize your technology investments smartly.

Evaluating information technology can be a challenging aspect of the CFO role. Your organization is likely inundated with requests for new IT features, and understanding the true value of many of them requires technical knowledge you may not have. The spending possibilities are nearly endless, and many CFOs have reason to be cautious. Perhaps you’ve been burned in the past, too, convinced by your CIO to sign off an expensive software package that failed to deliver.

In this arena, there are competing fears. You want to avoid spending money on IT solutions that don’t ultimately deliver the promised benefit or that cause unneeded disruption. You also can’t afford to reject an IT request that would have given you a competitive advantage (or worse, one that allows your competitor to gain the upper hand).

Evaluating IT is a tricky business. Here’s our CFO’s guide to evaluating information technology.

Communication Is Key

Communication from the CIO or the tech team is one of the big pain points CFOs face. There are a few reasons for this.

Apples and Oranges

The first communication difficulty is one of dialect. It feels like the IT folks are speaking a completely different language than the finance folks. To a certain degree, they probably are. Your IT group is focused on enabling the company to do more through technology and on increasing your business’s capabilities. Your group spends its time considering the financial aspects of the business. There can be inherent tension there.

Unhealthy Shortsightedness

In some businesses, it’s even worse. In unhealthy businesses, the CIO and IT team pursue technology innovations that don’t truly align with the company’s needs. They lobby to purchase software that adds capability you don’t need and solves problems you don’t have. Similarly, the CFO and the finance team in an unhealthy organization can fail to see the value of a spend or defer a purchase long enough that a competitor gains an advantage.

Either side of the equation—IT or finance—can become too narrowly focused on its own objectives. When this happens, the company loses out.

Finding Common Ground

CFOs and CIOs need to find common ground, a shared language that focuses both on the ultimate goal: making the company succeed. Ask bigger questions. Which of the company’s (not the department’s) goals will this IT spend help achieve? Is there a less expensive alternative that will still meet the company’s goals? What metrics will we gain by implementing this solution, and how will those benefit the company? Are there any metrics that can show how the proposed investment will improve a process? If those metrics show that an investment is failing to deliver, can we get out of the contract?

Questions like these are all rooted in a “what’s best for the company” mentality. Find a common language using questions like these, and avoid conversations that only benefit finance or IT.

Establish a Clear Approval Structure

The likelihood of conflict between the CFO and CIO increases greatly in organizations without a clear approval structure. To determine whether that’s your organization, mentally answer the following questions.

• Do you (or your reports) approve every IT spend?
• If not, who else can approve?
• What criteria determine which requests require CFO approval? Dollar amount? Subscription/lease entanglements? What else?
• Is there an established, documented appeal process when you deny an IT spend?

Depending on the size of your organization it may not be sensible for the CFO to approve every spend. Individual projects may have their own needs and budgets. If that’s the case, a clear approval structure is still crucial. Who on the team can make purchasing decisions? What criteria kick the decision up to a higher level?

In the end, to have a clear approval structure your business needs both a clear vision and strong, clear communication between the finance and tech teams and their leaders.

Visualize your Strengths and Vulnerabilities

Another central problem with evaluating information technologies is prioritization. Everyone wants a piece of the budgetary pie, and it’s your job to allocate it. You need a way to determine where your priorities ought to lie. This is challenging in complex organizations due to the number of requests and the varied nature of those requests.

Creating a visualization of your IT strengths and weaknesses can help you plan and prioritize. What can IT presently do for you? What are the known vulnerabilities? What systems or programs are on their way toward obsolescence? What functions or abilities does the organization view as needful but doesn’t have currently? Are there information technology solutions for those functions or abilities?

Mapping out your strengths and weaknesses gives you a clearer picture of which moves are strategic.

Conclusion

That’s it for our quick CFO’s guide on how to evaluate IT spends. If you want to learn more on this topic, or for assistance with a wide range of IT-related questions, contact us today.

More than ever, today’s CFOs are expected to have a degree of tech savviness. Big data and analytics are tools that are just too powerful to ignore in the CFO suite. If you’re not particularly tech savvy, harnessing the power of these tools to the fullest extent will remain out of reach.

Why You Need to Become the Tech Savvy CFO

It’s crucial to understand just how powerful today’s technology tools are for financial leadership. Whatever the nature of your business and industry, technology can empower you and your staff in the following ways.

Forecasting and Risk

Forecasting has always been a part of the CFO’s role. Forecasting today can be much more accurate, thanks to the rich data that’s available. CFOs must have the skills to understand and interpret that data (or they must employ people who can). Use robust data and analytics to reduce the amount of guesswork in your forecasting.

Risk management is another responsibility under your purview as CFO. Forecasting and risk management are interrelated, of course, and both have traditionally involved a fair bit of prediction and uncertainty. If you’re like most CFOs, you’re a fairly risk-averse person. Reduce the risks of prediction and uncertainty by basing your decision-making on data wherever possible.

Advanced Data Visualization Techniques

All this data that companies now have access to can quickly become overwhelming. Today’s tech savvy CEOs harness the power of advanced data visualization techniques to bring the most important information to the surface. These techniques include making dashboards for interacting with the data and scorecards for presenting it to users at all levels.

Predictive Analytics

In the 1960s, business predictions were often made around a conference table in a smoke-filled room. They were based on some amount of data, but hunches, opinions, and interpersonal power dynamics often played an outsized role.

Today, there’s a better way. Predictive analytics are driven by algorithms and data, not by cigars and opinions. Leverage the power of all the data you’ve collected into predictive analytics. While they are neither perfect nor omniscient, predictive analytics remove human biases from forecasting. This powerful tool can enhance your effectiveness as a CFO.

Adjust in Real Time

The CFO that understands how to use these new tools can be agile, adjusting in real time based on the data that’s coming in. Many marketplaces change rapidly, and a 6-month-old report may no longer ring true. Big data and analytics let CFOs make these quick adjustments as they continually monitor data and adjust their predictions.

Drive Growth

Acting on your analysis of data can often spur on innovation and growth. Creating efficiencies aids in growth, and as you do so you’re likely to discover new business opportunities, such as a hole in the market that your company is suited to fill.

How to Become the Tech Savvy CFO

Having a tech savvy CFO brings many advantages to a company. As a result, being a tech savvy CFO makes you a much more valuable asset. If you’re not there yet, here are a few quick tips for how to get there.

Learn Analytics

Yes, this sounds basic, but if you don’t understand how to use analytics to do the things we’ve talked about, you need to learn. If others in your company already know analytics, leverage your rank. You are the CFO, after all—make it part of their job to teach you. If you’re in a smaller firm that has yet to embrace big data and analytics, it may be time to go get a certification in this area.

Meet Regularly with Experts

Your CIO, if your firm has one, should be well versed in the sorts of technology we’ve discussed today. Meet regularly with your CIO and ask questions. Do the same with other experts in your network. They aren’t the finance people, so they may not readily see how big data and analytics can transform your role. As your understanding grows and you learn to them the right questions, you’re likely to discover breakthroughs together.

Read What They Read

Sites like CIO.com are go-to resources for CIOs, but you can benefit there, too. Not every article will apply to what you’re learning, but many will. Reading sites like these will increase your overall tech comfort level.

Leverage the Data

As your understanding of analytics grows, you can start leveraging that data in real, meaningful ways. It’s easy to get overwhelmed in a deluge of data if you don’t have the tools to parse through it. At the same time, it’s possible to parse the data so finely that you miss valuable conclusions. As your comfort level grows, you’ll improve in leveraging data to the fullest extent.

Educate Your Team

Last, you need to educate your team. As you journey to become a tech-savvy CFO, teach your team what you’re learning so that they can help you win using data and analytics.