Does your company have a digital CFO? If not, you might have one within the next several years. Industry trends point more and more toward corporate CFOs taking control of enterprise resource planning projects from project scope to implementation. And, if you think about the role of the CFO and the role of an ERP system, it’s obvious that this shift makes sense.
The Changing Role of the CFO
Chief Financial Officers, or CFOs, are tasked with the overall strategic management of a company’s finances. The typical CFO maintains the company’s financial vision, interfaces with all levels within the company, guides and manages budgets and cash flow. Other tasks include risk management and strategic planning.
The Intersection of Technology and Skill
The role of a CFO may look different depending on the industry and nature of the company in which they work. In the past, most CFOs had clear direction from the CEO on how to handle the company’s finances. They worked within these parameters using the tools at hand.
But times have changed. Just as accountants moved from green ledgers and double columns of pencil-written figures to modern accounting systems that handle entries with ease, so too have financial managers moved to more powerful technology.
Today’s CFO has a wealth of digital tools at their disposal to do their jobs well. One such tool is the enterprise resource planning system, or ERP. It makes the concept of digital CFO a reality by enabling CFOs to:
- View and use data from every area of the company to produce more accurate financial forecasts
- Automate many accounting and financial tasks that were once time-intensive
- Response rapidly to changing market and corporate conditions thanks to accurate and timely data
- Report on all metrics companywide, but especially those under their governance—finance and accounting metrics
- Track metrics against corporate KPIs
Strategic Vision, Strategic Leadership
Thanks to the tools accessed through modern ERP, digital CFOs can now provide both strategic vision and leadership to their companies. CEOs rely more and more on the financial judgment of their CFOs, using them as sounding boards and consultants before they make major decisions that can impact their companies.
With the right tool, such as an ERP system, accurate and timely data can be used to inform the company’s strategic vision. This information provides deep insight into all areas of the company’s business and can help both the CEO and CFO predict future trends, respond to competitive threats, and act with assurance.
Data-Driven Decision Making
CFOs have always used data to make decisions, but the digital CFO has access to more up-to-date data than at any time before. Cloud ERP systems, which manage data from multiple areas of the company through internet connections, provide such timely data that changing information can be responded to very quickly.
This is a type of data-driven decision making that helps companies respond based on fact. Gut instinct still plays and important role in the leadership of any corporation but having the data to assist with decisions offers excellent competitive advantages.
The Digital CFO: ERP Leaders
Lastly, although some companies view the selection and implementation of an ERP system as the purview of the IT department, more and more the CFO is stepping in to lead the team. The CFO understands the nuances of the company from a financial, data-driven viewpoint. They also know who among the various departments offers the best insight into the workings and needs of the department and can select the right people to be on the ERP team. Also, they understand the reporting needs of senior executives and can work with the ERP implementation team to automate reports routinely needed by C-level executives.
The digital CFO is something that few would have predicted decades ago, but now, it’s rapidly becoming an important facet of the CFO’s job. If you’re a CFO responsible for the digital transformation in your company, we invite you to follow Mindover Software’s blog, review our resources, and explore the ERP systems and software we offer—Sage and Acumatica—two of the leaders in ERP systems.
For more information, contact Mindover Software at 512-990-3994.