Think Like a Futurist: The Expanding Role of the CFO

The finance function’s traditional responsibilities like financial planning, analysis and accounting, have grown to include some aspects of the security and privacy of enterprise data such as controls for data privacy, audit trails and more. Finance organizations’ abilities to source, analyze, protect and share data are driving enterprise growth, resilience and decision-making. New priorities also encompass managing financial risk and responding to emerging regulatory challenges.

Meanwhile, with trade wars, real wars and supply chain challenges, constant change is the new reality for CFOs. Enterprise facilities, shared service locations and offshore delivery centers throughout the world are likely to be impacted by the ongoing COVID-19 pandemic, geopolitical and climate event scenarios. Organizations are now calling upon CFOs to strengthen enterprise change resilience not only through reliable financial reporting but also through processes and technologies that enable remote work for finance-related data security and privacy. Recently, I summed up my observations on the role of the Chief Financial Officer in Enterprise Application Systems in a presentation to the ISACA GRC conference.

Increasingly, a CFO’s success is both driven by and dependent on each leader’s personal abilities to evaluate the finance function in light of new criteria. These might include department capabilities in employing artificial intelligence (AI), machine learning and predictive analytics to enhance identification, monitoring and management of third-party risks, streamlining risk assessment processes and considering whether systems and processes are sufficiently diversified.

How CFOs derive full value from technology opportunities

CFOs are seizing the opportunities new technology represents to transform business processes. In particular, they are fostering enterprise-wide acceptance of digital transformation (like AI and machine learning) to create opportunities that address their organizations’ people and process challenges.

Many of these CFOs are finding themselves called upon to focus on automation and data, particularly as competition for talent creates demands for functional consultants in ERP applications. The COVID-19 global pandemic also accelerated the digitalization of ERP application systems to de-risk the use of talent from multiple geographies to execute the application systems. These and other movements have CFOs making difficult judgments about the progress of their organizations’ finance transformations.

Ongoing changes to accounting rules have placed new demands on financial systems and spurred the acceleration of automation and transformation. The finance function has a growing role in establishing a single source of truth for enterprise data. As I mentioned during my conference presentation, leaders will also want to establish or expand the finance group’s crucial cybersecurity role.

Finance leaders will also want to assess whether their current financial systems produce sufficient insights in real time and consider how to optimize or implement systems to automate time-consuming manual activities. They might also explore mechanisms for monitoring and continuously enhancing the finance customer experience.

ERP system implementations and the CFO role

The CFO’s role in ERP system implementation is changing in parallel with – and because of – the growing importance of data integrity and privacy as well as organizational change resilience.

Ideally, the new ERP becomes the single source of truth for enterprise data. For organizations to derive full value from their ERP implementations, the integrity of system controls and data is critical. This is particularly true of controls that ensure data privacy and provide audit trails.

Microsoft Dynamics 365 for Finance & Supply Chain Management is one cloud-based ERP service that’s particularly adept at supporting unique compliance requirements and helping to adjust to constantly changing business environments.

How can ERP systems help address CFOs’ concerns as their roles continue to expand? Look for integrated features that support:

• Single point of master data management
• Single point of data entry
• Seamless flow of information across technology and modules to enable efficient end-to-end processes without breakdowns in hand-offs between functional departments (e.g., purchasing and accounting)
• Real-time information for all users (e.g., production can see when an order was placed and when it is due to arrive)
• Seamless integration with external parties (e.g., vendors and customers)
• Built-in algorithms to ensure data integrity while recording and posting transactions
• Audit trails based on user access and defined system usage roles
• Continuous soft-close for financial reporting on all transactions posted.

Priorities for the financial function have expanded beyond traditional planning, analysis and accounting. Now, priorities also include data integrity and privacy, third-party risk management and responding to new regulations, among other responsibilities. CFOs will want to consider how the enhancement of current information technology assets and investments in modern systems can support their expanding roles by strengthening enterprise change resilience, enabling reliable financial reporting and automating controls that support finance-related data security and privacy work.

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