How CFOs can simplify their tech stack

The CFO role has evolved significantly in recent years, from being the financial gatekeeper who balances the books, to a key adviser and strategic decision maker for the business. 

As a result, they have become crucial decision-makers on what technology their business should invest in. There is a vast array of old legacy platforms and new technology and services which provide analysis and insight to provide CFOs with the information they need to grow and protect their businesses.

However, the continued adoption and layering of technology can create problems. An abundance of different applications and systems can add complexity to an already difficult job. Simplicity should be key when it comes to CFOs and their tech stacks.

The evolving role of CFO

A recent McKinsey survey shows that the CFO’s role is rapidly evolving – expanding in scope, requiring new capabilities, and demanding greater collaboration with C-suite peers. 

There is an increasing emphasis on non-finance roles including strategic leadership, business transformation and performance management.

The number of roles reporting to the CFO also continues to increase ranging from professionals in procurement, investor relations, M&A transactions/execution, enterprise transformation, post-merger integration, cybersecurity to IT. 

The reason why CFOs are been asked to provide advice on these various departments is due to the increased amount of data they now have at their disposal from new technology. 

CFOs are expected to quickly adapt and provide foresight into all the potential risks and outline the best approach in implementing strategy in several areas, all while ensuring the business is balancing its books. 

Unfortunately, these additional responsibilities can place a significant burden on CFOs. A pre-pandemic Brainyard report highlighted that 38% of CFOs found their biggest challenge to be juggling too many responsibilities.

How multiple applications are making it more difficult 

One of the reasons why CFOs are struggling with their additional responsibilities is due to the numerous tools they use, many of which have not kept pace with their growing remits. 

Some current tools don’t consider that many of the CFO’s tasks are cross-departmental. Treasurers for instance are being forced to rely on fragmented technology to manage multiple yet interconnected functions such as currency risk and payments.

This is because most tech tools are designed with the focus of targeting one pain point initially. Many tech start-ups will introduce additional services to improve customer retention and to unlock more revenue. An example includes a spend management company adding lending and insurance products. 

However, the sheer number of applications in the CFO tech stack means it is becoming increasingly difficult to manage. Most of a CFO’s time is taken up by manually stitching together information from separate sources and making sense of it in a spreadsheet. 

Businesses recognise the inefficiency of this process and are increasingly seeking more integrated, digitised solutions to help improve decision making for the CFO.

Simplify through integration 

A new wave of fintechs is now providing solutions to simplify the work of the CFO. Whether they’re automating financial analyses or providing software that lets finance teams collaborate more easily with other departments, they’re seeking to free up more of the CFOs’ time for strategic inputs.

As FX hedging and cross-border payments have become more prominent for businesses, the need for CFOs to have all their banking services in one simplified integrated platform has also increased. 

Treasurers can now adopt treasury management systems that allow them to take ownership of their cash flow, FX operations and access real-time insights from their data in one application. This has enabled them to have a complete view and understanding of their corporate behaviour, backed by unique data and intelligence.

This limits any potential chance of error in the decision-making process, which can occur from knitting together treasury information from separate sources. 

Through integrated systems, CFOs are not just simplifying their tech stacks and reducing their workload, but they can also gain real-time data and utilise the insights to drive faster and better decisions.