Finance Functions Evolve with Technology

A large volume of data coming from divergent sources flows through CFO departments; much of which is unstructured and overwhelming to assess. In the past, Finance teams would use the data to assist with financial reporting, yet in terms of analyseis for strategic purpose, the lack of uniformity is a tedious and time-consuming process.

Machine Learning: Artificial Intelligence – what does it mean? Digital transformation is changing traditional business models. As a result, companies are investing more in technology, utilizing Software as a Service (SaaS) platforms to dig deeper into big data sets, making it useful for strategic decision-making and operational functionality.

Traditionally CFO’s have approached investment in technology based on their needs and demand, but with the new model, they have to align the investment with corporate strategy. It is imperative for a CFO to evaluate the new investment landscape and understand its impact on the business both near and long term. The SaaS platforms can help CFO’s and CIO’s to align and create a Business Service model that can help them in understanding the current investments spread and align it more closely with the strategic objective of the organization.

Gartner Research uses three broad categories (RUN, GROW and TRANSFORM the Business) to bracket IT investments to identify and manage ones’ technology investment portfolio. It is important that the CIO and CFO speak a common language that aligns with the corporate strategy of the organization. For example, if an organization creates a service as Marketing Analytics tool which enables sales professionals to win new business, it can be aligned with “GROW THE BUSINESS (GTB)”. CFO’s understand the strategic impact on a business and on the consumer of the service i.e. sales & marketing. CIO’s use this business service to map all the applications and infrastructure that enables this service and to calculate the total cost of ownership for Marketing Analytics. It is easy for a CIO to explain the investments in the Marketing Analytics, which will directly result in Business growth and quantifiable data. For CFO’s it will be relatively easy to validate the ROI and benchmarking with external peers.

In a medium sized organization, one can have 10-12 Business Services, which align with Run, Grow and Transform portfolio. Traditionally the IT spend is skewed to 80% on RUN and remaining 20% on Grow and Transform. For an organization to make an impact with the new business model it is important to understand the spread of Technology investment and alter the spend ratio more towards Grow and Transform. Using Machine Learning or Artificial Intelligence tools can help CFOs and CIOs achieve this objective.