The way that businesses operate continues to change and the finance organization has been a key driver of this. The past decade has been a renaissance for the finance department; everyone from the staff accountant to the CFO has found him or herself in an increasingly important role in driving the business into the future. Whether it means adopting new skills to “fend off the robots” or do whatever it takes to bring stability to the bottom line, there are a variety of reasons finance organizations have found themselves taking a bigger stake in business decisions.
In part one of this blog, we discussed some of the key reasons that finance has needed to expand its role into other parts of the organization, considered one of the top trends businesses will see in 2019, per Microsoft. Today, we would like to discuss one of the areas into which finance is expanding—technology decision-making—looking at why it’s happening and exploring goals for the coming years.
Finance is Forging into Technology Decision-Making
Technology continues to play a bigger part in the way that organizations, and CFOs are a major driver of change. With the rise of cloud technology, the CFO now plays a part in technological decision making—nearly 70% of CFOs reported plans to increase investment in digital transformation this year.
Strategic finance leaders see that any technology investment will present new risks and revenue opportunities that will determine the future of the business. Therefore, finance leaders have taken a more significant role in managing technology, particularly in the areas of risk management and investment.
The Speed of Business Necessitates Finance and IT Collaboration
As organizations move faster than ever, this move into technological leadership is not unprecedented as we discussed in our blog last year on the importance of CIO/CFO alignment, which highlighted the following statistics on CFO growth:
- Nearly 40% of finance leaders admit the finance department is becoming more accountable for the business’ success
- 45% admit they are under increased pressure to raise productivity
- 44% say the company is placing more emphasis on driving business growth
- 41% say they are being asked to reduce operational costs
Because of this, the CFO has become an important driver in technological decisions. Making this happen, on the other hand, requires a different mentality—the CFO and CIO need to get on the same page, speak the same language, and each communicate his or her goals and concerns.
Technological Risk Management: Data Breaches Affect the Bottom Line
As Microsoft mentioned, anything that affects the bottom line is the CFO’s responsibility. Finance is built on structure—the entire concept of financial management is a science with the number one goal being stability. Knowing this, the most unexpected, costly, and destabilizing things that can happen to an organization is a data breach.
A data breach affects the bottom line in a variety of ways. Not only are there unexpected direct costs associated with the breach—in 2017, the average cost of a data breach was $3.62 million—there are long term effects on the bottom line. Lost customer trust results in lost revenue. Lower employee morale increases churn and in turn drives up hiring costs.
This is possibly the greatest driver of finance’s newfound role in technology and possibly the greatest driver of cloud solutions; Microsoft found that fifty-seven percent of CFOs report that risk management will become a critical part of their role in the future, a number that jumps to 66% among CFOs of companies with over $5 billion in revenue.
Bringing Your Finance Team Further: Technology Consulting from Wipfli
From the staff accountant to the CFO, there are a wide range of places that finance will move into, empowered by the technological decision-making and digital transformation efforts driven by the CFO. As the finance organization continues to increase its stake in the long-term stability and growth of the company, it pays to have the right partner in your corner.
At Wipfli, we work with organizations of all sizes and industries to help you find, select, implement, and operate software that builds your business, solidifies your cybersecurity, and improves your day to day operations. Learn more about the software solutions we work with, download the 2019 Trends Report from Microsoft, and contact us for more details.