Are you a CFO? or aspire to be one? Then, you might already know that CFOs today are Chief Future Officers in addition to being Chief Financial Officers. The role of CFOs has evolved to be decision-makers, responsible for driving the organization, combating disruptions, and transforming business challenges into opportunities through meaningful information and analytics.
At HighRadius, we talk to hundreds of CFOs every year and understand their challenges. With this eBook, we bring you conversations with CFOs that stood out and our key learnings from them.
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Why do some employees stay longer than others? The answer is ‘Inertia’. Employees tend to stay with companies until some internal or external forces motivate them to leave, much like the concept of inertia in physical science.
It is no secret that the resource crunch in finance is real- and is here to stay! Hiring and retaining staff is the most difficult task facing CFOs over the next 12 months, according to a survey from Gartner, Inc. This explains why most leaders work so hard to retain their trained professionals.
CFOs need to maintain workforce stability by empowering lean teams to go the extra mile with technology, so that “mundane tasks” don’t break the inertia.
Employee Empowerment at the CFO’s office is a must today. On the CFO Circle podcast, Ilana Esterrich, Chief Financial Officer at American Coatings Association pointed out that the biggest challenge faced in 2022 is combating talent shortage at CFO’s office. Ilana, said- “We are now required to provide more value with a smaller hybrid workforce and ensure employees keep upskilling themselves.”
While building a lean team that is capable of delivering more with less has become a top priority for CFOs, Ilana believes that technology is acting as a catalyst in achieving this. “As a company, we need to educate ourselves on how AI and automation can be beneficial in removing manual efforts from repetitive tasks so that humans can spend more of their time on value-added functions such as analytics and decision-making.”
Considering 2023 is just around the corner, it is essential to understand what CFOs are looking forward to this year. And investing in employees, empowering them with technology, and helping them upskill definitely tops the list of goals. “ I would try to retain my staff by giving them the bump they deserve and helping them upskill so they would want to stay in my organization,” says Ilana.
In the absence of information, humans often jump to conclusions! This human nature impacts decisions at the CFO’s office – as the decisions are taken on intuitions and personal biases. Primarily caused due to ambiguity of financial data, making it challenging for CFOs to decipher it.
CFOs have potentially infinite opportunities to gain fresh insights and provide value to the company as firms generate more data daily from several sources. Managing this volume of data to glean bankable insights can be overwhelming.
Modern emerging technologies like machine learning, big data, and AI enable CFOs generate operational value through analytics. With over 20 years of experience in the world of finance, Glenn Hopper, CFO of Sandline Technologies, believes that CFOs today need to leverage analytics to help businesses make strategic decisions. On the CFO Circle Podcast, Glen said, “We are the ones who should be leading analytics because we’ve been doing polynomial regression in Excel for 20 years. And we inherently know how to do this. It’s incumbent on us as finance professionals to learn new technology and to show that the finance role is evolving. And we’re not just historical reporters. We are the keepers of this data who can help become strategic for the companies.”
Modern CFOs are now giving serious thought to technologies such as machine learning and AI when it comes to processing huge volumes of data to become more strategic. When asked how machine learning could help CFOs, Glenn said “With machine learning, you can get cognitive insights. Once you start gathering that data, you can have descriptive statistics. And then can start predicting what future customers may or may not do based on that data. That means you go from descriptive to predictive, to prescriptive, meaning you’re taking the data and taking action on it.”
The value of data to any business is now possibly greater than the value of any single commodity. The ability to aggregate massive amounts of information and transform it into digestible and actionable insight is a significant business breakthrough. And with such modern technologies at hand, CFOs have the opportunities to add value, make better decisions, innovate and drive growth successfully.
The only thing predictable about the current business environment is its unpredictability. To thrive, organizations need to pivot quickly. Let’s answer the obvious “What can CFOs do differently in 2023 to future-proof their processes and respond more agilely to market pressures?
Start measuring business processes as it’s the first step towards establishing control and eventually leads to improvement. And work on building processes that are more flexible, easy to deploy, and adapt as the needs of a business evolve.
While there is no straightforward way of achieving this, a smart way to begin the journey would be to rethink legacy systems, implement cutting-edge automation, commit to solid data governance, and constantly instill the need for change throughout the organization.
Automation of processes is imperative for business growth. In a conversation with Frank Mastronuzzi, Chief Financial Officer & Managing Partner of Punch Financial about how companies can ensure growth in 2023, he emphasized that “Companies often try to change processes to make them more efficient, which is quite difficult. Instead, we need to focus on automating them, not just one or two but all of the processes.”
While automation of business processes is essential, Frank believes investing in scalable technologies are equally important as it makes businesses more agile. “I’m big on putting an infrastructure that will scale with the business because nothing’s worse than growing really fast and then midstream during that growth period, you have to change systems” He continued “We like using technologies that are flexible, that can fit process changes because processes change when you scale.”
In 2023, CFOs need to strike the right balance of humans+technology for business processes to be effective. A good way to start would be to invest only in technology that would solve business problems and ensure that processes do not use more manpower than needed. “The idea is to solve a problem. A problem that’s hindering the growth of the company and is using more manpower than it should. People are necessary for company growth, but the goal should be to hire them only if necessary. If they do not directly contribute to a business process, it will only add to business costs” says Frank.
If agility is the destination, scalability is the road. Digital transformation has become the need of the hour, and technology is the crux of it. Taking recent times into consideration, most CFOs are planning their 2023 strategies around making businesses more agile.
While gaining agility is the goal, focusing on scalability through automation and technology is what will drive businesses there.
To thrive, businesses need to leverage scalable technologies and wield them strategically, and at the same time drive their adoption across the workforce.
Knowing your needs is more important than following others. On the CFO Circle Podcast, Michael Samonas, Group Chief Financial Officer at SIDMA STEEL SA shared “CFOs need to find the real need for digital transformation and not just do it for the sake of it. It’s important to have KPIs to measure the ROI or outcome of the digital transformation.”
Businesses are constantly transforming as the world transitions to an ultra-digital era. Technology has ushered in this new era by enabling transformation and empowering people. According to Michael, there is a strong correlation between technology, transformation, and people. “The finance function needs the proper combination of technology and functionality. So, it makes it easier for employees to do their work as they please and keeps them satisfied.”
As they say, the technology world is flat. Many organizations are getting quick wins by leveraging technology. But, without a strong roadmap for the digital transition, adoption and long-term value realization still remain a challenge. When asked about the roadmap for digital transformation, Michael said ”First of all, I would choose a scalable solution. I wouldn’t go for software that might not work for me after a couple of years, and I would require to change it.”
In conclusion, digital transformation sometimes could be a slow-cooked meal, but scalable emerging technologies are the secret ingredients that make it worthwhile.
Having happy customers is good, but having loyal customers is priceless. Generally, customers are happy when businesses meet or exceed their expectations. But will those customers be loyal? The jury is still out on that.
Driving customer loyalty won’t happen overnight or in a vacuum. To achieve this a business needs to incrementally understand its customers and make an attempt to consistently keep them happy. Achieving this consistency is possible if businesses can cater to the changing preferences of customers through personalization.
Think about the experience provided by big businesses. From Netflix and Amazon to YouTube and Spotify— how they offer content that is uniquely personalized based on your watchlist and preferences. Isn’t that the kind of experience every business would like to provide their customers?
Well, this could only be achieved if businesses can capture and process customer data and personalize customer experience efforts based on it.
While this may be the age of automation, nothing can beat the human touch and personalization. When asked about the mistakes most businesses make with customer experience, Lawrence Chester, Fractional CFO of CFO Simplified said “Most businesses deal with situations on a blanket process, where they have the same blanket answer for every client.”
Every customer is different. In today’s business climate, customers value personalization, and generic interactions have gone out of sync with what customers want. Lawrence believes that personalizing efforts based on past experiences and interactions with customers is the best way to guarantee satisfaction. “Tailor your follow-up for individual customers based on what your experience has been with them. You are going to have a different experience with every single client that may be different than the experience that other people have with them. And so you need to judge how you are relating to that customer based on your individual experience with them.”
With an increasing customer base, businesses struggle to provide a personalized experience. As a resolution to drive better customer experience, CFOs have started leveraging automation. “I think the situation is that if you have five customers, it’s very easy to manage them. If you’ve got 500 customers, it’s much harder to manage them on an individual basis. So if there was an automation tool that allowed you to set rules, policies, and practices and can identify when things are happening out of the norm so that you can react to it, I think that’s the key” said Lawrence.
“At least 40% of all businesses will die in the next 10 years… if they don’t figure out how to change their entire company to accommodate new technologies.”
— John Chambers, Cisco
When you think about Tesla, you might consider it to be an ordinary car manufacturing company. But, Tesla is actually a technology-focused company that keeps artificial intelligence at its core- which is one of the major reasons for its success. And when you look at how Tesla has been able to capture people’s imagination with autonomous vehicles, you will realize what the company did was to make people understand the broader appeal of self-driving cars operating without any need for human intervention potentially boosting safety and productivity and curbing energy consumption.
If you think about it, in the B2C space, the top 10 applications that you use on an everyday basis like Amazon, Uber, and Netflix have completely disrupted their respective markets via data-driven intelligent platforms. We are seeing a similar transition in the B2B space, where traditional cloud-based software companies that are just systems of record are being disrupted by Autonomous Software players like HighRadius that have data-driven intelligent platforms.
HighRadius offers cloud-based Autonomous Software for the Office of the CFO. More than 700 of the world’s leading companies have transformed their order-to-cash, treasury, and record-to-report processes with HighRadius. Our customers include 3M, Unilever, Anheuser-Busch InBev, Sanofi, Kellogg Company, Danone, Hershey’s, and many more.
Autonomous Software is data-driven software that continuously morphs its behavior to the ever-changing underlying domain transactional data. It brings modern digital transformation capabilities like Artificial Intelligence, Robotic Process Automation, Natural Language Processing, and Connected Workspaces as out-of-the-box features for the finance & accounting domain.
Finance business stakeholders have been led to believe that they have only two choices: pick an application software vendor that digitizes a paper or Excel-based process to an electronic system of record, or, choose a middleware platform for AI or RPA to build and maintain in-house, domain-specific capabilities. In contrast, HighRadius Autonomous Software combines the best of both worlds to deliver measurable business outcomes such as DSO reduction, working capital optimization, bad-debt reduction, reduced month-close timelines, and improved productivity in under six months.
HighRadius Integrated Receivables Software Platform is the world’s only end-to-end accounts receivable software platform to lower DSO and bad-debt, automate cash posting, speed-up collections, and dispute resolution, and improve team productivity. It leverages RivanaTM Artificial Intelligence for Accounts Receivable to convert receivables faster and more effectively by using machine learning for accurate decision making across both credit and receivable processes and also enables suppliers to digitally connect with buyers via the radiusOneTM network, closing the loop from the supplier accounts receivable process to the buyer accounts payable process. Integrated Receivables have been divided into 6 distinct applications: Credit Software, EIPP Software, Cash Application Software, Deductions Software, Collections Software, and ERP Payment Gateway – covering the entire gamut of credit-to-cash.