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CFO’s Mandate to Digital Transformation


Companies are still in the early phases of integrating digital technology into financial processes in ways that can boost long-term value creation, efficiency, and insights. Here’s how the CFOs can take the lead by aligning the benefits of treasury software with their objectives.

Contents

Chapter 01

The Evolving Role of a CFO: Embracing Digital Transformation for Tomorrow’s Treasury

Chapter 02

How CFOs can Fast-Track Digital Transformation and Achieve a Win-Win from Treasury Software

Chapter 03

Aligning the Benefits of Cloud Treasury Management Software with the CFO’s Objectives

Chapter 04

Mastering Strategic Planning by Leveraging HighRadius Treasury Software
Chapter 01

The Evolving Role of a CFO: Embracing Digital Transformation for Tomorrow’s Treasury


Mid-market CFOs, traditionally considered number crunchers and financial risk managers, are facing a new era. As organizations rely on CFOs as strategic executives crucial to corporate planning and decision-making, the role is altering substantially.

CFOs will continue to be responsible for fundamental duties such as budgeting, financial reporting, and cash flow management. However, simply being the organization’s financial steward is no longer sufficient. The modern CFO is expected to contribute strategic ideas to the C-suite while creating and carrying out the business’s strategic plan and facilitating transformation across the entire organization. For many financial professionals, this meant acquiring new skills for the digital age.

Moving Towards Digital Transformation

Technology advancements and easy access to vast volumes of data, both inside and outside the organization, are changing the function of the modern CFO. They must take the initiative in implementing these new technologies and serve as transformational leaders who manage the speed of change across the organization. Those that succeed in doing this will be able to make data-driven decisions, which will help their organizations become more effective, successful, and agile.

How has digitization influenced CFOs?

With half the time of traditional processes, new technologies like APIs, Machine Learning algorithms, and Artificial Intelligence enable finance teams to find fresh insights that no human could ever anticipate. Digitization influenced to CFOs to: 

  • Automate the data gathering, modeling, and cash forecasting process.
  • Plan for a variety of scenarios using flexible user-defined variables.
  • Perform variance analysis effectively to improve forecast accuracy.
  • Segment transactions into relevant tags based on patterns in the data.
  • Reconcile bank statements automatically using a single and secure platform.

Despite the influence digital transformation has on finance and treasury, many CFOs cannot initiate the transformation due to some bottlenecks, which are discussed below.

What are the challenges CFOs face in initiating digital transformation?

What are the challenges CFOs face in initiating digital transformation?

According to the survey by Mckinsey & Company, CFOs are facing problems initiating transformations because some transformations are out of the scope of the CFO and also because they don’t have enough time and resources to lead the transformation.

Chapter 02

How CFOs can Fast-Track Digital Transformation and Achieve a Win-Win from Treasury Software


These are the best practices for CFOs to initiate and accelerate digital transformation:

  • Invest in value-added technology: Many businesses still use outdated technology to manage cumbersome financial procedures. And less than one-third of CFOs are confident that their organizations’ technologies are aligned to support future success. By using advanced technologies to automate complex finance operations, CFOs can focus on value-added activities.
  • Deploy data and analytics insights in a secure and scalable manner: Without the assistance of expert data scientists, the treasury team frequently faces difficulty creating insights that corporate leaders can utilize to make choices. CFOs can promote “democratization” by offering a more straightforward data and analytics experience to finance teams to uncover data and insights for the business at scale.

    For example, a specialized team could use data augmented with artificial intelligence to speed up data collection and preparation and discover and visualize discoveries, all without the need to create models or write algorithms.

  • Employ, retain, and advance digital financial skills: To support a business in 2022 and beyond, digital skills are required. But only one-third of finance leaders firmly believe that their teams possess the necessary skills for a digital finance role. CFOs must fill the expanding digital skills gap in finance to increase the ability to use digital technology capabilities properly.

To plan, companies must digitize their financial and treasury activities. To digitally transform operations, CFOs must lead the implementation to digitally transform operations by considering the questions below. 

What questions must CFOs consider before drawing their attention to technology investments?

Before CFOs make their decision, they may want to consider the following questions:

  • How will the new technology affect the company as a whole? 

    For example: How will this technology implementation allow the CFO to make more informed decisions?

  • Does the technology have the potential to develop and expand in the future?

    For example:

    • Can the new technology extend throughout the organization with a workflow that enables global teams to cooperate efficiently without the hefty investment in IT (hardware, software, data, security, etc.)? 
    • Will it scale easily when you expand into other markets or develop through acquisition?
  • Has the technology cost-benefit analysis been done?
  • For example:

    Treasury teams should have a system to keep tabs on expenses and gains during the solution. If the value outweighs the expected cost of a treasury management system, the business should consider going forward with the investment. 

A treasury cloud-based software can improve treasury processes and provide scalability and flexibility per a company’s needs. But these benefits can be obtained when the goals of the CFO are aligned with the software’s USPs.

Chapter 03

Aligning the Benefits of Cloud Treasury Management Software with the CFO’s Objectives


For an organization to profit greatly from treasury software, it’s critical to match the advantages with the CFO’s objectives, such as: 

  • Synchronizing digital strategies with business results.
  • Creating flexible planning and budgeting to effectively balance the benefit and costs of digital efforts while making decisions about how to allocate resources.
  • Considering new metrics to gauge the performance of digital investments, which conventional capital budgeting techniques may not cover.

Although most people are aware of the apparent advantages, the following holistic benefits that can help the CFO’s case are as follows:

 Benefits of Treasury Software for the CFOs

Chapter 04

Mastering Strategic Planning by Leveraging HighRadius Treasury Software


On average, our clients have saved 48+ hours per month by automating their bank data aggregation and standardization. 

Here’s a customer case study that states how a global wholesale distributor with a revenue of $37B with operations across America, EMEA, and APAC overcame their challenges with our software.

They were facing these challenges:

  • North America, EMEA, and APAC each had different ERP instances and different cash processes, creating significant challenges in global forecasting and visibility
  • Lack of bank connectivity and multiple legacy systems led to a longer turnaround time for generating forecasts
  • Lack of continuous visibility across thousands of transactions created high forecast variances
  • Extended user base across geographies provided inadequate decision-maker visibility

With HighRadius’ AI-Powered Cash Forecasting Software, they were able to: 

  • Consolidate 28 regional forecasts with minimal manual effort continuously
  • Provide highly improved accuracy vs. existing processes up to 74% 
  • Highlight forecast variance automatically at the regional, account, and transaction levels
  • Enable continuous insight into a current and forecasted global cash position 

With HighRadius’s Treasury Management Software, CFOs will be able to have access to the following: 

  • Improved productivity and reduced operating costs: Automation integration improves productivity, adds hours back to the company, and frees up staff time for higher-priority tasks. By freeing up resources, organizations can concentrate on high-priority projects frequently put on hold because staff members are too busy trying to keep up with the volume of manual work. This means more available cash flow for innovation and high-value activities.
  • Identifying and resolving workflow inefficiencies and bottlenecks: A CFO’s primary responsibility is to provide precise financial information to stakeholders on time. Still, inefficiencies might result in missed deadlines, further extending the financial closing time. Automation enables CFOs to effectively pinpoint bottlenecks, assign jobs, and expedite the financial process while meeting delivery dates.
  • Enhanced risk management and economic volatility control: The software helps CFOs protect their firms against various scenarios, such as downturns and upturns in market conditions, changes in customers’ business, etc., by offering clarity over customers’ behaviors and historical data, and delivering predictive algorithms that identify opportunity and danger. As a result, CFOs can forecast how to maximize prospective income while lowering the risk of bad debt.
  • Produce more actionable insights: Another crucial benefit of treasury software is reducing errors and generating valuable insights from data. The software’s feedback-loop model helps achieve up to 95% accuracy. This results in fewer errors in driving critical business decisions and allows CFOs to stay vigilant of their cash flows at all times.
Chapter 01

The Evolving Role of a CFO: Embracing Digital Transformation for Tomorrow’s Treasury


Mid-market CFOs, traditionally considered number crunchers and financial risk managers, are facing a new era. As organizations rely on CFOs as strategic executives crucial to corporate planning and decision-making, the role is altering substantially.

CFOs will continue to be responsible for fundamental duties such as budgeting, financial reporting, and cash flow management. However, simply being the organization’s financial steward is no longer sufficient. The modern CFO is expected to contribute strategic ideas to the C-suite while creating and carrying out the business’s strategic plan and facilitating transformation across the entire organization. For many financial professionals, this meant acquiring new skills for the digital age.

Moving Towards Digital Transformation

Technology advancements and easy access to vast volumes of data, both inside and outside the organization, are changing the function of the modern CFO. They must take the initiative in implementing these new technologies and serve as transformational leaders who manage the speed of change across the organization. Those that succeed in doing this will be able to make data-driven decisions, which will help their organizations become more effective, successful, and agile.

How has digitization influenced CFOs?

With half the time of traditional processes, new technologies like APIs, Machine Learning algorithms, and Artificial Intelligence enable finance teams to find fresh insights that no human could ever anticipate. Digitization influenced to CFOs to: 

  • Automate the data gathering, modeling, and cash forecasting process.
  • Plan for a variety of scenarios using flexible user-defined variables.
  • Perform variance analysis effectively to improve forecast accuracy.
  • Segment transactions into relevant tags based on patterns in the data.
  • Reconcile bank statements automatically using a single and secure platform.

Despite the influence digital transformation has on finance and treasury, many CFOs cannot initiate the transformation due to some bottlenecks, which are discussed below.

What are the challenges CFOs face in initiating digital transformation?

What are the challenges CFOs face in initiating digital transformation?

According to the survey by Mckinsey & Company, CFOs are facing problems initiating transformations because some transformations are out of the scope of the CFO and also because they don’t have enough time and resources to lead the transformation.

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The HighRadius™ Treasury Management Applications consist of AI-powered Cash Forecasting Cloud and Cash Management Cloud designed to support treasury teams from companies of all sizes and industries. Delivered as SaaS, our solutions seamlessly integrate with multiple systems including ERPs, TMS, accounting systems, and banks using sFTP or API. They help treasuries around the world achieve end-to-end automation in their forecasting and cash management processes to deliver accurate and insightful results with lesser manual effort.