The role of CFO has changed dramatically in recent months. Partly because of the corona crisis, new digital practices are being introduced within the workplace. And CFOs are being sucked in by the tide of technology. They are expected to make the most of the potential of data. And that they leverage that same data to automate business processes. The good news is that this offers CFOs opportunities to act as drivers of business growth.
Okay, but what exactly is holding them back? Ironically, it's the financing.
With the pandemic, CFOs are increasingly being asked to do more with much less. This puts more pressure on the back office and hinders investment in digital transformation.
The fact that cost cutting is a top priority is fine, but it shouldn't come at the expense of organizations' long-term goals. How can a company grow and save money at the same time? The answer to that question lies in digitization. And more specifically, the digitization of financial processes.
Linking technology to practical data and data analysis
The corona crisis had a huge impact on business planning. According to a recent survey of CFOs and financial decision makers, 42% of all respondents embrace new technologies to improve business efficiency. And prove them wrong.
Investing in modern CRM, accounting and ERP software is critical. But it is only one piece of the puzzle. The real focus of CFOs should be on investing in the engine behind modern technology. So that means a reliable foundation of high quality data and data analysis. This is necessary to stay ahead of the competition. In addition, it helps to understand current and future business risks and business opportunities.
The fact is that CFOs have a deep understanding of the receivables outstanding with various parties. And how long those receivables have been outstanding. But perhaps it is less clear to them how risky those receivables are and whether there may be problems collecting them at a later stage.
If CFOs do not know exactly which customers owe which amount, whether payment deadlines have expired or not, or whether there are debtors with a good business performance who can easily pay off their debts, they do not have the level of insight needed to make informed decisions.
Lean on automation to harness the potential of data
Using automation to gain insight is only possible if your organization has clean and actionable data. Only with high-quality data can CFOs improve operational efficiency and provide competitive advantage.
Lewis Hamilton's Mercedes is an almost perfect race car. But if you fill it with diesel, it won't be able to leave the pit with any luck. If you fill a company with poor quality data and inadequate data analysis capabilities ... , you get the point. You get back what you put in.
Once you have cleansed, structured and practically applicable data, the rest of your digital transformation initiative will seem like a much smaller task. This applies to everything from onboarding new customers to risk management, identifying opportunities, optimizing the debt collection process and application of cash.
To obtain clean and practical data, in order to unlock the full potential of data is precisely something that Altares Dun & Bradstreet can help you with.
A redefinition of the role of credit professional
Business credit management was historically viewed as a risk reducing feature. At the time, the goal was to prevent the delivery of goods and services to businesses that could not (or would not) pay within the agreed upon time frame.
Nowadays, the focus of credit professionals is becoming more focused on growth. They are even expected to balance revenue generation with sound risk management.
CFOs who make the best use of data, data analytics capabilities and modern technology no longer run the risk that automation will make their roles as credit professionals irrelevant. They can simply redefine their role by taking administrative tasks away from their team members, leaving them with more time for projects that add strategic value to the business.
Digital transformation has been accelerated by the corona crisis. This is the same for all sectors. Financial professionals need to stay ahead of developments in this area. CFOs should see themselves as the new digital sheriff of the village. But they need data deputies to take on a modern "digital first" role in the world after corona.
We wrote a paper about overcoming innovation obstacles as a Credit Manager. Definitely a must-read if you want to maximize the value of your finance department.
Curious about the entire research report on the world of finance in 2021? You can read it here: The Dynamic Finance Organization: How CFOs Will Lead Progress and Recovery in 2021.