The role of CFOs has expanded beyond standard financial management. Building a workflow that enhances financial services without compromising quality is always stressful.
As per a recent report by Pigment, “Office of the CFO 2024: Expectations vs Reality,” 64% of finance executives feel compelled to move beyond what is traditionally considered number crunching and provide early advice on business choices.
According to 34% of finance executives, they now make decisions for the entire company.
However, just 7% of finance professionals have total faith in their capacity to plan, make strategic decisions, reduce the risk posed by outside threats, and navigate their company through unforeseen circumstances.
Modern CFOs want a digital stack that can confuse data processing difficulties so they can concentrate on growth strategies in 2024. They must adopt expenditure management, risk management, and advanced financial planning solutions.
Pigment’s report also states that-
- 53% of finance leaders need the right tools to plan long-term growth.
- 88% are making monthly decisions they know are based on inaccurate or incomplete data
However, the ongoing adoption and layering of new technologies may need fixing. This occurs due to the inability of some apps and systems to mitigate the present difficulties in financial procedures. Thus, in 2024, simplicity needs to be the driving force behind CFOs’ tech stacks.
Crucial Components of a CFO IT Infrastructure
The complexity of the financial infrastructure increases along with technological advancements. Now is the ideal moment to think about adding some of the following components to the CFO tech stack upgrade:
Instruments for Financial Planning and Analysis (FP&A)
Strategic planning, budgeting, and forecasting are made possible by FP&A tools. It provides CFOs with extensive financial and operational insights.
Software for Accounting
This instrument simplifies financial management by automating labor-intensive processes like payroll, invoicing, and ledger entry.
Systems for Enterprise Resource Planning (ERP)
These systems can be integrated with other business processes and are a scalable tech stack component. Because of its integration, data flows across departments are improved, increasing the accuracy of financial reporting.
Tools for forecasting, budgeting, and business intelligence (BI)
The financial planning process can be approached more finely thanks to these instruments. CFOs can use it to prepare budgets, forecast potential future trends, and create financial targets. Actionable financial data can be created from raw data with BI technologies.
Software for Treasury Management
It supports risk management, liquidity, and financial activities. These systems are required to maximize liquidity and control cash flow.
Tools for Risk Management
These resources support the identification, evaluation, and reduction of business risks. In this manner, CFOs can easily anticipate possible financial hazards and offer methods to mitigate or prevent them.
Software for Governance and Compliance
Software for governance and compliance aids in upholding financial transparency, complying with regulations, and avoiding fines for non-compliance.
Techniques to Help CFOs Reduce the Length of Their IT Stack
Perform Research, Establish Goals, and Create a Data Structure
Do CFOs understand why their current IT stack isn’t meeting their needs? If not, now is the ideal opportunity to conduct an in-depth investigation and assess potential areas for platform improvement.
Do some research to find out more about alternative financial software options. Identifying the company’s pain points and establishing specific goals facilitates selecting a solution that best meets its needs.
Accurate data is also essential for financial planning. After conducting a thorough investigation, it is necessary to comprehend the internal architecture and the data structure.
Gain a thorough understanding of the platforms’ interactions and integrations for a smooth IT ecosystem. When necessary, employ finance automation as well.
Make a list of the best vendors and verify system compatibility.
Choosing the right technology for a business can be difficult as it evolves. Thus, making a shortlist of the best vendors can aid in focusing the study. Examine each potential vendor and determine whether they meet the requirements. CFOs can optimize the tech stack to support the current work processes by thoroughly screening each vendor.
Do a tech assessment to see which processes are streamlined and require improvement. At this step, CFOs can also assess the solution’s integration capabilities. By identifying opportunities and problems, CFOs may increase productivity, optimize ROI, and simplify data operations.
Make Sure the Technology Stack Provides Integrated Views
CFOs need detailed knowledge of the company’s financial situation and correct information to make wise judgments. However, when data is dispersed over numerous platforms and geographical areas, that might get complicated.
As a result, while selecting a tech stack, go for one that uses sophisticated integrations that provide system access and analysis in a single location.
Better insights from an integrated CFO tech stack must enable the team to get a more accurate picture. It must allow them to act on those insights without interfering with day-to-day financial operations or micromanaging them.
Put into Practice and Carry Out
After conducting all the necessary research and verifying the system’s functionality, install and run the new financial tech stack tools.
Every time a company adopts new software, they should take advantage of this chance to evaluate their existing procedures. This guarantees that management always makes course corrections and that every tech stack tool operates efficiently.
In summary
The contemporary CFO stack is an advantageous tool that improves the capacity for financial management. It makes better decision-making, gaining important company insights, and cutting costs easier. By 2024, a robust technology stack will enable the CFO to navigate the intricate world of financial leadership with assurance and competence.
