CFOs have an instrumental role to play in harnessing the power of data and technology. While firms have been digitalizing business processes for years, the Covid-19 pandemic increased the need for it as more firms urgently needed to invent better ways to do business remotely. And CFOs found themselves at the center of this shift.
But what, exactly, does it mean to be a “Digital CFO”?
Katherine Motlagh, CFO of Texas-based CyrusOne, is a leader and innovator in the data center industry. In an interview with Forbes magazine, she said:
“Becoming the Digital CFO is about creating the environment that can enable the data processing needed to present accurate, concise and relevant financial data to support business decisions in a timely manner.”
“The goal is not only to improve the day-to-day operations but also to find new lenses to look at how these decisions contribute to the enterprise’s long-term strategic vision. It is about having the right data at the right time to execute the best business decisions in as close to real-time as possible.”
Very little of this can happen without intelligent data integration.
The CFO as a Change Agent
Data integration was once the preserve of the IT experts, but today, the CFO plays a pivotal role as an agent of such technological change. The CFO must consider the integration solutions involved and help approve the budgets to make digitization and data integration projects happen.
This means CFOs are no longer just the custodians of the numbers. Today, they play a critical role as strategic advisors. They must keep on top of relevant trends and prioritize digital transformation projects, including integrations.
Increasingly, this means CFOs are leading the way to cloud-based platforms and more connected systems, not only for the business but also within their own departments, such as Accounts Payable (AP) functions. These days, you can manage the entire AP process of recording purchases and paying vendors in the cloud.
The top 5 intents in AP in 2021 are PO status, invoice status, payment status, statement requests, and buyer contact information.
Electronic or e-invoicing is also on the rise to automate each of those elements. Companies get a 30-50% reduction in data entry efforts with electronic invoices.”
The bottom line is that CFOs must help create data-driven and digital business models and processes that can adjust well to fluctuating conditions in the market and in health, supply chain, and environmental conditions.
With accurate data ported to you directly from a single verified source, you can prevent over- and under-forecasting whenever you’re making financial forecasts. A data-driven business process, based on a sound data integration solution, will help you make more informed financial analyses.
Start From Where You Are
A smart approach for the budget-conscious CFO is to start from where your organization is right now. Assess your existing systems and business needs, and then choose a pathway to connect your most important business data in consultation with all the stakeholders.
The correct data integration can mean the difference between being an adaptable, more profitable business or making faulty financial decisions. For instance, poor data sources might mean you tie up your cash reserves in unwanted inventory, for instance. Or that some departments can’t deliver as expected because they’re getting their information too late.
Technical systems and tools that once only the IT department would use are now accessed by people in many departments. Data integration underpins many of the emerging communication and collaboration tools that enable businesses to manage their remote workers and teams.
Integration helps these companies deliver services based on shared data systems, to everyone in the organization who needs it, even if they’re working at home.
Dealing with the data avalanche
However, even without a pandemic and changing work norms, most companies have been facing an increasing avalanche of data. They’re well aware of the need to understand it all better.
So, where does all this data come from?
It’s churned out by the hundreds of convenient and easy-to-use apps people use across different departments every day in SaaS sprawl, which shows no signs of abating.
Every company department also creates data: sales data, customer contact information, financial ledgers, inventory data, and supply chain management information. There are website traffic statistics and social media campaign information. Business data can include everything from simple analytics details to in-depth organizational performance reviews.
Having the data is one thing. Understanding it, seeing interesting connections, and acting on the information is another.
Smart data integration helps organize and centralize the data, so you can actually make sense of it and use it.
ERP systems are integrated business platforms.
For a more modest-sized business, the cost can be prohibitive, but there are many other options. You can still achieve integration through plug-and-play connectors. These connectors can enable critical parts of your business to communicate well and share the same data.
Prefabricated connectors have no expensive development costs. With data connectors, you avoid the programming costs of ERPs and custom integrations. You also eliminate maintenance costs.
You can deploy data connectors in days, not weeks or months, and they will improve the quality of your data, eliminating human errors. Integration can help your organization stay competitive by improving your existing workflows.
How Integration Can Help You
Here are six ways a CFO and the executive team can leverage data integration to help them build a better business.
1. Reduce costs
Using industry-standard protocols in data integrations reduces maintenance costs and eliminates separate data systems scattered across your organization.
2. Improve data transfer speed, access
With integrated systems, the latest data will be there at the touch of a button. Data should also become more widely available to anyone who needs it, with more cloud-based self-service options.
3. Ensure accuracy
Avoid the risk of using bad data as a basis for business decisions. Human input errors accidentally cause bad data, such as duplicate entries, spelling variations, and incorrect formats. Remove errors at the source.
4. Boost efficiency and save time
The right data integration improves workflows and automates self-access for many data-reliant functions, allowing managers and executives to focus on what’s important to them.
If you’re still using older software that you can’t yet afford to replace, then you can opt to connect systems and provide a platform through which all systems can communicate. Eventually, you will have a fully functional hybrid integration—a mix of systems where you bring diverse solutions together.
5. Future-proof your firm
Data integration can be the glue that enables new tools for remote and hybrid workforces to work together more easily, more naturally, and in more engaging ways. Using more effective visual collaboration tools, for example, can keep your projects rolling faster, with less stress and information gaps all around.
6. Simplify complex systems.
Data integration also simplifies sometimes complex systems. Information formats produced by different systems may be incompatible with each other and with the company’s systems.
Integration mitigates or removes that communication gap. The right integration project can extract and unify data from the complex web of applications in which it exists.
Data integration solutions can take you from disconnected systems to a more unified, seamless platform that gives a better customer experience, drives revenue growth, and improves ROI. For CFOs, data integration helps to optimize the business and remove some of the risks from financial decision-making.
Pixentia is a full-service technology company dedicated to helping clients solve business problems, improve the capability of their people, and achieve better results.