Chief financial officer of Chief Financial Officer, CFO

2020: Mobile technologies for chief financial officers. Research Intersoft Lab

The remote operation mode becomes the corporate standard for many Russian banks. Reality of the chief financial officer of bank - working office on the mobile device. Now using phone or the tablet it is possible to control remotely a financial result, to analyze indicators of financial performance, without delays to receive autonotifications on the events requiring special attention. On July 3, 2020 the Intersoft Lab company reported about it.

The remote format of work becomes a business organization trend. More than a half (60%) of chief financial officers of foreign banks intend to leave to work in the remote mode of employees whose functionality allows to work out of office. Results of the recent survey conducted by consulting company PWC are like that.

In the Russian credit institutions, according to Frank Media express poll, a number of employees, it is more convenient to them to work out of office, will offer different options, including transition to partial remote work.

The remote operation mode is attractive to the staff of financial departments. Their functional duties assume limited scope of personal contact and intensive use of financial data in planning processes, budgeting and forecasting, monitoring and performance monitoring. At observance of requirements of information security to remote jobs of employees, including regarding the protected environment, the financial service can carry out the tasks without loss of efficiency, being out of office. For heads of financial services it will be convenient to organize "mobile office" - to provide the key financial information necessary for accomplishment of control and managerial functions, directly on their mobile devices.

Use of mobile technologies allows to approach data view on the basis of which decisions on management of finance and efficiency are made in a different way. Instead of traditional, "static" tables - interactive reports (dashbord) in which information is provided in a form, compact, visually attractive and convenient for interpretation and the analysis. In addition to the main management reporting it is possible to bring information on measure values, operational informing on which status is essentially important for financial service, for example, to dashborda:

• indicators of profitability (ROE, ROA) and efficiency (CIR), their loudspeaker, etc.,
• profit, percentage margin and their dynamics and so forth,
• dynamics and structure of assets and liabilities, money, etc.

Having concerned the smartphone screen, it is possible to receive detailing on the interesting indicator, to compare planned and actual values, to look at the forecast, etc. Use of push-notifications guarantees that the chief financial officer will always be aware of critical changes of indicators timely to influence a situation.

According to the American center of performance and quality (APQC) and Association of financial professionals (AFP), in 2019 only 3% of bank financiers used mobile technologies in processes of financial planning and the analysis. The remote format can play a trigger role for their application in processes of financial management for which chief financial officers of banks are responsible.

• 1 XLIFFService: Error in XliffFile2XliffString method.

Mobile technologies become an embodiment of reality and a synonym of productivity. The Intersoft Lab company suggests heads of financial services of banks to seize the opportunities of service of mobile analytics Reviewer using whom they will be able to increase efficiency of the work out of office. Chief financial officers and irrespective of location will possess at any time the complete information necessary for them for execution of professional duties.

2017

Research Odgers Berndtson

The research of Odgers Berndtson company, company on selection of a managerial personnel, revealed considerable overweight of functional transformation of financiers towards information technologies and work with Big Data.

Emergence of new specialties and expansion of the current competences on a joint of functional areas of different positions already concerned all industries. The international company specializing in formation and development of management teams conducted survey Bol of 100 chief financial officers. As a result of a research traditional close interaction of financiers and lawyers (66.4%) found confirmation, also now CFO are integrated into HR projects (46.7%), marketing (22.4%) and the IT field (65.4%). According to analysts, in the large companies numbering from 5000 people the involvement of CFO into IT projects is 81%.

The set of data opening great opportunities for technical specialists — Big Data, require right approach to measurement and the analysis. The companies need to understand how it is possible to use and how to take the necessary information from data bulk. Financial top managers traditionally operate with a large number of digits, and building of qualitative analytics and forecasting — one of methods directly to influence the added value of business in opinion more than half of respondents.

"Scope of Big Data for acceptance of strategic decisions is wider and wider - it is also increase in efficiency due to process automation, and adaptation of a business model in the changing environment. Experience of the chief financial officer is ideal to undertake a role of the coordinator of analytics, as a result, participation of financiers in creation of the data warehouse in the progressive companies will be more significant", – Popova Ksenia, the senior consultant of Odgers Berndtson predicts.

The sphere of competences of chief financial officers considerably extended, calls changed. As a result of a research it was also revealed that functional area of CFO — the most important for stability of business^[1].

The forecast of Oracle for financial top executives

Oracle submitted forecasts for financial top executives for 2017. The main thesis of the forecast - in 2017 closer attention will be paid to schemes of optimization of taxation, accounting records and transparency of the international companies. Already today it is worth planning accomplishment of the new regulating regulations in the field of management of finance, such as fulfillment of requirements of IFRS 15 which become effective since January 1, 2018^[2].

1. For most of clients cloud ERP become the choice by default. On a curve peak of mastering of innovations clients will show bigger interest in cloud ERP solutions, than in the traditional systems unrolled on own platforms. By default all ERP systems which are implemented for the first time or replace outdate, will be cloud. There is an opinion that cloud ERP solutions can be same fascinating and fascinating as smartphones. The mobile, social and analytical opportunities available in a cloud, considerably exceed possibilities of traditionally unrolled systems, and they are extremely important for personnel of the companies at the moment.

In particular, young specialists are able to work in such environment and perceive such opportunities as new regulation. It becomes crucial for the companies aiming to attract talented youth.

2. There will be new determination of ERP. Clients will demand that their new cloud ERP systems always used advantages of the most modern technologies. Today's ERP systems are based on six technologies — cloud computing, mobile communications, social interactions, analytics, Big Data and Internet of Things. In 2017 this determination will be expanded to include flexibility, scalability and a possibility of sharing provided with PaaS use (the platform as service), an opportunity to add and connect artificial intelligence technologies to analyze and predict behavior of internal users and external clients.

In particular, the artificial intelligence can become in 2017 driving technology force, and even upper managers will use intellectual technologies of the automated forecasting.

3. Chief financial officers will master a role of "the second pilot of business". Heads of the companies and different business divisions rely on chief financial officers in strategic management by business more and more. Therefore CFO will focus on the reporting more and more less — on planning, risk analysis and adoption of investment solutions. During 2017 this trend will amplify. Financial top executives will play a key role in decision making on business management and to undertake duties of "the second pilot" at the CEO, and the financial service will perform functions of the "management system for flight" supporting acceptance of reasoned decisions.

4. There will be revolution in the reporting. The reporting will be more and more adaptive as the difficulties connected with abundance of data, requirements of IFRS 15 and ASC 606, transparency of taxation and the analysis of profitability are easily surmountable. For adoption of such solutions chief financial officers will need clearer understanding of all business that will mean ensuring transparency for all directions of business and for all systems used by them. It should become the center of attention in 2017.

5. The uniform data model will be necessary for financial services. If point 4 ever occurs, then the uniform model will be absolutely necessary for all financial data. Actually uniform model is necessary for all business data, and not just financial — for personnel management, marketing and sales, supply chains and other directions of business. Without the approved data model for all directions of business it will be impossible to know whether represent data arrays, generated by business, an exact picture. Without confidence in data heads can make catastrophically incorrect decisions. The Fragmentirovannost of data will interfere more and more with adoption of exact and successful solutions.

6. In 2017 digital transformation will become global. There are five significant trends having an impact on all industries and segments of business — global deficit of highly qualified personnel, appearance of robots, the accelerated reduction of jobs in connection with automation, the exponential growth of consumer expectations and change of models of business. We are in a step from transformation of some revolutionary technologies into a mainstream. Such technologies reduce operating costs thanks to bigger automation, however increase the need for investments.

If the modern companies want to survive, they should transform not only the transactions, but also the models of business. For achievement of success it is already not enough to sell the same products and services, as ten years ago. Heads of the companies and chief financial officers should look for new opportunities and implement digital technologies which will allow them to master the new directions of business.

7. The centers of the general services will become the centers of the general business. In 2017 the importance of the centers of the general services will increase again, however they will execute a new role, offering more full range of services, than traditional financial and HR services. It can be such before isolated functions as the development (which is traditionally executed by IT) or creative promotion services (a common feature of marketing).

In process of growth of automation and cost reduction use of the centers of the general business will exempt heads of business divisions from handwork which takes away from them now a lot of time that they could focus on more strategic work.

Actually 2017 - the ideal proving ground for strategic initiators. Some of the companies most successful today began the business after financial crisis of 2008, effectively using such technology innovations as emergence of smartphones and the related changes in a consumer behavior.

Now cloud solutions can become that strategic innovation which will help CFO with business optimization. It is noted by 78% of the polled financial top executives of Russia in our recent research. The cloud service of Oracle Revenue Management Cloud allows to manage easily contracts with clients and the corresponding duties to execution, helping the organizations to meet the new requirements of standards without delay.

2016: Modern Finance: Driving Transformation from Within (Modern financial department: Conversion from within)

Capability of financial department to take an economic benefit from corporate data is a key to implementation of expectations of the chief executive and board of the company today. The research of Oracle which received the name "Modern Finance: Driving Transformation from Within" ("Modern financial department: Conversion from within") ^[3], showed that closer interaction between the chief financial officer (CFO) and the Chief information officer (CIO) is a crucial condition for the head responsible for acceptance of finance solutions if he aims to help effectively business with achievement of goals and problems of conversion.

The research within which were is polled 1905 heads of the companies from EMEA region (Europe, the Middle East and Africa), finance solutions, responsible for acceptance, was conducted for studying of risks and problems which modern chief financial officers and also obtaining detailed information on what the companies undertake for implementation of conversions face.

According to results of a research:

• Nearly 40% of the polled financial top executives recognize growth of responsibility of financial department for success of business;
• 45% of respondents realize urgent need of increase in efficiency of decision making;
• 44% of respondents note that their company places emphasis on business growth stimulation more and more;
• 41% of respondents report that they ask them questions on reduction of operating expenses.

And that the most important, nearly three quarters (73%) of financial top executives agree that closer interaction between the chief financial officer and the Chief information officer is crucial for conversion of financial function of the company.

Besides, as showed a research, financial top executives recognize that changes get more and more out of the control of the companies as influence large economic, geopolitical, socio-political, and, even, climatic shocks is big more than ever earlier today.

More than a half (58%) of the polled financial top executives more are anxious with effects of the changes happening outside their organization.

• 30% of respondents disturb changes in the organization more
• 44% of respondents refer to macroeconomic problems as on one of pacing factors of risk
• 40% of respondents indicate gain of the competition and growth of business costs as the pacing external factors of changes

Financial departments need technologies which promote closer coordination between corporate divisions and help the companies to manage risks better. Nevertheless, as showed a research, years of development of highly specialized solutions led to the fact that the companies remained with bulky, nonflexible and complex legacy systems which approach a limit of the opportunities and, thereby, are incapable to manage future changes.

• According to 61% of the polled financial top executives, in their organizations the specialized systems are unrolled, and the complexity of these systems over the years increases in process of growth of requirements
• 54% of respondents consider that these systems hardly effectively will cope with satisfaction requirements of their organization in the near future

The modern, quickly configured systems which are more flexible and simple in implementation, gradually gain popularity, however many companies abstain from their implementation because of expected risks of migration in a cloud so far.

• According to 32% of the polled financial top executives, less than in a year operating expenses of the existing specialized system will exceed the costs connected with transition to the system of a new class
• Three quarters (74%) of respondents consider that use of the cloud software for management of finance is crucial for achievement of strategic objectives of digital transformation
• These 74%respondentov also claim that it will allow them quicker and more effectively to implement innovations

Many companies, however, are still not inclined to changes:

• 69% of respondents consider that transition to the standardized cloud finance applications represents risk for their business
• 45% of respondents reported that the growing complexity of observance of regulations of regulation and requirements of the legislation is the most important reason for refusal of transition to the systems of a new class
• 37% of respondents have no clarity concerning advantages and payback periods of investments (ROI) yet
• 30% of respondents recognize that the lack of coordination between financial department and other divisions of the company interferes with changes.

2014: Modern Finance in the Digital Age (Management of finance during an era of digital technologies)

The Oracle corporation and the research organization of FEI Research Foundation (FERF) published in October, 2014 the report of "Modern Finance in the Digital Age" ("Management of finance during an era of digital technologies") based on a new research describing the best practical approaches to management of technology changes which financial top executives apply during an era of digital technologies to creation of modern financial structures.

Modern technologies such as cloud solutions, social networks, mobile devices, processing systems of "Big Data", change competitive environment in global economy. The organizations which know how to create business models on a basis digital technologies try to obtain success. Heads, continuing to invest in traditional models of business on the basis of outdate to systems, the companies, employees and shareholders put at serious risk. Oracle together with Financial Executives International (FEI) association conducted a research for the purpose of determination of the best modern techniques which will help financial top executives and their departments to carry out upgrade and to try to obtain success during an era of digital technologies.

"Chief financial officers should realize importance of uniform approach to digital technology conversions which can provide both reduction of operating costs, and the increase in flexibility necessary for change of business models or dynamic mastering of the markets — the vice-chairman of Board of Directors of Oracle Jeff Henley noted. — Those who carries successfully out digital technology conversions on the scale of all enterprise not only fulfill the duties as managing directors on ensuring benefits for business better, but also have ampler opportunities for accomplishment of functions of leaders in the organizations".

The report is based on depth interviews with more, than 20 chief financial officers of leading companies and experts in data domain from all main regions of the world.

These best practical approaches are intended to help chief financial officers to be prepared for a new role in creation of more dynamic and technological models of business and to closer interaction with the top management.

"Chief financial officers interact with all bosses and bear responsibility for coordination of their actions that there were no gaps in strategy, decision making or execution. Actually, nobody adjoins to all aspects of the enterprise as the chief financial officer — Keith Kravcik, the executive vice president and the chief financial officer of Ovation Brands company noted. — For preserving of competitiveness in the modern market it is necessary to implement the best techniques similar to stated in this report, for the purpose of increase in cost efficiency and improvement of transactions".

As the chief financial officer can transform spheres of responsibility taking into account modern approaches to management of finance

Reporting and compliance to requirements of regulators:

• Implementation of modern and more technological process of closing of financial periods.
• Timely decision-making on the basis of the standardized processes and reliable management model data.
• Strategy of transition to cloud computing for upgrade of financial service. Mastering of cloud computing allows financial top executives to allocate the funds saved on IT service and the equipment for search of new opportunities for business development and also to redistribute IT personnel for support of technology innovations.

Assessment and reaction:

• Effective use of technologies of "Big Data" and expanded/predictive analytics for continuous improvement and testing of business models and formation of competitive offers to clients.
• Confidence is that all specialists make decisions, based on the same source of qualitative data.
• Investments into the platform providing providing information to the persons making decisions. It can be dynamically updated dashboards available through the protected mobile devices; timely warnings of achievement of certain parameters or exceeding of threshold values; or other means of fast and effective providing and data visualization.

Planning and forecasting:

• Replacement of difficult, separate spreadsheets with modern applications for planning. The modern functionality facilitating to business users inclusion in work and accomplishment of tasks is necessary; for example - an opportunity for work via mobile devices and support of chains of approvals.
• Inclusion of all directions of productive activity of the enterprise in business planning process for effective use of "collective intelligence".
• Reduction of dependence on annual budgets and effective use of the best techniques, such as the sliding forecasts which are based on drivers which provide planning with a business speed.

Purchases payments:

• Implementation of purchases on the basis of self-service (eProcurement) for control of extra contract costs.
• The rationalization of purchases using digital technologies providing transparency and expense control.
• Automation of settlings with suppliers using digital technologies, including electronic drawing of accounts and portals for suppliers, for the purpose of implementation of contactless transactions.

Financial management by projects:

• Application of the projects expanded the analyst for anticipatory condition monitoring in real time.
• Standardization of processes and data for providing a uniform source of reliable information on projects on the scale of all enterprise for the purpose of improvement of the analysis and the reporting.
• Providing information in real time via mobile devices and tools of social networks for decision support and successful project implementation.

Change management:

• The organization of a security system when providing powers on making changes to all contractors, starting with the CEO.
• The greatest possible simplification and standardization of processes and procedures prior to serious upgrade.
• Development of skills of creation of culture of change management.

Investment soundness:

• Use of the predictive analysis instead of the historical indicators which are based on the come true facts for reconsideration of an investment payback in digital technologies.
• At impact assessment of digital technologies it is necessary to pay attention to strategic results, and not just to operational improvements to business. More flexible resource allocation as processes are automated and rationalized should be result and also capability to attract and hold the valuable personnel using new instruments of social interactions, mobile technologies and the analysis.
• More purposeful efficiency analysis of investments for the improved assessment of investments into the specific areas having specific strategic result.

"Modern chief financial officers assume functions of catalysts of business development and propagandists of advanced technologies, however, finance divisions often implement digital technologies the last — Karen Torre's (Karen dela Torre) affairs, the vice president for the Oracle Applications direction noted. — Chief financial officers need to implement innovations in management of finance successfully to perform new strategic powers of leaders of technology conversions. This research helps to define the best practical approaches for key areas which are crucial for management of finance".

"Technology researches which we conducted before, demonstrate that influence of chief financial officers on IT service and technology investments promptly grows — Marie Hollein, the president and the chief executive officer of Financial Executives International association and the research center FERF noted. — In present period digital technologies IT services need to work more strategically, according to the corporate purposes and tasks. The research FERF and Oracle offers chief financial officers the complete guide to the best techniques of use of new technologies".

You See Also

• Chief Data Officer (Chief Data Officer, CDO)
• Chief Digital Officer of Chief Digital Officer, CDO
• The chief information officer (CIO - Chief Information Officer)
• Chief information security officer (Chief information security officer, CISO)

Notes