The evolving CFO toolkit: From the corner punch to advanced analytics
Do you remember the corner punch?
More than 20 years ago, it was a piece of manual technology issued to every newly minted auditor—as I was, in those early days at Price Waterhouse. I recall how essential it seemed in its stainless-steel perfection. Now, of course, the corner punch—and with it, the piles of work papers that filled my audit folder—seem relics of a pre-digital era. Today, the only corner punches one sees on the Internet are multicolored plastic ones you can buy at craft stores.
I found myself thinking of the corner punch, for the first time in years, during a meeting with one of IBM’s customers. We were discussing how so many performance management solutions are today moving beyond spreadsheets, with some even moving to the cloud. I thought of how Excel spreadsheets—once the height of digital planning and budgeting efficiency—now seem to be going the way of the manual technology of the past.
The new CFO: The 'brake' becomes a business 'accelerator'
Today, advanced analytics are transforming financial performance management systems and processes in companies around the globe. When I began in finance, the office of finance was often seen as the “brake” in the enterprise—controlling costs and determining limits to budgets and spending. The chief financial officers (CFOs) were the ones responsible for setting the checks and balances across the organization, ensuring all business units followed the planning roadmap.
In concert with the technological shift in finance—from the corner punch and spreadsheet to today’s cloud-based planning analytics—the role of the CFO has changed. In The New CFOs: How Financial Teams and their Leaders can Revolutionize Modern Business, the authors quote an FTSE 500 finance executive who notes how the traditional understanding of the CFO has radically evolved in recent years:
“Why does a car have brakes? So that it can stop—of course. But mainly, the brakes mean that the car can go faster. It’s the same for the CFO. She or he is the brake, not to stop the business, but to enable it to go faster—safely. Not the policing role, the naysayer—but the adviser who helps the firm create sustainable value.”
New technologies empowering the new CFO
Advanced analytics have empowered the finance function, enabling it to move beyond high-level oversight of an organization's finances and performance to play an increasingly critical role facilitating collaboration between other functions and business units, and driving business strategy at a more granular level than ever. For example:
- Planning, budgeting and forecasting: Cloud technologies are transforming this traditional role of the finance function. With users across the enterprise able to share analyses and collaborate more effectively in planning, finance teams can ensure greater buy-in from all business users.
- Performance and management reporting: New business intelligence and productivity capabilities, available on-premises or on-cloud, enable more detailed and collaborative reporting. Greater data input from more users enhances the accuracy of reporting and supports more-informed decision-making when changes to the business plan or strategy may be necessary.
- Predictive analytics: With predictive analytics, the finance group can mine internal and external data to uncover unexpected patterns and better predict future outcomes and trends—enabling clearer evaluation of strategies for more confident planning and attainment of business objectives.
- IBM Watson Analytics: This innovative cloud-based solution has transformed the finance function for organizations from large corporations to small and medium-sized firms. Combining powerful analytics with effortless ease of use, IBM Watson Analytics allows users to explore and visualize data, providing actionable insights for more accurate reporting, planning and business growth.
From the corner punch to spreadsheets to IBM Watson Analytics, the essential toolkit of the finance function has come a long way from yesterday’s manual technologies.
Learn more about the financial performance technologies that are empowering the new CFO.