OracleVoice: The Digital CFO Challenge

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By Francois Lancon

The CFO is one of only two executives at a company (the CEO is the other) who could go to jail should the company publish misleading financial information (depending on local laws and regulations).

That possibility is something every CFO must live with, while still trying to close the books more quickly and provide the kind of information that can help the entire executive team make better decisions. And while closing the books in a timely manner seems like table stakes, many large, complex organizations operate as semi-independent fiefdoms run on Excel spreadsheets. Outdated applications and disconnected processes also make it hard to hold individual budget overseers accountable for financial performance.

The problems CFOs face run the gamut from the mundane to the extraordinary, from shaving costs of shared services to complying with ever-changing regulations that vary from country to country.

These challenges are nothing new, but they are persistent. And they often stand in the way of CFOs’ ability to make better use of their time and expertise. Such as, for example, providing the executive team with better visibility into currency, interest rate, and inflation risks. Such as integrating new KPIs and non-GAAP financial metrics that can help identify new business opportunities. Such as spotting under-performing assets in near real time, rather than after the quarter closes.

Pity the CFO who would like to essentially close the books every day— something that is actually attainable today—without the right set of automated tools.

CFOs understand these expectations—that every board member and CEO wants to be reassured that the company isn’t going to be “Uber-ized.” They’re looking to the CFO to provide the kind of strategic information they can use to chart the new course they know they have to take.

However, taking this new course—the much-ballyhooed digital transformation—is very difficult. Frankly, many companies will fail at it. In some cases, they will fail because their culture simply cannot cope with radical change. Key salespeople will flee. New opportunities will slip from their grasp. New processes won’t be sturdy enough to take the place of the old processes they’re replacing. (It’s worth noting that losing salespeople might be beneficial in cases where those people are themselves unwilling to adapt, but organizations also risk losing key accounts, which is less than beneficial!)

Digital CFOs are turning to modern technology for the real-time analytics, adaptive intelligence, and mobile-ready tools to support digital transformation. But those tools may not be enough.

That said, one of the biggest risks a CFO can take today is play what they would consider their safest bet, such as investing in an on-premises financial management system. That’s because, no matter how modern it may seem, that investment is a fixed anchor in the past. Even at the beginning of implementation, the features in such on-premises software systems already are at risk of obsolescence. By the time those systems are fully implemented, they will be close to two years old: Two years old is now several generations behind in the new digital world. The next upgrade cycle will require yet more investment—and take several more months or sometimes years to fully implement.

All this creates a few challenges which could end up destroying the competitiveness of the company.

First : how will CFOs accommodate new regulatory processes and new digital initiatives the company is undertaking? How will they cope with changes they know are coming within the next five years…or maybe in the next five days ?

A second aspect to consider is end user adoption, including new business process adoption. The mobile device generation will not wait 6 months for a new feature, they will build their own in parallel…in the cloud.

Last but not least lies the real challenge: how can they hope to compete with companies that do adopt agile systems?

In reality, this is not about cloud… any legacy application can be containerized and ported to a cloud infrastructure. This is about application agility, flexibility, and speed, which can only be realized through native SaaS implementations.

CFOs relying on on-premises financial management systems is tantamount to using the most advanced camera in the world to take the greatest still picture, while the rest of the world has moved onto Facebook Live.

Part of today’s CFO new mandate is to ensure that the technology they’re using is modern not only today, but also into the future, only by using an agile SaaS financial system that seamlessly integrates the most cutting-edge technology on an ongoing basis.

Cloud technology won’t guarantee success, or even survival, but at least it gives Digital CFOs a fighting chance.

I’d be happy to share my experiences with you on an individual basis. Just connect with me on LinkedIn.

Francois Lancon is Oracle’s senior vice president for the Asia- Pacific region and is based in Singapore. His LinkedIn profile is linkedin.com/in/flancon.



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