By Larry Simcox, Sr. Director, Product Marketing – GROW with SAP, SAP
The role of the CFO is no longer about financial management. This may be a surprising claim to make but let me tell you why.
Over the last few years, the CFO’s responsibilities have shifted dramatically – from being primarily a finance and compliance expert to also serving as a risk and stakeholder manager and a strategic organizational decision-maker. And adeptly navigating increasingly complex and varied challenges requires a diverse skill set beyond traditional finance and compliance competencies.
According to a recent TechTarget article, “In many midsize organizations, CFOs often have oversight for such far-flung corporate functions as compliance, governance, human resources, and facilities.”
This shift is part of a business movement in which technology drives much of today’s innovation and transformation. As a result, CFOs are increasingly called upon to steer technology strategies and vendor selection as organizational change agents, extending their influence past finance-specific tasks such as payroll and cost accounting.
This evolution of the CFO’s role is particularly relevant in choosing and deploying ERP solutions, especially as more companies transition from on-premise software to the cloud. However, meeting this demand requires business acumen, strategic foresight, technological expertise, and the skill to collaborate with executive and organizational peers.
Valuable insights from a different perspective
Responsibility for back-office functions, such as HR and internal operations, has made CFOs qualified and uniquely positioned to influence IT decisions. Their perspective – driven by concerns over employee productivity, staffing levels, regulatory compliance, audits, and tax implications – is a valuable asset contributing to conversations beyond traditional accounting and finance features and functionalities.
This perspective primarily focuses on high-gain advantages, inspiring a multifaceted approach to IT decision-making. For example, applications and systems are evaluated based on usability, impact on workforce recruitment and retention, adoption speed, and best practices.
Other considerations include the friendliness of the user experience, compatibility with existing mobile devices, and ease of rollout across the entire business and into new regions. More importantly, finance leaders ask questions to help ensure risk management, compliance, forecasting, budgeting, and cybersecurity are adequately addressed when data is exchanged with other critical systems for manufacturing, sales, operations, engineering, and HR.
TechTarget reports that companies that use this approach are well-positioned to identify and select cloud ERP that best meets their needs. This extends to vital decisions on how and where to deploy cloud ERP and whether to focus on the investment as an operational or capital expenditure.
A reality check that accelerates cloud migration
When selecting a cloud ERP solution, CFOs wield a powerful tool for accelerating organizational growth: a longer-term view of the strategic outcomes of technology adoption. Cloud solutions offer agility and scalability, unlike on-premise software that demands substantial upfront investments and sluggish update cycles. This agility enables swift integration of new functionalities and best practices, empowering companies to promptly adapt to market shifts or unforeseen disruptions such as natural disasters.
Moreover, cloud technology automates many compliance processes, liberating finance organizations to focus on more tactical endeavors. By streamlining compliance tasks, cloud solutions afford CFOs the bandwidth to address broader risks associated with business expansion and product innovation.
Yet, for CFOs to wield maximum influence in technology decision-making, their involvement must be strategic and forward-thinking. Rather than getting lost in the minutiae of implementation and maintenance, CFOs should leverage their insights into the company’s trajectory and strategic objectives to guide technology decisions and foster collaboration between finance, HR, operations, and IT departments.
Such a collaborative mindset not only strengthens the partnership between the back office and IT department. It also helps ensure that technology decisions align with the company’s goals in ways that facilitate ongoing and reliable growth, including the simplification of mergers and acquisitions. Ultimately, CFOs assume another critical role: strategic architect who guides technology decisions and maintains transparent communication with stakeholders.
Dynamic partnership for an ever-evolving digital era
Emblematic of a dynamic environment where technology is at the forefront of business growth, the CFO’s role has undergone a remarkable evolution. But what really sets modern CFOs apart from most technology decision-makers is their holistic perspective, enriched by their involvement and hands-on knowledge of how the company runs.
Ready to help your company choose the cloud ERP that best fits your current and future business strategies? Get the guidance you need – from consideration to questions to ask – in the TechTarget article, co-sponsored by SAP, “A CFO Guide to Selecting the Right Cloud ERP Partner.”
