In a volatile business climate, CFOs need to reassess the way they work and use automation and Artificial Intelligence (AI) for better regulatory compliance. According to a white paper prepared by The CFO Board, there is a need to adopt digital tools to support the entire finance function.

Disruptive technology

“It needs to be done from existing daily generation of finance reports to dashboards that can predict the cash flow or unforeseen business risks,” said Giridhar Sanjeevani, Global CFO, Taj Group of Hotels. He, however, added that CFOs are evolving slowly and have not yet taken cognisance of the disruption that technology is causing in all kinds of businesses.

By adopting these tools, CFOs can improve decision-making, planning, control, and governance while reducing costs and increasing investment returns, according to Ajay Kumar, Senior Director, ERP/EPM sales consultant for Oracle India. So, typically, data from different sources are integrated into the IT system of a company and using AI techniques, efforts can be made to achieve the above objectives.

Resistance to change

While technological prowess is not something that CFOs are worried about, the challenges they face come from transitioning their team members to embrace the new way of functioning.

“The mindset in digital adoption is still on the kind of RoI that a finance function can get instead of looking at business efficiency and getting a heads-up on volatility,” said Sanjeevani. The paper also points to an increasing need to align business functions with technology, something which has been happening in bits and pieces. Some of the benefits include 50 per cent elimination of reconciliation by automating corrections at entry point, using machine learning algorithms to reduce the human effort to discover mismatches and reasons for them, automation of 40 per cent of tasks.

As an example, the report pointed to Ruben Stappers, CFO of Zalora. When he started out as a CFO, he had to use static excel spreadsheets to analyse his business. Now, he and his teams have the tools and technologies to analyse the business real-time, across multiple dimensions and in several visualisations. CFOs and their finance teams will need to reassess the way they work and the technology they use, and drive the transformation of their finance systems, Sanjeevani pointed out.

Dissenting view

However, not all CFOs believe that adopting digital tools will make any significant enhancements. “There are human instinct-backed decisions that are made a lot of times. Constantly having a dashboard in front of you pointing to meaningless data can be a big distraction,” said a CFO of a retail major, which has its captive business in Bengaluru. He added that companies should not get carried away with the digital tsunami, but instead should understand the key areas in which it will be beneficial.