Top 3 CFO priorities for embracing next-gen finance

If you spend time examining the most consistent trends and topics being discussed by finance thought leaders and professionals over the past several months, you’ll see a bit of a doomsday scenario playing out. There is real concern that a downturn in the number of accounting majors entering the field, along with an increase in CFO retirements/buyouts, could have a catastrophic impact on finance and the economy at large.???

There are multiple contributing factors to the current hiring gap. But what's clear is that for the industry to successfully transition into the next generation of finance, fundamental changes to business processes and shifts in mindset have to occur to ensure that emerging leaders are fully engaged and equipped for success.??

Next-Gen Finance and Data Stewardship??

Broadly speaking, next-gen finance reflects a commitment to moving away from the way things have always been done in favor of a new approach that prioritizes hyper precision, ultra adaptability, and dramatic performance.??

To achieve this, CFOs are clearly prioritizing finance technology, in the form of finance platforms, that store and validate data, streamline and speed up processes, and allow them to partner with the business to make strategic decisions with improved insights.??

Next-gen finance allows CFOs to anticipate what’s next – for their roles, for their business, and for their industry. At our conference earlier in the year, we asked CFOs where they see finance going in the next 5-10 years and one thing was clear among everyone: the importance of acting as data stewards.??

But what does the role of data steward entail? Data stewards own and manage all organizational data, including financial and operational insights, which helps them make decisions with more confidence.??

Looking ahead, we anticipate that finance’s responsibilities will extend to include both data and decisions, bridging the gap between a company’s numbers and the narrative they reveal.??

Dresner Advisory Services reinforces this idea by emphasizing that the next generation of finance leaders must be hyper-decisive, by relying on readily available data and analytics content.??

Getting Started with Next-Gen Finance??

Now that you know why CFOs are prioritizing financial performance platforms and what to expect in the future of finance, here are some priorities for CFOs embracing a next-gen mindset.??

Priority 1: Make the right investment in next-gen finance??

Finance teams want to drive value and be a strategic partner to the business. But the three pillars of next-gen finance: hyper precision, ultra-adaptability, and dramatic performance, are almost impossible to achieve without finance technology on your side. For CFOs, the first priority for embracing next-gen finance should be researching next-gen finance platforms and understanding the value they can offer your business.???

When looking at next-gen finance platforms, these are key capabilities that, as a CFO, I would look for:???

• An advanced solution for business management
• Collaboration, distinguishing itself from personal productivity tools like spreadsheets??
• Operating on a non-transactional basis, unlike traditional accounting systems or Enterprise Resource Planning (ERP) software??
• Automating finance department processes effectively??
• Historical analysis and future forecasting capabilities??
• Seamless interaction between applications, integrating budgets, plans, and forecasts for comprehensive reporting on results??

And I’d be remiss not to mention Prophix One, a Financial Performance Platform, when considering your options.??At Prophix, our finance team utilizes a few solutions within its tech stack, but - for obvious reasons - the department relies on our financial performance platform, Prophix One, to give our team the best chance at success. A robust platform can contribute to core processes, including:???

Financial close??

Aligning financial close with next-gen technology can improve the efficiency and accuracy by automating repetitive tasks such as account reconciliation, inter-company eliminations, and currency translations. Technology helps significantly shrink close windows, enabling faster and more predictable closings.??

Budgeting and planning??

By moving beyond disconnected spreadsheets and broken formulas, in-memory processing can enable quick and precise multi-dimensional planning and analysis. Centralized security and calculations can streamline data entry, saving time and ensuring users access only relevant information. A platform also automates budget distribution and tracks all changes in an audit trail for complete transparency.??

Reporting and analytics??

By automating the creation, maintenance, updates, and distribution of financial reports, a financial performance platform ensures you have timely and accurate information at your fingertips, freeing up valuable time for deeper data analysis.? Accessing a central version of the truth, finance teams can build and modify analytics quickly, drilling up or down to view specific details and pivoting perspectives as needed. This real-time access to reliable financial insights streamlines decision-making, empowers finance professionals to act confidently based on accurate data.?

Another piece of advice is to seek out advice from industry analysts like Gartner, Dresner Advisory Services, and BPM Partners. These industry analysts can help you narrow down the key capabilities you should look for in next-gen finance platforms, like:??

• Reduces manual processes to accelerate reporting and analysis??

• Maintains an intuitive data integration web interface??

• Leverages AI-powered automation??

• Provides accurate, real-time insight within an accessible, user-friendly dashboard??

• Read our blog on four priorities to consider when buying FP&A software based on industry analyst reviews and reports.??

And finally, it’s always recommended to see what users of the software you’re interested in have to say. Prophix, for one, regularly seeks out the invaluable feedback of users to help guide the strategy and development of our platform. The direct experience of peers can be an extremely helpful guide for organizations looking to break into next-gen finance.??

Priority 2: Build a next-gen finance organization??

The technology is only as good as the people that support it. As your second priority, it’s important to focus on building a next-gen finance organization.???

There are plenty of aspects that go into building a next-gen finance organization. But as a CFO, I’d recommend three focus areas:???

• Cultivating Talent and Skills Development: Look to hire individuals who possess not only financial acumen but also a strong understanding of data analytics, technology, and communication. Encourage continuous learning and professional development, but also take time to ensure that employees are in their best roles and fulfilled by their work (i.e. are they being assigned valuable tasks or value-add tasks?)??

• Fostering a Collaborative Culture: Encourage a work environment that leverages teamwork and cross-departmental collaboration. By doing so, finance can act as a strategic partner to other business units, ensuring that financial insights support broader business goals and strategies effectively.?

• Implementing Agile Processes: Adopt agile methodologies that allow the finance department to respond swiftly to changes and challenges in the business landscape. This includes adapting workflows and embracing technologies that support flexible and efficient decision-making, ensuring resilience in a fast-paced economic environment.?

On Sept. 25, Prophix will host a webinar, "Strategy over spreadsheets: Building the next generation of finance leaders" that will provide more guidance for shaping the new wave of finance leaders, allowing them to grow their skills and embrace the mindset needed to support the future of the industry. You can register to attend or watch on-demand here.??

Priority 3: Champion next-gen capabilities across the organization?

In line with the above two priorities, a crucial third priority for any ambitious CFO should be championing digital transformation across the entire organization. While implementing next-gen finance technology and building a future-ready finance team are crucial steps, ensuring these efforts permeate throughout your organization is equally important. It's not just about your finance department becoming more agile and innovative - it's also about cooperation and collaboration between disparate parts of an organization. ?

That can mean advocating for more tech-investment across various business units, and regularly collaborating with other leaders to align digital strategies and gauge where new or legacy technologies are truly adding value. Essentially, it's about fostering a culture where technology is recognized as a key driver of strategic growth, not just a tool for improving operational efficiency.?

As technology and automation continue to advance, it’s up to finance professionals to embrace this change and shift their focus towards adding strategic value to their organizations. Leveraging powerful new tools, building a next-gen finance organization, and aligning people and processes with technology, the finance department can quickly evolve into the strategic brain trust of the entire organization.?