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For CFOs, Tech Transition Is A Matter Of When, Not If

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According to a recent survey by financial services company UBS AG (UBS), more than half of American and European CIOs plan to gradually shift to cloud services while another third are transitioning as quickly as possible. I recently spoke with Mark Peek, CFO of enterprise cloud provider Workday, about the way technology is changing the role of the CFO and why soft skills still matter.

Jeff Thomson: Do all organizations need to be in the cloud, and what are the risks?

Mark Peek: It’s no longer a question of if a company will utilize cloud services or applications, but how quickly it will be able to transition a majority of its workloads to the cloud. There are critical business-specific applications that do not currently lend themselves to the cloud, such as securities trading desks. But I have no doubt that we are on a path where a majority of standard business applications will be cloud based.

For any organization, security and data privacy are always front of mind, but a sound vendor selection process mitigates this risk almost completely. The practical risk for most companies is their ability, willingness and commitment to the change management processes and education of their employees when rolling out a new cloud application.

Thomson: Why is cloud technology important for CFOs and driving overall business performance?

Peek: Today’s cloud software has evolved to be lean and agile. It allows companies to break down organizational barriers and address the changing behavior of customers, competitors, markets and economic conditions. On the other hand, certain applications (on-premise accounting, EPM, human resources) are still shackled with rigid and complex systems that don’t help the finance team build for the future.

Cloud technologies for finance give management access to reliable, accurate and timely information. Managers spend more time looking ahead instead of looking backwards. With cloud applications, you’re not constrained with the next database and application upgrade, hardware refresh or security and reliability concerns. Your cloud service provider owns those headaches. The CFO focus moves from IT infrastructure to customer-facing activities.

Thomson: In what ways is technology changing the accounting department and role of the CFO (for example, dashboards and real-time information access)?

Peek: Mobile is one technology that is beginning to make a significant impact on the way finance organizations operate. Workday has taken a mobile-first approach to accessing and interacting with its core applications and this is a major – but intuitive – change that fits the way employees interact with technology in everyday life. Now, finance teams and front-line managers securely enter data and share financial reports from anywhere. For example, we provide secure reporting “notebooks” of key performance data to managers on their smartphone or tablet in real time. Over time, we expect to limit the use of spreadsheets for reporting and analysis, which are subject to data integrity errors, and we’ll move to secure mobile reporting that delivers 100-percent accurate data.

Thomson: What technologies or skills might most CFOs be overlooking, for example, in book-close automation, in the disclosures process or predictive analytics?

Peek: It’s key for CFOs to be able to automate transactions in order to make processing more efficient. The less time you spend worrying about the accuracy of transactions, the more time you can spend on analysis of the business. It’s also important to make compliance efficient, including providing an audit trail for change management. Having that functionality integrated into your core systems of records is very important.

Another area that’s often overlooked is the ability to model the long-term impact of your current decisions, particularly for technology companies where there’s a maintenance element to what you’re selling. Having the right tools in place – for example, tools you use to procure products and manage long-term contracts – allows you to spend more time with analytics. The use of big data tools allow you to combine your financial or human resource data with unstructured data from other sources, including social media, compensation and economic or market data, to gain new insights for the business. This will change the way finance professionals work over the next decade.

Thomson: How else do you see the role of the CFO evolving in the future?

Peek: There’s always going to be a premium placed on making sure the books and records are accurate. Those are table stakes in today’s finance environment, and they need to be taken very seriously.

In my opinion, finance leaders must strive to spend a majority of their time on bridging the operational realities of the day-to-day business with the longer-term strategic objectives of the business. While numbers and data analysis are important, understanding that a business is a complex ecosystem of human beings – employees, customers, partners and suppliers – who all have somewhat independent motivations is equally critical to driving success. The “how” is just as important as the “what.” Culture eats strategy for lunch – and I will always take a great operating environment and culture with a good strategy over a great strategy with just a good operating environment and culture.