Good morning,
Lucy Brewster here, filling in for Sheryl.
For Part 2 in our series aimed at what it takes to become a CFO, we wanted to dig into tech. As the finance industry becomes increasingly automated, being tech-savvy is not just a plus, but an essential skill set for young professionals hoping to eventually land the CFO role. CFOs utilize software tools in a range of key job functions: conducting data analysis, outlining financial projections, and making strategic decisions. We asked experts to explain what tech trends are here to stay for CFOs—and what skills you should be looking to acquire as you climb the org chart.
Tech to get your data right
The most fundamental tech tools CFOs have at their disposal are accounting systems that help them store data and make financial projections for the company. “The concept of 'bad information in, equals bad information out' really applies,” explained Jason Dess, who leads Accenture’s global CFO and Enterprise Value services. "So aspiring CFOs really want to get a really good understanding of data and how it drives insight."
Jay Jung, who founded Embarc Advisors and works with startups as a "fractional CFO" and advises some as a consultant, emphasized that understanding how to use accounting tools is the most important skill that allows savvy finance executives to move on to more advanced toolset. For smaller companies, accounting tools used could be QuickBooks Online, but larger companies require more comprehensive systems. “Unless you have the raw data coming in from your accounting system really buttoned up, [more advanced] tools are oftentimes just the next shiny object,” he explained.
Other key tools for CFOs include enterprise resource planning (ERP) to assist in financial forecasting, Dess said. Most candidates will want to have some familiarity with the big ERP software providers like NetSuite, and the enterprise management cloud by Workday (the sponsor of CFO Daily).
For aspiring CFOs, Jung explained that learning more complex forecasting tools will help them stand out from the crowd. Data visualization software suites, such as Microsoft Power BI, allow CFOs to forecast financial figures for their own business and get a real time view of how their company is currently performing, he said. “If you can actually manipulate the data, you are going to be far ahead,” said Jung.
Tools for the CFO as a manager
As the CFO role shifts to encompass more than just financial planning for many organizations, the range of tools CFOs utilize has also expanded. “What we're seeing for modern CFOs is that they're not just contained to the traditional role of finance, they are more and more being asked to be the catalyst for change in the organization,” explained Dess.
“One of the key trends that I’ve seen over the last 10 years with CFOs is that they’re becoming more strategic,” Bain Capital Ventures partner Christina Melas-Kyriazi told Fortune earlier this month. “They need better tools to do so.”
One technology that gives executives more insight into what's happening under their own nose? Moving to the cloud. Other helpful management tools include diagnostic software that helps executives understand what’s happening in their organizations in real time to drive both cost and margin improvement. Dess pointed out data management company Celonis as one example.
Emerging tech trends for the CFO role
Experts emphasized that A.I. is not just a fad, and that tools similar to ChatGPT will revolutionize roles across finance in the upcoming years. “I expect to see more companies leveraging A.I. and machine learning to help forecast better and more accurately,” Melas-Kyriazi said. “I would say that of the companies I talk to, very few are using it fully today. But it’s definitely an increasing trend over time.”
Dess thinks that CFOs will eventually utilize A.I. to forecast their revenue and even to draft key documents. “In the next two to four years, every CFO will be spending a significant portion of their time in moving the needle [towards A.I. integration],” he said. “So if you're an aspiring CFO, that's a topic that you absolutely want to be well versed in," Less said.
Master the basics
Overall, using the basic tools skillfully is as important as understanding more complex technical softwares. One example? Jung recommends that young finance professionals use Excel instead of Google Sheets. “I found that among our clients, the younger people work in Google Sheets, which is a big handicap because Google Sheets lacks some functionality. It is likely that their senior leadership, like the CFO, grew up in Excel and appreciates the value of Excel,” Jung explained.
Dess also recommended that as a starting point, finance professionals should understand the tools the CFO at your own company uses. “If you're an aspiring CFO, either leverage your organization to go learn the tools they have, or do some research on your own and go play around,” he said.
Look for Part 3 of our series for aspiring CFOs in your inbox tomorrow. Forward this email to the aspiring CFOs in your circle—they can sign up for the newsletter here.
Lucy Brewster
Lucille.Brewster@fortune.com
