CFOpinion: Digital Transformation of Finance Series – Rose O’Sullivan, Strategic Finance Manager

September 8, 2021November 30, 2022

In the sixth and concluding interview of our Digital Transformation of Finance series, Fexco’s Strategic Finance Manager, Rose O’Sullivan talks about the role of new technology and innovation within the finance function and much more.

1. How is the role of the CFO evolving?

I think that historically, keeping the financial house in good order was seen as the sole objective of the CFO. Now in addition to that, CFOs are forming an integral part of the Executive management teams tasked with creating strategies for growth and increasing enterprise value in organizations. They don’t just report the numbers anymore but they also put their shoulder to the wheel in delivering them. CFOs are increasingly becoming more commercial in nature.

Given the vast amount of information and data now available in organisations and the rapid speed of change in the external environment I think the role of the CFO has also evolved to be a highly collaborative role requiring excellent communication skills with experts both inside and outside the business in multi-disciplinary functions. It’s not necessary to be an expert in every area but a good CFO recognises where risks may occur and ensure they hire and develop a strong team to manage these risks where possible. They are also becoming an advocate for digital transformation in finance to ensure that finance outputs are produced in as efficient a manner as possible, freeing up more time for analysis and development of insights & innovation.

2. Finance has traditionally been viewed as a back-end function in the past. Do you see it having more of a strategic role in the organisation going forward, with more input into areas like product development?

Absolutely, the traditional role of finance was one which was largely compliance-driven and revolved around reporting to boards, shareholders, Revenue and other relevant stakeholders such as banks. An extension of this is the finance business partner model where finance professionals develop a deeper understanding of the businesses they support and form part of the management teams in these businesses. Through involvement in the production of high-quality information for the management team, but also by being involved in decision-making, they can clearly see and justify the rationale for system or process enhancements.

There is huge value in having a finance view when it comes to innovation and product development.

They add to the diversity of teams which generally leads to better product design and decision making. They can adopt the persona of a finance user in a customer organisation where this viewpoint requires consideration.
Finance professionals generally have a good risk radar so may spot risks in a product design or business model that can then be amended or mitigated to reduce potential exposure.
Finance understands detailed back-office requirements and where this may historically involve manipulation of outputs, from say a new software platform which has been developed, they can inform the design process so that the outputs from the platform will meet the financial requirement. This greatly improves back-office efficiencies and leads to a more scalable platform as additional customers don’t add an additional resources in the back-office. It also facilitates efficiencies in reporting dictated by accounting standards/IFRS.
Finance input is also important given the changing landscape of VAT and digital taxes so they can ensure these items are considered
Finance brings commercial skills and support in the development of pricing policies, introductions, affiliates, partnership agreements and bonus schemes and can refine and develop these over time as products evolve to generate better outcomes for the business.

3. When it comes to digital transformation, do you feel that the finance function is slower to adapt compared to other business departments?

I believe that in the past this may have been the case when life moved at a slower pace and companies had a culture of “that’s the way we have always done things around here, so why change?” Finance teams have seen the massive improvements that technology can bring to their personal and professional lives and they understand that while there may be temporary pain in adopting new technologies, the long-term gain far outweighs this. Also, it can be exciting to be involved in the rollout of new technologies, as well as a great development opportunity for so many ambitious accountants will seek out and embrace these challenges.

4. What do you see as the typical barriers to digital transformation in the finance function?

People and Costs.

It can sometimes be challenging to get people to embrace new ways of working when they are happy with existing technologies and processes. The change in mindset is just as important as changes to technologies and processes so its vital that the users of new technologies are brought on the journey of digital transformation and can see the value it can unlock for the organization but also for them personally, as ultimately they will be key to the implementation of the new technology and its effective day to day use.

Cost can often be perceived as a hurdle though in most cases once payback can be shown and the ROI and qualitative rationale for the change are clearly outlined this hurdle can be overcome. It’s important though when looking at costs to consider them fully – system implementation, parallel runs if required, testing & training in addition to ongoing maintenance/licence/OPEX costs. Any potential savings should be explored and highlighted with the same vigour.

5. There have been many changes in finance in recent years. What do you consider to have been the biggest catalyst for transformation in the Finance function?

The ever-increasing pace of technology has made it more possible which coupled with increasing demands across multiple stakeholder groups, both internal and external has created a push and pull catalyst to drive digital transformation in finance. A stricter compliance/regulatory environment is also increasing the reporting burden on finance and has accelerated the need for automation and digital transformation.

6. What impact, if any, do you think AI will have on the finance function?

The Finance function can use Artificial Intelligence (AI) to search for underlying patterns in data. It’s important to acknowledge though that “data tells you what, not why”. While AI has the ability to have a significant impact on the way finance professionals interact with large volumes of data and create insights its true value can only be fully realised when utilised by a finance professional who has a comprehensive understanding of how their business works, which data points are of most value and how they may be interconnections or interdependencies. I believe a strong finance business partner network needs to be embedded in a business to maximise the benefits that AI can offer.

7. What technologies do you think will offer the biggest opportunity to the accounts payable/receivable functions?

I think automation is key to driving operational agility and efficiencies. Technologies like OCR on scanned documents can support in pre-population of defined fields thereby reducing manual inputs. APIs which link the systems of customers and suppliers can support pushing or pulling data across with little or no human intervention which reduces processing times and data entry errors. Portals are also useful to be able to manually retrieve documents that may previously have been sent by post or e-mail.

In all instances to get the best outcomes, it’s essential that robust processes are put in place and people are trained and comfortable with the technology.

8. As businesses are going global, how do you think technology could help to foster better relations between organisations and their international suppliers?

Video conferencing tools like Microsoft teams & Zoom have really proven their worth in the mass move to remote working prompted by Covid 19 restrictions. It is now routine for negotiations on contracts to be done remotely while previously these may have required a face-to-face meeting. Project work, innovation and new product development are all taking place in virtual meeting rooms across the globe.

For the employees of businesses operating on a global scale, learning how to optimize video conferencing tools in conjunction with other flexible online collaboration tools like Teams, Slack & Trello can support in optimizing their relationships with their colleagues and third parties.

The use of cloud-based platforms to share data in a secure and transparent manner and APIs to feed data from supplier to customer systems or vice versa in real-time is of huge benefit in a global market. Removing manual inputs and interventions can help minimise any potential disruption which may arise from varied locations/timezones.

9. According to the banking association UK Finance, a total of £207.8m was lost to bank transfer fraud alone in the UK in the first half of 2020. What role will technology play in the battle against financial fraud?

Technology can support a business in minimizing the potential damage of fraud however investment in people and policies is as crucial as an investment in technology, in order to create an environment where potential attacks are detected as quickly as possible.

While technology serves as a great tool to combat fraud, given our hyper-connected world this isn’t just an IT problem anymore but an overall business problem with every employee having the opportunity to act as a gateway to or gatekeeper of their organisation’s data.

Ongoing communication around this area and campaigns to drive awareness can help to ensure employees remain vigilant to the potential risk of fraud.

View previous interviews in the CFOpinion series:

CFOpinion explores the thoughts of CFOs and finance leaders on the topic of digital transformation of finance. Each week a CFO will offer their thoughts on matters like security, the role of AI in finance and how the finance function compares to other departments when it comes to digital transformation.

Fexco International Payments provides automated solutions for international payments and receivables. We remove the friction in cross-border payments, giving your businesses more time to concentrate on strategy and success. You can talk to us on IRELAND 1800 246 800 or UK 0800 840 2887 or email us at fcpsupport@fexco.com.