Market shifts and macro turmoil have savvy CFOs examining internal processes to ensure sustainable growth.
“When you’re in a rising interest rate environment where it’s unclear whether or not you will have a soft landing, it’s a serious concern for CFOs in terms of how they think about their planning, budgeting, and business investments,” he said.
According to 2023 PYMNTS data, more than 90% of chief financial officers expect a global recession within the next year, and Shenkman added that macroeconomic conditions are “incredibly difficult” to address in finance teams’ planning and forecasting processes.
Given all the ongoing uncertainty, how can CFOs chart a clear path forward?
“You try to get a feel for how your business is performing and how that performance relates to the overall economy,” Shenkman said. “And you talk to other CFOs to see how they’re doing — it’s important to [talk with your peers] and understand where they are in their journey as you think about planning for your business.”
Shenkman emphasized that when finance leaders find themselves in an unclear growth environment, one of the best things they can do is start to measure the data they have, because “usually the data will lead you to the right place” and provide “the headlights you need in order to navigate through your business cycle.”
That’s because, as he said, critical to the role of a CFO is building teams, building processes, and being deeply “ingrained” into the operations of a business. All those pieces, he noted, are driven by data.
“Data resides today, and has for 50 years, at the core of business operations. The CFO that can bring together technology and gain insights into where their business is heading will have the most foresight into what is actually happening in the economy, as well as the best ability to respond to that,” Shenkman said.
As PYMNTS has written, decades-old legacy platforms and historically siloed finance office operations are creating a mounting technical debt that negatively impacts business planning and development cycles, hinders speed to market, as well as frequently adds strain to ecosystem relationships with accounting and bill pay solutions that talk past each other.
That’s why Shenkman highlighted the need for both CFOs and the broader management team to “try and simplify the landscape” with technology that makes them more agile.
“To have the burden in a legacy environment with the technical debt of applications you’re paying for that aren’t giving you the data, performance, or ROI [return on investment] you expect is not just a waste of time — but it’s a waste of money and energy for the company in terms of driving the organization’s broader strategy,” he said.
While companies are considering whether they can realize bigger payoffs as the economy’s digital shift continues and storms continue brewing in the broader macroclimate, Shenkman said that there’s “really no substitute”’ for experience.
Still, the Boomi CFO noted that “technology has absolutely evolved” the role of the CFO.
Things like being able to accurately close the company’s books on time, determine margins and headcount, revenue recognition and balancing foreign exchange rates (FX) for international growth, those are all table stakes he emphasized, adding that they will get a CFO a seat at the table but won’t win them any awards.
“In terms of the ability to gather data and gain insights and be more strategic at the management table — I think over the last 20 years CFOs have consistently become more strategically aligned and operationally important to a business,” Shenkman said.
As for the advice he would give today’s emergent generation of finance leaders, just cutting their teeth in amidst growing uncertainty?
“Leverage the information and data you have in your business, leverage your network and make sure that you have the right people you can trust — actually have conversations with them to make sure you’re addressing the right issues. Have a network of experts you can rely on to pick up the phone when you call and delve into issues together,” Shenkman said.