Long gone are the days when Excel and PowerPoint ruled supreme in the CFO office.
That’s because in today’s fast-paced and hyper-connected operating environment, future-fit technology and data-science-driven solutions are the new tools finance leaders are using to help keep the score.
“It’s becoming a very blurred line between where you need to have finance acumen and skills on one side, and where you need to have more technical capability on the other side to really balance the two out,” Jeffrey Noto, chief financial officer at global communications infrastructure provider Zayo Group, tells PYMNTS.
Contemporary finance teams are increasingly tasked with leveraging a suite of data-powered digital tools running advanced analytics that can provide a clear line of sight into their organization’s risk profile, as well as forecast both potential business impacts due to future negative events and emergent white space growth opportunities.
Looking back on his career in finance, Noto says that being able to “work seamlessly with large lines of information” in order to provide actionable insights of the business through technology has been the biggest change in the last five years.
Technology has really infused itself, he adds.
Still, while effectively using digital tools can give CFOs faster insights and empower them to be much quicker and nimbler in their decision-making, Noto remains a “firm believer in the basic blocking and tackling” around business and financial fundamentals.
“[The role] is about situation awareness, making sure you know what’s going around at the macro level in your industry, what’s affecting your customers and your company, and how you can use technology to evaluate those different impacts — both the things you see today, but also the second-order impacts, the things you don’t see right now, but that are coming around the corner,” Noto explains.
Historically, the finance function was just about diagnosing reporting results, but now the role is moving forward into more of a proactive reporting and strategic advisory role within the organization.
“For a long time, finance was the reporter of what had happened in the past. Here are your results, go figure out how to be better. We’re now much more proactive and embedded in the business operations of the teams that lead to the outcome of the results,” Noto says.
With technology at their fingertips, CFOs can stay ahead of the curve and make informed decisions that benefit their company.
“Finance is at the center of a lot of things — we are the glue that holds together the operations of the business in many ways,” Noto explains.
“Being able to take [cross-departmental] information and put it together in a way that uncovers new insights to help us either operate more efficiently, by spending less money, or operate more effectively, by providing better service to our customers at a better price point, [is the new reality of the role],” he says.
In today’s fast-paced world, information overload is a common problem, and can hamstring a finance department’s ability to be nimble and adaptable in ensuring their company’s success.
“Systems nowadays kick out so much information that curating the data in a way that helps you understand what matters most to your business now, and helps define what will matter in the future, is super important,” Noto says.
He emphasizes that the danger is focusing on the wrong information, but says the business landscape is undergoing a transition from relying on executive opinion and experientially based management strategies to trusting the outcome of an iterative, data and analytics-driven process.
“The transition is a dicey one, it takes time to get comfortable trusting the data instead of trusting your instinct or that of a seasoned executive — but firms need to make that leap if they want to be cutting edge in the future,” Noto says.
Still, he cautions that digital tools, including next-generation solutions like generative artificial intelligence (AI), are “only as good as the code and the lack of bias encoded into those tools” — meaning that CFOs need to be sure not just that they are asking the right questions, but that there are “confidence bands” baked into the projections business decisions are being based on.
An ongoing operational truth is that a well-ordered balance sheet and an effective runway to support oneself in both good and bad times are crucial to maintaining a healthy business.
Particularly as the role of the finance department within an organization grows more complex, Noto says, “You need to have a strong team, and you need to make sure the players on your team know their positions and can play them the way that they need to be played,”
As for what the Zayo Group CFO is looking forward to most?
It’s working “very closely” with the IT team to ensure that finance has access to all the information needed to “keep that flywheel of innovation and actionable insights going.”
It’s an exciting time to be in finance, he adds — the possibilities for growth and innovation are endless.