Optimizing the CFO Tech Stack

tech stack

The role of the office of the CFO has changed considerably over the past decade, moving away from a transactional approach and evolving to become a more strategic business partner. In that time, finance leaders have been quietly assembling a new tech stack to adapt to the shifting demands of a complex market and support the needs of the finance organization. 

The technology landscape is vast and continues to grow, which makes technology investment decisions difficult, especially as finance leaders look toward the future. For example, the number of marketing technology vendors, which includes automation tools, analytics platforms and customer relationship management (“CRM”) applications like Salesforce, increased from a mere 150 in 2011 to more than 7,000 as of 2019. That figure only accounts for a fraction of the technology solutions finance leaders may consider integrating into their tech stacks, such as ERP, inventory management and networking tools. Vendor consolidations further complicates matters.

Although finance leaders have historically looked for all-in-one solutions that met most of their needs, today’s specialized tools allow them to pick and choose the best fit for every requirement. A best-of-breed approach that tailors each solution to a particular need is an effective way to optimize the CFO stack and drive greater value throughout the business.

Through careful tech stack design, technology can be molded to fit your organization’s needs – not the other way around. 

Given the sheer volume of options available – including technology, vendors, packages, services and deployment tactics – strategically selecting the right tools from the best vendors can be a daunting task.

Creating a comprehensive technology roadmap that lays out how the tech stack needs to evolve to support future business demands will make these investment decisions easier – and more successful.

There are five steps that you should consider to optimize your tech stack:

  1. Conduct proper discovery on the existing tech stack to understand key pain points and highlight future business requirements.
  2. Clearly define your data strategy and architecture requirements.
  3. Refine the vendor selection process to identify the best candidates.
  4. Create a clear and comprehensive implementation plan and project roadmap.
  5. Implement solutions and support Finance ownership.

Step 1: Conduct discovery and design a scalable foundation

Finance leaders should begin by reviewing the organization’s existing technology footprint and identifying where improvements need to be made to support both current and future business goals.

It is important to approach this discovery process from both finance and technology perspectives to ensure your tech stack is flexible enough to expand in any direction and support the addition of new elements and tools. 

During this process, you will need to clearly define and document business requirements for the foreseeable future. Fully understanding where the organization’s priorities lie will help align technology decisions with business objectives. This is also a good time to review current processes and identify ones that need to either be replaced or re-engineered. You’re not just upgrading your technology stack; you’re improving the way your organization runs.

Technologies to consider prioritizing to deliver the most impactful business value include:

  • Process optimization and automation.
  • Enterprise resource planning (“ERP) and enterprise performance management (“EPM”).
  • Data visualization and business intelligence (“BI”).
  • RPA.

Key questions

  • What are you trying to solve for? [People / Process / Systems].
  • What does the work look like today? [Current State].
  • Where is the work performed? [Technology].
  • Who is performing the work? [People].
  • How is the work performed? [Process].
  • Are there any gaps/inefficiencies within the current state that can be mitigated and / or eliminated in the future state? [Current State / Process / Technology / People].
  • Are there any redundancies that can be eliminated? [Process].

Step 2: Define future data structure and architecture

Having completed the discovery phase, finance leaders should begin mapping out the organization’s data structure and architecture. 

This step is critical for several reasons, helping finance organizations:

  • Identify who owns each component of the data.
  • Understand how data is processed in the system.
  • Ensure all systems are capable of processing the data.
  • Check that data can be transmitted between each system.

Data structure and flow diagrams can help streamline this process as well as facilitate system integrations.

At this stage, you should consider drafting integration strategies that will support the addition of new technologies in the tech stack. Data integration can take on various forms, and it’s essential that every new solution seamlessly integrates with other systems to facilitate day-to-day transactions and data capture.

Finance leaders don’t need to be told how important accurate data is to financial reporting, but there are many other benefits to proper data structure and architecture to consider, especially regarding analytics capabilities. Consider leveraging extract, transform and load (ETL) solutions to identify, capture, prepare and transform data so it can be used for analytics purposes later on.

Once you have outlined the current state of data architecture, as well as what changes will need to be made to meet future requirements, you can begin vetting different technologies and selecting the right solutions for your needs.

Key questions

  • What capabilities need to evolve to achieve business objectives? [People / Process / Technology].
  • What products enable business objectives? [Technology / Process].
  • How will performing the work change with new capabilities? [People / Process].

Step 3: Optimize strategic search and selection process

The legwork done up to this point will help you refine your vendor list and zero in on the best candidates available. Any vendor who is unable to meet your future state criteria can immediately be removed from consideration.

Available options can be further narrowed down by focusing on which tools best align with your specific business needs, and developing a weighted scorecard for 3-5 vendors that are the best candidates. A good place to start is by prioritizing enablement and efficiencies, as these solutions will deliver immediate results and help build toward the future. Another point to consider is usability. Intuitive and user-friendly software is easier to adopt, helping organizations create more power users capable of managing those tools in a self-service fashion.

By taking a strategic approach to the selection process and carefully vetting each potential addition to the tech stack, you can minimize system redesign requirements, avoid incurring additional costs and maximize your ROI.

Looking for ways to drive the most value throughout the organization? These areas are good candidates for initial investment:

  • ERP/Accounting: ERP systems touch every corner of the enterprise and help the office of the CFO achieve full ownership of the organization’s financial data. Integrating ERP solutions with other systems paves the way for real-time analytics and strategic planning.
  • Process enablement: Streamlining and standardizing financial processes increases business efficiency and agility, improves productivity, reduces risk and helps finance leaders become better business partners.
  • Automation: Automate manual, repetitive tasks to enable speed of delivery and optimize value-add work for your workforce.
  • EPM/Budgeting & Reporting: Financial planning and analysis (FP&A) is increasingly becoming an important component of the CFO role. Investing in these solutions today will help CFOs provide meaningful, timely analysis.
  • Payroll/HR/HCM: As your business changes, so too do your personnel requirements. Your payroll and HR systems need to be flexible enough to grow with your organization.
  • BI/Data visualization and analytics: Leverage available data to guide decision-making and respond to new market developments and business requirements in real time.
  • CRM platform: Better understand your customer base and improve sales forecasting and reporting, while increasing sales productivity and customer retention.

Key questions

  • What processes will be impacted and re-designed with new products and capabilities? [Process / Technology].
  • Are the product controls in compliance with the organization’s requirements? [People / Process].
  • How do you ensure efficient selection from a system-agnostic partner?
  • Should the organization leverage a system-agnostic partner to optimize strategic search and selection? [Process].

Step 4: Design a clear and holistic implementation work plan

No matter how capable your technology solutions are, they can only do so much if existing processes are broken. That same logic applies to project planning execution: Garbage in, garbage out.

As noted, even before reaching this stage in the tech stack transformation process, you should understand what processes are broken and which ones need to be re-engineered. That way, you can ensure your business requirements actually meet the company’s vision of the future and maximize your ROI.

The holistic approach described above for technology assessment should also be used when designing implementation work plans. In particular, consider how new technology can enable more effective processes and, in turn, how those streamlined processes can unlock the full functionality of systems, platforms and other solutions.

Key factors to consider include:

  • Defining integration requirements and system limitations.
  • Facilitating project management, stakeholder alignment, change management and internal communications.
  • Understanding the impact new systems will have on business processes and operations.
  • Developing all required analytical functions, such as data mapping and data conversion.
  • Documenting all test plans and test cases.
  • Establishing cutover methodologies.
  • Monitoring all system change requests and developing implementation guides.
  • Identifying workforce needs to successfully adopt new systems.

Key questions

  • What does business as usual (BAU) look like and what will be different from today? [Technology / Process / People].
  • How do we seamlessly implement new products with efficiency and agility? [Technology / Process].
  • What controls need to be in place to ensure data integrity and quality of financials? [Technology / Process / People].

Step 5: Execute & own the implementation

Implementing any new system presents the perfect opportunity to review current processes and make improvements wherever possible. 

Process enhancements can mitigate massive inefficiencies that slow businesses down, hamper productivity and increase operational costs. As such, taking the time to optimize both systems and processes will drive greater ROI. 

Every technology implementation project should support your ongoing efforts to work better, faster and cheaper. It should deliver tangible results that improve business operations while laying the foundation for future growth and development. 

Taking ownership of these implementation projects and technology solutions in partnership with your IT department will help establish the finance organization as a leading driver of innovation within the enterprise. As business requirements evolve, the organization will continue to turn to the CFO office for guidance and strategic direction.

Key questions

  • How will the organization monitor, evaluate and revise the implementation plan? [Process].
  • Will additional resources, upskilling and / or training be required for successful implementation and future state objectives? [People].
  • How will additional resources, upskilling and / or training be acquired? [People / Process].

Start planning for the future today

Finance leaders need to drive innovation within their own organizations, and that starts with the technology stack. Planning for future business requirements while vetting the thousands of vendors and technology solutions available on the market is a daunting proposition, to say the least.

Pure system implementers understand the technology, but they rarely have the expert insight and first-hand experience into the functional process. Working with an intermediary who understands both the technical requirements and the demands of financial systems and process enablement will help you select the best technology for your organization.

CFGI speaks the language of finance while having a clear understanding of how the latest technology can support business goals and build for the future. Our expert teams can help you assess your tech stack, identify key areas of need, develop a technology roadmap and narrow your list of vendors down to the very best solutions that align with your business requirements.

If you are interested in learning more about CFGI’s Finance Transformation services related to the Technology Stack, please contact Andres Garzon, Partner (agarzon@cfgi.com, 617-306-1888) or Oscar Palacio, Managing Director (opalacio@cfgi.com, 617-921-3469). 

Get started on your journey: Take our sample BI compatibility quiz

As a use case, CFGI took four of the leading business intelligence vendors and created this sample Business Intelligence compatibility quiz to highlight how your specific requirements and objectives ultimately drive which tool is best suited for you. 

Please note that this tool is for demonstrative purposes only, and many additional vendors exist that may be a better fit for your specific requirements and objectives. Additionally, please note that inputs within this survey are not all inclusive, and further diligence and a formal business requirement gathering process should be executed in reaching a final decision that is best suited for your business.

Acknowledgements

Key Contributors:

  • Oscar Palacio, Finance Transformation.
  • Kathryn Streeter, Finance Transformation.
  • Joseph Savoca, Finance Transformation.
  • Ryan Sullivan, Finance Transformation.