Hakan Ebersjo, VP Sales of DSPanel shares his thoughts about dynamics of modern technologies with new solutions in financial management.
How technology is changing the role of the CFO?
H. Ebersjo: It is certain that finance department receives a lot of request from different departments of the organization: from operation, sales, management and the Board. However, the most important parameter that must be managed by financial management today is the changes that take place in the economy and the market. In this context, technology can be a catalyst for improving operational efficiency. Especially for financial management, technology can help with the flow of data from other departments of the organization, thus strengthening the role of the CFO as the business partner who can make changes in the organization. Without the appropriate technological tools, the planned changes are at risk of being “stuck” in the processes – and this can be fatal for a company in the growth phase.
Generally, the idea that the finance departments is the “kingdom” of Excel still prevails…
As a matter of fact 95% of all companies update manually Excel files on a daily basis. The only drawback with Excel is that it does not provide the capability to explore data in depth, so businesses end up with estimates and not necessarily with accurate data. With the use of modern financial tools, businesses have the right data at the right time in their hands and so they do not base their decisions on incorrect data. Making business decisions is, of course, also possible with the “traditional tools”, however, if the organization decides to undertake changes at a later time, it must spend a lot of time to identify all possible consequences of this decision and must take all necessary corrective actions.
Many would say that Excel “speaks” the language of finance: it is aimed at people who are familiar with data in rows and columns, it easily adapts to growing volumes of data, it gives a sense of control (the user can modify the functions as desired) and it makes the presentation of the conclusions easy. In other words, Excel works just like a finance department -this is why it is so popular in the finance community.
In that case, does transitioning to a more advance financial tool a problem?
The problem with some tools on the market today is they try to be more like excel, rather than to focus on approaching the intrinsic weaknesses of Excel in a different manner. The greatest challenge for the transformation of the finance management has to do with tools that promote the change of working methods and the business dimension of financial management. To return to the example of Excel, the point is not to shift the interest of the financial management away from massive spreadsheets, but to help it transform the data of those sheets into insights that will be meaningful to the organization’s strategy.
How will the Big Data trend affect the operations of financial management?
The effect of predictive modelling in the market is considerable and has the potential to change the budgeting processes. The most important difference is that, instead of the budget being prepared by the finance department, and then communicated to the organization, different departments can import their own forecasts into the system and the finance department can process the numbers. In order for this approach to succeed, it is necessary to “train” the individual departments in this type of modelling. It is an effort well worth, as financial projections will become more accurate. In this context, the solutions that give organizations the possibility to process very large volumes of data will gain a lot of ground in the future.
DSPanel offers cutting edge technology platform for business analytics, planning, and visualization. DSPanel designs, builds, and operates with the end users in mind. Performance Canvas was created by DSPanel to answer the unarticulated needs of the market not addressed by previous available solutions. With Performance Canvas, information is transformed into valuable business insights for the business executives to utilize in their decision-making process. DSPanel currently has over 2500 organizations deploying their solutions.