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A Small Business CFO’s Practical Approach to New Technologies

Large companies are firmly committed Robotic process automation (RPA), uses sophisticated data analysis and visualization tools and examines the use of blockchain and other new technologies. The media say that small and medium-sized enterprises (SMEs) must also proactively adopt these new technologies, otherwise they risk competitive disadvantages.

However, it has taken a toll on small organizations to endure the challenges and uncertainties of COVID-19 for the past year and a half. This makes the priority more existential. As a Small business CFO, how do you navigate to business recovery? Also, how do you ensure security, privacy, and data quality as cybersecurity breaches continue to skyrocket? Below are some practical considerations as new technologies keep coming our way.

Business stabilization

The top priority of a small business CFO is navigating their way through the intense and ongoing headwinds of COVID-19 – including finding and retaining talent, overcoming supply chain issues, negotiating fair terms with aggressive customers, and managing cash. Until management stabilizes the business, worries about the next wave of technology are rather meaningless.

Improved data security

ON Data breach is one of the CFO’s biggest nightmares. A small business I know was short of money, like many SMEs. It was tricked into sending supplier payments to a bad actor’s account due to poor controls. Unfortunately, the company was unable to recover. Malware attacks, especially ransomware attacks, are on the rise. To prevent damage to your network and mitigate risk, consider using multi-factor authentication for accessing corporate data, encrypting emails, securing email attachments, and implementing other best practices. Also, review cash management and other controls, purchase adequate cyber insurance coverage, and develop contingency and recovery plans in the event a cyber attack does occur.

Maximizing the benefits

For many SMEs, the investment and maintenance costs for their Enterprise Resource Planning (ERP) system are high. Many managers and owners do not get what they need to run the business effectively. Due to insufficient training, users are not fully utilizing all the functions of the ERP system. The root cause can also be system complexity, poor quality data, or inadequate reporting capabilities. Thanks to their curious and process-oriented nature, CFOs are well positioned to analyze the status quo, identify opportunities, and allocate budgets for system improvements and training. This way, they can ensure that the technology in place is value for money.

Digital savvy mindset

CFOs need to set the appropriate “tone at the top” by showing a willingness and willingness to educate themselves in technology areas. For many SMEs, the CFO oversees the IT function and is de facto the Chief Information Officer. Therefore, as a CFO, it is imperative to build your knowledge of new technologies and trends in order to determine which tools will be most effective for your business.

To develop a digitally savvy mindset, ask the right questions when thinking about new technology. Could, for example RPA benefits the team? Think about how data analysis and visualization tools can become more powerful and user-friendly. Could you use data analysis and visualization tools to improve the storytelling skills of finance and other departments so that cross-functional partners can better understand current realities and trends and thus make better decisions? New technologies enable companies to face ever-changing regulations, tax laws, internal control requirements, corporate governance, changing reporting requirements, and more, especially for global and complex businesses. Is your company facing any of these challenges? Does it have the right software to take it over?

Overall strategy

When Campbell Soup Company, one of my previous employers, decided to roll out SAP software across the company, the IT team created a diagram of nearly 100 applications and systems that needed to be replaced and optimized. We called it the “spaghetti chart”. Many SMEs likely have their own infamous spaghetti charts. Too often, companies make investments over time to meet one need or another without developing an overall strategy or streamlining existing systems. Ideally, small business CFOs are qualified to drive their company’s overall philosophy and strategy around new technology. Take into account how much of the IT structure should be outsourced to a managed service provider (MSP) instead of being managed internally. Likewise, define the company’s desire to implement off-the-shelf software rather than requiring customization to meet the company’s (presumed) unique needs.

discipline

There are several ways CFOs can discipline the technology selection process. The CFO should have cross-functional discussions on each initiative and review the purpose, need, strategic goal, and problem. Strive for consistency in the project evaluation and ask the team to identify alternatives, along with the pros and cons of each. Do a general assessment of the risks and opportunities, including an analysis of the cost and impact, if you fail. Research potential partners, including software vendors, MSPs, consultants, and others, and evaluate their reputation, financial health, and track record. Finally, drive forward the ongoing assessment of the performance of these investments and correct the course if necessary.

training

As mentioned earlier, effective user training is critical to the business, whether in terms of making full use of existing tools or implementing new, cutting-edge technologies. Once the team members are trained, make sure they are taking advantage of new technologies and systems.

Steve McNally, CMA, CPA is the elected chairman of the Institute of Management Accountants and CFO of the PTI (Plastic Technologies Inc.) group of companies.

picture of Gerd Altmann the end Pixabay
Data leak, ERP, RPA, Small business, continuing education

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