By Les Rechan
Corporate finance is often thought of as the central support system of an organization. It is key to ensuring that the organization not only survives, but thrives. While the core function of the CFO has remained consistent, the responsibilities and approaches of the position are rapidly evolving.
Over the next five years, the role of the CFO will continue to transform under the influence of analytics. As the primary guardians of information across all lines of business, CFOs can and should foster an analytics culture to support fact-based decision making.
Some CFOs are already ahead of the pack, applying analytics to their data to uncover hidden pockets of profitability. As data continues to grow, those CFOs who uniquely capitalize on it can proactively set leading business strategies. In fact, Gartner predicts that the amount of data stored by enterprises will grow 650 percent by 2018.
This is at a time when finance reporting requirements are only growing in complexity. They now require a combination of diverse data from a variety of sources in the enterprise and narrative text for regulatory filings like 8Ks, investor presentations, debt management reports in treasury, and operation reviews.
Unfortunately most finance departments must rely on a cumbersome, manual process to create the required reporting. Not only is this process time consuming, but also error-prone because every change made must be repeated, which opens up the business to greater risk.
But new analytics software capabilities are coming online that are designed to help CFOs capture and analyze diverse finance reporting data using a familiar spreadsheet environment. Not only will the software help them more accurately address regulatory requirements, but also controllership, investor relations, treasury, financial planning and analysis disclosure requirements.
New Disclosure Management analytics software from IBM, for example, which is now available on the cloud, enables organizations to automate processes and meet the ever-increasing array of regulatory mandates. It generates XBRL documents for regulatory filing requirements that fully support the European Banking Association’s COREP and FINREP taxonomies mandate and Solvency II requirements.
Features like these, that are available both on-premise and on the cloud, can help clients decide which approach is best suited to their organizational needs without sacrificing any capabilities or boxing themselves in as needs grow. It also helps them better manage their growing list of internal demands.
Organizations are already seeing business benefits from these new capabilities. AppVine, a leading IBM Business Partner, is working with IBM client NextGen Financial to bring disclosure management, narrative reporting and analysis to their business. Clients like NextGen need this single application solution to bring together data and narrative reports in a controlled, auditable environment, which will help them save valuable time and money.
Eventually the questions for CFOs will evolve from what they know about the information they have, to what they will do with it, and how fast. Those who do not find ways to uniquely capitalize on their data will fall behind.