Finance teams will seek tech that helps with efficiency in 2023

The theme in fintech will be doing more with less.
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· 6 min read

Let’s get this out of the way first: Excel isn’t going anywhere in 2023, despite any misguided “Excel is dead” headlines you may see in the coming weeks. The humble spreadsheet is still an integral, if not central, part of many finance functions.

So while we’ll ignore what is, or isn’t, happening to Excel (or Google Sheets), we can make some prognostications about CFO tech trends in 2023. Basically, it's all about the economy and enabling business partnering. As the outlook for the 2023 economy becomes more uncertain, finance professionals are looking to invest in technology that increases organizational efficiency and contributes to strategic decision-making.

“Anything that can help you with reducing costs is quite popular at the moment,” said Wouter Born, founder and managing partner at Born Capital, an investment firm specializing in CFO tech. “Of course, in the end, [organizations] always want to add strategic value as well.”

But that’s not the only thing that’s driving tech investment for CFOs in 2023. CFO Brew recently spoke to several fintech experts about the technology trends and innovations that they think finance professionals should be paying attention to over the next 12–18 months.

Watching the spend. Although CFOs are optimistic about organizational growth in 2023, they see “cost control as their most urgent imperative” in the face of economic uncertainty, according to the Grant Thorton 2022 Q3 CFO Survey. In that same survey, 41% of respondents said that technology investments could be cut to save costs, but only 11% said that digital transformation expenses would decrease.

In a downturn, organizations will be looking for digital technology that helps create efficiencies and cost savings, especially in back-office processes like financial planning and analysis (FP&A), accounting, and accounts payable and accounts receivable (AP/AR), according to Thiago Sachs, co-founder and managing partner at RVNA, a professional services firm specializing in finance technology.

“It’s all about cost cutting, efficiency, doing more with less,” he said.

On point. One way that organizations may be investing in 2023 is to solve for very specific pain points with technology that offers an instant business use case and clear ROI, things like spend management or accounts payable, over broader, more systemic investments, like an enterprise resource planning (ERP) platform, according to Born.

“I think the market now trends towards these solutions that don’t solve a whole process but look for added value on a specific point,” he said. “I think those solutions go beyond just efficiency. They’re focused on an outcome: Either your revenue is optimized, or your spend is optimized.”

However, technology investment isn’t universal, and different companies will have different technology needs. Larger companies that have already invested in digital technology may look to increase or supplement strategic technology solutions, like ERPs, while smaller companies may be more focused on tactical pain points, Sachs said.

Kurtis Babczenko, PwC’s finance consulting leader in the US, sees the trend more focused on the larger platform investments over point solutions. “We expect to see into next year a significant push towards next-gen ERP and moving into cloud,” he said. “That is pervasive across all industries.”

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FP&A all the way. A September 2022 Gartner survey found that companies are investing heavily in FP&A technologies through 2023. Organizations will be looking for technology that increases visibility, offers predictive capabilities, and provides strategic insight as the economy becomes more uncertain. FP&A technology is at the head of that list as it offers agility, especially for smaller companies, according to Born.

“I think companies will need more simulation capability while still needing their formal planning process,” said Born. “More agile forecasts and at least [weekly] forecasting and assimilating on your latest forecast is probably really what companies need today.”

As CFOs become ever more critical to the strategic direction of a company, these predictive and analytic tools can help finance professionals provide true business partnership to the rest of their organizations, Sachs said.

AI ain’t there (yet). For all of the hype that AI gets in the finance technology space, neither Sachs nor Born think it is quite ready for prime time yet.

“There is actually a big disconnect between what people expect from AI and finance, and the actual practical solutions,” said Born. “In our strong use cases today, we might see some fraud detection, we might see AI and power forecasting, but it’s all very early stages.”

Regardless, organizations are pumping up their investments in AI, according to a recent study by Strategic CFO and The May survey of 145 CFOs found that 58% planned to “increase their investment in automation” into 2023.

Talent challenge. No matter how much money companies spend on technology, they still need people to manage and analyze the data. And that will continue to be a problem for organizations in 2023. According to a Tradeshift/CFO Dive survey of 300 finance professionals, 37% said that they “lacked the internal expertise to properly analyze their financial data.” Filling that gap will be essential for finance departments in 2023, according to Babczenko.

“As technology gets applied, as you start to apply some of the new tools, as you try to become more of a business partner and provide more detailed analysis of the data, the skills that your finance function has needs to continue to evolve,” he said.

However, Born sees a different technical skill set in demand for finance professionals in 2023. Rather than hard technical skills, as technology becomes more low-code or no-code, finance professionals will need to rely more on business partnering soft skills, like communication and presentation, to maximize tech investments, he said.

“The soft skills around basic partnership—that’s already a trend,” and it’s increasing, he said.—DA

News built for finance pros

CFO Brew helps finance pros navigate their roles with insights into risk management, compliance, and strategy through our newsletter, virtual events, and digital guides.