In CFO Brew’s latest live event, Glenn Hopper, CFO and director at Eventus Advisory Group and author of Deep Finance: Corporate Finance in the Information Age, spoke to editor Drew Adamek about how CFOs can choose the right finance and accounting technology. Here are some key takeaways from their conversation. To watch the virtual event on demand, click here.
As the tech stack has advanced over the last decade, how do you see the CFO’s role in investing in organizational technology?
That’s been a challenge because just keeping up with the latest technology seems like it could be a full time job. It’s easy to get lost in the fear of missing out. You hear about this new tool that everybody’s using for close management…you think about how long it takes you to do your monthly close, and there’s pressure from the board and the investors to get the close done quicker.
People want more real-time information. So you’re constantly looking for that edge. The interesting thing to me is it feels like you’re not being asked to do more with less…it’s you’re being asked to do more, because there are more tools out there. It’s easy to get down the rabbit hole of chasing the latest technology. You start plugging in pieces of software just because you feel like you need to add some automation and some horsepower to whatever group you’re looking at.
But the danger in that is you can sometimes forget what problem you’re solving for. You’re just throwing software at the finance and accounting operations. So the biggest challenge to me has been trying to find ways to streamline your processes and everything you do, but not just grabbing the latest technology because a salesman gave you a great pitch on it.
What is your recommendation for the kind of first steps for organizations looking to invest in new technology?
That’s a great question. Because when you’re in the middle of your normal operations, it’s hard to step back and get [to] this level. But I would say this… you need to take a more fundamental approach when thinking about software, rather than finding a piece of software and seeing what it does and visualizing, “Oh, that would be great in my system.”
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I think the first step is to step back and be technology agnostic. Just look at your end-to-end process over the whole customer customer life cycle…With these tools, you get great data on what you’re doing but you have to learn to manage the data environment. It’s easy to take all this technology, gather the data and have different siloed reports on it and think of each part of your financial tech stack as just doing one thing. But I think you have to have a holistic view.
Once you have this view of your workflow, and you understand where your pain points are, this is the groundwork for the work requirements document that whether you’re shopping for a piece of software that just does one task, or an entire ERP system—or ERP/CRM, just if you’re looking at the whole back office end to end. Start with what you actually need to do, and where you need help. Then it’s a lot easier to make those technology decisions.
What are some of the most common mistakes that you see finance professionals and organizations making when it comes to investing and using new technologies?
The biggest mistake is buying a piece of software that you don’t fully understand but that someone told you, “This is going to solve all your problems,” and trying to go top down and cram a piece of software into a system that isn’t thought out first, picking a piece of software before you know the requirements.
If you are doing a major ERP implementation or a software change to your tech stack, [it’s] not partnering with the business units, the other people who are going to be impacted by, and use, the tool, not partnering with the CTO. It’s too much to do to try to go it alone if you don’t have the support of the other departments and, in particular, IT.
So I would say, understand the problem that you’re solving for, and get partnership and buy-in from the other teams. These are the ways to avoid those mistakes.