For CFOs, 5 Key Qualities To Look For In New Technologies

CFOs need to do more than adapt an agile operational process and mindset. They need to know what to look for in technology platforms so that when they do make a big investment, it’s worth the time and cost.

Early on in our company’s lifecycle, we decided to test an idea. We had developed great technology that we were successfully using to deliver services to banks, and wanted to see if licensing the technology directly for internal use would be attractive as well. To prove the concept, we initially focused on smaller banks (< $1Billion in assets), and in less than a year we had deployed the solution to six of them. Things were going well. Interest from larger banks was enormous, the value proposition was strong and we believed we were onto something.

Yet despite all the clear benefits the technology solution provided – and strong CFO support – internal processes kept getting in the way. It took the better part of a year planning the budget and scoping the requirements, followed by the better part of another year issuing a request for proposal, conducting evaluations, and undergoing internal reviews, followed by even more time in vendor certification due diligence and contract negotiation. By the process’s end, personnel had changed, the technology they had originally envisioned had evolved, and the investment (on both sides) had become so large that the ROI had taken a significant hit.

What this experience illustrates is that in today’s increasingly virtual society – one in which rising data demands, evolving regulations (e.g., around data security and privacy), and new customer expectations have fundamentally transformed the financial administration environment – many CFOs cannot afford to let a process designed for a different era run its course when it comes to adopting technologies.

Rather, they must embrace a new role, not just as the arbiter of a company’s budget, but as a leader “responsible for executing strategy and controlling the pace of transformation through resource allocation and project management.” Otherwise, they risk losing their firm’s competitive advantage – and may be incapable of seizing opportunities others have missed: for instance, Gartner says that roughly 85 percent of big data projects fail.

Moving forward, CFOs need to do more than adapt an agile operational process and mindset. They need to know what to look for in technology platforms so that when they do make a big investment, it’s worth the time and cost. Here’s what they should keep top of mind.

1) Customization is differentiation.

Adopting technology is akin to airplane transportation: everyone’s trying to go from A to B, but the experience is radically different for different people. In other words, if you run a private equity fund, you will need to use some sort of technology to administer it; at the same time, each PE fund has its own unique requirements, regulatory pressures and mission statement.

Therefore, the right technology platform should be able to meet common industry standards while also offering mass customization capabilities. If used effectively, customizable technology can then help your organization differentiate itself in a crowded field. It can also grow with your company as it scales up or down, and meet changing regulatory, economic and/or business conditions. 

2. Total transparency is necessary.

Given my background in specialty finance administration, I know how important it is for fund managers to provide investors with a transparent view of their investment activity. But the need for technology to offer transparency to CFOs extends to nearly any company – especially given the morass of personal data now collected and the evolving regulations designed to protect it.

3. Efficient data management is key. 

CFOs need to understand their company’s data: how it’s collected, how it’s stored, how and with whom it’s shared. The challenge for many is that such data has for decades been stored in legacy infrastructure. The right financial administration platform must interact with the particular specifications of that infrastructure and, ultimately, quickly source and govern data from multiple systems.

4. First-rate cybersecurity controls are a must.

CFOs must ensure that any new technology – and/or third-party technology vendor – can withstand a growing number of cyberattacks, which have been on the rise in today’s remote-work environments. For example: Does the technology enable you to create backups of your systems easily? Can you securely house, duplicate and encrypt those backups? Are you training your employees to spot cyberattacks and protect data?

5. Go with purpose-built solutions.

Cutting-edge technology for financial administration is increasingly necessary for all industries, but not all industries are the same when it comes to reporting and regulatory requirements: healthcare, for instance, has a whole other set of challenges than, say, the banking world.

Purpose-built solutions can offer CFOs technology suited to their particular company and industry, with specific controls and tools built-in, and third-party support and expertise that can help integrate the technology into your organization. Choosing the right solution can help ensure technology projects succeed—and steer companies away from potentially costly initiatives, like building the technology themselves.


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