The CFO priority is clear: cut costs and boost profitability while optimizing growth. And the stakes have never been higher. The actions we take now must transform and future-proof our businesses. Near-term survival is not enough. We must initiate changes that result in long-term resilience and business prosperity.
Combating Economic Challenges
As the economic landscape continues to be incredibly turbulent, it’s no surprise that 93 percent of CFOs we surveyed earlier this year said they’re concerned about company financial performance. More specifically, they’ve identified their biggest concerns to be hitting sales forecasts (cited by 91 percent of respondents), declining profitability and margins (42 percent), and meeting payroll (39 percent).
In the face of these challenges, it comes down to a crucial question: How does a CFO ensure the money their company makes, as well as spends, matters? Every dollar earned must be spent strategically. And every dollar spent must go further.
That’s where a CFO’s true challenge lies. They must confidently be able to execute a strategy of optimizing costs intelligently based on data rather than cutting costs broadly in a reactive way. They must be able to execute in the present with a sense of urgency without subsequently creating negative long-term impacts. They must uncover their unique opportunity to thrive or risk failure.
Investing in Digital Transformation
One opportunity stands out among the rest: digital transformation. A recent Deloitte study found that digital transformation can unlock $1.25 trillion in market capitalization for the Fortune 500. That’s an opportunity that cannot be overlooked.
More and more CFOs are recognizing that digitizing financial operations can have an immediate, significant positive impact on profitability. In our survey, 93 percent of financial leaders agreed that more digitization—and automation in particular—would help their companies respond to these pressing economic challenges.
As CFOs, despite a general desire to reduce costs, we’re not entirely shying away from technology investments right now. Especially if they have a fast return on investment. IT spending should become more strategic, focusing on mission-critical transformation projects that enable companies to respond to macroeconomic challenges quickly and effectively.
That’s why more than a third of those we surveyed say they plan to invest more in automating supplier management, invoicing and payments in the next six months. Financial leaders are turning to digital transformation as a lever to drive efficiencies, productivity and—ultimately—profitability.
Finding Value with Business Spend Management
The most valuable automation technologies to CFOs right now are ones that go beyond managing the traditional core transactions of a company to capture everything that comes before, during and after the direct action of spending money. Such value can only be found and truly optimized in Business Spend Management (BSM) platforms.
BSM platforms empower CFOs to better understand—and influence—not only how resources are being used across their company, but also the strategic impact of managing spend in a holistic way. It gives CFOs the opportunity and visibility to understand spending practices across their organizations and apply precision tools—not blunt instruments—to contain costs. With increased visibility across all spend types, from cost of goods sold (COGS) to operating expenses, finance leaders are better able to make the informed decisions necessary to ensure their company remains competitive.
Fueling Future Success
This year will no doubt be a demanding balancing act. Interest rates are fluctuating, growth is down, jobs are tight and a recession may or may not be looming. But these challenges are no longer shocks to the system. They’re expected. Successful finance leaders who lay the right foundation now will be best positioned to capitalize on opportunities for growth and scale, as they brace for potential challenges.