CFOs at the start of 2023 are holding a tight grip on technology spending as several risks beyond their control threaten profitability.

Forecasts of recession, high inflation, turbulent equity markets, rising borrowing costs, geopolitical tensions and the most aggressive monetary tightening in four decades are compelling CFOs to conserve cash and ensure every dollar spent on technology pays off, according to financial executives and technology consultants.

A recession “is not going to be a surprise to anyone,” Coupa Software CFO Tony Tiscornia said in an interview. “Everyone is battening down the hatches, getting ready for whatever may come in the next year or two years, and most CFOs are hoping for the best but fearing and preparing for the worst.”

Gartner this month cut its projection for 2023 growth in global information technology spending to 2.4% from an estimate of 5.1% just three months ago. It forecasts $4.5 trillion in IT outlays this year, only 2.1% higher than in 2021.

“What every CFO is saying right now is, ‘I don’t want to buy it unless I have a business leader who is sitting in front of me screaming they have to have it,’” Salesloft CFO Chad Gold said in an interview. “It’s this idea of how do you do more with less?”

Weak growth in corporate spending has prompted tech industry giants to slash payrolls. Microsoft, Twitter, SAP and International Business Machines have announced sweeping layoffs in recent weeks. Both Amazon.com and Alphabet plan to cut staff by about 6%, and Meta Platforms in November said it will lay off 13% of its workforce.

Companies outside the tech industry are also coming down from a spending sugar high after years of near-zero interest rates. Focused on growth, CFOs borrowed heavily with a conviction that “profitability is not really what investors are focused on,” Tiscornia said.

Last year the Federal Reserve halted the period of easy money by pushing up the federal funds rate 4.25 percentage points. Fed policymakers have committed to further tightening, and may announce a quarter-point increase in the benchmark interest rate on Feb. 1.

The pullback in stimulus has prompted a change in CFO strategy. During the past six to nine months, “profitability and generation of cash flow have really become as important if not more important than growth to investors,” Tiscornia said.

CFOs in many industries face high stakes as they try to conserve cash without missing out on the newest profit-boosting innovation. Advances in technologies such as artificial intelligence, data analytics and cloud computing can determine whether CFOs lead or lag their peers.

To achieve high ROI from technology, financial executives and technology consultants offer CFOs five tips:

1. Take a technology inventory

CFOs determined to achieve a bigger payback from technology and improve cash flow should start by drawing up a detailed inventory of software, hardware and tech services, the financial executives said. The aim: consolidate and eliminate duplication.

“Take inventory of every piece of technology you have in your company,” Gold said. “Have a list of everything that’s there and sit down with every business leader and ask them what it does.

“You’ll find that there are things and pieces of technology that either one, they don’t know what they have, or two, they can’t even explain what it does,” Gold said.

Many CFOs lack visibility on technology outlays, with scattered groups in the company separately spending without cooperating to find the lowest cost, the financial executives and technology consultants said.

CFOs may find that two or more units in the company bought two different technologies to perform the same task, or purchased the same technology from the same vendor without having negotiated a volume discount.

“Visibility is really key to budgeting during economic uncertainty,” Tiscornia said.

2. Prioritize, postpone spending

Amid increasing forecasts of a brief, shallow recession, many CFOs are reviewing their technology priority list and postponing spending and hiring until the outlook for the economy brightens.

“The stuff that we’re buying right now is the stuff that makes us say, ‘We’ll go backwards if we don’t have this,’” Gold said.

Gryphon.ai, a provider of AI-guided sales intelligence, has decided to continue relying on outside cloud computing consultants rather than add to its current in-house expertise, CFO John Renehan said. It has also postponed buying new back-office infrastructure technology.

“Rather than putting in place new systems this year, we’re really focusing on making sure our Salesforce or Zendesk — they’re all communicating with each other,” Renehan said in an interview. “We’re prioritizing the payback period more than we used to as a component of ROI.”

3. Renegotiate contracts

The prospect of a downturn has added urgency to talks between vendors and buyers over costs, the financial executives and technology consultants said.

“Every negotiation is a little harder these days,” Renehan said, referring to discussions with Gryphon.ai’s customers. “We’re seeing that they’re tightening their belts, some of them have had layoffs, and it’s imperative for us to work with them closely to show how our products are making them more productive.”

Gryphon.ai is also more sharply scrutinizing its costs with “a constant review of every piece of software in the business,” and pushing back against vendors after low returns, Renehan said.

“There’s certain technologies that sales uses where, in my opinion, the providers of these technologies just routinely increase your prices,” he said.

“They’re not in the business like your cloud operator of trying to help you maximize your investment,” Renehan said. “They’re just trying to raise your prices every year.”

Gryphon.ai has identified the best software, and achieved high value in negotiations, by simultaneously running applications from two companies and then choosing the best when the licensing period ends, Renehan said.

When sizing up software, financial executives should pick apart the vendor’s ROI pitch, talking to peer companies selling similar products and contacts at other companies using the software, Tiscornia said.

“Let’s say it’s a lead generation tool for sales,” he said. “I’d want to understand very intimately or have someone on my team understand that calculation of how they arrived at that ROI.”

4. Gather front-line insights

When scrutinizing technology, CFOs should reach out to ground-level staff, as well as department heads and other members of the executive team, the financial executives and technology consultants said.

“A CFO, especially at a time like this, really needs to have a hand on the pulse of the business,” Tiscornia said.

“Usability of software is of the utmost importance — No. 1 from an employee morale perspective,” he said. “You want employees to have solutions that they feel enable them to do their best work, so they feel like the company is investing in them and you can avoid burnout.”

Close consultation with grass-roots staff can yield big improvements in a company’s products, Renehan said. Gryphon.ai’s sales team was the first user of its AI for customer support and increasing sales. “They understand exactly what the product needs, so they helped make the investment decisions,” he said.

5. Bring cloud spending down to earth

Cloud computing will grow more than any other IT category in 2023 and remain as the No. 1 spending target, Gartner said. It forecasts that worldwide end-user spending on public cloud services will surge 20.7% this year to $591.8 billion.

At the same time, concerns about recession and the availability of broader, deeper data on the value of cloud computing has prompted many CFOs to scrutinize their cloud use, according to CFOs and technology consultants.

CFOs are asking, “‘OK, we moved to the cloud and that was great, but have we really been applying financial discipline to it?’” according to Randy Armknecht, managing director for enterprise cloud and global delivery at Protiviti.

At some companies CFOs are refining key performance metrics, such as cost per sale, and compelling their cloud computing providers to commit to a plan for savings extending two years or longer. They are also tracking how closely costs match forecasts.

“Did we forecast that it was going to cost X and it’s costing 2X?” Armknecht said.

Financial executives at some companies have stepped up collaboration with software engineering teams to gain insights on the strong or weak spots in cloud computing, he said in an interview.

With such data CFOs can determine the cost of a sale down to the cent and predict the cost of a project in the design phase before deployment in the cloud, he said. They can also precisely track whether a project has met its target and refine the customer journey, maximizing the value of time spent with the company’s app.

Cloud providers feel more compelled to show value as competition in cloud computing intensifies and customers master the technology, the CFOs and technology consultants said.

“When we first moved our products to the cloud years ago, we didn’t know what we didn’t know,” Renehan said. “You just bought this big block of time up in the cloud.”

“Now the focus is on reducing the costs and increasing our gross margins,” he said, noting that Google Cloud Platform is helping the company identify savings and increase value.

Cloud computing providers in recent years have recognized that “the onus is on them and their transparency in reporting on your spending within their platforms,” Armknecht said. Instead of losing a customer, “they would rather have a customer that works with them to figure out how to optimize spending.”

While highlighting the need to maximize the value of technology investment, the prospect of recession has also underscored the longstanding imperative for scenario planning.

“Conservation of cash is just something that’s in our blood as a CFO, so you’re always looking at that,” Renehan said. “What we’ve done through our budget process is a lot more scenario testing, including for the worst case.”

As technology innovations accelerate, companies also need to focus on the future needs of their customers, the financial executives and technology consultants said.

CFOs “should be thinking about where the customer is going to be and not necessarily just keep funding where they were,” Armknecht said. “Market alignment and customer alignment — that is huge in driving the strategy for funding tech.”

Technology firms have been hit particularly hard by economic headwinds. Many companies inside the industry are pulling back from “moonshot” or other long-term projects and  are reducing spending, cutting staff or implementing hiring freezes, in the face of persistent inflation and a probable upcoming recession.

To address changing company needs, technology companies are hunting for new executive leadership, according to a recent study by executive search firm Christian & Timbers.

This hiring is a reverse of the typical dynamic expected during downturn, said CEO Jeff Christian. “Normally people observe things for a while … they’ll sit, reevaluate, reassess, not make major changes,” Christian said in an interview. “But what they're doing right away is recognizing who their poor leadership is.”

‘Wartime’ CFOs sought 

C&T predicts “operating CFOs” will be one of the “hottest” leadership positions in demand for tech companies for 2023.

Tech firms may be seeking out “operating” or “wartime” CFOs as economic headwinds push such companies away from the growth-at-all-costs mindset that has proved common over past couple of years and towards focusing on profitability or more sustainable growth, Christian said.

Such trends have already begun in industries like private equity, according to Sean Mooney, CEO and founder of “business builders” network BluWave. Mooney, whose company provides consultative services to private equity clients, noted in a December interview with CFO Dive, that  the firm was seeing “tremendous amounts” of hiring in the sector, including for interim CFOs.

The hiring spike was partially driven by companies’ desire to swap out “peacetime ministers” for “wartime generals” in the face of a dawning recession, Mooney said.

The economy has put a spotlight on finance chiefs that are able to streamline operations and lower costs — a financial leader that “really knows how to help run a business and be a confidant to the CEO,” Christian said.

Operating CFOs are those with the skills to bring “greater financial rigor to every part of the business,” Christian said.

“How can they drive FP&A in their organization, help revenue?” he said of the role of an operating or wartime CFO.

Christian also pointed to such CFOs’ ability to aid other executives, such as the chief human resources officer, develop better financial controls over things such as hiring, which remains a top concern among executive leaders as labor challenges persist. 

Solving the talent problem

Executive hiring trends come as many technology firms, including Google parent Alphabet, Microsoft, and Facebook, now Meta, have recently announced layoffs or staff reductions, which for many follow periods of aggressive hiring in prior years. Alphabet, for example, announced on Jan. 20 it would be cutting 12,000 jobs, approximately the same amount it added during 2021’s third quarter, the Wall Street Journal reported.

Even as technology firms make staff reductions, balancing the need to reduce costs while also finding top talent is a key concern for executive leaders across industries. For example, while 57% of executive leaders said they planned to cut staff, half of CFOs and CEOs also said they planned to increase their hiring budgets for 2023, according to a recent study by Mercer.

Being able to attract new talent into an organization is becoming one of the skills firms are seeking out when it comes to filling their executive seats, Christian said.

“More and more, people are asking for someone that can bring a team with them,” Christian said. “They're looking for people that are going to solve their talent problems at the same time.”

“Interviewing has now gotten to be about, ‘tell us about your network,’ he said. “’Tell me about the people that are waiting to find out where you're going to go next.’”

Sponsored content

By Eide Bailly

Organizations are focused on being more customer-centric, innovative, and sustainable. Yet their technology capabilities often prevent their success. After three years of post-pandemic emergency response, organizations are now faced with new challenges—a talent scarcity, domestic and global economic pressures, and the rate of change in technology. After a forced digital response, it’s time to prioritize and strategize for new opportunities. 

What many organizations have     found is that small choices     made in silos create     inefficiencies that lead to     big problems.

What’s Driving the Need for Re-Evaluation?

• The immediate need for organizations to switch to remote and hybrid environments resulted in quick acquisitions of cloud collaboration software, ultimately resulting in unused features and services or duplicative applications.
• Many applications that organizations introduced during the pandemic, combined with the increased rise in remote workers and devices, have increased the risk of cybersecurity breaches. 
• Piecemeal solutions have led to constraints on integration capabilities and the lack of a data strategy.

4 Steps Turn Your Digital Response into a Digital Future  

1. Start with outcomes.

It’s important to start with outcomes. Defined business outcomes and a widespread understanding of what improvement looks like makes it easier to start the journey toward your digital future. 

Organizations that rely on the IT department alone to spearhead technology initiatives do not get the results they want at the pace they desire. This is because the IT department doesn’t have a full view of the overall desired business outcomes. You can’t create lasting and meaningful change in a vacuum. Building a digital future is about transforming the way people work, and it takes a coordinated cross-team effort to turn that vision into reality. 

Successful digital futures are the result of input from all areas of the organization. A diversified team of IT staff, business experts, and executive leadership—with support and buy-in from each department in your organization—will help ensure business outcomes are met.

2. Take inventory of your tech.

Research from Productiv found that the overall average software as a service (SaaS) portfolio across organizations of all sizes is 254. Yet less than half of these app licenses are actually being used on a regular basis. Additionally, the study found organizations often had five or more tools belonging in the same category. 

Begin turning your digital response into a strategic plan for a digital future by taking a thorough inventory of your current software. Identify gaps and overlaps in your technology landscape by examining:  

• What do I have?
• What is it capable of?
• What am I using it for?

Cutting waste is imperative if you’re looking to get the maximum value out of your investments. This doesn’t just apply to software licensing costs; Flexera reports that organizations waste more than 32% of their cloud storage on unnecessary applications. Evaluating the number and type of applications your organization utilizes and examining the rates of end-user adoption can eliminate waste and increase efficiency across your organization. 

3. Evaluate your data strategy.

Next, evaluate the quality and accessibility of your data. At any moment in time, you should be able to easily access accurate, real-time data from across your organization. That data should be able to tell a story about where your organization has been, where it is, and where it’s going. As the role of the financial office has evolved, top-performing CFOs are defining a data strategy that gives them the speed and agility to respond to the new demands and needs of the rest of the executive suite. 

Since apparel company Black Clover implemented their data strategy, they have grown over 400%. “The reason,” says Mike Lichtie, CEO, “is because we are able to look at our reports during the day and see where our weaknesses are and react to those things so we can turn them into a growth channel. The dashboards are critical. If you want to scale your business, you’ve got to be able to see it.” 

4. Align your tech strategy with your business strategy.

Once you’ve taken account of your software inventory and data capabilities, it’s time to overlay it with your business strategy. Start by asking: 

• What is the overall vision of our organization?
• How does our current technology landscape help or harm in achieving the vision of our organization?
• What does the dream state of our technology look like?
• Are our current systems flexible enough to support our growth and expansion goals?
• Where are our blind spots?

Move Forward with Confidence

Leaders often struggle to identify blind spots in their own organizations. Look for partners who can see past your current state and help you create a strategic business and technology transformation roadmap for where you want to go

PriceWaterhouseCoopers will continue to shop for new capabilities this year, using M&A to boost its advisory services business as clients digitize operations and strive to meet economic, social and governance goals.

Last fall PwC acquired Sagence, its fourth acquisition in 18 months, as part of its effort to build up its expertise in AI and data science, CFO Dive reported. 

Now, rather than slow down that initiative, PwC says the economic downturn represents an opportunity for the Big Four firm: many potential acquisition targets are under pressure in the current economic climate and evaluating their viability, likely making them more open to conversations, according to PwC. In addition, PwC clients’ ongoing digitization efforts ensure a continued need to add technology capabilities.

Doubling down

As part of its M&A efforts, the company will look to expand in cloud software engineering, data and analytical engineering and digital product engineering as they modernize their core systems in the cloud and develop new products and services, said Jenny Koehler, a strategic growth and business development leader at PwC.

“We believe companies of the future, industries of the future, will continue to… look like technology-based companies,” she said in an interview. The company’s merger and acquisition agenda, she said, will allow PwC to double down on becoming a “digital business partner to our clients.”

A key metric influencing PwC’s M&A moves, said Koehler, was referenced in the firm’s recently-released CEO study, in which 40% of global CEOs who were polled said they think their companies will no longer be economically viable a decade from now.

“Writ large, we do see our mission in large part is helping those companies be economically viable,” she said. “To do that, we need to bring them the right expertise and the right thinking, et cetera. That helps us then think about our M&A strategy of where we may either want to close gaps in our current business or …maybe where we double down.”

Becoming a “digital business partner” and acquiring the enabling skill sets, she said, helps PwC support clients as they modernize their tech stacks and adapt to evolving market conditions.

“In order to stay lean, and to stay optimized, you need to cross some degree of a chasm towards developing a digital core that's modern. The other flavor of digital transformation is more like the front-office side, reaching customers [and] continuing to do that in a highly interactive digital way,” said Koehler.

Financial services and health care, fields experiencing rapid digital transformation, are of particular interest to the firm.

A broader focus on consulting

Big Four accounting firms are competing with smaller rivals by differentiating on both price and the comprehensiveness of their offerings, said Liz Cowle, assistant professor of accounting at Colorado State University. Acquisitions, of course, help PwC build up a war chest of capabilities.

“The ‘Big Four’ are able to offer a lower priced set of services due to their economies of scale,” she noted.

Acquisitions that support the growth of PwC’s consulting arm, said Cowle, are broadly in line with efforts of other Big-four accounting firms.

“They're not only acquiring the tools and capabilities, they're also acquiring the human capital, which represents a significant asset,” she said. “I think what they're really trying to do from a practical standpoint is expand their capabilities and try to be more market leaders by buying, basically, the competition.”

Nearly half of C-suite and other top executives expect the frequency of cyber attacks targeting their organizations’ accounting and financial data to increase in 2023, according to a new Deloitte Center for Controllership poll.

Despite this though, only around 20% of those polled say their organizations’ accounting and finance teams work closely and consistently with their cybersecurity teams or their companies’ chief information officers. 

“One of the absolute key relationships within an organization is between the CIO and the CFO because the mission of the CIO is to make sure that the organization is running not only efficiently, but effectively, and that's the same thing the CFO is concerned about,” Russ Porter, CFO of the Institute of Management Accountants, said in an interview. 

Almost 43% of the 1,100 C-suite and other top level executives polled say their organizations’ finance and cyber teams only work together as needed “with inconsistent closeness and consistency,” while 11.1% do not work together at all, according to the poll. 

Meanwhile, CFOs may be putting IT spend on the back burner in the face of unfavorable economic headwinds. Where only 14% of CFOs will prioritize IT infrastructure in 2023, cost management (52%), financial performance (50%) and growth (38%) are their top priorities, according to Deloitte’s most recent CFO Signals report. 

“As always, CFOs are tasked with optimizing spend, and preparing for a number of different potential scenarios,” Porter said. “I wonder if CFOs are looking at potentially deferring adoption of new technologies in favor of keeping up and refreshing the tech stacks,” he said. 

However, the lack of focus here could come back to bite finance chiefs. During the past 12 months, 34.5% of polled C-suite execs said their organizations’ accounting and financial data was targeted by cyber adversaries. Of that group, 22% experienced at least one said cyber event and 12.5% experienced multiple attacks, the poll said.

“I would not be surprised to hear that some CFOs are evaluating what I'll refer to as maintenance of their existing tech stack versus enhancements to their technology environment,” Porter said. 

These enhancements can take place in the form of adding new capabilities to teams or investing in pursuing new opportunities, according to the finance chief, who also spent three decades at IBM. 

“CFOs are designed to manage risk, not to manage risk to zero, but to manage risk of action versus what's the risk of not taking action? And larger companies are going to make different decisions about ‘how much do I invest in preventive measures, versus what's it going to cost me if I am impacted by a cybersecurity event?’” Porter said. 

As the scope of the CFO’s responsibilities have widened in recent years, Porter stressed how a strong and reliable relationship between a CFO and a CIO is essential in optimizing tech spend for the year ahead. 

When deciding on whether or not to spend big on preventative measures versus reactive measures, the CFO will have to ask themselves a lot of questions. 

“What's the form of that event going to take? What's the exposure potential to my company and my clients, my customers?” Porter said. Additionally, CFOs are going to be making largely appropriate risk balancing decisions about how exhaustive cybersecurity measures need to be. 

“It's not about cost minimization, it's about cost optimization. And that's one of the areas where CIOs and CFOs can absolutely partner to make sure that the company is making good decisions about how it's deploying technology to maximize the value to the employees and the clients,” Porter said.

 

Finance leaders are still prioritizing investment into artificial intelligence or other digital transformation areas, but in the face of persistent economic headwinds they’re rethinking their spending on these tools, and reassessing their potential return on investment.

One of the main challenges is the nascent nature of the technology itself. Finance leaders looking to spend on new technologies will need to make investments into unknown areas, which necessitates more risk, said Angela Pierce, CFO and president of data science and machine learning platform Anaconda.  

Pierce has served as president and CFO for the platform for three years, and has held other CFO and financial executive roles at companies including Airstrip Technologies and Trillion Partners, according to her LinkedIn profile. She began her career at Deutsche Bank.

Moving into the dark woods

Finance chiefs, tasked as they are with managing their companies’ funds responsibly, tend to be relatively risk-adverse. This mindset can be a help and potentially a hindrance when it comes to rapidly changing technologies like AI, where CFOs must quickly determine just how much risk they are willing to take on with potentially unproven technologies as they look to remain competitive. 

Many businesses are reorienting their tech spend to stay disciplined on business needs first and transformation second in a contracting economy, but AI’s long-term potential is still captivating businesses and their executive leadership.

Tools such as ChatGPT, a free language model powered by OpenAI, have spurred AI initiatives forward at large-scale companies including Microsoft and Google, according to a recent report by sister publication CIO Dive.

Pierce herself is anticipating a kind of AI gold rush, she said.

“You’re going to see this mass of people that have never thought about AI before, or maybe they thought about it but they didn't know how it fit, and there's going be this huge rush for people to say, ‘how can I get it?’” she said. “I want to be in the movement, right? I don't want be left behind in five years like, ‘everyone has an AI strategy, I don’t.’”   

This, however, means CFOs that do want to stay ahead of the technological curve need to get comfortable with some level of uncertainty, Pierce said.

“If you want to be one of the players in that space in five years, if you want to be a name, you're going have to go into the dark woods,” she said. “And CFOs don’t like that. We don't like dark woods — we like well-lit areas.”

Pierce, who is also in charge of Anaconda’s sales, marketing and revenue, does not view herself as a conservative CFO.

Anaconda is already experimenting with ChatGPT for some of its SOPs, Pierce said, as well as utilizing it for things like the company’s travel and reimbursement policies, she said. They are also going to begin testing out the tool for certain written and quarterly reports. 

Opening space for education, collaboration

It’s unlikely AI’s evolution will slow down in the near future. CFOs who are making investments in these uncharted areas must therefore prioritize education in this space in order to make the best decisions possible, Pierce said.

“I think there's a huge opportunity … for CFOs to be kind of a champion, to challenge organizations on how they can use and view frameworks that are out there to get better cost structure, to have better reporting, get better results,” Pierce said.

It is also important for financial leaders to be able to lean on their team when it comes to these decisions, including those outside of the finance department, Pierce said.

At Anaconda, Pierce will have one-on-ones with engineering leads to discuss different solutions or potential partnerships, she said, which can help to make such decisions even if both parties are stepping out of their areas of expertise.

“You can't be afraid to collaborate with the seasoned people outside of your comfort zone,” she said.

Efforts by CFOs to reach a state of “autonomous finance” within the next three to six years will require significant reshaping of finance team structures, with 40% of finance roles to be completely new or reshaped by 2025, recent research from Gartner found. 

Of the headcount growth to take place by 2025, over 80% will be in new subfunctions, and not in traditional accounting and financial planning and analysis roles, according to the research. 

There may be a new style of leadership needed to support these new roles as well. “Expertise in traditional finance topics, while valuable, does not prepare leaders to train staff to execute on capabilities, such as deploying bots, machine learning, and AI algorithms,” said Shannon Cole, senior director analyst of research at Gartner.

The rise of digitalization in business operations and the growing availability of new technologies has both proven to increase efficiency within the finance function as well as shown why a new form of leadership — an operating or “wartime” CFO — is needed to charge the process. 

“CFOs that effectively lead and navigate transformation will add roles to their leadership team to address analytics and decision support, finance IT and global process ownership,” said Cole in a statement.

The goal of “autonomous finance” refers to the idea of organizations being able to deliver finance capabilities through “processes and activities that are partly governed, and majority operated by self-learning software agents that optimize front-, middle- and back-office operations,” according to Gartner. 

“Mindset is the hardest barrier to overcome in achieving autonomous finance — followed by talent (or expertise),” said Cole in an emailed response to questions.

The role of the CFO has been changing drastically in recent years, with their responsibilities especially creeping into technology and IT-related spending. 

Both inflation and labor market shortages have pressured CFOs to justify labor-based models, the survey said, with such economic headwinds pushing organizations away from the growth-at-all-costs mindset. 

“As more finance resources are directed towards digital transformation, it becomes apparent there is a need for deep process expertise, and for project management offices to provide governance and coordinate these initiatives,” Cole said in the statement.

Meanwhile, technology spending can offer much “greater reliability and efficiency for scalability than the labor-based method traditionally used to deliver finance capabilities,” the research found.

By 2025, over 30% of finance roles will be aligned “horizontally”, a major shift from the current organizational structures that are in place at companies today, according to Cole.

“Currently, most enterprises have traditional organization structures that were designed for the industrial era. They are designed for efficiency in a production or manufacturing context and are organized “vertically” in functional silos such as finance, product development, and IT,” she wrote to CFO Dive. 

This structure is in direct contrast to the digital era, which is characterized by collaboration, data-orientation and disruption, “so we see businesses adapting to ad hoc, agile and cross-functional work groups to achieve better alignment and responsiveness to customer and market signals,” wrote Cole.