Human resources, technology integration, data reliability, and cybersecurity will all be part of digital acceleration strategies in 2023.
Two-thousand twenty-three’s outlook is much different than the projections from a year ago. Coming out of 2021, executives were excited to continue recovery from a pandemic-induced economic struggle, and overall confidence in the outlook for the global economy was much more positive. Although much of what was predicted happened— interest rates rose, labor markets struggled, and technology integration increased in nearly every industry — the economic outlook this year is much bleaker. A hawkish Fed shows signs of a trembling market, and many executives see a recession on the horizon
Despite the Federal Reserve’s plan to tighten monetary policy until inflation falls to the 2% target, many executives are still planning for significant growth. As companies implement more human-centric management practices around workflow, the work environment, and company culture, these efforts pale in comparison to the efforts to integrate technology into systems and processes. Despite the issues surrounding technology usage and costs in 2022, digital acceleration throughout businesses, especially in corporate finance, is unprecedentedly expanding.
1. Modernizing Human Resources
With the very foundation of human resources being revolutionized by technology, the new year will undoubtedly bring further automation and the leveraging of data by what many now refer to as the “people team.” Automation of the front office, through what was referred to as “growth tech” at November’s 2022 Ascent Conference, will be a significant part of how the relationship between employers and workers are facilitated.
Simplification of processes is what HR workers strive to offer to their customers. Whether it’s improving the reliability of HR data, expanding benefit packages, or even using banking as a service (BaaS) to offer employees earned wage access, CFOs looking to adopt a people-focused approach must be aware of the technology available for making work more flexible and fulfilling for employees.
2. Leveraging the Tech Stack
As a Vertice survey identified in early November, SaaS products are heavily relied upon, frequently underused, and often wastefully expensive. Vertice CEO Eldar Tulvey’s exclusive take with CFO on the vendor’s survey identified “shelfware” as rampant. In addition, according to Tulvey, product duplication, or having multiple tools in an effort to try and solve the same problem, is also a major issue. “These issues are both unintended consequences of SaaS sprawl, which has been [caused] by the ease of implementation and self-provisioned software within departments,” said. “[They] create a company-wide lack of visibility into the tech stack.”
While most executives are aware that proper research, negotiation, and execution of tech integration pays major dividends, the process is much more difficult than many anticipate. As fintech continues to disrupt the day-to-day of corporate finance, executives should be on the lookout for the right software, not the best-rated or most popular one, for their business.
3. Improving Data Reliability
As remote work environments and relocation to the cloud potentially lead to less reliable and secure datasets, CFOs must prioritize the accuracy of data. The ability to predict, forecast, and analyze the huge amounts of data accumulated by operations is absolutely critical to a company’s growth.
As almost half of CFOs claimed recently that they don’t have reliable cash flow data, allocation towards technology that makes financial data analysis simple and accessible (and improves the visibility into cash flows and the accuracy of the data) will be massively important in a volatile economy.
As work environments fluctuate, the processing and utilization of data need to be paramount. At the CFO Summit in Newton, Massachusetts, the frequency of forecasting was an important topic. CFOs, regardless of industry, appear to be forecasting frequently as their data reliability knowingly varies. If frequent forecasting is being done with poor data, not only is CFO productivity taking a major hit, but business decisions and capital allocations are being determined with bad information.
4. Furthering Cybersecurity Legitimacy
Six and seven-figure cybersecurity breaches have become more common in digital corporate environments. With just over a third of CFOs reporting last fall that cybersecurity is a top concern, the protection of company, customer, and partner data will continue to be of prime importance this year.
“Having a response plan in place in advance is good, but having a cyber resiliency plan in place that involves the entire C-suite will improve the ability of an organization to withstand an attack and keep essential core systems operational,” Michelle Search, Jefferson Wells’ national practice leader, finance and accounting, told CFO in October 2022.
An acceleration of attention to and planning of cybersecurity strategy is needed. With the new SEC regulations regarding data breaches not far away, executives looking to manage risks to growth should be taking a close look at the effectiveness of their spending on security. As Mitek CTO Stephen Ritter put it to CFO in September 2022, “Cybersecurity is unfortunately no longer an option, but an essential element of any organization’s infrastructure.”