A CFO’s Perspective On Advanced Technology

As advanced technologies become commonplace in organizations today, they are changing the way the finance function operates and how it contributes to the overarching goals of organizations. In a recent interview with Forbes Insights, James J. McKinney, CFO of Kemper Corporation, provided his perspective on how advanced technologies are impacting corporate finance and improving the audit.

In recent years, McKinney notes, there has been a rising expectation among CEOs that CFOs work with front-end team members to design processes to bring information straight into corporate technology systems, such as automating journal entries.GETTY

“The broadest theme I see with advanced technologies is that they are changing the finance function to be one that is working on the business versus working in the business,” says McKinney. “That’s resulting in skill set changes. The skill sets today are more change management control and analysis focus, whereas historically, bookkeeping would have been a bigger component of the job.”

McKinney, 39, has been CFO of the insurance giant ($11 billion in assets) since 2016. Prior to joining Kemper, McKinney was CFO at Banc of California, and before that, principal accounting officer and global corporate controller for AIG’s International Lease Finance Corporation. He has also held roles at RBC Citizens Asset Finance, KPMG and Federal Reserve Bank of Chicago.

Expectations Of The CFO

In recent years, McKinney notes, there has been a rising expectation among CEOs that CFOs work with front-end team members to design processes to bring information straight into corporate technology systems, such as automating journal entries. In fact, a series of advanced technologies beyond workflow automation are now in the scope of responsibilities of finance leaders, McKinney says. These include visualization technology, data analytics, robotic process automation (RPA), artificial intelligence and cloud.

“Our role is really shifting to managing these technologies and analyzing the information they provide to help think through how we can move our business forward, in terms of both increasing throughput or sales of the organization and decreasing operational costs,” he explains. “The value that we can provide absent these items would be substantially less, or we would have to be two, three, four times the size, from a functional perspective, than we are today,” McKinney says.

Improving The Audit Process

In addition to changing what’s expected of the CFO, advanced technologies are also improving the audit. With advanced technologies, many routine tasks can now be automated, and as a result, auditors can be more productive and use their training and skill sets for more strategic tasks. If CFOs are using these technologies throughout their organizations, auditors will ultimately have continuous access to data through the cloud and smart hubs. This will not only reduce time spent on the audit but also make it easier for companies and their auditors to work together through a fluid flow of information sharing.

For instance, says McKinney, in the CFO role itself, peer analysis used to be cut-and-paste work from regulatory filings to Microsoft Excel spreadsheets that would take hours and be out-of-date within a few weeks. Today, robotic processing automation pulls the needed data from Securities and Exchange Commission filings, sorts them and runs a report through Tableau that’s always up to date.

“I can now spend my time looking at anomalies and also looking for new trends or new information to come out of that, versus having to spend my time creating that report.” It’s a simple example of the gains advanced technologies bring, but one illustrative of the benefits cascading throughout the finance function and through the audit process.

Evolving Employee Skill Sets

As finance evolves and skill sets change, CFOs need to ensure not only that they are adjusting to the new technology reality, but also that their departments’ capabilities shift too. Research by the Financial Executives Research Foundation and recruiting firm Robert Half shows that while basic finance skills remain essential, CFOs are increasingly seeking employees with specific digital skills as well, including in enterprise resource planning systems and data analytics, cited by 19% and 18%, respectively, of the 1,632 North American executives surveyed in 2018.

More broadly, experience with technology really counts in the creative ability of finance professionals to recognize and understand the information the tools are providing. McKinney says he advises students and those early in their finance careers to recognize that the function is moving beyond the boundaries of being accomplished at just accounting and finance basics to including better analysis skills.

As companies deploy advanced technologies and make them commonplace, the expectation is that their auditing firm will be using the same technologies to create efficiencies in sharing data. It’s equally important for auditing professionals to get up to speed with these advanced technologies to better support their clients.

“You’re really seeing more of a blend in the finance and the accounting disciplines than you have historically,” says McKinney. While fundamental accounting skills go without saying, McKinney stresses that “you’ve also got to have really good change management and analytical skills to succeed today.”