How CFOs can build the most effective tech stack

The technology underpinning a finance function is only as effective as the people and processes that govern it 


The first official accounting records are tax information etched onto clay tablets from around 3,300 BC. These artefacts were discovered by archaeologists in Egypt and were understood to have been used by Egyptians to monitor their pharaoh’s possessions and uncover fraud.

The accounting system remains largely unchanged today. Fundamentally, it is still an independent record of inventory and transactions. Finance teams, however, have since switched their clay tablets for technology and now have to manage a carefully curated selection of platforms. Each CFO‘s tech stack comprises software designed to manage financial activity, from payments, payroll and accounting to spend management, financial planning and analysis. 

As the finance function continues to take on a more diverse and strategic role within the organisation, and the volume of information being collected increases, the tech stack is becoming an increasingly vital weapon in the CFO’s arsenal. 

In a perfect world, a tech stack should strike a balance between cost, functionality, reliability and scalability but this is rarely the reality. So says Martin Edstrom, CFO at business service provider Paragon. “The perfect finance tech stack doesn’t exist. It is more a matter of optimising what you have and figuring out what works for you,” he says.

One size does not fit all 

Andrew Kennard is CFO of London-based whisky cask investment and brokerage firm VCL Vintners. When it comes to building a tech stack, he believes there’s no one-size-fits-all approach. “Every finance function will have slightly different technology requirements depending on the size, culture and growth plans of the business,” he says.

The perfect finance tech stack doesn’t exist

Finance heads face an “overwhelming” number of tools to choose from and a limited budget, Kennard says. In these circumstances, it can be tempting to choose all-in-one solutions but he warns against such an approach. “A tech stack will quickly lose its relevance unless it’s addressing the unique needs of the business,” he adds. 

As an example, VCL Vintners uses blockchain technology to record every step of the whiskey process, from maturation to energy use. This means the finance system requires a special focus on data consolidation. In comparison, when Kennard worked in the fashion industry, most recently as finance director at Kanye West Ltd, he found it more relevant to use dashboards and visualisation tools to track sales. “The tech stack needs to reflect the mission statement of the business,” he explains. 

As CFO of a global business spanning five countries, Edstrom has to consider the needs of local management when selecting the right finance platforms. This meant sacrificing efficiency for improved operational freedom when choosing an accountancy software provider. 

“It would make life much easier to move to a centralised platform but this would take away from our ability to operate autonomously,” he explains. “As a finance leader, I have to consider how we operate, how we want to go to market and how we incentivise people to use the tech we invest in.”

Finance functions tend to be based on disparate systems and technologies, which makes integrating new tools into existing work streams extremely challenging. Because of this, Edstrom believes the focus should be on making incremental improvements as opposed to “massive amounts of innovation”. “Change cannot happen overnight,” he adds. “It’s important to have an end goal in mind and work towards that slowly.”

The four levels of a financial tech stack 

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Evaluate your tech stack 

As a company grows, its tech stack needs to scale accordingly, says Julien Lafouge, CFO of fintech company Spendesk. Ensuring that the technology is flexible enough to adapt to changing business needs is challenging and made harder still by the rapid rate in which technology is evolving. 

CFOs should look to strike the right balance between innovation and stability, Lafouge says. “It is important to look beyond the hype of the latest functionalities and features of the moment,” he adds. “You don’t want to have to keep switching out tools, which can be hugely costly and disruptive to the team.”

Mapping out where the business is likely to be in five years and asking providers for their product roadmap can help finance chiefs determine which tools are most compatible in the longer term.

It is equally important to be able to identify when a tech stack is falling short, says Vijay Padmanabhan, CFO of digital transformation company UST. This is something CFOs should be constantly evaluating, he notes. Integration issues, slow performance and security concerns are among the most common warning signs. 

For Padmanabhan, usability is always the main consideration when he’s making a decision about upgrading his tech stack. When it comes to automated tools, such as financial planning and analysis (FP&A) software, he highlights the importance of sense-checking the data and balancing it with human judgement and intuition. 

“Finance heads need to act quickly and discontinue any technologies that are not working as they should. Failure to move fast enough could be detrimental,” he adds.

Barriers to adoption 

Despite having a broad array of tools at their disposal, Lafouge believes that many finance professionals are not using them to their full potential. A lack of training, inefficient processes and inadequate automation systems are preventing CFOs from making the most of their tech stacks, he says. “If finance professionals used even 50% of their tools’ full capabilities, they would see huge increases in efficiency,” Lafouge adds.

Poor data management is another common issue, says Kennard. “Companies tend to have data silos where they’ve got redundant or duplicated information that they’re unable to access. This means businesses are generating massive amounts of unused information.”

Prior to this, finance workflows, such as annual planning and quarterly reporting, were managed within disconnected spreadsheets with no automation capabilities. A great deal of time was therefore taken up by manually stitching together information from disparate sources and making sense of it in a spreadsheet.

It is no longer enough to be trained in pure finance

Advancements in technology are further complicating matters and “fundamentally reshaping” the finance role, according to Lafouge. “It is no longer enough to be trained in pure finance. Candidates need to have some level of engineering knowledge – or an appetite to learn at the very least,” he says. 

Research published by consultancy firm Gartner predicts that, by 2026, 50% of all employees hired into the finance function will have backgrounds in a discipline other than finance or accounting, due largely to the rise of AI and automation. 

Instead of focusing their time and effort on chasing the perfect tech stack, finance chiefs should be looking more closely at their own internal processes, skills and capabilities. 

Three future tech stack trends 

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