CFOs, by and large, are still a long way from fully realizing the promise of financial technologies that are flooding the market, experts said.

Software vendors are providing innovations in the cloud that are expected to transform corporate finance departments in coming years, according to Cenk Ozdemir, cloud and digital leader at PricewaterhouseCoopers US.

“I think we’re at an inflection point,” he said in a recent interview.

While financial chiefs have historically needed to grasp the core technologies that support their function, many are now scrambling to keep up with a rapidly changing landscape, according to Kurtis Babczenko, global banking and capital markets leader at PwC.

“When you talk about the new features that are available as people move into the cloud — artificial intelligence, machine learning, natural language processing, chatbot — those are new, and CFOs are not deep in those technologies quite yet,” Babczenko said in the same interview.

The global value of the financial software market is forecast to reach $44.7 billion by 2025, a 35% increase compared with 2020, driven by the increased demand for cloud-based applications in the wake of the COVID-19 pandemic, according to research firm IDC. 

Though finance technology investments by businesses are rising, such initiatives are running into challenges, according to a Gartner report released Monday. “The existing complex and siloed legacy technology portfolios make it difficult for finance teams to decide what technology to prioritize and which capabilities to invest in,” the study said.

Data shows that only 30% of technology projects succeed, according to the report, which advises CFOs to design a strategy and roadmap before undertaking such an initiative.

Finance chiefs are increasingly looking to technology to help them do their jobs more effectively as they grapple with expanding functions and macroeconomic pressures, according to research from FTI Consulting, a business advisory firm.

“For CFOs, right now, it’s not just about closing the books and being a bean counter, but being the enabler of accurate and timely insights, with a keen focus on profitability,” Mukesh Shah, a senior managing director of FTI’s CFO Solutions practice, said in an interview.

About 300 finance leaders around the globe responded to FTI’s survey. Of those, 51% said their role required an increased focus on technology implementation in 2022. That trend is expected to continue, particularly as CFOs look for ways to shore up their financial management and planning capabilities amid a possible economic downturn, according to the study, which was conducted in partnership with CFO Dive and released on Feb. 14.

Forty-four percent of respondents said they expected to focus more on technology implementation over the next 18 months, with 40.8% saying they plan to upgrade enterprise resource planning and business intelligence technology. Another 39.1% said they plan to implement enterprise performance management/financial planning and analysis tools.

ERP refers to a type of software that organizations use to manage day-to-day business activities such as accounting, procurement, risk management, and supply chain operations. EPM software is associated with areas such as budgeting, financial management, and forecasting.

Shah said the use of AI and machine learning to perform functions such as financial forecasting is still an “up-and-coming area” for many CFOs, particularly among the mid-sized businesses that his firm advises.

“It’s not something they’re going after as a primary objective,” he said, adding that some are looking to cloud-based tools to deliver more timely profitability analysis, while others are still focused on their migration to the cloud.

Seventy-eight percent of executives responding to PwC’s 2023 Cloud Business Survey said their companies had adopted the cloud in most or all parts of the business. Yet, more than half said they had not realized desired outcomes such as cutting costs, improving resilience, and driving new revenue.

About 10% of those surveyed said they were able to reinvent their businesses through the cloud and expect to see continued revenue growth of 15% or greater, despite the current economic environment.

Such “cloud-powered companies” can now turn their attention to leveraging machine learning and AI to reduce costs, add intelligence and get things done more quickly, the report said. 

“Cloud-based AI services can be used to wrangle data, reengineer processes, make automated decisions in real time and drive simulations to model different strategies and outcomes,” it said, adding that companies will need “the business and data science talent who can make it all happen.”