Lucy Brewster here, filling in for Sheryl.

For Part 2 in our series aimed at what it takes to become a CFO, we wanted to dig into tech. As the finance industry becomes increasingly automated, being tech-savvy is not just a plus, but an essential skill set for young professionals hoping to eventually land the CFO role. CFOs utilize software tools in a range of key job functions: conducting data analysis, outlining financial projections, and making strategic decisions. We asked experts to explain what tech trends are here to stay for CFOs—and what skills you should be looking to acquire as you climb the org chart.

Tech to get your data right

The most fundamental tech tools CFOs have at their disposal are accounting systems that help them store data and make financial projections for the company. “The concept of ‘bad information in, equals bad information out’ really applies,” explained Jason Dess, who leads Accenture’s global CFO and Enterprise Value services. “So aspiring CFOs really want to get a really good understanding of data and how it drives insight.” 

Jay Jung, who founded Embarc Advisors and works with startups as a “fractional CFO” and advises some as a consultant, emphasized that understanding how to use accounting tools is the most important skill that allows savvy finance executives to move on to more advanced toolset. For smaller companies, accounting tools used could be QuickBooks Online, but larger companies require more comprehensive systems. “Unless you have the raw data coming in from your accounting system really buttoned up, [more advanced] tools are oftentimes just the next shiny object,” he explained. 

Other key tools for CFOs include enterprise resource planning (ERP) to assist in financial forecasting, Dess said. Most candidates will want to have some familiarity with the big ERP software providers like NetSuite, and the enterprise management cloud by Workday (the sponsor of CFO Daily).

For aspiring CFOs, Jung explained that learning more complex forecasting tools will help them stand out from the crowd. Data visualization software suites, such as Microsoft Power BI, allow CFOs to forecast financial figures for their own business and get a real time view of how their company is currently performing, he said. “If you can actually manipulate the data, you are going to be far ahead,” said Jung. 

Tools for the CFO as a manager

As the CFO role shifts to encompass more than just financial planning for many organizations, the range of tools CFOs utilize has also expanded. “What we’re seeing for modern CFOs is that they’re not just contained to the traditional role of finance, they are more and more being asked to be the catalyst for change in the organization,” explained Dess. 

“One of the key trends that I’ve seen over the last 10 years with CFOs is that they’re becoming more strategic,” Bain Capital Ventures partner Christina Melas-Kyriazi told Fortune earlier this month. “They need better tools to do so.”

One technology that gives executives more insight into what’s happening under their own nose? Moving to the cloud. Other helpful management tools include diagnostic software that helps executives understand what’s happening in their organizations in real time to drive both cost and margin improvement. Dess pointed out data management company Celonis as one example. 

Emerging tech trends for the CFO role 

Experts emphasized that A.I. is not just a fad, and that tools similar to ChatGPT will revolutionize roles across finance in the upcoming years. “I expect to see more companies leveraging A.I. and machine learning to help forecast better and more accurately,” Melas-Kyriazi said. “I would say that of the companies I talk to, very few are using it fully today. But it’s definitely an increasing trend over time.”

Dess thinks that CFOs will eventually utilize A.I. to forecast their revenue and even to draft key documents. “In the next two to four years, every CFO will be spending a significant portion of their time in moving the needle [towards A.I. integration],” he said. “So if you’re an aspiring CFO, that’s a topic that you absolutely want to be well versed in,” Less said. 

Master the basics

Overall, using the basic tools skillfully is as important as understanding more complex technical softwares. One example? Jung recommends that young finance professionals use Excel instead of Google Sheets. “I found that among our clients, the younger people work in Google Sheets, which is a big handicap because Google Sheets lacks some functionality. It is likely that their senior leadership, like the CFO, grew up in Excel and appreciates the value of Excel,” Jung explained.

Dess also recommended that as a starting point, finance professionals should understand the tools the CFO at your own company uses. “If you’re an aspiring CFO, either leverage your organization to go learn the tools they have, or do some research on your own and go play around,” he said.

Look for Part 3 of our series for aspiring CFOs in your inbox tomorrow. Forward this email to the aspiring CFOs in your circle—they can sign up for the newsletter here.

Lucy Brewster
Lucille.Brewster@fortune.com

Big deal

A survey by Gartner released on Monday finds that CFOs plan to increase spending on employee compensation in 2023. Eighty-six percent are planning to raise compensation spend by at least 3% across their budgets year over year. Most CFOs said they intend to remain competitive in a tight labor market. Just 5% of respondents said they plan to reduce compensation spend in their budgets, Gartner found. Meanwhile, 80% of respondents said they're also planning to increase their technology spend by at least 3%, and 43% are planning to increase technology spend by 10% or more. The data is based on a survey of 279 CFOs.

Going deeper

A recent report by FP&A software provider DataRails, “CFOs and the C-Suite: Staying Power, Pay, and Pain Points,” is based on the viewpoints of more than 2,000 executives at U.S. companies. To gauge their perspective on tech adoption in finance, a previous survey of 200 CFOs in the U.S. and U.K. found that 81% of respondents believed they suffer from the most intensive manual work daily in comparison to any other role in the C-suite.

Leaderboard

Sabra Purtill was named interim CFO at American International Group (NYSE: AIG). Mark Lyons was terminated from his position of AIG’s interim CFO and EVP, global chief actuary, and head of portfolio management after the company became aware that he violated his confidentiality/non-disclosure obligations. "These violations were unrelated to the company’s financial statements, financial reporting generally and related disclosure controls and procedures, or reserves," AIG said in a statement. Lyons, who joined AIG in 2018, entered into a settlement agreement with the company. Purtill previously served as chief investment officer of Corebridge Financial. Before that, she was AIG’s EVP and chief risk officer, and deputy CFO. Before joining AIG, Purtill held senior leadership roles in finance and investor relations at The Hartford Financial Services Group, Inc., Assured Guaranty Ltd., and ACE Limited (now Chubb Limited).

 John Garratt, president and CFO at Dollar General Corporation (NYSE: DG), announced he is retiring, effective June 2. Taking into account its succession plans, Dollar General will evaluate options for its next CFO and is not currently conducting an external search. Garratt joined Dollar General in 2014 as SVP of finance and strategy and was named EVP and CFO in December 2015. He has served as DG’s president and CFO since September 2022. During Garratt’s tenure as CFO, he oversaw the finance, accounting, investor relations, treasury, and procurement functions. In addition, he partnered in establishing the company’s current strategy function.

Overheard

"We do expect consumer spending to hold up relatively well in this environment driven in part by the strong labor market."

—Mastercard CFO Sachin Mehra said during the company's Q4 2022 earnings call on Jan. 26.