This lengthy BW article reports that CFOs are turning to technology to automate the financial-reporting process to meet new regulations imposed by the Sarbanes-Oxley Act. This is a good example of how legislation and stricter enforcement by the SEC can induce a structural change in businesses across the nation.

It's a familiar refrain throughout Corporate America. Within companies large and small, demand is "greater than it has ever been," says Packard, for better financial information that's available at the speed of a keystroke. Shaken by the Enron and WorldCom accounting scandals, shareholders want companies to provide more granular reporting. CEOs and boards of directors want more data at their fingertips so that they can intercept and fix problems before they hurt the quarterly numbers. And regulators are requiring greater consistency and transparency of financial data.

The Sarbanes-Oxley Act, passed in reaction to the corporate scandals of the past two years and set to take effect next summer, will hold CEOs and their chief financial officers personally responsible for the accuracy of their companies' numbers. Execs who mess up could face 20 years in jail.

CONTRADICTORY REPORTS. This new reality has registered with CFOs -- especially since many of them are ill-equipped to guarantee accurate financial reporting and forecasting. In fact, Roth argues that even the most basic financial reporting is flawed in many instances. To set things straight, corporate financial analysts have to perform tedious "reconciliations" that require lots of time and money -- resources that corporate finance departments increasingly don't have.

NEW CLOUT. Increasingly, these execs are turning to technology for help. They're buying packages that allow them to collect data consistently across their organizations, from the usual suspects. They're also buying software that helps them do better data analysis and planning. One thing that has changed already -- no doubt in part because such software is so expensive -- is that the CFOs, instead of CIOs, increasingly have final say over their companies' tech budgets. The increasing influence of CFOs over technology is boosting investments in finance-related hardware and software even as overall corporate tech spending remains flat.

The hottest areas in financial software are tools that help create more accurate budgets, pull relevant data out of various reports, and do better financial analysis. One popular product is called a dashboard. Sold by several dozen companies, a dashboard provides a daily summary of a corporation's most important performance indicators -- just a few key ones vs. hundreds some CFOs get now. The indicators might include information such as how many days it takes to collect money from customers or a company's current debt.

MATERIAL EVENT, OR GOOF? Some dashboards -- which essentially overlay many other programs in a finance department -- can also create income statements and other mandated reports in three to five days. That's a huge help in meeting the requirements of Sarbanes-Oxley.

FREE TO FOCUS. Because the latest technologies automate what was previously hand work, they can also allow financial analysts and CFOs to focus on more important tasks. "Now, technology frees you up to do qualitative work," he says. So, if sales spiked in a quarter, he can analyze what changed from the previous quarter and which event or decision triggered the change, Blinn says. The new systems "give ammunition to the CFO to show that we're delivering value to the company," says the WCCFO's Roberts. They also disperse responsibility for making smart financial decisions, by turning unit or store managers into mini-CFOs. Within the next year, however, Kinko's will move to a Web-based system that will let store managers look at the information for their location at any time -- down to any level of detail they desire. This will "enable them to understand the impact of their decisions faster," Blinn says.

"ENTERPRISEWIDE VIEW." Many CFOs are quick to note that technology doesn't solve every problem. Most say even the latest packages leave plenty of room for improvement. "I don't see an immediate forecasting software solution [that works well]," says Blinn. So for now, financial planning remains as much art as science. "It's about understanding your business," Blinn says.

"At the end of the day, CFOs have to have an enterprisewide view, and they need as much information as they can get," says Roberts, of the WCCFO. "Nobody wants to be jailed," adds Boston University's Lataif. "CFOs have to rely on good technology tools."

-GDK