The role of CFOs in the digital transformation of finance
Digital transformation is happening across all areas of business in all sectors, and organisations must adapt now. But who is responsible for driving this transition? CEOs and CIOs will play a huge part, of course, but in this new-age world of financial transformation, the chief financial officer (CFO) must also play a pivotal role.
The CFO is an all-encompassing role; from strategist, forecaster and leader, to the company’s advocate for third parties. Lenders, investors, partners and suppliers all look to the CFO to gauge the financial viability of the company and its ability to deliver based on their respective interests.
In 2020, the pandemic crisis and the digitisation are spearheading a transformation of the CFO role at a pace never quite seen before, together with a shift in mindset that finance is solely a business support function.
Critically, managing digital transformation is about preparing for the future; laying the foundations for a successful tomorrow, positioning an organisation to take advantage of any disruption that lies ahead and maximising its opportunities. This requires clear vision and strategy for finance. With the CFO in the driving seat, the business can be steered away from situations where their organisation is stifling success and resisting change through budget restraints. Often, digital transformation is operationally minded when it should be financially driven based on cost effectiveness and added value. By focusing on this, they can deliver the best business outcomes in terms of ROI, value and revenue benefits.
Using technology to save and simplify
Properly evaluating technology and the opportunities it presents is a big part of getting this right. The growth of automation and cognitive innovation are only set to continue, becoming more and more integrated into everyday business processes, and feeding deeper into finance operations. They add value and cut out some of the unnecessary resource once dedicated to these functions. A CFO will need to ensure they select the right balance of technology that reduces complexity and cost, without forfeiting functionality. For example, automating business expenses, once a huge part of a finance department’s undertakings, now easily processed with technology like Traveldoo Expense, frees up that resource for a more strategic use, and near reduces the opportunity for human error in the process, maximising efficiencies.
Digital transformation and business insights
It isn’t only processes that will shift through digitisation. It will also make business insights ever more real-time and accessible, allowing businesses to respond to these with much greater degree of accuracy and impact. It will overhaul forecasting and strategising as a result; creating a real-time response to BI will become an increasingly important part of the CFO’s role. The world is already seeing this shift in data analysis with technology that can interpret big data in real-time and communicate this in an efficient way to any stakeholder.
An adaptation on People level
It isn’t just about selecting the right technology, though. It is equally as much about people. A CFO will need to ensure that where the technology they are selecting replaces finance personnel through automation for example, they will also need to be mindful of the technological capabilities of the rest of their team. Selecting digitally savvy finance personnel who have an ability to adapt, embrace change and innovate is becoming increasingly important.
The CFO role, once the primary driver in a business’s push to outperform last year’s revenue forecasts, is now, in the world of finance digitisation, needed to create future value in that organisation, across every function, and truly lead in a new way.