4 steps for CFO’s to lead on digital transformation
If you’re a CFO preparing to lead your company into digitisation, no transformation is more important than making customers’ experience with your organisation better.
Nearly half (46%) of CFOs are facing increased demand to provide overall business counsel. Additional factors driving the changing CFO role include the availability of real-time data and increased compliance and regulation requirements, as well as the expansion of the role beyond financial management to include functions like IT and cybersecurity.
The enthusiasm behind introducing new innovations is, in part, being driven by the benefits finance leaders are already seeing. Approximately three-quarters (76%) of financial decision-makers currently drive digital transformation in their business. In addition, more than nine in 10 (94%) agree that financial management solutions are helping their teams optimise operations, while 92% believe these efforts can help automate and streamline the compliance process.
Here are four steps CFOs can take to ensure the digital transformation they lead creates value rather than simply cuts costs:
Examine the business model to understand what you’re providing to the customer
Any transformation that doesn’t keep the customer at the centre is a wasted exercise. Ultimately, you will digitise your processes, but be clear on intent. It must be about transforming your customer experience, the way the customer does business with you, and consumes your product or services with the latest tech.
Finance transformation on its own won’t produce impact, results or value if you’re not fundamentally changing your customer experience. You might automate, and you might make back office processes better, but if it doesn’t involve customers quickly getting information at their fingertips and finding your company easier to deal with, then it’s cost reduction, not value creating.
Examine finance, accounting and legacy processes
Upon examination, re-engineer them to fit the business model. Don’t adapt technology to your processes, which does not add value. Rather, change your legacy processes so you can leverage the power of new tech. The modern CFO is evolving from being a backwards-looking number collector to a trailblazing strategic leader who uses data and emerging technologies, like artificial intelligence and predictive analytics, to create a vision for the future of their business. The digitalisation of business is changing the way finance leaders work and embracing technological evolution will separate the leaders from the laggards in this new era. However, a lack of cultural readiness in the office of finance may slow adoption of new technology and hinder achieving optimal results with any digital transformation.
The enthusiasm behind introducing new innovations is, in part, being driven by the benefits finance leaders are already seeing. Approximately three-quarters (76%) of financial decision-makers currently drive digital transformation in their business. In addition, more than nine in 10 (94%) agree that financial management solutions are helping their teams optimize operations, while 92% believe these efforts can help automate and streamline the compliance process.
Right people, right skills
Use the right people, with the right skills, to understand tech and data, so they can analyse it and provide insights. A CFO must have all of these skills. You don’t need to make your finance people data engineers or scientists, but they need to understand and leverage data science within your function so you’re taking the maximum advantage and leveraging the new capabilities. What finance needs to know is the art of the possible. If you don’t understand the breadth of the available new tech, you can’t leverage the power new tech can provide.
Collaborate across teams
Build your capabilities around human skills by creating a function that’s able to collaborate with the rest of business, operate cross-functionally, and understand the needs of other parts of the business. Be able to influence, impact and change behavior based on clearly communicated insights.
The CFO and the office of the CFO are both positioned to look across the business from the front seat. They know, because of their involvement in numbers and reporting, that they understand the cross-functional impact. They should be driving that enterprise-wide transformation from that vantage point.
To do that, you need people with those human skill sets around collaboration, being able to problem solve, and think critically. These skills, widely talked about in the finance profession, are critical in today’s environment.
These are the four essential building blocks to successfully transform your enterprise, and how finance can play a pivotal role in driving that transformation.
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