In this day and age of Ever-Changing business models, products are giving way to services, customer outreach is becoming more direct, and customer expectations are rising. As a result, the entire enterprise is on an ever-changing transformation journey powered by data and digital experiences.
The CFO has emerged as a key figure in this seismic digital shift. As the budget owner, the role has always been about being a steward to protect critical assets and fulfil the core responsibilities of the finance function, but it has become exponentially more complex.
The CFO is now in charge of implementing strategy and managing the pace of transformation through resource allocation and project management. It is also an ideal location for the C-suite to collaborate with other business functions such as IT, sales, and marketing.
According to a new SAP-Sponsored Harvard Business Review Analytic Services paper, expanding the CFO’s role beyond its traditional financial boundaries necessitates the use of technology.
From analytics to AI, the right digital tools enable the CFO to increase efficiency while also gaining useful insights that drive the best decision-making on the company’s behalf.
Technology Has Changed Everything
As a result of technological advancements, the role of the CFO is changing. This shift is being driven by innovation and access to massive amounts of data, both inside and outside the organisation. Today’s CFO must effectively leverage new technologies while ensuring that the organization’s financial processes are at the forefront of its digitization efforts.
CFOs must lead the charge in these new technologies in order to be successful. They must be the change agents who control the pace of transformation throughout the organisation. Those who succeed will become the primary source for data-driven decision making. As a result, they are better equipped to drive their organisations to become more agile, dynamic, and successful.
Leading The Way: Three Key Technologies
This transformation is being led by three key technologies:
1. Automation — Typically, the first step in a technology transformation is the automation of financial processes. According to a McKinsey Global Institute study, 42% of a finance team’s processes can be fully automated, while the remaining 19% can be highly automated.
General accounting operations, accounts payable, accounts receivable, payroll, financial controlling and reporting, and tax workflow are examples of finance activities that lend themselves well to automation. The finance team saves time and resources by automating these processes, allowing them to focus on driving strategy and change throughout the organisation.
2. Data Dashboards — When financial and operational processes are automated and data visualisation tools are used, organisations gain access to valuable real-time data.
Companies frequently lack easy access to data. Typically, the critical information they require is spread across the organisation or in disparate systems. Data visualisation software collects and organises raw data from various sources. Creating clear, timely, and actionable dashboards that can be pushed to the appropriate end users to improve decision-making.
3. Analytics — Automation aids in the streamlining of processes. Data dashboards display data in real time. Data analytics is the advanced analysis of massive amounts of data. Companies that can strategically leverage data will be market leaders in the future. Such businesses will make more informed tactical decisions and identify more opportunities for growth.
5 Ways The CFO Role Is Changing, And Technology Is Rising To Meet The Demand
These are the Five Most Important Ways The CFO Role Is Changing To Guide The Transforming Enterprise — and How Technology Can Help The CFO not only cope with but also grow and thrive:
CFOs Must Be Well-Versed In Data- CFOs must now have data scientist skills in addition to traditional finance skills. The challenge is no longer in gathering data, but in determining what to do with the massive amount of information that is constantly flowing into the business. Technology can now assist CFOs in transforming real-time data into insights that drive process improvements, ensuring compliance and increasing employee and customer satisfaction.
CFOs Must Take On Data Security Responsibilities- Data contamination and theft are now directly under the CFO’s purview, both to maintain customer and investor digital trust and to improve compliance with increasingly stringent data protection regulations. The organisation can detect emerging security risks before they become a threat to the business by leveraging data, AI, and machine learning.
CFOs Require Finance To Be A Testing Ground For New Technologies- Finance is frequently used to demonstrate new technology before it is deployed throughout the organisation. The right tools can assist the CFO in solving business problems for finance teams, generating interest and enthusiasm for new digital tools across the organisation — whether it is RPA to handle rote tasks or forward-thinking analytics to anticipate a recession and make strategic adjustments to cushion the blow.
CFOs require an exceptional transformation team- A cross-functional, collaborative team is essential as the CFO seeks to develop and implement a viable strategy for enterprise transformation. This group will need to combine multiple skills (such as analytics, automation, data visualisation, and process expertise) as well as functions such as IT to form a unit focused on solving business problems rather than just cutting costs. This complex effort to turn words into action is enabled and supported by the right digital tools.
CFOs must play the role of the devil’s advocate- As the “keeper of the purse,” the CFO has long been regarded as a trustworthy member of the C-suite. It is also a role that frequently both collaborates with and challenges the CEO. When it comes to enterprise transformation strategy and actions, the CFO must have a 360-degree view of the organisation, leveraging data and technology to create new business models and identify growth opportunities.
Finance is central to any journey toward digital transformation. This means that the entire organisation will look to the CFO to coordinate the plethora of activities that lead to the single, shared goal of long-term transformation and growth.
From securing customer trust and loyalty through constant monitoring of available customer experience insights to transforming the supply chain by connecting buyers, suppliers, and third parties, the CFO has not only the opportunity, but also the duty, to reach out into many decisions that are outside of the traditional finance area.
The good news is that technology is now available to help businesses improve processes, overcome obstacles, and steer them toward transformation success.