The function of the chief monetary officer has advanced extra within the final 12 months than previously 5 years, as a result of huge digital transformation that came about in response to the pandemic. Whereas numbers — from these related to efficiency metrics to the underside line — proceed to be a major focus, CFOs right now at the moment are being requested to play a key function in driving the group’s broader strategic agenda.
These agendas more and more function digital transformation as firms search to leverage synthetic intelligence, the Web of Issues and different applied sciences to realize a aggressive benefit in a frequently altering enterprise surroundings. And it’s not unusual to seek out CFOs on the forefront of those efforts.
A PWC US Pulse survey in August reported that 68% of the finance leaders surveyed plan to spend money on digital transformation over the subsequent 12 months. That’s in keeping with a 2021 Gartner CEO Survey: The CFO Perspective during which 82% of the respondents mentioned there was intent to extend funding in digital capabilities in fiscal 12 months 2021 in comparison with FY2020.
CFOs are creating and executing insight-driven methods that drive and assist technology-powered change all through the group, and creating cultures open to new methods of working. Moreover, CFOs are using a extra holistic view of the enterprise, and championing data-driven determination making, to future-proof the group and make groups extra agile and resilient.
Let’s look at why and the way these particular adjustments to the CFO function got here to fruition.
Pandemic-influenced acceleration
Whereas the CFO function has been evolving for years, its growth into the realm of digital transformation ramped up all through the pandemic. As COVID-19 lockdowns have been imposed, many organizations digitized processes to assist distant work operations.
Investments in digital applied sciences and the supporting info know-how infrastructure have been important in enabling these organizations to adapt and thrive amid unprecedented disruptions, and CFOs prioritized the price range for this enablement.
The pandemic additionally supplied a powerful proving floor for the worth of superior information analytics. Armed with information, CFOs and finance groups have been in a position to generate insights that enabled the group to pivot to different markets and suppliers and adapt to new methods of working in response to sudden enterprise and market shifts.
The success of these efforts, which incorporates constructive ROI on digital investments, has inspired many CFOs to advocate for quicker and elevated digital transformation as a result of favorable short-term efficiency outcomes. CFOs additionally see the potential for long-term worth creation and are making extra investments.
The digital transformation of finance features
Digital applied sciences aren’t simply altering enterprise operations and buyer experiences. These applied sciences are reshaping finance and assist features — and the CFO function.
Automation, AI, machine studying, course of analytics and different applied sciences are getting used to streamline workflows and eradicate many tedious, repetitive duties. That features handbook workflows related to areas like accounts payable, compliance, and danger administration. The outcomes of this evolution are plentiful: elevated productiveness, much less human error, lowered prices, and higher-quality outputs.
The applied sciences are additionally liberating CFOs up from the various handbook processes that sometimes take up time, like signing and sending again checks, so the main focus may be reassigned to higher-level, extra strategic endeavors. It permits for higher use of the CFO’s experience and expertise, and permits for the flexibility to offer larger worth to the group.
As well as, the elimination of handbook processes gives CFOs with extra bandwidth to create significant roles for the finance workforce. That allows workforce members to commit extra time to high-value actions as effectively and transfer previous paper pushing, primarily making a trickle-down impact. It additionally contributes to larger profession satisfaction which may enhance worker morale.
Harnessing the ability of information
Knowledge analytics have lengthy been utilized by CFOs and the finance workforce to assist handle enterprise actions. By way of digital transformation, CFOs can do rather more — and do all of it quicker and extra cost-effectively.
CFOs can simply collect information from quite a few disparate sources, clear it, label it, arrange it, retailer it and guarantee it meets compliance necessities. With only a click on or two, finance leaders can entry the info wanted, drill down, slice and cube, and carry out ad-hoc analyses. This entry permits for real-time supply of insights and the flexibility to create easy-to-understand visualizations for human assets, gross sales, procurement, working divisions, enterprise items and different inside prospects all through the group.
This data-driven info can be utilized to develop course of enhancements, guarantee compliance, and improve worker and buyer satisfaction. It may be used to establish new market and revenue alternatives, measure and handle enterprise efficiency, and run simulations. It may possibly assist organizations hedge towards volatility and reply quicker to adjustments.
Finally, the result’s that CFOs have gotten information scientists as a lot as finance professionals. With the flexibility to interpret information and join information factors, these leaders are additionally turning into storytellers — together with the hows and whys. With this info, CFOs can stroll by means of the steps which can be informing determination making behind particular aims, methods, and success definitions.
Looking for resilience and readiness
With know-how and buyer expectations continually altering and the quantity of information rising exponentially, digital transformation is taken into account an ongoing journey. CFOs are steering efforts to maintain ahead momentum. Doing so requires steady innovation and the flexibility to anticipate, reply and adapt to adjustments, challenges and alternatives as they come up.
It’s not sufficient for CFOs to make use of the newest applied sciences or drive company-wide know-how adoption. It’s now about striving for digital resilience. Digital resilience permits organizations — and CFOs — to quickly adapt to enterprise disruptions and capitalize on altering situations, two components that ought to be included in each enterprise continuity plan transferring ahead.