Until a few years ago, digital transformation was not high on the agenda of most finance executives.
Although they recognised IT was important, most CFOs thought of digital transformation as a technology play, a channel strategy or a customer experience concern. That picture is changing fast as digital technology pulls finance in exciting new directions as a real-time, digitally-fuelled and data-driven competency.
What’s behind the rise of digital as a CFO priority?
Along with risk and compliance teams, CFOs play a key role in overseeing data, fraud, cybersecurity, and data privacy. They need to be keenly aware of how digital technology introduces new risks and how they can use it to enable real-time decision making and build resilience into the business.
Secondly, the CFO’s role is shifting as a result of the adoption of technologies such as the cloud, artificial intelligence (AI), robotic process automation and machine learning. This combination of technologies is creating a new breed of trailblazing senior financial decision-makers who use data and emerging technology to drive their function.
Digital technology for improving financial performance
We are seeing a growing appreciation among CFOs of how digital technology can help them improve financial performance. More than half of all respondents of a recent Sage survey believe emerging technology will continue to support them in their roles and allow them to keep a finger on the pulse on their business’s finances.
This adoption of digital technology within finance is helping to spur the interest of CFOs in playing a more significant part in their enterprise’s digital transformation strategy. In trusting technology to automate much of the finance function and allowing data to change the dynamics of decision making, senior finance managers have more time to focus on digitalisation to drive growth.
That brings us to the third reason CFOs are playing a key role in digital transformation – no one is better placed to understand how the adoption of digital technology might impact key business metrics and outcomes.
Digital transformation is no longer the sole responsibility of the CIO and is central to the overall business strategy.
While the CEO might provide the vision for digital transformation, and the CIO may propose the means, the CFO can help draw up the budgets and the metrics for success. Undoubtedly, the CFO’s insight into the financials is key at a time when organisations need to drive a real return from the investments they make into digital technology. Working together, C-suite leaders can develop a strategy for prioritising digital investments that produce or result in the best possible outcomes.
One thing is clear: Today’s CFOs are transforming into real-time analysts, and they’re part of a C-suite task force leading the digital transformation agenda in their organisations.
Finance is no longer just a reporting function but a data-driven insights centre that propels key business initiatives. CFOs that ride the technology wave will have an easier time of leading through uncertainty and using digital to deliver high business impact.
By Pieter Bensch, Executive Vice-President at Sage Africa & Middle East