The finance function, traditionally, has been a stronghold for accountants and numbers men, not forward thinking tech gurus. This is changing. The rise of digital has led many organizations to adjust their business models. Firms are now failing 30 times faster than they were 30 years ago, and if they are to stay solvent and be competitive, they must embrace technology that cuts costs, increases efficiency, and drives profits. To deal with this shift towards digital, there has been a dramatic transformation in the make-up of those who work in finance.
Over the course of the past decade, the CFO’s role has grown from focusing purely on controls, budgeting and reporting, and become instead a broad leadership role that holds responsibility for charting the company’s growth agenda while guarding against risk. To do this, they have to seek out creative solutions, and embrace bold decision making and innovation to overcome business challenges. According to Accenture’s 2014 High Performance Finance Study, 84% of CFOs are now being impacted by digital technology. They must have the skill set and knowledge to deal with this. Mark Evans, CFO of telecom firm O2, told IBTimes UK: ‘Like it or not, every business, regardless of sector, and everyone within your business, must grasp technology and be more courageous than ever before. That includes the CFO and the entire finance team.’
The Accenture study further found that digital is already on the CFO’s radar, with 72% of respondents saying that they are currently using Big Data and analytics for better decision making, and 71% saying they have moved finance and accounting to the Cloud. This is set to increase over the next two years, with 85% planning to move their operations to Cloud computing or Software as a Service (SaaS), and 82% set to embrace Big Data and/or analytics.
All departments need digital, and finance holds the purse strings. The CFO and his team must therefore have a rich understanding of the benefits that digital can bring to a business, much of which will come if they adopt the technology and see the benefits themselves. They can then better champion how connectivity and digital investments can contribute value to the organization. They must look beyond ROI, and think about social metrics and real-time sentiment analysis alongside the usual measures that drive their decisions to get a complete picture of the health of new digital initiatives.
CFOs face a number of challenges to digital transformation. Moving from legacy systems is one of the biggest obstacles, with the complexity of moving systems across often incurring substantial costs. CFOs also need to work closely with functions across the enterprise, and persuade others in the C-Suite that they must be involved in decisions around technology. They must develop a relationship with the CIO and the CTO, which may draw resistance for fear of a land grab. However, given CFOs’ fiduciary responsibility to deliver shareholder value, it makes sense that they be leaders in digital business-model innovation.