Today’s CFOs are transforming into real-time analysts and they are part of a C-suite force leading the digital transformation agenda in their organisations.
Until a few years ago, digital transformation was not high on the agenda for most finance chiefs. Though they recognised that IT was important, most CFOs thought of digital 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 competence.
A recent Sage research report1 highlights just how central digital is for today’s CFO. Nine out of ten South African CFOs today play a role in their organisation’s digital strategy with 15% being fully responsible for digital transformation. Where they do not take the lead, CFOs are key partners with the other members of the C-suite.
So, what is 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 as well as 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 amalgamation 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
Thus, we are seeing a growing appreciation among CFOs of how digital technology can help them to improve financial performance. More than half of the respondents in our survey believe that emerging technology will continue to support them in their roles and allow them to keep the pulse on their business’s finances.
This adoption of digital technology within finance is helping to spur CFOs’ interest 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 financial decision-makers have more time to focus on digitisation to drive growth.
That brings us to the third reason that CFOs are playing a key role in digital transformation – no one is better placed to understand how the adoption of digital technology might impact on key business metrics and outcomes. Digital transformation is no longer the sole responsibility of the CIO and is central to the business strategy.
While the CEO might provide the vision for digital transformation and the CIO might propose the means, the CFO can help draw up the budgets and the metrics for success. 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 in concert, C-suite leaders can develop a strategy for prioritising digital investments that drive the best possible outcomes.
One thing is clear: finance is no longer just a reporting function but a data-driven insights centre driving business initiatives. CFOs that ride the technology wave will have an easier time of leading through uncertainty and using digital to deliver high impact on the business.
1 CFO 3.0: Digital transformation beyond financial management, preparing the finance function in the wake of COVID-19.
AUTHOR | Pieter Bensch, Executive Vice-President at Sage Africa and Middle East