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Spearheading Digital Transformation as a CFO

Two of the most significant developments in FP&A in recent years include the changes of the CFO role, and the acceleration of digital transformation. These two phenomena have fed into one another; the proliferation of AI and other high tech tools have led to new CFO responsibilities, and the emergence of CFO’s increasing role in company leadership (in addition to their traditional roles as number crunchers and bookkeepers) have led to their push to integrate the newest technological resources within their finance teams.

CFOs should be aware of how specifically they can take the lead in digital transformation, and what specific FP&A technologies can benefit their organizations the most.

New CFO Responsibilities on Top of Traditional Tasks

Traditionally, the CFO fundamentally had three main tasks:

1. Organizing the books and records of the company

2. Financial reporting

3. Ensuring statutory compliance

The modern CFO must complete these tasks in addition to acting as organization leaders, who are key players in directing the company towards success. Four specific new CFO skills are as follows:

  1. Leadership: To be an effective business partner, today's CFO must have the necessary leadership and communication skills. They must give advice and counsel, as well as provide a voice of reason.

  2. Operational Knowledge: They should possess a strong understanding of the company's business model and industry. CFOs should use this knowledge to provide an independent perspective, and constructively challenge the commercial and operations teams, ensuring that business decisions are grounded in solid financial criteria.

  3. Controls: In an increasingly global and volatile environment with additional regulatory burdens, it often falls to the CFO to ensure adequate assessment and mitigation of risk as well as compliance with applicable regulatory or other legal requirements.

  4. Strategy: Supporting strategy development and helping enable its execution. The CFO also plays a role in prioritizing and ensuring the strategy can be funded.

In the context of digital transformation, these competencies are crucial, as finance is now at the crossroads of IT strategy and business intelligence. CFOs are now able to dictate the core principles that organizations use to shape their overarching focus.

Challenges in 2021 & Taking the Lead with High Tech

The emergence of new technologies in finance has elicited challenges and advantages in the world of finance. CFO Research surveyed over 200 CFOs, senior finance executives, and CEOs about their technology adoption for finance, along with how they are using automation, the benefits they perceive, and where they might find success in future adoptions. The findings of the survey show significant levels of inequality in the technology and the benefits gained, as well as some interesting insights about the adoption of technologies such as automation and artificial intelligence. Key findings include:

  1. Reducing manual, time-consuming processes was a priority for 90% of the executives.

  2. The surveyed executives expressed regret for not investing more in advanced analytics, AI, blockchain, distributed ledger technology, machine learning, and robotic process automation five years ago.

  3. 45% of respondents wish they had invested more in tech. Advanced analytics tops the list of hindsight wants, with 67% wishing they’d made it a bigger priority.

  4. The top challenge for digital transformation projects is support from C-suite executives, such as CEOs and chief information officers, according to the surveyed executives.

Based on such results, it is clear that C-Level executives across the board are aiming to improve their digital transformations, and that CFOs can do a lot to overcome the obstacles to quality digital transformation. There are two key roles CFOs can play in adjusting their workforce to high tech. First, as leaders of an organization’s finances, they can explain the value of reskilling their own finance talent. Secondly, as company leaders who regularly communicate with C-suite executives, CFOs can argue the business case for these workforce development policies. CFOs can look at the development and learning budget, and find ways to channel some of that investment toward retraining for more tech-savvy skills needed for changing job descriptions. FP&A software is among the newest and most powerful tools FP&A professionals can and should familiarize themselves with. CFOs can lead the effort to educate their teams about this software.

Digital Transformation Options

Microsoft Excel has been the bread and butter of FP&A for decades; it is understandably difficult for finance teams to transition to another method of collecting, analyzing, and presenting data. There are numerous finance professionals, and FP&A software organizations who encourage the abandonment of Excel altogether when transitioning to using their product, which, in turn, makes it ever more difficult to reskill a finance team.

A better approach to this is, to find a solution in which an organization can continue to benefit from their workers’ expertise in Microsoft Excel. Some of the best FP&A software have the unique feature of complementing Excel use; this way finance professionals can continue to use their knowledge of Excel to succeed in their work, while reaping the benefits of newer tools at their disposal.

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