Why finance is ahead when it comes to business transformation
Boards today believe CFOs don’t need to be accountants, instead, they look out for strategic, operations-minded finance chiefs as emerging technologies are invading office spaces.
Traditional task like technical accounting is becoming a smaller role as emerging technologies such as RPA (Robotic Process Automation) is taking over.
The CFOs of today are moving beyond numbers and are increasingly in charge of human resources, information technology, and enterprise risk management. Leading in the front end, the financial chief is tech-savvy with a firm grasp of both digital skills and soft skills to streamline operations.
It is clear that the role of business finance is getting more tech-driven, but with it comes some business-wide implementation challenges.
A study by Sage highlighted the evolution of CFOs in the digital timeline with 98 percent of CFOs recognizing that their role has changed over the last five years.
The overall digitization of the finance industry drives a larger leadership role. For instance, the availability of real-time data, demand to provide overall business counsel, and stringent compliance and regulation requirements are priorities of new-age CFOs.
Finance professionals are generally seen to be conservative and risk-averse with emerging technologies; yet, that perception has changed as the CFO 3.0 – Digital Transformation Beyond Financial Management report demonstrates.
Up to 92 percent who are already employing automation found an improvement in productivity. A similar number—93 percent are comfortable with technologies taking over more daily accounting tasks in the future.
With three-quarters already driving digital transformations in respective organizations, the figure is predicted to rise as technologies advance.
Artificial intelligence (AI) and machine learning (ML) will help CFOs evolve to the next level in the digitization of finance.
However, this transformation is not without several challenges in terms of implementation and integration with existing systems and culture.
“The digitalization of business is fundamentally changing the way finance leaders work and embracing technological evolution will separate the leaders from the laggards in this new era. However, a lack of cultural readiness in the office of finance may slow the adoption of new technologies and hinder achieving optimal results with any digital transformation,” said Marc Linden, Sage EVP and GM.
The level of a company’s tech-readiness is reflected in their leaders’ and employees’ perceptions towards the success of digital transformation and their ability to employ to streamline tasks as a result.
To date, only one in four (26 percent) are confident that their organizations are at an upper-tier in digital transformation.
Meanwhile, 32 percent CFOs identify the absence of digital skills as a key gap in their organizations and 83 percent believe their teams are lacking the skills to utilize advanced technologies effectively.
As a consequence of the lack of digital skills within an organization, a large majority (82 percent) are not confident that their organizations are ready for the introduction of more automated technologies. Moreover, close to 80 percent are concern with the security risks emerging technologies will bring.
In the end, organizations investing time and resources to educate and prepare teams to embrace the digital wave will witness a high ROI (return on investment) with a tech-savvy CFO leading the digital transformation.
Staff buy-in may be a determining factor for a successful transformation, yet leading the pack, is a CFO that works magic with numbers, technology, and people.
6 June 2023