CFOs are leading digital transformation and automation
Businesses with future-forward CFOs who quickly embrace the world of digital will reap the rewards in the form of increased profits and revenues.
Gartner recently reported that 82 percent of CFOs are increasing their investments in digital and that those investments now exceed investments in other areas such as talent, supply chain, business services, and fixed assets.
This is unsurprising given that one of the biggest lessons business leaders gleaned from the Covid-19 lockdowns is that the more digitalised a business is, the better able it is to pivot rapidly to meet the demands of a volatile and highly competitive business environment.
As such, it has become imperative for CFOs to capitalise on digital transformation and to pursue automation within the finance department and across the business. “Making the right digital investments used to get CFOs extra credit,” says Alexander Bant, Chief of Research for CFOs at Gartner. “In 2022, successful digital transformation will become the baseline for even, solid performance for all finance leaders.”
Although investment in digitisation continues to rise, CFOs need to justify this spending and the challenge is to illustrate how these transformation efforts result in ROI for the finance function and the business as a whole.
The Gartner study found two main areas in which CFOs can illustrate tangible digitisation wins within their organisations – transformation and automation.
Let’s unpack these two key focus areas in more depth.
1. Digital Transformation (DX)
The trend of digital transformation (DX), which took root during the last decade, has only been accelerated as a result of the pandemic, and even as the pandemic subsides, DX is going to be the future.
Initiatives that will drive transformation and elevate digital capabilities within their teams, specifically when it comes to more flexible budgeting and forecasting, will be a crucial focus for CFOs within the finance function.
Within the broader business context, many organisations will shift their focus from growth efficiency and partnerships towards business continuity, increasing their cash position, and more importantly, lowering the functional costs by enabling remote work, all of which will go hand-in-hand with digital transformation efforts.
2. Accelerated Automation
Efforts that will lay critical groundwork for more autonomous operations will enhance the competitive advantage of the business in years to come. In the future finance, operations will be increasingly driven by hyper-automation, artificial intelligence, blockchain, and quantum computing, reducing the need for human intervention and the best CFOs will start preparing the foundation for this now.
Fintech is changing the world of finance at a rapid pace. Digital ‘workers’ or bots are now available to CFOs to automate their accounting processes. These tools are helping avoid unnecessary losses including vendor overpayments or revenue leakages from bank accounts.
There are also other powerful automation tools like AI engines with excellent document understanding. They have system integration capabilities that can reconcile information from various sources (PDF documents, spreadsheets, system entries, etc) to the accounting system eliminating the need for hours of human intervention that would be needed to sift through this information.
Overall, when it comes to digitisation, CFOs have the opportunity to create organisations that work smarter, and not harder. As Nico Serfontein, CFO at Maserati, recently mentioned in our CFO Talks podcast interview with him, “IT is definitely a tool that can assist to buy you time, you can’t do without it, it helps you to work faster and more efficiently. I think it’s something essential for us as CFOs and senior financial managers to free up some time and focus on the more complex matters and to ultimately get to our to-do list and start ticking it off.”
Listen to our full podcast with Nico here and click here to view all our previous episodes.