Today’s CFO is at the heart of his company’s digital strategy. His decisions do not only concern the finances of his company but also the entire digital transformation strategy leading to the improvement of his company’s performance.
New technologies for storing, processing and visualizing financial and business data will be the best allies of CFOs in their key role as orchestra leaders in the financial performance of their structures.
Which technologies for an optimal transformation of the finance function?
As a result of a series of technological advances, digitization has become a realistic objective for the finance function. This includes the widespread availability of business and economic data, as well as the ability of teams to process large datasets. This has been made possible by the use of algorithms and analytical methods that are now available, but also by the improvement of connectivity tools and platforms through IoT and cloud computing technologies.
Finance departments and their teams are the custodians of the critical data needed to generate forecasts and support management’s strategic plans and decisions. This includes data on sales, purchasing, supply chains, cash management, business performance and economic performance.
According to the experts, at the present time, three technological areas can offer significant added value to the finance function:
1. automation and robotization for the improvement of financial processes;
2. visualization of data to give users and decision-makers access to real-time financial information and improve business performance;
3. advanced analysis of financial and commercial operations to accelerate decision support and the detection of market opportunities;
Financial organizations carry out a wide range of activities, from basic data collection to complex decision-making and consulting to business leaders. As a result, the potential for performance improvement through new information technologies, including robotization and process automation, varies from one sub-function to another, and requires a portfolio of technologies to capture all opportunities.
What strategy for an effective digitisation of the finance function?
CFOs are almost always at the centre of their company’s operating committee or management teams. In most cases, they are responsible for the strategic planning process and financial disciplines. In many cases, the combination of the strategic planning process and financial disciplines becomes an essential factor in leading to digital transformation.
Many CFOs confess that they don’t know where to start. The rapid arrival of innovative technologies and the general shortage of talent in advanced technologies will not make things any easier. However, they must begin to experiment, to avoid falling behind other functional groups in the organization and other companies in the sector whose digital transformations are already underway. This is an essential step to guarantee the sustainability of the service and the company.
It would be highly recommended that CFOs work in conjunction with their CEOs, the Board of Directors and their Information Systems Departments. This collaboration would proactively and systematically identify the tasks and processes of the finance function that would benefit most from digitization. They can then locate and invest in the technologies and capabilities required to improve these areas.
CFOs and their information systems management teams can initiate the digitization process by identifying key use cases and determining their position in relation to each of the digital technologies available in the marketplace. An analysis of the values and potential of digitisation of each financial process, as well as its level of feasibility, should be carried out. Pilot projects on well-defined processes are to be favoured, for a better management of the risks and opportunities of digital transformation.
Digital is the major challenge of the current generation of CFOs. And their decisions will determine whether their companies are thriving or weakening.