A recent report titled the ‘Digital Future of Finance’, released by Gartner, highlights the areas and opportunities that CFOs need to make the most of to simplify and accelerate the path to digital transformation for their respective organizations. The report also mentions how many business leaders expect their revenue growth to increase considerably in the coming years. It also outlines how CFOs are expected to be at the centre of all the measures taken by organizations to recover from the pandemic-induced economic slowdown.
The biggest challenge for CFOs to drive their organization’s digital finance transformation is to understand the demand of the senior leadership and devise an effective strategy to meet those demands in the stipulated time. So, the challenge is to bring the organization back to its pre-pandemic financial health and accelerate digital finance models and economic growth. CFOs have a business function to lead and take in the best possible condition into the future. With the emergence and easy availability of newer technologies to develop business performance insights and improve efficiency, the future of finance will witness significant transformation – CFOs need to have all the tools and be prepared to ensure smooth sailing for their organizations through this period.
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The primary focus of CFOs in the next few years is thus as much on helping their organizations accomplish their digital ambitions as it is on ensuring that the digital finance function becomes a reality. The expectations of leaders are not just to see a separate process but also one that is driven by data, employs fewer resources, and is entirely digital. For CFOs to define the path to digital finance transformation for their organizations, they need first to understand that it is fraught with challenges. To overcome these challenges, CFOs will have to align themselves with the digital finance transformation of their organizations.
CFOs that are already on this journey realize how important it is to organize the finance function at their organization in such a way that it helps them make the most of the available digital transformation opportunities. And they also understand that to do this; they need to modify not only organizational design but also update functional strategies to set up the digital design function.
However, if history has anything to go by, then the transformation of finance functions isn’t something that many organizations have been successful with. And success has come at a cost for others. Transformation for many organizations didn’t prove to be as beneficial as they expected it to be when they initially decided in favour of it. So, what exactly should CFOs do to navigate these challenges and ensure smooth digital finance transformations?
To begin with, CFOs need to evaluate whether existing Robotic Process Automation (RPA) programs are offering the benefits they were supposed to when they were implemented and ensure that they are in line with business goals. RPA had indeed been instrumental in bringing added efficiency, speed, cost-effectiveness to finance processes. But, what it is expected to do now is to lend support in decision-making. The correct use of machine learning with existing RPA programs can help CFOs simplify complex processes like forecasting and budgeting. This will also leave relevant finance resources with enough time to engage more in the decision-support process.
The finance function at organizations is often running short of insightful data that key stakeholders can use to make profitable decisions. And this is majorly found in organizations that fail to understand the importance of employing data science professionals. CFOs can provide the finance teams with a simple and effective data and analytics experience to make data and insights readily and instantly available at scale. A finance team that understands how data and analytics work is always in a better position to leverage the data provided by AI to develop insights that can be beneficial for their organizations. And they can do this without having to create algorithms or develop models.
CFOs also need to make sure that they have the right talent at their disposal to implement the digital finance transformation strategy. They need to have people on board with both finance and digital expertise. But currently, not many organizations have access to talent that comes with a combination of digital and finance skills. This is where CFOs need to aggressively look to fill this talent gap and have resources at their disposal that can help them make the most of the available technologies in finance. To hire the right people, CFOs need to change how they approach sourcing talent. Instead of forecasting the future themselves, they should partner with HR firms to be in the know when it comes to trending skills and ensure that they can adapt those when they are hiring.
CFOs need first to discover the right finance technology and invest in it to transform cumbersome finance processes that are still there due to many organizations’ use of traditional technology. CFOs need to think long and hard about bringing Finance AI into their systems. It is the ideal way to hyper-automating finance. So, in addition to automating finance tasks, Finance AI helps automate how the finance function is run in its entirety. By doing this, CFOs can shift their focus towards areas that are likely to add more value, including using consumer behaviour insights to forecast pricing.
References:
- Digital Finance Transformation: 10 Imperatives for CFOs | Gartner
- How CFOs are driving Digital Transformation within their organizations | LinkedIn | Eric Doyle | April 19, 2021
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