The role of a Chief Financial Officer (CFO) has conventionally centred on financial planning, data and reporting, but in an increasingly digital world, this responsibility is beginning to change.
Digital transformation has ushered in technology like the Internet of Things, artificial intelligence, predictive analytics, and augmented and virtual reality. Not only does the CFO of today need to understand what these new technologies mean but also how they impact every aspect of the business, the investment required to implement them, how they affect other business functions and how they can be used strategically to drive business growth.
But that’s only the beginning.
In this new multifaceted role, the CFO isn’t required to be a technology specialist but must have a confident and comprehensive understanding of the fundamentals of new digital technology. The CFO’s responsibility is no longer a back-office function, where reports are compiled on past financial activities, instead it’s about looking forward to uncover new sources of revenue and to help strategically shape the long-term financial future of the business.
In addition, the new CFO is expected to:
- Recognise the value of real-time data in order to make faster, smarter decisions
- Pinpoint technology that will improve internal efficiencies
- Bring attention to the legacy systems that expose the business to risk
- Embrace the role of change agent and drive change in people and processes
- Identify emerging digital technology trends that will add value to the whole business
- Empower CEOs with strategic digital insights
- Shape the customer experience
- Reduce digital risks
While the CFOs of the future will need to collaborate more with their CEOs, to identify technology investments that will drive new business, they must also engage more with operational leaders, using financial data to guide operational decision-making.
Take the example of Robotic Process Automation (RPA), new software technology that is beginning to replace repetitive manual functions such as balancing a company’s books. CFOs must investigate and implement digital technology solutions, such as robust enterprise resource planning (ERP) software, that will streamline and simplify operations, reduce costs and improve the quality of the financial data being produced. In an evolving finance department, the CFO needs to also prepare staff, so that they embrace – rather than fear – digital technology changes.
With their unique bird’s-eye view of the business, the modern CFO should be at the centre of digital transformation, identifying opportunities, collaborating on strategy, building value and ultimately driving top-line growth. In a world where competition is becoming global, organisations must embrace digital transformation – with their redefined CFOs taking the lead.
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