The need for digitalisation in finance is clear. CFOs for companies of all sizes understand the benefits of technology for financial oversight, risk management, and strategic decision-making. The problem is that many CFOs have a poor understanding of the critical role they have in driving these advancements and how to work with IT to connect financial operations and new solutions with broader organizational goals.
Defining Digital Organization-Wide
As financial leaders, CFOs are uniquely positioned to create alignment between operations and finances, but this begins with ensuring that all decision-makers are on the same page. Is an accounting digital transformation, for example, simply a path to growth? Or does it involve a broader organizational alignment that influences how the company will adapt to the digital economy?
A CFO transformation effort starts with having these conversations and ensuring that everyone in the executive suite can get on board.
Given that finance and digital transformation will inevitably require input from CIOs, operational teams, IT departments, and the Office of Finance itself, CFOs must act as a champion who can keep all teams on the same page and ensure that all elements work cohesively to achieve the organization’s larger finance goals.
Understanding Where Problems Lie
CFOs understand well the key challenges that their financial operations teams face, particularly when the organization works with outdated legacy systems. Managing data stored across disparate systems and spreadsheets forces companies into inefficient manual assessment and collection, reducing efficiency and increasing error rates across the Report to Record process.
No finance department sets out to create a system like this, but they tend to evolve in this direction as the company grows and finance teams push the limits of their legacy systems. Silos appear and create visibility challenges to all aspects of financial oversight, which in turn makes it hard to solve cash flow management problems and other key finance issues.
CFOs need to understand these challenges and push for specific improvements that can be justified by other members of the C-suite. In many ways, CFOs are the ones who “lead the charge” in joining finance improvements with the company’s larger business goals.
Spearheading Collaboration and Communication
As the chief driver of digitalisation in finance, CFOs will need to work closely with other departments to review and implement changes. This may begin with top-level assessments with other executives on which solutions will best move the needle but will eventually move into deeper conversations about procurement and deployment.
In other words, CFOs will need to get comfortable working directly with IT and operations departments to create clear expectations for project prioritization and knowing which solutions offer the biggest benefits to finance management:
- Workflow automation
- Data visibility
- Reduced silos
- Audit transparency
- Communication and collaboration
Given that these executives have their finger on the pulse of finance operations, the role of CFO in digital transformation includes communicating the benefits of these improvements and creating the necessary organizational relationships to ensure a smooth transition.
Working closely with the CIO is a given for assessing and deploying relevant technologies, such as those that allow finance automation or improved close processes – but again, there needs to be a team effort in identifying and eliminating silos in the existing technologies.
The CFO proper may not have the hands-on experience that boots-on-the-ground finance teams have when dealing with the outdated legacy system – and when this is the case, it can help to get those perspectives and ensure that all teams have input in the process.
Implementing the Right Finance Solutions
These days, there’s no shortage of new tech solutions to support a digital transformation initiative. Chiefly, we’re seeing increases in cloud-based solutions for ERPs, more automation, and better platforms for accounting management across the board. Such solutions give CFOs better control of data across the Report to Record process, allowing for reporting and forecasting that happens in real-time.
We’re seeing these modern finance solutions create a new normal where CFOs and decision-makers can access the data they need at any time rather than being restricted to strict reporting periods.
Doing so lets executives focus less on the logistics of reporting and allows more focus on broader strategic planning, business insights, and service. This is a key part of the role of CFO in digital transformation – selecting and implementing the right finance solutions that enable their teams to manage finances more effectively. Solutions can lead to a modernization of the accounts receivable process:
- Reduce days sales outstanding for all clients
- Eliminate cumbersome manual tasks
- Implement reporting automation
- Reduce overdue bills and receivables-at-risk
Naturally, CFOs will be instrumental in driving these types of big picture improvements, but doing so depends on knowing what needs to be improved and which solutions are most capable of improving them. It’s vital that they have a strong understanding of how technology can be leveraged for digital transformation.
