How Can CFOs Lead Digital Transformation in Finance?
Covid-19 presented an opportunity for finance teams to transform their strategy and embrace digital transformation. Today, CFOs and Finance Directors are in a particularly good position to leverage digital technology for broader change within their organisation to maintain business continuity.
At its most fundamental level, digital transformation through finance and accounting Cloud software has the potential to promote greater transparency around budgeting, forecasting as well as spotting anomalies and trends more rapidly to stay ahead of the competition.
What has become clear in the past year is that it’s no longer just an option to incorporate Cloud technology into a business – it’s become a necessity.
What is digital transformation?
Put simply, digital transformation is the adoption of advanced technologies to transform the way services and businesses run on a day-to-day basis. It involves replacing manual and non-digital processes or replacing outdated software with newer digital technology.
Financial and accounting management Cloud software, Big Data, real-time analytics, AI and RPA all hold a universal goal – to validate data. Digital transformation and its assortment of new technologies therefore represent a major opportunity for CFOs.
To maximise the potential of these technologies, CFOs must demonstrate adaptability, continuous learning and constant self-improvement to develop and maintain their digital, interpersonal and technical skills.
Why has digital transformation played a critical role in finance?
The unpredictability of Covid-19 in the finance function firmly placed old workforce rules such as spending hours working on Excel spreadsheets and frantically scrambling to collate sitting data for monthly reporting as a thing of the past.
“Digital transformation” therefore became much more than a buzzword in finance, it was a way for CFOs and their finance teams to have a real-time pulse on the business.
Planning, analysis and reporting have always played a critical role in finance. However, it has taken the pandemic-driven crisis for CEOs and board members to fully appreciate the benefits of real-time quality financial reporting.
Cloud technology has enabled CFOs and finance teams the ability to model various scenarios, measure business performance and put strategic plans into action; all areas which have been critical to business continuity and survival.
Here are some of the top-level benefits of Cloud technology in finance
- A single consolidated system with dashboards to easily track records of activity
- Automation of time-consuming manual processes to maximum time spend on higher-value tasks
- Real-time visibility on data and reporting allow for instant reporting and agile strategic decisions
- Streamlined reporting provides a real-time view on the business available on request at any time
- Speed and accuracy in understanding and adapting to new compliance processes (i.e. Making Tax Digital)
- Boosts the morale of the finance team through the shift from mundane transactional accounting to strategic analysis
How can CFOs lead the digital transformation journey?
2020 saw the role of the CFO evolve rapidly and expand into the remit of a leader and strategist. Coupled with the adoption of Cloud technologies, this driving shift in the CFOs mindset has placed business continuity, team productivity and growth at the forefront.
Digital transformation, and its assortment of new technologies, requires adaptability, continuous learning and regular strategic evaluation to maintain a combined skillset of digital, interpersonal and technical skills within the remit of CFOs.
Productivity in the workplace is not strictly a new challenge, but the introduction of digital transformation to the finance team requires CFOs to lead from the front by gaining new skills to effectively improve and deliver productivity from their team to the business.
Cloud technology, financial automation and big data all significantly improve the day-to-day tasks for finance teams. A modern workforce, supported by Cloud technology, frees up finance teams from ongoing low-value tasks which are time-consuming, demotivating and prone to human error.
To gain the most out of these technologies, CFOs must widen their technical knowledge to balance data-driven decision making and position themselves as strategic leaders.
Looking to improve productivity in your team? Read our Top Productivity Tips for CFOs in 2021 Checklist today.
Listen to your team
Big changes aren’t always welcomed and can seem daunting to finance teams who have become accustomed to working in a set way. The view of “if it isn’t broke, don’t fix it” can hinder business innovation and growth if finance teams are against changing outdated ways of working.
For CFOs to deliver successful digital transformation, they need to engage and listen to their team. Taking the time to listen and gain insight provides an opportunity to understand and address any hesitations, concerns and opinions from the finance team.
Agreeing and acting on the right team views will build trust and get colleagues onboard with digital transformation - even if these changing times ahead require patience and adaptability.
Engaging and listening to the finance team is just one piece of the digital transformation puzzle. Traits such as agility, strategic leader, decision maker and analytical thinker are all associated with a successful CFO. However, there are other traits which matter just as much when leading a team.
Kindness and patience are valuable and go a long way when nurturing the growth and development of team members when implementing new Cloud technologies.
Taking the time to invest in training to help the finance team develop their digital skills will help with the transition to modern working ways.
By understanding how Cloud technology enables and transforms the business model will provide finance teams with a wider perspective on how data will influence future metrics driving performance measurement and will ensure that everyone is on the same path when it comes to the digital transformation journey.
Begin your digital transformation journey
In times like these when uncertainty looms big, digital transformation can be a catalyst to become leaner and focus on the things that add value and make a business more resilient.
It starts with small steps like being able to process invoices and initiate payments even when no one’s at the regular office and instead review and approve new documents on a mobile device from anywhere.