At the end of 2019, we released a white paper authored by leading UK accounting journalist Kevin Reed, delving into the digitalisation of the finance department. Kevin explored the changing digital agenda, and how the evolving role of the finance department has meant that technology has naturally become more crucial in enabling CFOs to ensure their department is able to progress and move forward in the digital age.
Twenty years ago, finance teams were still focused on number-crunching and fulfilling legislative requirements. However today, the finance function has a responsibility to help their organisation in meeting its commercial goals, supporting this through data analysis, forecasting and business partnering. So how can CFOs ensure they are prepared to support this change in direction?
Take a look at what we believe are the top five traits are of The Digital CFO, and why they are crucial for any CFO looking to succeed in 2020 and beyond:
- Upskilled on technology
The Digital CFO needs to understand the impact that technology can have on the finance function and the wider business. In today’s changing technological era, truly successful CFOs will see technology as an investment rather than a cost, and will look to new advances as a way to improve business performance.
- Anticipates future needs of the business
The role of the finance department is no longer about balancing the books, but ensuring the business is ready for tomorrow. The Digital CFO needs to be able to predict the organisation’s future cash position, as well as the impact that different scenarios will have on business performance. Having good analytics and reporting tools will enable CFOs to become more operational and future-focused.
- Drives change across the business
With the CFO increasingly at the right hand of the CEO, their role is to help drive business performance and strategy. Many organisations are now looking at AI, Machine Learning and Cloud to reduce manual tasks and drive business performance, and finance chiefs must ensure they are leading best practice.
- Handles increasingly complex compliance and risk analysis
Organisations hold vast amounts of confidential data, and have different legislative requirements which need to be met. CFOs are under ever-increasing pressure to ensure the business is meeting standards, and not at risk of paying hefty fines due to compliance breaches.
- Deals with non-financial data
Perhaps the most radical change that most CFOs will have experienced in recent times is the shift to dealing with more than just financial data. Analysing non-financial data brings the finance department into a better working relationship with other key stakeholders across the business and enables a holistic view of performance, ensuring finance teams are backing up the numbers with qualitative data.
A lot of these traits CFOs and business leaders will already recognise within themselves and their organisations. However, we believe that these characteristics will become even more important as we move into the next decade, and the finance function continues to digitalise and keep up with the pace of technological changes.
As Andrew Hicks, CFO at Advanced, says: “The fact that technology can elevate the role of the finance department cannot be underestimated. Many tasks can now be automated through sophisticated and intuitive finance management systems, freeing up finance teams to provide value-add analysis.
“The right technology can even strengthen the relationship between the CFO and CEO, whereby the CFO acts as the CEO’s ‘sounding board’. It’s a position that is becoming more critical as technology gives ever greater levels of understanding and insight. So there is no better time for the finance department to invest in technology – or risk being left behind.”