Covid-19 has indeed turned out to be a black swan event. None of us has ever seen anything even remotely like this in our lifetime- “a firestorm erupted, and a dark cloud descended over us.”
In mid-March, much of the country, became remote workers overnight. During a period of unprecedented upheaval brought on by the COVID-19 pandemic, though, “everyone in finance executed their daily tasks, closed the books, and filed the financial statements on an entirely remote and virtual basis, something they had not done previously,”
If 2020 has taught us anything, it’s that none of us have a crystal ball vision into the future. But as we head into 2021, I feel confident making at least one prediction: Digital experiences and solutions will only become more and more important. After all, digital capabilities were the key to developing and deploying rapid innovation during the pandemic.
As the drumbeat of digital transformation grows louder,CFOs are stepping up to serve as designers of the future finance function.
Fulfilling the duties of a CFO is no longer just a matter of bookkeeping as organizations seek every possible advantage in the digital age. While digital technology has just begun to exert its impact on performance, forward-looking CFOs can already envision the potential payoff in implementing automation, embedding sophisticated analytics, and exploring new technologies.
A notion has emerged about the next-generation chief financial officer who leverages resources available through digital transformation for more than just efficiency. This may also be part of an overall shakeup already under way in the C-suite, thanks to digital transformation.
A position that barely exists anymore, chief operating officer — at one point there was something like 494 of the Fortune 500 had a chief operating officer,” said Jack McCullough, president of the CFO Leadership Council.
CFOs are best placed to drive digital transformation in an organisation. They have touch points with every function in the organisation, know the systems and processes, understand the business and more importantly the DATA. No doubt the CFO’s conventional role still remains and is extremely important, still CFOs have stepped-up and is driving transformation in a business.
Transformation needs to be done incrementally and the key is to start with analyzing the integrity, accuracy and quality of data. CFO has the best visibility of many critical data flows — not just finance information, but also sales, supply chain, marketing and business performance. Understanding this data and how to access it is vital to making the right choices with digital transformation.
“CFOs today spend only 45 per cent of their time on traditional financial management; 14 per cent on specialty finance, and 41 per cent on other important functions such as risk management, performance management, regulatory compliance, strategy and now more importantly on IT, cyber security and digitisation,” explained Aman Choudhari, Chairman CII Karnataka.
CFOs are likely to be involved in digital transformation conversations anyway, due to their financial planning and capital allocation responsibilities. They’ll inevitably be dealing with requests from different parts of the business to help fund new technologies. And the more strategically involved and informed they are, the better they can balance IT requests with the need to drive overall business performance.
So exactly how the CFOs play the role of designers of digital transformation? From our research, we found four reasons that stood out:
- Determining the economic viability of digital business models
- Sparking profitable cross-functional digital process innovation
- Helping the CIO determine the IT function’s operating model in a cloud world
- Accelerating the finance function’s shift from low-value manual work to extreme automation and analytics-rich internal financial advisers.
Adding this opportunity into the broad consensus around finance functions needing to become more automated, data-driven and focused on high-value work, one thing is clear: going forward, finance functions could look very different and play an even more crucial role in the success of the 21st century enterprise.
But only those organization which have the ability to unlearn and embrace change, will emerge as the leaders in their respective domains.
For any query, support or feedback, reach us at Taxmantra Global CFO Advisory Services or WA us at +91-9230033070 or Call us at 1800-102-7550
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