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Redefining the role of the CFO in the age of digital transformation

To make the right investment decisions, CFOs must stay informed about the latest technological advancements, consider process fit, and foster cross-department collaboration

Redefining the role of the CFO in the age of digital transformation

In an era of constant business evolution, CFOs face the critical challenge of identifying the best tech investment strategy to drive financial growth. Aligning investment cycles with the
pace of internal innovation is essential for making well-informed choices.

For organisations constantly evolving, it is crucial to keep investment cycles nimble, aiming for quicker returns on investment. Equally, to maintain competitiveness, CFOs must move away from cost-cutting and move towards the strategic integration of new technologies. After all, this is the key to unlocking cutting-edge functionalities and steering financial success.

Seamlessly integrating and embracing innovations

Despite serving as the backbone of financial operations, the rigidity of ERP systems can impede operational efficiency1 as businesses evolve and adapt.

One significant barrier to moving away from legacy technology is the fear among users that they will lose the benefits of an integrated system. This concern arises from the potential need to build interfaces or manually transfer data, which can jeopardise data integrity.

Overcoming this challenge requires CFOs to focus on developing dynamic data connections, such as application programming interfaces (APIs), that allow seamless integration between applications. By enabling direct connections and avoiding the complexities of data warehouses, CFOs can ensure a smoother transition and maintain data accuracy.

Additionally, CFOs may experience obstacles surrounding evolving technology requirements. The risk of investing in a technology that becomes obsolete shortly after implementation is a valid concern. CFOs can mitigate this risk by adopting agile approaches to technology implementation. This involves staying informed about emerging technologies and trends, observing their maturity and stability, and assessing their compatibility within the unique business environment.

From cost-cutting to process optimisation

In the past, CFOs have often relied on traditional cost-cutting methods to reduce expenses and raise finance. These methods typically involved identifying areas of excess or
inefficiency within the organisation and implementing measures to reduce costs.

However, these traditional cost-cutting approaches may not be as effective in the current landscape. Deloitte’s CFO Signals survey revealed that 60% of CFOs prioritise revenue growth as their
top focus, while only 14% prioritise cost reduction.

With advancements in technology and the establishment of better controlling tools, cost visibility has improved, making it challenging to find significant areas of “fat” to cut. Instead,
the focus has been redirected towards internal efficiency, seeking ways to optimise processes, streamline operations, and create a more cohesive workforce.

By prioritising internal efficiency, CFOs can maximise resource utilisation and generate additional funds for growth in a landscape where traditional cost-cutting methods may have
diminishing returns. This shift in focus aligns with the findings of recent studies, highlighting the increasing emphasis on sophisticated enterprise technology systems.

By leveraging technology and process optimisation, CFOs can drive revenue growth and enhance financial performance while ensuring effective resource allocation.

Leadership and collaboration for technology integration

Christoph Ott, CFO Dizmo

To ensure smooth integration and user adoption, CFOs must step into the role of integrators and networkers within their organisation. New technologies focus on simplifying user experiences, enabling employees of all levels to utilise applications for decision-making purposes.

By prioritising process fit and understanding the needs of various stakeholders, CFOs can ensure that technology decisions go beyond technical aspects and truly support the organisation’s existing workflows. This expanded role positions CFOs as key players in driving digitalisation and successfully integrating new technologies across departments.

Additionally, encouraging collaboration between departments, particularly finance and IT, is vital for seamless technology integration. A recent study by Accenture found that “collaboration champion” organisations achieve 4x the revenue gains with digital projects, and they grow 13x more profitably.

However, traditionally, the IT department has focused on ensuring technological alignment and data security, while the CFO has specialised in evaluating the process fit and economic viability. This approach leads to diminished results and often creates a disjointed system where each department operates independently.

To remain competitive organisations must create a truly collaborative technology that allows for seamless cross-department collaboration.

The evolving role of CFOs

The role of the CFO has evolved beyond simply managing finances and cost-cutting measures. They now play a critical part in steering organisations towards embracing and
integrating new technologies that drive growth and operational efficiency.

To make the right investment decisions, CFOs must stay informed about the latest technological advancements, consider process fit, and foster cross-department collaboration. By doing so, they can ensure a seamless transition from legacy systems to innovative solutions that empower the entire organisation and pave the way for long-term financial success.

Christoph Ott is CFO of Dizmo and Project Sponsor of Planisy

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