Digital transformation is no longer a buzzword
When undergoing digital transformation projects, how can CFOs effectively navigate change and address resistance? Which skills are critical for successful change management, and how do great leaders demonstrate them?
These pressing questions set the stage for a compelling discussion at the recent Connect CFO conference, where finance leaders shared their insights on steering digital evolution.
“Digital transformation is not just a buzzword; it’s a business imperative,” declared one finance leader during a panel discussion on May 20.
The panel explored the multifaceted role of CFOs in digital transformation. From balancing stakeholder buy-in and employee engagement to leveraging new technologies for strategic development, the discussion underscored the critical importance of collaboration between CFOs, CIOs, and CTOs.
Managing Change in Legacy Systems
One major challenge highlighted was managing change within legacy systems.
“To go through digital transformation was really disruptive,” said one of the panellist. “It was challenging to create the right sense of urgency across the whole organization…relying on the middle management as the catalysers to spread the whole change across the organization.”
The transformation process, especially in companies with extensive histories, demands careful management of both technological integration and cultural shifts. Legacy systems often include outdated technologies and ingrained processes that can be resistant to change.
Successfully integrating new technologies requires a strategic approach that ensures compatibility and minimizes disruption to ongoing operations. This includes updating or replacing old systems, training employees on new tools, and maintaining data integrity throughout the transition.
Simultaneously, cultural shifts are essential to embrace new ways of working. Long-standing employees might be accustomed to traditional methods and sceptical of new technologies.
The panellists noted that overcoming this resistance involves creating a culture of continuous improvement and innovation. This can be achieved by involving employees at all levels in the transformation process, clearly communicating the benefits, and providing continuous support and training.
Skills and Emotional Intelligence
The panellists unanimously agreed that emotional intelligence is critical for CFOs leading digital transformation.
“The most important part is to have really emotional intelligence inside finance which is something awkward,” remarked one panellist.
This involves understanding varying levels of readiness for change within finance teams and addressing resistance with empathy and strategic communication.
Effective communication and stakeholder management also emerged as key themes when executing a successful digital transformation project.
One panelist advised, “The end user actually needs to know what he is going to get or what is the requirement…Every stakeholder needs his place.”
Clear, consistent messaging and involving all relevant parties early on were identified as vital for successful implementation.
Learning from Failures
The panel did not shy away from discussing failures. “Recognizing and addressing failures early is important,” they said noting it is important to stop a project that has already been started to fix it, then let it run its course.
The same participant went on to recount a project where poor data integration led to significant setbacks. Learning from such failures, they emphasised, is essential for continuous improvement and success in digital transformation initiatives.
AI and the Future Workforce
The discussion also delved into the impact of AI and machine learning on the workforce.
“AI can help us get all the boring stuff out of the way so that we have more time for added value,” noted a participant.
This shift necessitates upskilling and reskilling of the workforce, preparing them for new roles that these technologies will create.
A recurring challenge discussed was the integration of various systems.
“Integrating various systems and ensuring they work together is crucial…investing in data connectors and integration solutions can save money and improve efficiency,” a panellist recommended.
The consensus was that an integrated solution approach, rather than piecemeal adoption of multiple software systems, is key to a seamless digital transformation.
Collaboration with CIOs and CTOs
The critical role of CFOs in collaborating with CIOs and CTOs was another focal point.
One panellist emphasised that more often than not, CFOs, CIOs and CTOs often speak different languages. “Understanding what they want from me [as a CFO] is important and we have to view our CTOs and CIOs as customers in that way,” they said.
This collaboration among the technical C-Suite is essential to find and implement the best technologies tailored to an organization’s unique needs and goals.
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