There are many moving pieces that can dictate how any business transformation will pan out. CFOs must consider the greater economy, business goals, and labor trends that may impact operations.
Largely to increase collaboration, CFOs have taken a hands-on approach to the digital transformation of the company. Significant changes require significant involvement from the CFO to make sure the finance team is aligned with the rest of the company both organizationally and culturally.
New data from Gartner suggests that although CFOs' focus on contributing to tech transformation efforts is heightened, integration results have underperformed. Their Top 5 Priorities for CFOs in 2024 report found nearly three-quarters (70%) of the 185 CFOs surveyed described their finance transformation's impact as “less impactful or moving slower than expected.”
Priority is to Lead Transformation Efforts
Finance chiefs have an initiative to get involved on multiple fronts. When asked to select their most critical priorities, leading transformation efforts was the top choice (79%), followed by improving the finance function's strategy and design (78%) and improving finance metrics insight and storytelling (76%).
The spend on some of these tools is increasing as well. But, 54% of respondents said their organizations still face issues producing trustworthy reports for stakeholders.
CFOs must be able to relay how new technology can provide value to an organization. Keeping employees in the loop of the technology integration process adds to this trust. Only 35% of CFOs told Gartner they believe their teams can accurately and confidently evaluate their technology integration's value-creation potential.
“What we see through the data is an overall theme of CFOs moving beyond the traditional finance function, and into a more enterprise-centric role,” Marko Horvat, vice president of research at Gartner told CFO. “The priorities on transformation, functional design, and storytelling show how CFOs are looking beyond data as a tool to better run your function, and more towards it being a foundation to better run the business."
According to Horvat, new technologies entering the market have served as the catalyst that sparked CFO initiative to get involved. “Driven by the sudden onset and omnipresence of AI and other disruptive technologies, CFOs are taking a hard look at the opportunities these technologies present to enhance the effectiveness of the finance function and enterprise decision-making,” Horvat said.
New technologies have negatively impacted employees' social interactions and job security, and staff’s ability to work with new tech hinders productivity. Surveyors reported a 50% year-over-year decline in finance teams’ ability to absorb changes before becoming fatigued.
Data presentation is a key element to what Gartner refers to as "creating actionable insights." And the CFO must make sure the data is portrayed in a way that has functional value. Finance leaders should provide higher levels of detail to people such as managers and analysts and more aggregate reports for senior stakeholders, the report says.
Cost Optimization and Taking Action
Despite initiatives falling short, finance teams and their leaders are still expecting to increase their spending to best improve their technology stacks. As the costs associated with this build will inevitably rise alongside a strong need for cybersecurity becoming more important, most CFOs expect they'll have to spend more. Over eight in 10 (81%) said they anticipate they'll have to increase their technology investment in 2024.
Gartner advises finance executives to increase accountability when it comes to the cost problems associated with the underperformance associated with digital transformation. Finance leaders should develop living project charters, measure the costs around non-financial KPIs, and evaluate the lessons learned from these projects outside of their technological impact.
Curious about how CFOs and their team members would take steps toward initiating their presence in transformation, we surveyed our LinkedIn followers. Nearly six in 10 (59%) said their focus is on collaborating with IT and other parts of the company to turn their desire to participate into action.