New and emerging technologies — including AI, robotic process automation, advanced analytics, and machine learning—are the catalysts of unprecedented change in today’s business climate. Digitalization is sparking the shift to customer-centric business models, putting greater responsibility on the finance function.
“We have not seen this level of change before, and organizations need to be thinking about developing the tools and platforms for the 21st century CFO to navigate the current industrial revolution and world economy,” said Ash Noah, CPA, CGMA, Managing Director, CGMA Learning, Education and Development, at the Association of International Certified Professional Accountants (AICPA & CIMA). “Companies need to view technology as an ally in this new paradigm, not a disruptor.”
Organizations increasingly rely on the office of the CFO to provide strategic insight to guide critical business decisions. Senior finance executives, in turn, must leverage the unprecedented opportunity that modern tools provide to establish themselves as key advisers to the business.
While transformation is essential to survival, many organizations still struggle when it comes to implementing emerging technologies, according to Agile Finance Unleashed: The Key Traits of Digital Finance Leaders, a new report from the AICPA, CIMA and Oracle. About one third (32%) of 700-plus senior finance executives identify as digital leaders.
To meet this new imperative, Noah outlined three steps CFOs can take to plan and execute digital transformation.
Achieving Operational Excellence
Incorporating intelligent technologies such as process automation, artificial intelligence and machine learning is necessary to make progress in improving operations. It’s important to embrace technology to fundamentally reengineer, rethink, and reimagine work, Noah said.
Take an “adopt” rather than “adapt” approach when it comes to technology, Noah suggested. “If you’re simply applying automation to the same processes, you won’t achieve the desired results and benefit from the complete functionality that technology enables. You have to see the power of the possible to transform the fundamental structure and processes of the accounting and finance engine.”
It’s also essential to have people with a strong understanding of automation, machine learning, and the cloud.
Enabling Digital Intelligence
This step involves building the analytical skills and personal capabilities needed to interrogate data effectively. This means assembling the right technology and finance teams to enable digital intelligence across the enterprise.
A robust platform ensures that all stakeholders are accessing a single version of data. Data analytics has to be positioned as a value-generating function, according to Noah. “Digital intelligence enables the finance function to transform from a back-office cost to a value creating part of the business. Using external data-sets such as geo-positional data, demographic data, and weather data combined with the enterprise financial and non-financial data provides rich insights that enable the organization to serve the customer in new ways.”
The Agile Finance Unleashed report concluded that the biggest barrier to finance teams playing a strategic role is having to focus on core compliance and control responsibilities. But once organizations have done the first two steps, they free up talent to focus on digital strategy.
“Strategic influence is about CFOs becoming more effective partners to the business and identifying innovative ways of serving the customer,” Noah said.
While the adoption of these transformative technologies is an imperative, CFOs also need to turn their attention to the skill sets within their teams. With technology improving the assembly, analysis and insight generation, Noah says there is an unprecedented need for skills such as strategic thinking, collaboration, communication, negotiation, and influence. Programs such as the CGMA Finance Leadership Program have enabled organizations to develop these specific competencies. The program’s online, personalized learning experience helps finance professionals to develop the necessary digital, technical, business, leadership, and people skills.
“Programs that enable the building of strategic, collaborative and communicative skills are essential to becoming a 21st century CFO,” Noah concluded.
For more information, visit www.cgma.org/cfo