We are living in an age of digital disruption where technologies such as social media, mobile, analytics, cloud, and process automation are changing the way companies function and interact with their employees, customers, partners, and shareholders. The finance department that controls new investments is in the middle of these sweeping changes and can play a pivotal role in shaping business strategies to handle the onslaught of technology. According to the latest PricewaterhouseCoopers (PwC) finance effectiveness benchmark report, while some finance teams have risen to the challenge in deciphering the complexities of the digital world, some still lag behind. However, the results are plain to see, with CFOs who are ahead of the game operating at 40% lower costs than their peers.
For a long while now, traditional costing methodologies such as activity-based costing (ABC) have played an important role in managing and optimizing costs for companies. The inclusion of technology to this mix has resulted in shorter reporting cycles, reduced human resources, and overall higher operational efficiencies. CFOs will do well to understand how new technologies can be harnessed to continually reduce the time lag in the access to strategic financial information and keep a check on spiraling costs. Governance, risk, and compliance (GRC) – three critical areas for any CFO – have also benefited tremendously from technology with processes becoming automated and easier to monitor and manage.
But it’s not merely finance processes that the CFO needs to stay on top of in the age of digitization. Digital is completely changing the customer experience, allowing customers to gain an ever-increasing proximity and connection to the products and services they consume. In this evolving landscape, the CFO needs to steer the customer strategy right from the product development stage. The new-age CFO has to be innovative and offer concrete suggestions on how the company can become more responsive to customers’ needs while at the same time ensure profitable margins.
In this new role as business advisor and enabler, CFOs require a completely new set of skills. They have to be tech savvy and open to an ever increasing barrage of new, emerging technologies. They have to closely work with CIOs in identifying and adapting the technologies that will deliver operational efficiencies and reduce costs for the business. Agility and speed will become the key attributes of the finance function in the digital age, and ROI on digital investments won’t be measured only in monetary terms. CFOs need to act as agents of change in today’s environment and make the transition to the digital world smooth and effortless. Front runners will be those that make their companies’ propositions more compelling to consumers while continuing to break new milestones for the organization.