Today, CFOs are under tremendous pressure to help their businesses evolve into the digital economy, because investments and challenges to business are greater than ever. But how is the digital economy impacting finance and the life of the CFOs? Here are three areas that are going through big changes:
1. Strategy and execution
CFOs are increasingly making major decisions about whether they should invest to develop new capabilities, leverage partners, buy new companies, or divest older components of their businesses. They need to step forward with the information, insights, and the ability to plan and demonstrate what the future looks like.
Behind the scenes, they need to execute on these changes quickly because within any corporation, finance is one of the few departments that is directly impacted by all of the major digital evolutions.
2. Business performance
Finance needs to adopt a strategy that puts the right information in the hands of any member of their business when they need it, so the decisions that move the business forward can be accelerated.
While the technology to get those insights didn’t exist in the past, today finance has the ability to adopt a single real-time platform that transforms the way budget cycles are performed. The month-end close can be just another day of the month, and the annual budget cycle needs to turn into a dynamic planning cycle. Finance has the ability, like never before, to break the siloes so that all the organizations, including planning, treasury, operations, and risk and compliance, are working on the same information and towards the same goals.
3. Core financial operations and compliance
A substantial wave of automation is coming into financial organizations. Increasingly, the effort is moving out of the back office and into strategic and performance support roles. Organizations that undertook this move in the past have seen back-office cost reductions from 20 to 40 percent. As machine learning and other new technologies mature, companies will be able to reduce back-office costs even more.
In addition, automation and the adoption of real-time compliance systems will allow organizations to keep up with the pace of the digital economy and new regulations much more easily.
As these trends happen at an unprecedented speed, finance professionals are being asked to expand into new areas and take on new responsibilities. They are becoming more involved the strategic decision-making of the organization. With a host of new, ready for prime-time technologies at their disposal, they are in a unique position to get out of the back office and apply their analytical skills and business insights to set their company on the right course.
To learn more, check out these business cases of CFOs adapting innovation into live business insight. To understand the trends shaping the future of financial management, read the research Thriving in the Digital Economy: The Innovative Finance Function. More information is also available at the Digital CFO video and the SAP Digital Boardroom video.