CFO of future digital finance

The digital finance organization is still a new idea in many organizations. CFOs are far from the core of digital-transformation efforts, but there is a clear mandate for them to take the lead. Companies are still in the early phases of adopting digital technology to financial activities. There are few proven business cases of digitization in finance and few best practices to draw on.

The Digital Future of Finance

CFOs and their staff are the gatekeepers for crucial data needed to develop predictions and support senior leaders’ strategic goals and choices. These include sales, order fulfillment, supply chains, consumer demand, and company performance data, as well as real-time industry and market statistics. These include the broad availability of business data, teams’ ability to handle massive volumes of data using newly available algorithms and analytic approaches, and advancements in connectivity tools and platforms such as sensors and cloud computing.

There are four areas of technology that show the most promise for usage in finance right now:

• Finance procedures will benefit from automation and robotics.
• Data visualization may provide end users with real-time financial information while also improving organizational performance.
• Advanced analytics for finance operations to speed decision-making
• Advanced analytics for overall business operations to find hidden development prospects

The CFO should be able to establish proof points and facilitate the ultimate roll-out of digital technology across the entire function and across other parts of the organization. Much will be determined by the company’s starting point, which includes its current strategies, needs and capabilities.

Simplification with Automation and Robotics

Robotic process automation (RPA) is a vital instrument that cutting-edge finance departments are already investigating. 40 percent of financial activities can be entirely automated, according to research. RPA and other task-automation tools have matured to the point where they are used across numerous areas of the organization.

Data visualization to Improve Performance

Some finance departments are combining automation and data visualization to provide clear, fast, and actionable business reports. A huge consumer-goods company’s finance department has implemented a self-service strategy. Instead of waiting for reports, sales employees can use dashboards to acquire the data they need when they need it. The CFO should work with the CEO, chief information officer and other business leaders to develop data usage policies. Such expertise may assist the CFO in rebuilding end-to-end finance processes using a user-focused approach.

Advanced Analytics and Value

Every CFO should commit to turning pressing business concerns into advanced analytics use cases. The CFO and finance division can employ advanced analytics to better handle basic financial transactions and fundamental operations, as well as shape (and speed up) tactical talks. Once CFOs understand the role advanced analytics can play in enhancing financial processes, they can collaborate with the CEO, board of directors and other senior leaders to discover broader applications of advanced analytics.

Standard Transactions

A truck manufacturer tracks the sales of its own forklift because it considers this statistic to be an early indicator of future sales. Other firms’ finance teams are utilizing sophisticated analytics to discover duplicate spending and invoices, or to correlate the terms of procurement and payment schedules for a good or service with actual invoices in order to spot early or missing payments, or possibilities to offer discounts.

Core Finance

Chemical company uses advanced analytics to improve demand forecasts. Organization cross-references internal customer data with external data sets such as stock prices, weather, and business-cycle indices. Analysts are able to determine whether or not existing estimates were correct and respond accordingly.

Getting the CFO Started with Digital Transformation

The CFO should begin the digitization process by inventorying core use cases and identifying where they stand with each of the digital technologies mentioned above. They should hold discussions with business-unit leaders about the pain areas in various finance processes, such as sluggish reporting and incomplete data. A desire to learn about new technology or process-design expertise may be required. Incentives of this type might also assist the organization in attracting top digital talent.

Summary: CFO of the future — Digital Finance

CFOs must build and share a vision for a digital finance role with other senior leaders. CFOs should be able to shape the evolution of their companies while also gaining useful insights and experiences. More human judgment is needed when evaluating strategies over a longer time horizon and more human judgment is required.

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