Over the past few decades the Finance function has remained largely unchanged. With a focus on financial planning and analysis, cost control, and risk management, the role of the CFO has been based around overseeing the financial stability and regulatory compliance of the organization.

But a new era is dawning. CFOs are increasingly being required to support business decision-making, resulting in an evolution from financial custodian to strategic business advisor, and this step change brings new challenges. CFOs are faced with the need to produce fast, relevant business insights to inform decisions, in addition to maintaining regular and accurate reporting with teams which are more than likely already overstretched in their day-to-day activities. Achieving this requires the CFO to lead a digital transformation effort, and it is this subject which we focus on in this blog.

The Challenge Facing CFOs

The provision of accurate, up-to-date insights relies on a strong foundation of business data, not only from a financial perspective but also from an operational standpoint. With ever-increasing volumes of data, the traditional financial analysis and reporting methods still utilized by organizations worldwide – namely multiple Excel spreadsheets and silos of data – are too cumbersome and disconnected to produce relevant insights. By the time data has been manually collated, checked, and analyzed, it is already out-of-date.

For some finance teams, point solutions have been implemented to try and aid the situation, such as standalone analytics, business intelligence, or planning products. Typically deployed by separate departments using disparate datasets, these solutions can create complex technological environments and cause even more of a headache when trying to understand the bigger picture. Often they are still unable to provide the fast, accurate, holistic view of the enterprise that the CFO really needs to contribute meaningful insights to the board.

These typical financial setups create several challenges for the CFO in their new-found role as a business advisor:

• How to achieve enterprise-level adoption of a standardized, automated approach to analysis, planning, and reporting
• How to leverage analytics to support strategy with better insights of the business
• How to connect finance and operations to really understand what drives the numbers

How do you drive Digital Finance Transformation?

Overcoming these challenges is critical for CFOs, and the key is the creation of a centralized, holistic view of business information which provides the foundation for effective business insights. But with so many legacy spreadsheets, data silos, and systems in place, the only way to achieve this is by undertaking a complete digital transformation effort. And as the custodian of the final financial results, and the one being relied upon to guide strategic decisions within the business, it is the CFO who has to take the lead.

Forward-thinking finance leaders are already investing in decision-making technology, which enables reporting, planning, analytics, forecasting, KPI management, and strategy formulation to be connected across the organization. These solutions result in:

• The replacement of Excel-based analysis and reporting activities (which are usually time-consuming, error-prone, and manual) with a more automated, reliable approach
• The elimination of point solutions in favor of a single point of truth for all information, with a single process methodology for carrying out business-wide planning and reporting
• The connection of different planning phases and departments, enabling greater insight into the relationship between operational activities and financial results (and in turn aiding operational decisions)

A Change in Mindset

Of course, digital finance transformation is not as simple as installing a piece of software. This level of change requires a shift in mindset across the business. Departmental leaders, and their teams, must be willing to move away from a siloed culture and be part of a digital transformation management process, and the CFO must act as the central driver.

Championing the unification of reporting, planning, and analysis across the organization, tomorrow’s CFO must understand the capabilities of the technology available to ensure they are able to make the best recommendations for change. They must then lead the transformation efforts, bringing departments together in a centralized, collaborative approach. Only then can they hope to deliver the right environment for faster, more effective decision-making.

What next?

Raconteur recently published a special report in The Times titled The Future of the CFO, which explores the changing role of the CFO and the impact technology is having in the changing financial environment. Download your copy to explore the topic in more detail.