For finance executives, the digital transformation isn’t at hand. It’s already arrived.
Or so they need to act, anyway. At a time when business is embarking on an immersive digital future, powered by a convergence of new technologies—the cloud, mobile, robotics, and artificial intelligence (AI), among others—that will require finance executives to rethink every aspect of their functions.
Their fellow executives may still be prioritizing and procuring the technology necessary to compete in the digitized marketplace. But CFOs need to make sure that the organization’s future shape can accommodate—and maximize—emerging technologies such as Blockchain and the Internet of Things. In their evolving role as strategists, they must visualize a reconfigured finance function, one that brings into line advances in technology with the acquisition of new and critical skills. Companies that cannot successfully integrate technology, embedding it throughout their business, risk extinction. In its relatively short history, the disruption phenomenon, as CFOs have well-observed, has repeatedly rumbled through established industries and architectures, handily hollowing out legacy business models.
Yet the urgency with which finance executives need to rethink the function, while confronting fast-moving waves of high-impact technological changes, shouldn’t compel them to abandon their methodological ways. They can’t start the reconstruction process without first laying the supporting groundwork.
How finance executives are successfully straddling two worlds—managing the growth of the existing business while also reinventing it— is the primary focus of a recent survey conducted by CFO Research, in collaboration with Tata Consultancy Services. Using an online questionnaire, which drew responses from 689 senior finance executives in the U.S. and Europe, respondents shared their attitudes about many evolving aspects of digital maturity and leadership. The need for balance is paramount: Even as they ensure compliance with changing regulations, CFOs must also keep mitigating the risks that accompany the growth of the digital economy.
No matter what industry they operate in, most CFOs have by now embarked on ambitious digital initiatives. But as they sort through the technical issues, they must also confront the managerial challenges involved in enabling and scaling digital innovation: allocating resources, recruiting talent that can drive technical advances, helping align functions such as marketing and product development. For finance leaders, the new digital mandate requires that they make strategically selective investments, weighing leading-edge technologies against those that are more mature.
The survey explored the categories of tasks that finance leaders need to confront: Modernizing the function to “Business 4.0,” making the shift to digital technology; Adopting a Machine-First Model, aligning human skills and technological advances to support digital growth; Becoming catalysts for growth, actively adopting strategies, technologies, and agile business models.
For their companies to thrive in the digitized economy, CFOs must become scouts, dissecting future technologies and piecing together a vision of an optimal business model. With that blueprint as a guide, they then pivot into serving as leaders who can persuasively communicate the dimensions of the digital shift and galvanize employees to contribute.
As much as the upsurge of digital technology will eventually increase the speed of corporate decision-making, senior finance executives can’t rush when it comes to formulating a clear and comprehensive strategy for building a more agile organization. As their role shifts from historical record-keepers to pioneering settlers in the digital future, CFOs will inevitably make a dramatic transition to becoming both explorers and innovators.
To read more about how senior finance executives are navigating the future—and compare your own perspective to that of your peers—please download Back from the Future: How Finance Leaders Can Drive Transformation.