Five things CFOs can do to help deliver digital transformation
The pressure is on CFOs to deliver not just discipline and financials, but also emerge as enablers of digital projects and strategy.
Adrian Clamp (contact)
5 minute read
If you were to guess the CFO’s most important area of expertise, what would you say? Once, it would have been numbers. CFOs were financially minded first and foremost. Ensuring investment is well targeted and likely to deliver a return is a key challenge for all organisations, large and small. So it follows that developing the business case for investments and measuring ROI could be regarded as the top priority for the finance function.
But as businesses change, so too do the roles of every member of the C-suite, and the CFO is no exception. In fact, in a recent survey of CEOs globally, KPMG member firms found that the CFO is indeed exceptional, because compared with any other executive in the organisation, the CEO expected the CFO role to change the most.
High expectations, indeed, and unfortunately one in three CEOs say their CFOs aren’t up to the challenge. So, how can we equip our financial leaders to not only accept the challenge of creating a successful customer experience, but exceed it?
Today’s CFOs need to go beyond their traditional role to become a strategic advisor across strategic initiatives but particularly on digital projects that centre around business transformation. Indeed nearly a quarter of respondents in a recent survey saw finance leadership partnering with other senior colleagues to plan the overall digital strategy.
“CFOs must be champions of digital as it represents a fundamental transformation of the business model and they need to ensure the funding and capital requirements are correctly in place” , Adrian Clamp, Partner, KPMG.
A digital first mindset
As part of their engagement with digital transformation strategy, CFOs need to think and lead with a 'digital-first' mindset and make technology investment a major priority. The right strategic IT investments will be critical to drive innovation and enterprise value. Collaboration between the CFOs and CTOs is therefore critical.
A portfolio approach to investments
New technology development models have reduced the cost and risk associated with rolling out and introducing digital projects. Companies can afford to experiment with a broader mix of initiatives. Today’s CFOs must play a more active role in channelling the organisation’s resources around digital innovation. They have to therefore strike a new balance. In a world where innovation is essential to grow, they need to be willing to tolerate a degree of risk, and even a certain level of failure. But they can also encourage smarter, faster and more cost effective approaches to digital implementations.
Embrace the cloud
Many finance departments have been slow to engage with the growth in cloud computing, but its transformative impact can no longer be ignored.
A survey of nearly 800 technology industry leaders ranked cloud as the technology that will have the greatest impact in driving business transformation for enterprise. Indeed, nearly half of respondents are benefiting from the advantages of cloud computing, particularly to drive cost efficiencies.
Transforming current finance capabilities can be a long and costly journey often constrained by the organisation’s ERP system and with the final result unable to meet the demands of the business. Traditional transition programmes often last between 14-18 months, are complex, delivered late and over budget due to existing architectures hungry for heavy customisation and expensive ongoing upgrades.
Cloud computing services - in particular Software as a Service (SaaS), offers an alternative to this scenario and puts business at the forefront of digital transformation.
Understand the language of digital
All of the above and the growth of digital technologies have brought forth their own internal jargon. Metrics can however go beyond clicks, likes and follows. There are some hardcore data points that serve common ground for the digital team and the boardroom and should be used as part of an organisation wide balanced scorecard to understand customer lifetime value, fuel profitable investment and shut down unprofitable projects.
Think like a millennial
Our increasingly digital world will continue to evolve and disrupt business planning. They key is to remain agile enough to keep up with digital technologies and one way to do this is think like a millennial. Eighty five percent of CEOs in KPMG’s global survey were concerned about the differing wants and needs of millennials and how they will change the organisation so this is a serious point. Attracting millennials into the organisation and involving them in transformation projects will give clues on how to stay relevant and make progress for the years to come.
CFOs are responsible for business transformation as much as any other member of the board. It’s time to stop taking a backseat in the finance function alone. Those who are ready to embrace technology and start collaborating will be the true agents of change in delivering a digital vision centred around their customer promise.
 KPMG/ YouGov Survey ‘Digital to the Core’ 2015