Financial professionals are taking on a new role: delivering the digital value story

CFOs need to ensure investments align with the business outcomes and overall strategy.

The fundamental nature of finance is changing. Increasing data volumes and the faster pace of business means that CFOs and other senior financial decision-makers have less time to implement changes in their organisations or to monitor competitors. That is, unless they use technology to power decision-making

In light of changing customer needs and new market and industry threats, CFOs have become guardians who provide insight, direction, and measurement of business outcomes. The CFO has become the right-hand to the CEO, and enabling business strategy has become a C-suite concern.

In light of the forces that are changing the role of the CFO, which include compliance considerations and pressure to show growth and profit in challenging times, senior financial decision-makers are taking on a new role: delivering the digital value story.

While businesses increase investment in digital tools, systems, and platforms, CFOs must ensure that the pace and scale of these investments align with the business outcomes and overall strategy.

Recent research by Sage, CFO 3.0, found that 90 percent of senior financial decision-makers in South Africa have adopted emerging technologies in some form, as they take on a bigger role in driving digital transformation.

Presenting the research findings in an exclusive virtual event, Arthur Goldstuck, CEO of research firm World Wide Worx, which conducted the research on behalf of Sage, said the results showed the single biggest shift in the responsibility of the CFO in the past decade.

“The research enabled us to drill down into how CFOs saw their roles evolving and how, in particular, they saw technology changing and improving that role in the years to come. The research is also telling us that digital transformation is not a tech issue per se; it is, in fact, a business process issue, and this is where the CFO has been integrally involved,” says Arthur.

Known as the CFO 3.0, these forward-looking, forward-thinking senior financial professionals analyse data in the moment using automated finance processes, financial management technology, and sophisticated data sets. They also leverage robotic process automation (RPA), artificial intelligence (AI), and machine learning (ML) to create a vision for the future.

The Sage research found that 87 percent of CFOs play a key role in their organisation’s digital strategy, with 15 percent being fully responsible for digital transformation.

Value-adding, value-driving business partner

Speaking in a panel discussion during the virtual event, Ron Derby, editor of Fin24, said: 

“The redefining of the CFO’s role is interesting. With data and technology, CFOs are getting much clearer insight into the future of the company. They’re in a much stronger position now, whereas in the past they worked in the background, supporting the CEO.”

Pieter Bensch, executive vice president, Sage Africa and Middle East, said it’s encouraging to see the level of collaboration and communication happening in the C-suite. “We’re seeing collaboration overlaps at the C-level, across HR, finance, technology, and marketing. It’s becoming a discussion around strategy; how do we go to market? And how can we optimise the business?”

For Lerato Nkabinde, CFO at FutureProof SA, collaboration is key to success. “Our role as CFOs has grown into a value-adding, value-driving business partner. To do this, we need collaboration among all stakeholders in the C-suite to understand what’s happening in the business and to provide valuable insights for the future.”

Enabling success with technology

Respondents to the CFO 3.0 research were nearly unanimous in saying that next-generation technology that incorporates emerging technology has been critical to their success.

In fact, 49 percent have seen moderate to strong growth in organisational performance over the past year, despite the recession and Covid-19. And 78 percent of these businesses expect even further growth.

In not being bogged down by numbers, budgets, data integration, and reporting, CFOs at these businesses can turn their focus to changing stakeholder needs and modernising business processes.

That said, only a little over half of the respondents said most processes are automated in their businesses. This suggests that a massive shift is still coming – especially since 86 percent of CFOs believe that financial management technologies can help their businesses to discover new opportunities and better manage risk.

Cautiously confident

Clearly, confidence in new technology is growing, with most senior financial decision-makers citing direct productivity benefits, like automated compliance reporting and the ability to make real-time decisions around risks and opportunities.

In South Africa, 64 percent of CFOs spend more time analysing data than they do gathering and processing it. This compares to 50 percent of financial managers in the UK. Despite this, many are still drowning in data that’s streaming in from everywhere. Plus, they have to comply with ever-evolving data protection and management legislation, as well as increasing reporting requirements.

But they’re confident that predictive-based technologies will change the way they operate at board level. Two-thirds of CFOs expect emerging technology to audit results continuously and to automate period-end reporting and corporate audits, reducing time to close in the process. This will become increasingly important as businesses interface more and more with open banking systems and automated taxation processes.

Strategy shapers

Technology is taking finance in a new direction and the research shows that senior financial decision-makers are going along for the ride – and enjoying it. In handing over the number-crunching to automation tools, CFOs are gifted with the time and opportunity for creative and strategic thinking. There’s also more room for critical analysis and innovation to augment business strategy.

More than half of respondents believe that emerging technology will continue to support them in their roles and allow them to keep a finger on the pulse of their business. Those that have already invested in automation solutions cite efficiency, streamlined processes, reduced human error, risk mitigation, and competitive advantage as the main business drivers.

The biggest benefits they’re looking forward to as they continue on this journey? Real-time audits, efficient and accurate forecasting and strategic financial planning, faster closing, and enhanced governance.

As the custodians of data, fraud, cybersecurity, and data privacy, CFOs are increasingly looking to emerging technology to decrease risk, enable real-time decision-making, and help them to build a finance function that can withstand future challenges.

The Sage research found that good business strategy matters most in difficult times. But through smarter technology investments, CFOs can play an even bigger role in shaping that strategy.