The CFO 3.0 sees data as an organizational asset and understands its value.
The technology environment has changed significantly in the last decade from one of data scarcity to data overload. At the same time, business has become more complex with rapid change being embedded into social and business structures. In this context, CFO’s were starting to see the value of modern financial management systems but were slow to adopt.
And then the pandemic hit. CFO’s were expected to lead in an environment that had a substantial market shock – with an increased need for governance, remote working, cyber security and access to data to drive rapid decision making. The CFO’s role shifted overnight to one of the real-time analyst, to a crisis management leader with the need to quickly predict the impact of changes in consumer demand, stock levels, cash flow, employee costs and more on the business and its ability to survive.
As Covid-19 has become entrenched in our ways of working, the CFO role is again shifting to be future focused, moving from crisis control to value creation with technology at the centre of this transformation. With massive amounts of data available across the organization from sales, supply chain, operations, finance, customers and more, data management is a key enabler to an organization’s growth and success. However, each division’s data needs are different – what is important to finance is not necessarily important to the sales or operations teams. Regardless of the department, data accessibility has become a necessity across all levels of the organizations to drive real time decision making while embedding future focused predicative analytics.
In some organization, this role may fall to the CIO or CTO. The risk of this is that these departments are often support based around the systems, website, hardware and in-house customers, so they may lack the strategic vision and business capability to fully understand the data needs of the organization.
CFO’s are positioned ideally to lead this transformation not only because the costs impact the balance sheet, but also as leaders that have strategic vision as well as a deep understanding of business and data and what needs to be done to ensure data is easily accessible, usable and relevant while rigorously adhering to data governance.
CFO 3.0 sees data as an organizational asset and understands its value. To harness the power of big data, and the multiple sources of data across the organizations, the new CFO is expected to do more than ever before. The role of the CFO is to lead digital transformation by embedding a new way of working through democratised data accessibility and self-driven analytics to embed value throughout the organization. CFO’s of today need to be finance and business guru’s, but are also expected to be communicators, strategic thinkers and problem solvers. Their role has expanded beyond the confines of the house of finance to future value creation.
And while value creation is important, so is data governance. CFO’s need to ensure that both the correct data content and the right controls are in place for the relevant people within the organization. This real-time data driven approach will embed flexibility, agility and integrity of decision making to transform your organization to evolve to structures like Google, Amazon, Tesla and Uber who are using technology and data as an asset to drive organization value, growth and deliver an enhanced customer experience.
While many CFO’s understand that data and digital transformation is core to organizational success and future growth, starting the journey towards real-time, accessible and easy to use data can be daunting. The key to transformation starts with the customer: You need to ask yourself what metrics will lead to happy customers and an enhanced consumer journey, then figure out how you will measure this, and who in the organization needs to be accountable for each metrics.
Once you have mapped this out, the CFO can then drive both investment approval as well as assist in identifying the data solutions partners that are able to clean, blend and prep data with easy to use predicative analytics and data governance embedded in the system or systems of choice. More often than not, you may need more than one solution to obtain all the relevant metrics, and then identify a platform that will bring this all together.
The reality is that digital transformation is no longer optional. It is a necessity with the CFO best positioned to lead the organization into the future to move from survival mode to one that is resilient and positioned to thrive.