The CFO Role in Digital Transformation


A recent article on ZDNet highlighted the rising role of CFOs of both tech and non-tech companies in the ongoing digital transformation sweeping virtually all industries. In our role of serving as the outsourced CFO for a variety of companies in the San Francisco Bay Area, we have also been at the forefront of driving digital transformation in both small businesses and larger businesses.

Too many CFOs (as well as CEOs and business owners) are still stuck with an obsolete view of finance as a back-office, support role only. Instead, today’s advanced CFOs are leading the charge of finance as key internal business partner to the CEO and integrated into all sorts of crucial business processes.

In particular, modern CFOs have a critical role to play in customer-facing processes related to sales and customer engagement, which are typically driven by Chief Marketing Offices (CMOs) and Chief Digital Officers (CDOs).

However, as the article points out:

“The Finance function is central to digitalization within the organization, as it allocates resources for growth, but is often not the leader in applying digital technologies. Paradoxically, Finance often (rationally) allocates IT investments to the revenue-generating and customer-facing functions risking its own functions to be stuck in the digital wilderness.”

Moreover, the traditional Finance department is falling behind with the digital transformation:

“Often, Finance reacts slowly to these changes struggling to keep up with the daily operations of recording transactions and closing the books. They are stuck in the annual budget cycles that increasingly become obsolete the moment they are created. Due to the workload to perform this routine work, Finance teams often have little bandwidth to support the strategic needs of the business in assessing risks to respond to volatility and more importantly, develop new strategies to capture new opportunities and business models.”

Increasingly, Finance can no longer be an isolated area within a company whether it’s a small business or a large, international company. The accounting team used to only be charged with recording transactions and ensuring compliance. Reports centered on the company’s plan, budget, and profitability.

In these days of the inter-connected company:

“One example is HR, where Finance needs to strategically support the hiring and growth plans across locations, while keeping an eye on the budget. Beyond the company, Finance also needs to collaborate with external strategic suppliers and financial institutions.”

Read the full article

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