CFOs and CIOs must collaborate on digital transformation to remain competitive
CFOs are shifting their priorities from cutting costs to rapidly investing in technology and data.
Significant percentages of senior financial executives currently implement technologies such as advanced analytics (38 percent) and machine learning (30 percent), while many plan to dedicate additional resources to frontier technologies within two years, including:
- Artificial intelligence, or AI (41 percent)
- Drones and robots (30 percent)
- Blockchain (40 percent)
- Robotic process automation, or RPA (41 percent).
In addition, financial leaders plan to speed up their efforts to implement several popular technologies within the next two years, including optical character recognition (45 percent) and broader distributed ledger technology (44 percent), according to Grant Thornton’s 2019 CFO Survey, conducted in partnership with CFO Research.
Further, year-over-year comparisons show that CFOs are seeing dramatic changes in technology adoption at their companies:
- Forty-two percent reported their finance functions regularly make use of advanced and automation technologies in corporate development and strategic planning, compared to 18 percent in Grant Thornton’s 2018 CFO Survey;
- Forty percent reported their finance function already implements advanced technologies and automation technologies in risk management, compared to 20 percent in 2018;
- Thirty percent use machine learning, compared to 8 percent in 2018; and
- Twenty-five percent use AI, compared to 7 percent in 2018.
“Financial leaders must embrace and adapt to new technologies to ensure their organizations operate efficiently,” said Srikant Sastry, national managing principal of Advisory Services at Grant Thornton.
“The speed with which CFOs are investing in IT shows a clear vision of the digital transformation they want to see at their companies. But, advanced technologies like AI, RPA, drones, and robotics require CFOs to focus on specific use cases, workforce preparation, and measurements for these technologies to facilitate and maximize a timely return on investment.”
CFO role continues to evolve
CFOs reported that they are well-positioned to collaborate with IT and ensure that digital investments fit into their organization’s innovation strategies: Nearly 91 percent of respondents agree or strongly agree it is the CFO’s job to ensure their companies fully realize the benefits of technology investments.
That said, almost the exact same amount of respondents (92 percent) believe the finance function of the future must do a better job of leveraging both technology and people.
According to the “All systems go: CFOs lead the way to a digital world” survey, CFOs see themselves as part of a cross-functional, collaborative team.
Of the nearly 400 financial leaders surveyed, 95 percent of respondents said their company’s CFO is a key stakeholder of enterprise transformation planning; while 94 percent reported their company’s CFO actively supports an innovation culture; and 90 percent agreed the company’s CFO actively shares insights about how to run a lean, efficient function with their peers in business units.
Challenges ahead: Skill and collaboration
As CFOs speed toward transformative technology, 60 percent believed the finance function must provide advanced analytical support. The most important skill sets senior financial executives want to develop in the finance function are:
- Data analytics (55 percent),
- Business strategy (40 percent),
- Operations management (35 percent), and
- Technology acquisition (33 percent).
Moreover, the survey showed that financial leaders want to recruit and retain employees who possess traditional financial expertise, while also showing an eagerness to learn new technologies and process design.
“Over the next two years, talent and skills will be one of the top three challenges the IT function faces as it seeks enterprise growth, along with system complexity and business integration,” says Chris Stephenson, Business Consulting principal at Grant Thornton.
“As the finance function of the future takes shape, it will demand new skill sets. Leaders will need to move full speed ahead to invest in the right technology and people to transform their businesses and, ultimately, guide strategic decision making across their organizations.”
Stephenson concludes that this transformation will not end with recruiting and developing employees to have the right set of skills – or merely implementing the latest technologies. “Working more closely with the IT organization can help the CFO rethink end-to-end finance processes. CFOs and CIOs must closely collaborate on digital transformation to remain competitive,” he says.