The rise of digitized processes and data analytics in modern companies has unquestionably influenced the CIO’s role — a topic we cover often here on SearchCIO. But realizing the importance of technology for modern business success is spreading throughout the C-suite, giving rise to a relatively new, highly sought-after position: the digital CFO.
Chief financial officers must reexamine their role as they navigate the “unprecedented and uncharted territory” of how to successfully operate in the increasingly tech driven world of digital business, said CGMA external relations VP Ash Noah when moderating a session at the MIT Sloan CFO Summit earlier this month.
“We need to adapt to this environment, we need to adopt these new technologies, we need to be able to leverage data so that we can truly add value to the business,” Noah said during the Digital Finance, Digital World panel discussion.
Increasingly, as the digital CFO is finding their way, they’re tapping into the business benefits afforded by machine learning, automation and advanced data analytics, panelists said. They were clear that technology is a huge driver as the CFO role evolves from an “information provider” for the organization — pulling together things like quarterly earnings reports — to a “problem solver” that helps the organization leverage data to increase business value.
The finance team has a ton of data available to them from various business departments and advanced analytics techniques can provide in-depth business insights for CFOs, said panelist Anitha Gopalan, CFO at Catalant Technologies.
The digital CFO knows how to harness that information to make informed, data-driven decisions. This can go a long way to help companies establish a stronger base for innovation and disrupt faster — essential goals for any digitized business, Gopalan added.
“Finance can be a huge enabler from that perspective,” Gopalan said.
One obstacle facing the digital CFO is the availability of too much data, with Noah saying they risk “analysis paralysis” when there is excessive information to pick through. Automation and machine learning are helping in this regard — but knowing what data is valuable relies on rudimentary CFO skills like knowing the business and its associated goals, panelists said.
Understanding business drivers will go a long way toward realizing what data is useful to solving specific business problems, they added.
“Every single person on the finance team has to truly understand the business model,” Gopalan said. “Understand the business drivers, what is the value that each of them are bringing.”
Panelists reminded the audience that technology advancements typically require a new set of skills for the digital CFO — and their staff — to be successful.
Those tech and data analytic skills are not necessarily present in the organization, said panelist Doug Baker, a principal at KPMG. Although new tech creates vast new business capacities, developing the skills to tap into those capacities poses a real challenge for organizations.
When it comes time to find people with both advanced technical and data analytics know-how, “you have to look at your organization and recognize whether or not you have people today that are maybe underutilized and maybe could be doing that, but aren’t,” Baker said. “Or maybe, you just don’t have those people and need to go find them.”
From there, finding the balance between incorporating old school CFO traits and the ability to tap into advancing tech for business benefit is essential for the digital CFO as the role continues to evolve.
“The technical skills bring you to the table, but it’s then your knowledge of the business, your interaction with the business, truly being embedded in the business, that is key,” Noah said.