From ITWeb: The classic picture of a chief financial officer is that of a historian. This is CFO 1.0, a financial professional who isn’t taking much advantage of modern digital tools and simply uses software for record-keeping. There is a perception that pretty much all CFOs fall into this category.
Yet new research from Sage and World Wide Worx challenges that notion, said World Wide Worx CEO Arthur Goldstuck: “One of the questions we asked was: Who has responsibility for digital transformation in the organisation? Had we asked that question five years ago, the answer would have been the CTO or CIO. But that role has shifted to the CEO, who depends heavily on the support and partnership of both the CIO and CFO to effectively achieve digital transformation. What we’re seeing is that key C-suite roles support not only each other, but also technological and business transformation. This is why the role of the CFO is evolving at such a significant pace.”
The research articulates three distinct milestones for the CFO role, supporting Goldstuck’s analysis. CFO 1.0 focused on balancing the books and delivering historical reporting. CFO 2.0 roles started appearing around a decade ago – these financial professionals began leveraging data analytics and automation, alleviating the pressures on their teams and developing a capacity for forecasting.
Today it’s the turn of CFO 3.0 – here the amalgamation of robotic process automation (RPA), artificial intelligence (AI) and machine learning (ML) has created a new breed of trailblazing senior financial decision-makers. They use data and emerging technology to create a vision for the future and to break through finance.
A sensible alignment
In other words, as CFOs became more comfortable with what digital technology can do, they have gravitated towards the strategic decisions that impact technology deployments. As Goldstuck said, this brought CFOs to the table where CEOs and CIOs had been pondering their next digital steps. Now, instead of just controlling payments, CFOs actively engage in finding the value in digital transformation.
“What the CFO 3.0 research shows is that digital transformation is not a tech issue per se. It’s a business process issue, and this is where the CFO is becoming integrally involved,” Goldstuck added.
The study, CFO 3.0 – Digital transformation beyond financial management, spoke to over 300 South Africa-based senior financial decision-makers to gain insight into these trends. The findings challenge the dogma of CFOs as barriers to progress. For example, 15% of CFOs are fully responsible for digital transformation agendas, and 87% of CFOs play a role in digital transformation.
Remote working challenge
While CFOs have been able to inch into the waters of digital transformation, they suddenly had to take a deep plunge.
Gerhard Hartman, Vice-President for Medium Business, Africa & Middle East at Sage, said: “Before the COVID-19 pandemic, CFOs pursued advantages through emerging technologies. This is still happening, but CFOs now also have to manage the vagaries of remote workforces. Around 27% of CFOs are currently managing remote team members.”
A live poll with over 800 attendees during the report’s virtual launch supported this development: 49% said managing, leading, and/or working within a remote team had been the biggest disruptor in the finance department this year.
“This aligns closely with what we found in the CFO 3.0 research. In fact, it suggests the trends we uncovered have actually accelerated since we conducted the research. If we had asked the same question in January, the single biggest shift in the role of the CFO would have been addressing the demands of digital transformation and changing stakeholder needs. But now, managing remote teams has risen to the top for everyone.”
This, according to Goldstuck, is the most fundamental change in the CFO job description in the past decade, overtaking business strategy, which, until recently, was considered the most significant shift.
CFO 3.0 ascending
CFO priorities are shifting fast as they engage with the digital world. Other than managing new data, technologies and stakeholder expectations, they must also maximise their technology investments by enabling their teams to work remotely, while retaining accountability, transparency and productivity. Parcel to those responsibilities is tackling challenges around cyber security, data protection, and compliance.
The research found that, in the past two years, CFOs have taken on new job responsibilities, including:
- Driving business strategy and objectives (21%);
- Managing government affairs and relations (14%); and
- Digital transformation-related activities (14%).