The digital revolution has empowered small and midsize businesses (SMBs) to compete with the largest enterprises in the world, and grab their share of the market. Simultaneously though, it has put a lot of pressure on Chief Financial Officers (CFOs), who now need to assume a more active role in digital the transformation efforts of their respective organizations.
“When you think about planning processes and so on, it’s the CFO who is asking where growth will come from and how to think about it relative to previous years. But the more progressive CFOs are also asking more provocative questions like, “How aligned are we, really? And if I’m managing my business plan on this definition of digital, are the commercial officer and the operations guy too? Do they all agree with that definition?” noted Kate Smaje of McKinsey & Company
Traditionally, CFOs have been responsible for managing the risks that the business faces and focusing on the bottom line. Their main objective: guaranteeing continuous growth through sound investment. While the traditional role remains relevant, it has and will continue to expand to address the risks and the opportunities presented by modern digital technologies.
Now more than ever, CFOs are looking for ways to generate better business insights through data analytics. If we look at the current digital trends, we can see how data generated by the massive amounts of internet-connected devices is shaping how companies large and small are gathering valuable insights and making critical decisions. According to EY’s 2020 DNA of the CFO study, CFOs are increasingly turning to digital transformation as a key enabler of growth and future success.
As a result, they are driving a greater focus on digital transformation strategies as they look to drive enterprise value in the new decade. This is a huge shift from how things were just five years ago. But with the rise of cloud computing and big data analytics, the finance function has been able to transform itself from being just a traditional accounting function into something that is much more strategic and forward-thinking.
30% of organizations have already adopted advanced technologies to generate insights from their data (compared to 21% in 2019). This points to a greater focus on driving productivity through transformation — a trend that will only accelerate as more organizations embrace the digital age."Modern CFOs operating in the digital era must seize the opportunities created by emerging digital technologies and use them to manage the risks that go hand-in-hand with these technologies as well as provide management with valuable insights to ensure long-term company growth.