CFOs and digital finance transformation, how to make the transition?

CFOs and digital finance transformation, how to make the transition?

The role of CFOs has evolved significantly over the past decade. In addition to traditional finance functions, today's CFOs are also responsible for driving innovation, implementing digital solutions, and improving business performance. As the business world continues to become more digitally focused, CFOs are required to lead the charge in driving digital finance transformation. In this article, we will discuss some key insights on how CFOs can make a successful transition toward digital finance transformation.

Embracing Automation and Artificial Intelligence (AI)

One of the critical aspects of digital finance transformation is the integration of automation and AI. CFOs can improve their efficiency by automating processes such as accounts payable and receivable, financial planning and analysis, and tax compliance. Additionally, AI-powered tools can provide valuable insights to help CFOs make informed decisions quickly.

Digital commerce has generated large amounts of data from customer-facing operations, which CFOs can analyse using AI-powered tools to make informed decisions quickly. By correlating price behaviour and receivables with transaction data such as product type, payment method, and customer demographics, CFOs can project optimal pricing for specific customer segments and predict inventory levels to save working capital.

invest in software with incorporated AI

Invest in software that has AI capabilities built in so that you can experiment with the technology and use it to swiftly develop pilot applications for specialised business challenges. Building internal AI solutions for all financial operations results in significantly more effort and less time to investigate new pilots or use cases.

Building a Robust Data Analytics Strategy

To digitally transform finance, data analytics is crucial. However, firms often try to implement advanced analytics without first standardising their data, which can be siloed if they rely solely on manual spreadsheets. By using a cloud-based business analytics solution, firms can establish a single source of truth and enable predictive and prescriptive capabilities. This frees up finance personnel from mundane routine tasks to focus on higher priority items.

Implementing Cybersecurity Measures

Cybersecurity threats continue to evolve, and data breaches are becoming increasingly expensive for companies.  According to IBM research, the average cost of a single data breach has risen to a record high of $4.35 million. Additionally, small cybersecurity errors, such as sending an email to the wrong person, can also have significant consequences. According to a survey by Tessian, nearly one-third of companies reported losing customers due to email errors.

The CFO plays a critical role in ensuring the security of a company's financial data. However, relying on siloed spreadsheets and basic security measures, such as password protection and cell locking, can leave a company vulnerable to cyberattacks. Moving to modern automation software that centralises and secures data is crucial for improving cybersecurity.

Fostering a Culture of Innovation

To make the transition toward digital finance transformation successful, CFOs need to foster a culture of innovation within their organisation. This involves encouraging employees to experiment with new technologies and providing them with the necessary training to do so.