As organisations continue to see digital transformation as the key ingredient for succeeding in today’s disruptive and tumultuous market landscape, the role of the chief financial officer (CFO) has moved beyond “financial steward” to a catalyst for strategic digital change.
Nearly three-quarters (72%) of CFOs report that they are part of the decision-making for an enterprise’s technology direction, according to the CFO Now: Breakthrough speed for breakout value report by Accenture last year. The share of finance leaders who say that they are responsible for their companies’ digital activities has also more than tripled between 2016 and 2021.
It is imperative that CFOs step up as the strategic partner to their C-suite peers to help accelerate digital business transformation. However, given the breakneck speed at which the world evolves, are CFOs ready? More importantly, are they equipped with the know-hows to embrace their new role?
Making dollars and sense of digitalisation
The same Accenture report reveals that less than half (43%) of the CFOs surveyed have used advanced financial modelling to identify future risks and opportunities in the past two years.
This is worrying as 70% of financial controllers and CFOs in Singapore see an increasing demand for financial analyses and forecasts, as stakeholders are increasingly interested in non-financial data for corporate reporting. This includes the organisation’s environmental, social, and corporate governance (ESG) performance. As a result, CFOs must build their capabilities in predictive analytics to accurately assess, approve and advise on digitalisation projects that the various business functions embark on.
Plugging in access to real-time insights is a great example of how CFOs can enable data-driven strategies. The era of constant disruption has made clear the importance of having data and insights in real-time, giving businesses greater agility in making data-driven decisions and building resilience in times of crisis.
Empowering the office of finance
Finance teams also play an equally important role in leveraging data analytics and employing data-driven strategies in their daily mission-critical tasks.
However, fragmented processes, legacy technologies and analytics inefficiencies are the major stumbling blocks impeding the office of finance and its analytics transformation. Of the 78 million advanced spreadsheet users worldwide, data-native workers report losing 800 hours annually due to 61% of data activities still being completed in inefficient legacy spreadsheets.
Democratising analytics is a missing piece to empowering finance teams. This is the ongoing process that enables employees — irrespective of business acumen and technical skill sets — to work comfortably with data and make data-driven decisions. For example, finance teams can be trained to use no-code and low-code analytics automation tools to enable the timely collection and analysis of data across the organisation to better inform and influence C-suite decisions.
According to a study by International Data Corp commissioned by Alteryx, business leaders in Singapore believe that democratising data skills with self-service analytics tools provides their organisations with the agility and scalability to deliver insights-driven decision making.
These advanced analytics solutions can also auto- mate tedious and time-consuming analytics processes and enable finance functions — such as accounting, audit, tax, financial planning and analysis, payroll and accounts payable — to optimise analytics inefficiencies and reduce time to insights. Research reveals that analysts who use modern analytics showed 74% greater improvement than non-users in the time it takes to complete a forecast.
Many established organisations across industries — including professional services firm KPMG, telecoms giant BT Group, and healthcare consultancy company IQVIA — have modernised their finance operations. By automating their financial data consolidation, they are able to perform complex quantitative tax analyses more quickly and accurately, which helps them improve their understanding of their revenue drivers. Doing this has saved teams more than 2,000 hours of manual finance work.
Fostering data-driven culture beyond the finance function
Democratising analytics enables the office of finance to lead by example and facilitate digital transformation 2.0 in other business functions. For instance, financial planning and analysis teams can leverage analytics automation to help sales and marketing teams understand the financial implications of their plans or automate exception and risk identification in risk management and operations.
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Additionally, the financial planning and analysis teams can automate accrual reporting to be posted more frequently. This provides accountants with a clearer view of revenue based on credit and future liabilities, as well as the wider organisation with higher quality financial information.
CFOs who embrace their new role will drive greater value at even greater speeds than their peers in areas such as time-to-market and market differentiation. As such, they could also potentially see an incremental increase in overall revenue and better profit margins. The more CFOs are empowered to leverage analytics for decision-making and collaborate within the organisation, the more they will be able to advance and enable success in digitalisation initiatives.
Gari Johnson is the senior vice president for Asia Pacific and Japan at Alteryx