Digital Transformation pulls the CFO into a business model revolution
Against a backdrop of economic uncertainty, disruptive technologies, shifting consumer demands, and competition from new and unexpected sources, we are amid the next revolution; the changing CFO. And when it comes to innovating, the CFO is stepping up.
Over the last 5 years we have seen the CIO move from the backroom to the boardroom and new roles emerging for example; the Chief Digital Officer and the role of the Customer Experience Director. These changes have been driven in retail to win the heart of the customer through fantastic retail experiences.
Today’s CFO is managing an ecosystem of expanding complexity — thinking and operating globally, leveraging financial data and analytics to achieve profitable growth, challenging and enabling business strategies, and capitalising on a dynamic regulatory environment — all with a view to achieving competitive advantage. In a recent KPMG survey, 63% of CEOs from high performing organisations believe that the CFO’s role will increase in significance over the next 3 years.
Strategic thinking required
CFOs are looking beyond their traditional finance role to become more collaborative and insightful business partners boosting the relevance and value they contribute to the business. The CFO is no longer the ‘bean counter’ but together with IT, Operations, and Marketing – the next vital step in building a successful customer centric business.
In this new era, CFOs must find ways to improve on business insight, leverage new tools and technologies, drive strategies and decisions, take corrective actions, and be a bold strategic leader for the business.
Customer intelligence is key
Applying financial data and turning it into actionable insight to achieve profitable growth is the greatest strategic value a CFO can bring to a business. CFOs can develop an enhanced understanding of customers’ business models and drive strategy based on that knowledge. Finance has long been data-driven, but the availability of big data and the growth of data analytics capabilities have further heightened its importance. With tools such as Power BI and Machine Learning, CTOs have the opportunity to use automated tools progressing often occasional data activity to a consistent routine of data mining and interpretation.
The CFO of the future leverages the latest technology
The pace of change continues to accelerate rapidly and digital transformation is set to fundamentally change the business landscape. According to a survey from KPMG, 70% of CEOs say technology will have the greatest effect on the future role of the CFO. CEOs expect them to constantly explore and implement the best new technology.
CFOs are focused on seeking out new commercial opportunities that support growth, which means they need to embrace the potential that emerging technologies offer. Legacy tools were simply not designed to operate in today’s world. This is the reason many retailers we talk to are moving to cloud based technologies and modern ERP systems.
The repeating themes here are clear: think strategically, know the business, focus on growth, and optimise the value from investments. As many retailers transform into a more customer-centric business, finance still has a way to go in leveraging the vast amount of customer data to provide valuable insight and predictive approaches. Leveraging technology to take advantage of progressing market opportunities continues to increase in importance for the enterprise and the CFO.
Natalie Bruins. K3 Retail