While the responsibility for driving digital transformation often falls on the shoulders of IT departments and Chief Technology Officers (CTOs), Chief Financial Officers (CFOs) also play a crucial role in this journey. As a CFO, you have the power to significantly impact your organization’s digital transformation efforts by applying your financial expertise and strategic thinking. But digital transformations involve many moving parts, so it can be hard to know where to focus your efforts for optimal results.
To help you maximize your impact, let’s explore 8 ways CFOs can drive digital transformation within the finance department and their broader organizations.
8 Ways CFOs Can Drive Digital Transformation
1. Modernize Your Planning and Budgeting Activities
For decades, businesses have taken care of budgeting and planning-related activities annually. However, sticking to a rigid budgeting and planning timeline makes it nearly impossible to pivot and jump on new opportunities as they arise. And that’s how to fall behind your competition.
Today’s increasingly dynamic business environment requires a more agile approach when it comes to digital transformation and the budgeting behind it. Specifically, you must embrace iterative planning on a case-by-case basis. To stay grounded, set clear business priorities and ensure your budget reflects them. Many organizations accomplish this by zero-basing budgets and resource allocation decisions, followed by contingency budgeting for select cost categories of specific scenarios.
2. Accelerate Strategic Cloud Adoption
Since the COVID-19 pandemic first mandated remote work, finance teams have widely shifted core operations to the cloud. This move has been valuable, as cloud-based solutions offer cost-effective options for data storage, software applications, and infrastructure while bringing faster updates and audits. Even more, cloud service providers expertly handle large quantities of data, which allows them to offer better data security than on-premises solutions. As a CFO, you can push this momentum forward by prioritizing cloud expansion to additional finance activities and other departments to support business goals.
3. Get Key Stakeholders on Your Team’s Side
If you don’t have the explicit support of all necessary stakeholders, your digital transformation initiative will struggle to get off the ground, much less accelerate and thrive. But as a CFO, you’re uniquely positioned in the finance department to gain the digital transformation sponsorship of team leads and executives organization wide. Share the finance department’s challenges with these leaders, and you’ll likely find that many of them can relate. That’s because operational issues usually aren’t isolated to one department. After having conversations like this, you can begin to align on the imperative of digital transformation.
4. Gather Context Across the Enterprise
Checking in with other executives will also give you the opportunity to evaluate other internal changes going on elsewhere that might impact your initiative. With the executive team, consider your digital transformation initiative against other changes on the table, including new technologies, processes, acquisitions, products, or services. Evaluate the level of change, resource commitment, duration, and risk associated with each. These considerations may affect the rollout and timing of your plans. An organization can only take so much change at once before the change fatigue strikes and sabotages your efforts. On the flip side, your transformation initiative might be vital to ensure the success of another change. Either way, investigating the full context will help you to simultaneously achieve your transformation goals and support your organization’s broader strategy.
5. Invest in Value-Driving Finance Technology That Supports Your Work Model
Investing in employee performance means something different when you’re embracing a hybrid or remote work environment. Giving employees the tools they need to maximize productivity will go a long way in accelerating your digital transformation goals and creating a stellar employee experience. Technology that drives productivity and engagement include:
- Enterprise content management offers a seamless solution for your workforce, regardless of their location. Among the myriad features ECM provides, its capacity to grant employees secure content access from anywhere stands out as a key advantage. Moreover, mobile accessibility empowers managers to approve tasks while on the move. Complemented by robust security protocols, you can rest assured that only authorized individuals can access the content.
- Collaboration tools that facilitate real-time communication and enable seamless co-editing of documents, presentations, and spreadsheets are essential. When employees encounter obstacles to collaboration, they may experience a lack of support, exclusion, and a sense of disconnection. Make sure to create a smooth collaboration experience for all your employees, regardless of their location.
6. Find a Digital Transformation Partner
Digital transformation is a massive lift for any organization. Employees already have full-time jobs and it can be challenging to carve out extra time for transformation efforts. That’s why one of the most common reasons transformation initiatives fail to launch or meet their goals is a lack of sufficient team resources.
To avoid this pitfall, we now see that 88% of businesses engage third-party collaborators to assist in at least one aspect of their digital transformation endeavors. Each digital transformation effort varies distinctly from one organization to another. The ideal digital transformation partner will acknowledge these distinctions and adopt a tailored approach. They will also commit to supporting your organization’s triumph by leveraging their expertise and insights to guide you through every phase. Here’s a checklist to assess the suitability of a potential partner for your needs:
Digital Transformation Partner Checklist:
☑ Has experience in defining company objectives and innovating
☑ Asks about your internal resources and can provide additional resources as needed
☑ Has experience working with multiple solutions
☑ Has achieved success with organizations like your own (request case studies and references)
☑ Has experience turning a vision into a strategic digital transformation roadmap
☑ Has a track record of supporting thorough change management programs
7. Let Your Investments Differentiate You
Many CFOs have historically made investment decisions solely based on what their peers are doing. But to ensure your organization thrives in the coming years, you must be bold when deciding where to focus your digital transformation efforts. To have optimal impact, you must concentrate on costs and investments that set your organization apart from the competition. The most effective approach is to maintain a focus on costs aligned with digital expansion and the development of new business models.
8. Fill Digital Skill Gaps in Your Finance Team
Successful digital transformation hinges on your team having the digital skills necessary to maximize the value of your new tools and processes. However, given the ever-growing skill gap in the finance world, this is no easy task. To keep up with rapidly evolving skill requirements, you must continually identify new skills and assess skill development priorities. Then, you’ll need to recruit, retain, and cultivate these digital skills within your department. This could involve hiring, but the most cost-effective skill transformation strategy is to continuously reskill and upskill your existing workforce.
Investing in your staff’s skills guarantees that the changes you’re making will have the essential backing to succeed in the long run. Additionally, from the viewpoint of employees, receiving adequate training makes them feel appreciated and self-assured as they adapt to their changing responsibilities.
Lead Your Department to Success
As a CFO, you are more than just a financial expert; you’re a key driver of digital transformation. By taking a proactive approach and integrating financial strategies with technology initiatives, you can lead your organization to success.
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