As the COVID-19 pandemic forces more companies than ever to digitally transform – one IDC survey expects Canadian spending on digital transformation to grow by seven per cent in 2020 – and leadership teams find themselves overwhelmed by the number of digital tools available to them, they would be well advised to consider the evolving role of the CFO.
Just as no CEO worth their position now believes they have all the answers, few CFOs still spend most of their time collecting fiscal data and calculating performance metrics. With analytics now doing the grunt work, the CFO’s primary job has expanded from research to analysis, making them both a primary user of digital technology and the enabler of its adoption across the business.
In fact, a recent report from cloud business management solutions provider Sage found that almost three-quarters – 70 per cent – of financial decision makers are now responsible for driving digital transformation at their companies.
This should hardly come as a surprise. After all, the questions that the leadership team are repeatedly faced with when it comes to strategizing are familiar to CFOs: “Does the data support our strategy?” “Are we agile enough to adapt our plans if necessary?”
The CFO as Chief Digital Transformation Officer
For many CFOs, embracing an elevated position will require a shift in mindset, aware as they are that some “C level” executives still see them more as the financial risk police than business enablers. They should press forward, knowing their suggestions are backed by data, and data talks. No less an authority than the Business Development Bank of Canada has found that, to use the manufacturing sector as an example, 60 per cent of businesses that adopted digital technologies saw a boost in productivity, while half reported saving operating costs thanks to higher automation and predictive maintenance, and 42 percent said digital technologies improved the overall quality of their products.
As I mentioned recently in a live webcast hosted by Sage, in my 20-plus years of supporting companies, one lesson I have learned is that finance departments are often the only teams constantly thinking about the entire customer lifecycle. Though often derisively framed as limiting the company’s budget, the finance team’s true goal is allocating finite resources based on where they will help the business grow.
There are two important ways leadership teams can support their CFOs, and if you’re a CFO you should be prepared to ask for them. Firstly, every member of the executive team should have a seat at the table, whether they’re in charge of customer service, products, sales, marketing, or finance. Two, the company should ensure that everyone has access to the same data pool. Too many companies limit the viability of their digital transformation strategies by relying on a patchwork system of competing and often outdated enterprise software platforms. Using the same platform across the enterprise improves the quality of data collected, metrics measured, and dashboards produced. It’s only with the right information and the authority to use it that CFOs can play a leading role in guiding their companies to improved performance.
Let experience, not roles, define your team
If you’ve ever wondered why so many businesses based on excellent ideas falter while others based on mediocre ideas become market leaders, it’s because the former is too often broken apart by arguments, ego, and lack of introspection, while the latter can be knocked out of the park by people who understand how to work together and play to each others’ strengths.
If you’re a CFO, there has never been a more relevant time to have your voice heard and apply your perspective to your business’s digital transformation journey.
Bruce Croxon is a Canadian entrepreneur, television personality, and venture capitalist. He’s currently a partner at Round13 Capital and co-host of BNN TV show The Disruptors.