The top digitalisation trends for CFOs and the finance function

04 March 2021 Consultancy.asia 4 min. read

People take centre stage in digital transformation efforts – as far as CFOs are concerned. A new report highlights how the finance function is riding the digitalisation wave.

Tokoyo-based Genex Partners surveyed finance professionals at more than 200 companies from a variety of sectors globally, in collaboration with fellow Cordence Worldwide partner Horváth & Partners. The broad consensus is that digitalisation is a top priority, as the applications of technology to the finance function become clearer by the day.

Data integration across a business can help create value; analytics can allow for predictive rather than reactive decision-making; robotic process automation (RPA) can boost efficiency by taking routine work of human hands; all of which can transform the finance function from a number crunching entity to a strategic, data-driven and digitalised engine room.

Top digitalisation measures for CFOs

And CFOs are well aware of these opportunities – evident from the volume of concrete measures being taken to digitalise. One is to focus on upskilling. Per the latest survey, 90% of CFOs feel the key way forward is to align employees and competencies with the future avatar of finance departments. Equally important, according to CFOs, is a more decisive role for finance.

“The opportunities obtainable by digitalisation need to be utilised more effectively to generate value-adding activities and results for internal and external customers from this role, as better data availability and increased transparency automatically lead to better-founded, more meaningful indicators and related measures,” explained Achim Wenning, partner at Horváth & Partners.

Treating CFOs as business partners is key to drawing this value. Other measures being taken with gusto include process transformation, automation of repetitive tasks, and integration of IT landscapes. Some have even built an integrated platform to manage vast pools of organisational data, while advanced businesses are experimenting with agile methodologies.

Untapped potential of digitalisation efforts

Untapped potential

So digitalisation of finance is well underway, although this picture remains one of untapped potential. Smart dashboards and robotic process automation are the two most widely adopted tech applications – and even these are only productive in 25% to 30% of organisations as of now.

The rest are still in the proof of concept, pilot, prototyping or transition phase. Other technologies such as advanced analytics and predictive forecasting are also popular, although around 10% of organisations have actually reached productivity with these tools.

Then there are Industry 4.0 technologies such as centralised data repositories – data lakes – machine learning, artificial intelligence and blockchain, all of which remain untouched by the majority of CFOs. If developed, these tools could well transform the finance function into a steering entity.

Perspectives on digital transformation

Already, 75% of CFOs acknowledge the quality benefits from technology, while nearly 70% note that finance has become a more attractive workplace via digitalisation. Nearly a third also appreciate the open mindedness that technology brings to the financial workforce. The potential is there for tremendous value, although some barriers persist. 

Indeed, successful digital transformation as a whole remains elusive for many businesses – mainly owing to high costs, disruptions, unstructured success measurement and a lack of business cases. Bringing these factors under control could be critical, particularly at a time when efficiency is a key to business survival.

“The coronavirus crisis will give fresh impetus to digitalisation. On the one hand, because necessary measures can be implemented, offering advantages in terms of cost and performance, and on the other hand, because companies have learned a lot within a very short time about digital opportunities in a kind of “crash course of necessity,” concluded Wenning.