How can CFOs play a central role in accelerating digital transformation?

Danny Ho, Sammy Yeung and Joanne Chan

Experts chime in on the latest topics in accountancy and business

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Danny Ho, Sammy Yeung and Joanne Chan


Danny Ho, Executive Director and CFO at Sa Sa International Holdings Limited, and an Institute member

A company’s business and revenue model establishes a path to profitability, while the chosen industry lays out the boundary for the size of the attainable “pie.” How a company sets and implements its chosen strategy will determine its success in that industry.

I look at technology as an enabler that can help a company turbo-charge its strategy, whether through raising productivity or serving existing customers better or reaching new markets, thereby increasing the size of the pie. In order to succeed, it’s important not to look at digitalization as a separate strategy or a standalone. It must start with the overall company strategy with digitalization overlaid and an inseparable part, ensuring goal congruence across the organization.

Therefore by design, digitalization will have top management backing and be driven from the top with all functions held to account for the company’s achievement of the overall objectives. With chief financial officers’ remit often covering oversight for strategy, technology and data, they are increasingly charged with the responsibility for championing the adoption of technology and ensuring company performance is benefitting in the present and future. With their financial training and ability to decipher unit economics and the dynamics of financial performance, they are uniquely placed to assess the value-add from proposed digital implementations. Ensuring projects are managed against “objectives and key results” and delivered against timelines and budgets are part and parcel of their governance. Almost everything digital looks fancy, but not everything digital is value accretive.

“Ensuring projects are managed against ‘objectives and key results’ and delivered against timelines and budgets are part and parcel of their governance. Almost everything digital looks fancy, but not everything digital is value accretive.”

Depending on the size and type of implementation, having the right talent in place to see the digitalization through is essential, and not solely IT talent. Being tech-savvy and having awareness of how digital can add value in the operating departments is equally or even more important. These are the teams that will use and benefit from the technology adoption, and need to be at the front line when it comes to digitalization, otherwise projects run the risk of failure.

With responsibility for company finances, CFOs are also able to balance and prioritize strategies and investments, including digital investments, across the short to longer-term timeframes, managing the expectations of functional departments striving for the same capped resources.

With a seat on the board, CFOs also manage upwards, seeking support for investment and aligning understanding of the challenges of change and the reason for exercising patience where patience is due. Sheltering functional departments during the process and ensuring full support for digitalization implementation are factors to success.

Sammy Yeung, Regional Finance Lead, Greater China at Workday, and an Institute member

Today, CFOs need to focus on value creation while anticipating and navigating what’s coming next. But how do they do that? It starts with having the right insight at the right time, and the adaptability to keep up with the velocity of change, such as major business disruptions like mergers and acquisitions and regulatory changes.

CFOs need to support their organizations to leverage vast amounts of accurate data and transform it into meaningful insights. However, most CFOs today don’t have the right data, in the right format, or at the right time to drive impactful decision-making.

They need resilient, efficient, and flexible financial processes to spot trends and adapt quickly to external changes. They need an intuitive user experience that gets answers at the speed of thought for today’s digitally native finance and accounting workforce. All of this requires a fundamentally different relationship with technology and data that removes obstacles and gets those insights into the hands of decision-makers as quickly as possible.

“It is important for CFOs to partner with IT to drive transformation across the organization.”

Modern technology offers many answers, but the key is simplification of the core transactional processes combined with the removal or automation of manual interventions. What today’s leaders need is fewer systems with limited handoffs and one source of truth for all their data, including financial, human capital management, operational, and other data housed in the same architecture with strict data governance models in place.

It is important for CFOs to partner with IT to drive transformation across the organization, as evident from Workday’s global study, Closing the Acceleration Gap: Toward Sustainable Digital Transformation, which surveyed finance, IT, and human resources leaders. The results showed that there was plenty of room for improvement to meet shifting demands around efficiency and organizational abilities. One data point showed that only half of finance leaders (49 percent) expressed confidence in the efficiency with which their organization manages among planning, execution, and analysis cycles, while roughly one-third (34 percent) said they have little to no confidence in their teams’ ability to meet the demands of the business.

Transformation is not isolated to a single place, event, or time. Cloud technology can make systems faster, more nimble, and more responsive. Pausing to think about how processes can be improved and then getting them right will ultimately foster a more effective digital transformation. It is an opportunity to tackle challenges and issues that have traditionally hampered the business, and to harness the efficiencies and values that cloud technology can provide.

Joanne Chan, Deputy Chief Financial Officer at Animoca Brands

There is no doubt that the role of the CFO is rapidly evolving, becoming more strategic and transformational within the organization. In recent years, CFOs have already expanded their responsibilities beyond accounting and finance. These new responsibilities include business partnering, governance, business intelligence and data analytics, to name a few. Positioned at the confluence of data, processes and cross-departmental interactions, CFOs naturally assume the leadership of business intelligence and data analytics functions. Moreover, as digitalization entails the upstream process that captures and produces data – a crucial starting point for robust business intelligence and data analytics – CFOs are well-suited to spearhead digital transformation initiatives.

Digital transformation requires an organization to rethink its business model and operations, resulting in streamlined workflows, improved customer and employee experiences and high-quality data. The company’s data and analytics capabilities should be developed alongside the digitalization project to reap the benefits of high-quality data early on. Under the CFO’s guidance, business intelligence and data analytics teams should develop their own parallel roadmaps to best leverage new and improved data, and extract insights in an expedient way. Harnessing data allows CFOs to offer valuable strategic guidance and support the executive team to make better decisions, optimize operations and identify growth opportunities.

“Forward-thinking finance teams should embrace new workflows and systems... and constantly think about how best to add value to their stakeholders.”

As CFOs are uniquely positioned to drive the company’s strategic planning process, they play a vital role in securing sustained funding and resource allocation for multi-year digital initiatives. Continuous evaluation of the financial feasibility and project effectiveness allows CFOs to achieve successful outcomes.

Finance is the strategic hub of the company, and CFOs can inspire their finance teams to build a strong data culture. Forward-thinking finance teams should embrace new workflows and systems, learn to code and use data visualization tools, and constantly think about how best to add value to their stakeholders. CFOs, supported by a capable finance team, can facilitate effective cross-functional collaboration across various teams, such as technology, operations and human resources, and provide strong leadership to bring the project to fruition.

Overall, CFOs can drive successful digital transformation by securing funding, harnessing data and upskilling their teams. Leveraging CFOs’ financial acumen, operational focus and strategic mindset, transformation can be achieved while balancing short-term financial performance with long-term value creation.

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