The CFO driving digital change
CFOs are uniquely positioned to lead a broader organisational shift into digitisation because they have insight into all business units and how they interact with one another.
09 October 2019 | Business
The greatest challenge is not the technology itself, it is developing people at every level of the hierarchy.
In this environment, it is no longer enough for chief financial officers (CFOs) to be the financial overseer, ensuring finance reports are accurate and complete. In addition, they need to take on a more strategic role by joining the data flowing through the organisation to help fellow leaders see not only where the organisation stands at any given moment, but also where it can and should be in the next week, month and year.
Why the CFO?
How CFOs can lead this change starts with standardising and automating repetitive tasks. Basic automation tools can lead to increased efficiency and lower costs in handling routine, predictable processes like reporting and reconciliations. I can also help to improve performance (accuracy and speed) of a given function.
The finance department can then start applying more advanced tools such as artificial intelligence (AI) and analytics to interpret data, more accurately predict what will happen according to a variety of factors and plan for scenarios. Based on the industry and level of digital maturity in the organisation, every CFO will have a different approach.
The greatest challenge is not the technology itself, it is developing people at every level of the hierarchy who can harness innovative thinking, form the right strategies and apply the systems and tools that best fit the needs of the business. With the right skills in scarce supply and the financial impact of hiring the workforce you need, organisations must look at upskilling their existing employees.
In PwC’s 22nd Annual Global CEO Survey it stated that the World Economic Forum estimates that it will cost US$24 000 per head to reskill displaced US workers. But when set against the alternatives — severance payments for workers who are let go and the cost of finding new workers with in-demand skills, amongst other things — reskilling is the more attractive option.
Technology to replace human workforce?
A stigma that normally goes with automation is that the human role will become redundant, leading to loss of jobs. Organisations need to explain the opportunities that come with this; to do more interesting, value-creating work, rather than something that will replace human staff.
In a PwC case study titled “Boston Scientific boosts efficiency and job satisfaction with robotic process automation”, the corporate tax team at medical device maker Boston Scientific is a good example of this.
The team had been burdened by manual tasks that were so time-consuming that employees often had to work overtime during busy periods. In addition to paying overtime expenses, the company was finding it difficult to retain top tax talent.
Seeing an opportunity to free their team from repetitive work by automating a variety of tasks, tax leaders tested the possibilities with a few processes at first, then built on those successes by automating others. The automation software they implemented reduced the time required to complete manual tasks by 85% and created a better work-life balance for employees in the corporate tax and finance functions.
The best technology will not deliver results if a CFO doesn’t have a workforce with the right capabilities. Some finance organisations may need a culture shift among their employees.
In the past, finance rewarded staff on adhering to routine processes and avoiding risk. Finance has traditionally been concerned with certainty and accuracy of historical data. The changes you want to encourage, ideally by adjusting your own perspective, should help your team cultivate a more exploratory, proactive mind-set.
Where to start?
For some CFOs, the big question regarding automation and AI is how to begin.
Implementing technology today is different than it was in the past. It happens faster and real-world pilots and experimentation is preferred rather than planning and deliberation.
CFOs need to embark on some initiatives:
- Identify cases where you can involve automation through straightforward tools like robotic process automation (RPA),
- move into more ambitious AI-powered initiatives and
- build on that experience over time.
For automating the finance function to be a successful initiative, the CFO will have to do more than approve a budget and hold the leaders accountable; you will have to take part in the learning efforts yourself, engage in teaching others, and use this transformation as a genuine opportunity to improve your own skills.
In the end there is more benefit than merely a more efficient and effective finance function that can operate with lower costs and with greater speed and accuracy. It will lead to more challenging work for employees and result in upskilling both the staff and the CFO.
Riana Esterhuyse is a tax associate director at PwC Namibia. Contact her at [email protected]