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The Evolving Role of CFO within the Digital Landscape

October 07, 2016

The chief financial officer (CFO) generally holds the purse strings at an organization, keeping a tight rein over how much may be spent on IT investments. Typically, CFOs have had little involvement in technology decision-making, however, leaving that to IT executives along with CIOs, CTOs and CMOs.

The omission of the CFO in leading and directing technology decisions and expenditures has been a pretty major flaw in IT planning at most organizations. CFOs are integral to the back-office functions at most companies, and have a major role to play in the digital transformation of those functions and solutions. Investments in customer-facing technologies and solutions are pretty clear cut, with a measurable ROI on the horizon. But investments in back-office functionality that can increase efficiencies and productivity along with driving development are much murkier. And that is where the CFO has an important role to play.

Accenture conducted a 10-year study of CFOs and the evolving role of finance within the changing technology landscape. The company found that significant progress is being made to manage external factors that impact financial performance, including the volatility of markets. But financial decision-makers are still bogged down by traditional factors like annual budget cycles and keeping on top of the books. The role of CFO needs to expand to better handle volatility and outside challenges in order for companies to stay competitive.

                    Image via Bigstock

The Accenture study also found that business complexities are still an organization-wide burden, one that is bogging down finance departments significantly. By streamlining processes, including back-and front-office operations, finance can become a complementary part of the greater networked company. That means accounting departments get all the benefits of automation and collaboration traditionally extended to other departments, making them infinitely more integrated and useful to the overall management and direction of the organization.

Accenture also found that digital technology has had a profound impact on the performance of CFOs and finance departments, giving them more power and control within the company. And cost control is no longer the main objective for finance departments which are instead focusing on investment and growth opportunities. Digital transformation and networking obviously play an important role in these growth strategies, with CFOs increasingly making key strategic decisions about technology.

While CFOs have come a long way in the technology landscape, they need to further evolve their roles to truly integrate finance departments and functions into the broader digital transformation. Once finance departments get rid of the siloes that have been preventing growth and integration within the company, they will play a prominent role in guiding and managing key technology and growth decisions.

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