Jamie Wark, CFO of Telefónica Tech, talks about digital transformation and the modern CFO
As CFO of a technology business I can see the evolution of the role of the finance professional as I am fortunate to be around the latest technology and to meet with finance professionals across different industries.
This change is down to more businesses realising that technology is probably the most important external force shaping how their business operates. And, with the richness of the outputs from a modern Enterprise Resource Planning (ERP) system providing such high quality and well-interpreted data, the influence of the CFO can now be felt across the organisation, which allows the CFO role to now converge with that of the COO.
The sheer scale and pace of change in digital technology presents a huge challenge for companies, but for those that embrace technology and strive to understand what digital transformation can deliver for them, the reward can be a significant competitive advantage and cause disruption in their chosen markets.
I increasingly see the CFO role merging into more of a COO role. It’s not just a functional role anymore, CFOs are business leaders involved in decision making at a boardroom level.
The changing face of the finance function
Understanding how new technology impacts a business is no longer exclusively the realm of the IT department. It has also become the domain of the CFO. It is now common for a CFO to have the lead responsibility when it comes to the implementation of new technology into their business.
Increasingly, the key priority for many CFOs is digital transformation for which they are becoming personally accountable for and therefore it’s only right that they are the person who oversees the implementation of the new technology that knits the many layers of their business together. There is an inevitability about this as new technology often requires substantial financial investment and the CFO is the one that can apply an objective and quantified approach to such strategic projects
At Telefónica Tech we typically sell to the business rather than the IT department and, more often than not, that is the FD or CFO. It is for this reason that many of our consulting team come from a finance background. You wouldn’t think using accountants to sell digital technology is a great idea, but it’s a really strong position to come from. They understand what they are selling and implementing and they are able to talk the same language as the CFO or FD they are advising.
Automation, not eradication
With companies from IBM to Salesforce investing in artificial intelligence (AI), many businesses are already using such technology in their day-to-day operations. Over the next five years AI will become far more commonplace within the finance function, automating many of the lower level manual tasks within a finance team. Those more mundane tasks will disappear and be replaced by technology. That’s not a bad thing.
What that does is free up the time, not just at a junior level but all the way up to CFO. The technology has effectively reduced the detailed burden, allowing time to be focused more valuably on interpreting and improving business performance. Although the role of the finance function will be impacted by this increase in automation, there will still be a need for qualified professionals to work with the outputs and implement the actions to drive business performance improvements.
This kind of process will provide far richer data and it becomes more of a value-add process rather than just churning out a set of management accounts every month. It allows better conversations to be had that can ignite positive change within a business.
This increased automation can occasionally come up against resistance from within a business, this is common when faced with change. Take the humble spreadsheet. It made a significant change to how finance professionals conducted their everyday work. It wasn’t that long ago that people used paper ledgers, but the seismic shift created by the introduction of spreadsheets is not looked at disdainfully, and therefore such changes should be embraced rather than resisted. Find out how to overcome these challenges by getting in touch.