Finance leaders no longer face the question of whether to strengthen their digital capabilities; it’s now a necessity for companies that want to drive value and, ultimately, to survive. The energies of a CFO should now be focused on making sure the adoption of new capabilities is carried out effectively, and that means building a constructive relationship with IT and Data Management.

Effective digital transformation today means making a much deeper commitment than just buying a new IT product or upgrade, and it is not a one-and-done exercise. Change and transformation are moving at light speed, with organizations and the business landscape becoming more complex, as are the roles of finance leaders: shifting daily, expected to do more, forced to adapt to change and innovation while writing the playbook as they go.

Having a balance of critical skillsets in one’s team, creating forward-thinking mindsets, and being adaptable are essential attributes needed for CFOs to successfully navigate the continuous waves of transformation and drive value for the organization.

The new capabilities which are coming to market will affect the entire organization and its culture, so they must be approached with this concept front and center: You will always be looking to use them to facilitate better ways of working and creating value.

There was a time when all eyes were on IT when it came to any technological or data needs, especially when installing the right infrastructure or automating processes. Finance has previously been viewed as a facilitator, with IT leading and managing the process. Today, however, finance has a bigger role to play in infrastructure adaptation, automation, and data. They should be not just a facilitator, but rather a driver in the process.

Finance leaders have relationships with operational leaders, as well as data insights into a business’s value chain across all its operations, and they can use this data to improve decisions. Because of this unique position within organizations, we are ideally placed to lead the shift towards digitization.

Making automation work

Advanced software and robotic process automation tools are now automating routine tasks such as data entry, invoice processing, account reconciliations, and payroll calculations. Additionally, data analytics and machine learning algorithms are making large datasets more accessible, generating deeper insights for operational leaders and leading to better decision-making across businesses.

For these processes to work, collaboration between finance, data, and IT teams is necessary, but getting these departments on the same page can be a frustrating challenge, hindering the optimization of these technologies and business functions. This is a classic case of how working in silos can undermine organizational performance. CFOs should use their convening powers to avoid this.

The finance team needs to have a ‘seat at the table’ from the very beginning to overcome these challenges and effect successful transformation. Too often, finance only becomes involved when it comes to the cost and financing of the project, and when finance leaders do try to become involved, they can have difficulty gaining access to the needed data. This was recently confirmed by members of the Future of Finance Leadership Advisory Group, where almost half of the group polled (47%) noted challenges gaining access to needed data.

As finance professionals understand the needs of stakeholders within the business, they are in the best position to outline what is needed for IT to create an effective, efficient structure. Finance professionals are in-house consultants who collaborate with other functions to understand their workings and end-to-end procedures, discover where both problems and opportunities exist, identify where processes can be improved, and ultimately find solutions.

Digital transformation projects rely on harmonizing processes and standardizing systems across different operations. This requires the sort of end-to-end perspective finance teams have, and which IT teams might lack. Finance leaders should ensure that automation mirrors the value chain across all operations, and they should be doing this in partnership with the IT and data management teams.

Finance professionals are also data translators. Many of a business’ systems are non-finance owned, but, while the stakeholders have access to these systems, they often do not understand what the numbers are telling them. This is where finance comes in to help understand the stories behind the numbers and how they affect the organization’s health. Overall, finance is a central partner that connects the needs of the business.

Those companies further along in their digital transformation journeys indicate the process begins with an organizational vision, with digital strategies that are supported by the senior executive team. Having a digital roadmap facilitated by finance depicts a clearer understanding of what needs to be achieved, as well as how to achieve those goals.

Finance’s data analytics role and responsibility

Digital technology is dramatically enhancing the power of data analytical tools available to finance professionals. A consequence of this change is that finance needs to step up and take a leading role in data strategy. This is not something you can leave solely for the data or IT functions. As outlined above, if finance teams are to leverage data to extract the maximum possible organizational value, they need to be fully involved in all data processes and planning — which includes data ethics.

It is crucial for organizations to establish clear responsibilities and protocols regarding data ownership to ensure its integrity, quality, and compliance. For this to happen, finance leaders need to play a bigger role in enterprise data and analytics governance, and that means becoming familiar with the concepts that underpin it. If you consider the range of data now available, especially on the non-financial and sustainability side of things, and how it is dispersed across organizations, this can be quite an undertaking.

The volume and breadth of financial, non-financial, structured, and unstructured data available to finance teams has grown exponentially with the proliferation of digital transactions, online platforms, and interconnected systems, as well as changes in regulatory and reporting requirements. Data analysis may not be a new activity for finance, but it has grown in complexity.

Compliance with data regulations in your jurisdiction is a necessary step, but not a sufficient one by itself. Your stakeholders will have expectations around how your organization uses and handles data, and a high performing finance team must be aware of these and work hard to meet them. This is not something which any single team can achieve by itself. It requires cross functional collaboration and the establishment of a good data culture to maintain. It is another example of how breaking down silos is a key part of achieving success in the digital age.

Today, data is scattered all over the organization with limited control or governance, which makes analyzing, storytelling, and influencing exceedingly difficult. It is generally agreed that the finance function owns the financial data and plays a significant role in data governance. However, the challenge is finding alignment on who, between business owners and finance, should own the non-financial data within an organization.

What is clear is that it is crucial for organizations to establish clear guidelines, roles, and responsibilities for data ownership to ensure data integrity, quality, and compliance.