Digital tech in business is two things at the same time: exciting and intimidating. Globally, companies have spent more than $1.2 trillion on digital reinvention over the last few years. And if your organization operates in the industrial manufacturing vertical, you probably know that Digital Transformation initiatives are expensive.
In fact, IDC, in its 2019 Digital Transformation spending report predicted that between 2018 and 2021, companies worldwide would have collectively spent nearly $6 trillion on digital transformation initiatives. And do all of these initiatives reach the culmination of success and provide the organizations with the much touted and promoted 'profitable growth'?
The truth – A major percentage of these initiatives fall flat to their faces and Boards of directors and shareholders struggle with the ROI on these expensive ‘Digitalization’ initiatives.
So, as a key role that carries most power and significance in order to ensure that ‘Digitalization’ is done right, the crucial significance of a CFO’s functioning cannot be undermined. Here’s how the right CFOs are going to lead their organizations into the right-kind-of-absolute digitalization in 2021 and beyond.
Assessing the digital models with Data and insights
Data is the fuel for digitalization. And a great CFO is the champion of all kinds of data, knows what kind is to be analyzed and when, for better decision-making. Their identification of critical data parameters of the business is top-notch. They know how to capture the right kind of data and align the insights from the adequately structured data into their strategy and initiate the process.
A CFO is all about Finance and more. And with the role, comes the responsibility of being mindful of the big enterprise risk, and small. All enterprise-wide decisions have to be wary of risks in the form of data privacy, cybersecurity, regulatory compliance, external factors at play, etc.
Answering the much-asked question, now!
A CFO can help answer - What’s the organization’s financial justification for shifting from on-premises computing to cloud? Especially in the post-pandemic-WFH business scenario, can legacy organization still manage with on-premise solutions for their all their processes?
With their careful assessment, a CFO’s guidance and involvement can help the organization:
Charity begins at home
By kickstarting the ideal of ‘digitalization’ from their very own department, CFOs can help launch it across the organization. To digitally transform the function of finance by devoting finance budgets for the same is a great way to start; digital-enabled business processes, digital infrastructure, and more - getting rid of legacy platforms in finance processes with the use of automation via AI and other tech.
For example, CFOs putting up systems in place that help the department get started with financial forecasts using digital processes is not only great for the cash flow but also accelerates optimal decision making for the other departments.
CFOs, in 2021, are required to be digital-aggressive; emphasizing the move from everything ‘manual’ to ‘digital-enabled’. They can act as a valuable asset for business organizations when they know how to marry the shift of the economics to the long-term benefits of their organization's digital journey.