Chief Financial Officers (CFOs) and finance departments in general are critical to the success of almost any digital transformation project. After all, in the world of business, support for a project can be quantified in terms of dollars made available for that project.
It doesn’t matter if you are a department manager who is trying to fund a project to automate a specific manual process or a unit vice president overseeing a more widespread project that involves hundreds of processes and thousands of people. Finance is going to have to be “convinced” that the dollars spent are going to be recouped in the form of a better, faster, less-costly operation.
In a recent article, ServiceNow CFO, Gina Mastantuono, identifies several key elements she looks for in any project proposal that relates to digital transformation and offers up a sort of tactical guide to selling your CFO on digital transformation.
What Do CFOs Care about?
Impact beyond a Single Process, Work Group or Silo
Obviously if you are trying to automate a process in a single department, you are going to face challenges in the form of competition for resources from other groups, projects and operations within the enterprise. Your CFO is simply not going to have time to look at an isolated, low-impact project.
The key to moving beyond this perception is to identify how your process touches, supports or impacts other processes and other departments within the organisation as a whole. If you can’t do that, you may want to re-evaluate the need for the process itself.
Certainly, some processes are only directly felt within a single business unit. But how does that business unit benefit from the improved process, and how does that translate to benefit other units and the enterprise as a whole?
By elevating the scope of beneficial effect, you are more likely to interest your CFO or at least those within finance who control budgets and project funding.
Ability to Employ Advanced Technologies to Deliver Transformational Improvements
Technologies such as mobility, AI, robotics or predictive analytics offer huge potential benefit for the enterprise. Projects that effectively integrate these technologies with adjacent systems will positively affect the performance of those systems.
Positive effects of improved systems must be demonstrated with data-driven metrics that offer visible evidence of improvement and also provide the basis for accurate predictive processes.
CFOs see the leveraging of these technologies as investments that will pay benefits for years to come.
Value Expressed in Terms of Improved Business Outcome
CFOs are interested in improvements that are transformational in nature rather than incremental. Any project presentation or proposal to the CFO or to finance should strive to identify, quantify and define resulting marked improvements in business outcomes.
Again, this is accomplished by showing how the project will impact and deliver improvement beyond the individual process involved or the department that oversees that process.
ERP and Digital Transformation
For CFOs and finance managers, it is imperative that they understand what digital transformation is and is not. Some will no doubt assume that their ERP system achieves everything that is necessary for the enterprise. They’re possibly thinking that they’ve already invested in digital transformation when they implemented ERP.
They need to look beyond the financial components of ERP. Digital transformation is an entirely different thing. Some CFOs who have recently implemented large, single-vendor, single-tier systems that cover the entire enterprise may not immediately see a difference.
Digital transformation is not so much one grandiose project of installing one huge system, rather it is many smaller projects integrated and coordinated to maximise the beneficial effects of each.
The case for digital transformation within the finance group is compelling, and CFOs would do well to get behind efforts to clean up their own operations. This will not only deliver huge benefits to finance and the rest of the enterprise, it will also elevate the technological credibility of finance within the enterprise as a whole.
Strategic View of Digital Transformation from the Finance Point of View
For several decades, finance has been looking to technology to deliver transformational change that translates into enhanced enterprise performance.
Most of that experience has centered around ERP. The promises made became more and more elaborate as the scope and role of ERP evolves and expands.
On the whole, ERP delivered on many of those promises, but it also experienced some colossal failures as the difference between capability and need was tested in the real world.
Digital transformation offers a different approach to applying technology to problem-solving. It is far more process-based and results-oriented and is not guided by dependencies on all-encompassing solutions; rather it is the application of specific technologies on a case-by-case basis.
Transformative Technology for Finance
McKinsey & Company tells us that technology for finance should improve the financial processes and also deliver enhanced visibility of real-time financial information. Both of these elements (technology and real-time data) facilitate faster and more responsive business decision-making and the identification of business opportunities.
For finance, there are three elements that make up the digital transformation process.
- Advanced Technology – Robotics, automation, VR, additive manufacturing, cloud and mobility are just a few of the technologies that will enable the transformed enterprise. For finance, this ensures the standardisation of data collected and the consistent formatting and delivery of performance data in real time.
- Data Visualisation – Rather than presenting huge, incomprehensible reports, data is presented in easily understood forms via dashboards and graphics designed and formatted to the individual consumers’ needs. Multiple data sources will supply a federated view of data generated. This eliminates the need to align and normalise data created by disparate systems or emanating from multiple sources.
- Analytics – Finance used to plan future activities and budgets by looking at past performance. This process was called steering by watching the rearview mirror. Real-time data delivered to planners with access to analytical tools will facilitate predictive processes that will orient planning for the future based on the present instead of in reaction to the past.
Finance is empowered via technology to direct the enterprise and guide it toward success. The old role of scorekeeper, bean counter or expense regulator is as passé as the green eyeshade.