The next few years will see a huge increase in tools based on artificial intelligence and the Internet of Things using wireless sensors. What are the implications of this for CFOs? One thing they can do is drive their companies to take advantage of digital opportunities. There will be much research and development taking place and it will be CFOs who decide which funding requests should be given priority.
CFOs in digital transformation will basically play the role of advisors concerning where to invest money in digital initiatives of the company. In digital transformation, they will need to help decide where money is to be spent and how much. One key challenge will be connecting new strategies to new revenue. Finance managers will need to help their colleagues estimate what amount of money the digital transformation will bring.
According to an article on the cfo.com website, there are four ways in which CFOs can do this:
- Leading the shift within the finance department, moving it from low-value manual work to automated and analytics-driven financial advisers
- Assessing the economic viability of digital-enabling business models
- Bringing together profitable cross-functional digital processes
- Assisting CIOs (Chief Information Officers) in selecting the appropriate IT model in the age of cloud services.
1. Changes in the finance department
To transform their own department, CFOs need to determine how tasks might be automated. AI can help with financial forecasts and cash flow. Software robots help to improve internal accounting and decision making.
Computers should take care of manual, low-value work. Humans will be free for more strategic roles, helping other departments with their decisions.
The second part of the article will look at the three remaining options of how CFOs can help with digitisation.
-jk-