For any type of digital transformation efforts to be successful, there is a need to have alignment of the full management team on the definition of what is digital and what should go digital, and this requires a healthy conversation between its members. They need to articulate these definitions in a simple way and set the goals so that the entire organization can rally around by implementing digital strategies in waves, starting with smaller easier pieces and eventually expanding.
As for the role of a CFO within the above scenario, there have been different CFO types based on their backgrounds or experiences.
They generally come from an accountant or a controller background. When they evaluate digital transformation initiatives, whether it be a cloud migration or a mobile enablement, they prioritize concepts like governance, compliance, and risk programs by heavily focusing on how to keep up with regulations.
This type comes from different financial planning and analysis (FP&A) positions, and understands what goes on in different parts of the organization. When they look at digital transformation projects, they want to understand if they will be able to process the numbers and graphs in order to extract any worthful business value, explore the rate of return on investments (ROIs), and where the growth will come from.
They normally come from the operations departments and look for the ways to improve efficiency through the digitally transformed platforms. They are the CFOs of a companies where business operations like production, logistics, marketing, legal and office report to them, in addition to finance and accounting teams.
There are, of course, many CFOs who are combinations of these types at different dimensions and levels. At Digiant Group, regardless of which type they belong to, we believe that CFOs should take the lead for the willingness to adopt new digital ideas. This is basically because almost all parts of any organization are connected to finance, by being either a cost center or a revenue center. When organizations run in a harmony, employees and customers are happy. Happy employees and customers mean higher revenues which translate into higher profits and valuations.
If we go now back to the scenario in the first paragraph, for the role of CFOs, they need to (1) have great communication skills to manage the internal change management which comes during and after the digital transformation projects, and (2) understand the technology to have smart conversations with her or his peers in the management team about what the upcoming technology can and cannot do. They have to work and align priorities with the CEOs, CMOs, COOs and more.