4 ways CFOs can navigate the incoming wave of digital finance transformation

Imagine a world in which digital technologies, like artificial intelligence, run most CFO functions. While this might seem futuristic, it’s here today. IT modernization is rapidly impacting an increasing number of CFO functions, generating a significant return on investment and freeing up the CFO to focus on more strategic and value-added functions. Benefits include improved operational efficiencies, business intelligence, decision-making, risk management, and more.

Success in this modern era of finance requires bold thinking and a defined technology strategy and roadmap, along with a people-centric change management strategy.

Among the digital technologies at play, artificial intelligence, particularly generative AI (GenAI), is receiving the most attention right now. In this blog, I’ll share insights on the impact of AI on the CFO office, as well as specific transformation opportunities made possible through other digital technologies such as automation and data.

The impact of AI

As AI continues to advance, CFOs who grasp its potential and keep up with its rapid evolution can significantly accelerate their strategic impact. Key areas in which AI can help CFOs include:

• Financial analysis and reporting: Financial data collection and analysis, financial projections, financial reporting process automation, ESG data collection and reporting
• Operational transformation: Budget formulation, workflow analysis, transaction processing automation, technology/ back-office modernization recommendations
• Regulatory compliance, risk management, and audit remediation: Internal controls, risk assessments, audit findings analysis, corrective action plans
• Talent management: Increased workforce capabilities, productivity gains, enhanced decision-making, improved performance management

It’s important to note that any use of AI should include a strong commitment to its responsible use. This ensures ethical, transparent, and accountable usage, and, ultimately, the alignment of technological advancement with ethical business practices.

Key digital finance opportunities

Among the many opportunities for improving CFO business functions through advanced digital technologies, like AI, intelligent automation and data, here are four specific opportunities that deliver tremendous gains.

Opportunity 1: Supporting standardization with digital exception management

CFOs can help their organizations move away from manual and costly exception processing and progress towards standardization and efficiency through digital exception handling. For example, they can use AI to automate processes and manage vast quantities of data. They also can use process mining algorithms to capture exceptions across end-to-end core accounting processes (R2R, P2P, etc.). Additionally, AI enables the setup of controls and rules that facilitate standardization.

Through process and systems standardization, CFOs can help their organizations increase efficiencies and cut costs. Research shows that 5% of non-standardized processes can account for as much as 25% of operational processing costs. Standardization is key to preventing operational bottlenecks, which block the sequential flow of information and activities resulting in costly disruptions and delays.

Opportunity 2:  Lead organizational modernization through automated transaction processing

CFOs have an opportunity to play a major role in business process modernization—within their own office and in other areas of the business as well. This includes automating finance processes and expanding this expertise to other operational areas, such as HR, IT, operations, etc.

Leading CFOs are applying robotic process automation (RPA) and virtual assistants to basic finance transaction processes and then to areas like financial statement production, audits, reconciliation, and data transfer. We are aware of CFOs, for example, who oversee 10, 50, 100, or even more processes augmented by RPA, driving efficiencies across their organizations.

Some, CFOs are going even further by becoming RPA leaders and champions for their organization. In this expanded role, they are helping other executives identify valuable RPA opportunities to drive operational excellence across the enterprise.

Opportunity 3:  Improve data governance to reduce data complexity and drive better decision-making across the enterprise

In today’s data-driven world, data governance is more important than ever. While it’s easy to think of data governance as a CIO function, CFOs are taking the lead in this area as well. They are focusing on managing vast quantities of complex data (e.g., financial, sales, operational) to drive better decision-making, not just within their own offices but across the enterprise.

A 2023 survey of more than 100 CFOs by the Association of Government Accountants (AGA),  found that CFOs view a well-defined data strategy as a must-have for transforming the business through advanced technologies. Further, in our latest CGI Voice of Our Clients research, CFOs cite advanced analytics as one of their top innovation investments over the next three years.

CFOs are taking the lead in their enterprises to identify data sources (internal and external), collect, consolidate, and cleanse data, and set up robust data analytics operations. Through this work, they’re gaining a greater understanding of the business and using data to forecast sales, identify market trends, assess competitors, and much more.

Opportunity 4: Build a digitally empowered workforce to drive resilience and long-term sustainability

Lastly, CFOs can add greater strategic value by building a digitally empowered workforce that can meet the demands of today and the future, driving both organizational resilience and long-term sustainability. Today’s shortage of finance professionals shows no signs of abating. Many CPAs, for example, are retiring, leaving knowledge and skill gaps within their organizations.

Recruiting talented professionals and empowering them through digital tools and a culture of continuous learning increases the resilience of an organization amid this shortage, while CFOs also can add value by ensuring the right mix of professionals within their offices—both finance and operational—to ensure broad capabilities that deliver modern solutions for the benefit of the entire enterprise.

Learn more

To learn more about how we’re helping CFOs drive greater strategic value across their enterprises or to discuss the insights I’ve shared in this blog, feel free to contact me.