CFOs are uniquely positioned to lead the enterprise digital transformation journey, in their roles as stewards of performance data and reporting. Now, some are using action-oriented analytics and insight to step up—and drive opportunities for profitable growth.
Given the pace of change in technology and markets, digital transformations for most companies no longer have a fixed destination. They’ve become open-ended journeys, informed by business strategy, powered by effective use of data and enabled by technology. These complex projects take the right combination of leadership, planning, and resources to succeed. Because CFOs and their teams traditionally sit at the intersection of information flows, budgets, and planning, stakeholders increasingly look to them to lead the charge.
In our most recent CEO Outlook survey, 69 percent of CEOs reported they were speeding up the development of new digital operating models and revenue streams. And 74 percent said digital transformation accelerated at their companies in just the past year. Expectations to turn target-state vision into operational reality often come with impatience. At some point in this fast-paced journey, management and staff may naturally ask, “Are we there yet?” For CFOs caught between “deliver now” and “deliver best,” we recommend three key principles to set digital transformation agendas on the right footing.
Put the customer first: The North Star for all digital transformation—regardless of sector or internal objectives—is the end customer. The key to understand what customers want, and aligning the organization to respond quickly, is data. Not data that aligns to the organization’s own internal priorities (though that also matters). Transformational data captures, aggregates, and assesses the drivers of customer behavior, delivered in real time to the areas of the business best equipped to deliver customer impact and benefits.
Customers have consistently spoken: They want an easy, friendly, seamless digital experience. They want to engage immediately, on-demand, and without losing the sense of personal connection. In practice, meeting these expectations rests upon a nimble and connected ecosystem of digital solutions—all fueled by data. This is the model adopted by the top-performing companies in our recent Customer Experience Excellence report. We think most CFOs can emulate this data-driven approach.
Build the team for the long haul: Transformation, classically, is about people, process, and technology. The intelligent, new AI-driven forecasting processes and fancy digital tools tend to steal the headlines, but your people are the most important ingredient. Successful digital transformations are rooted in a digitized design-thinking culture, in which employees are empowered to focus on strategic and creative problem-solving. That might require additional training for some staff or allowing teams to “fail fast” when testing new ideas.
Another successful trend at many leading-practice companies is building a digital center of excellence (COE) for data integration. A COE comprises a core team to rapidly ideate on business problems and test solutions. The winning ideas can be quickly scaled to transform the enterprise. For CFOs and Finance teams, COEs promote an agreed-upon framework for managing the value chain, assessing digital bets, and allocating capital. They specifically support finance-led investment prioritization, using dynamic budgeting and continuous funding to better keep pace with rapid changes in marketplace conditions, customer behavior, or priority requests from the business.
Get the data right: Data is the critical enabler to digital transformation. It’s not simply a commodity to cross off the to-do list – it’s table stakes. Ensuring that the entire company is effectively leveraging high-quality data is the difference between accelerating results and meandering down multiple blind alleys.
A high-value, outcome-oriented approach to data quality integrates essential internal data (customer, operational, and financial) with external signals. For example, your customer buying patterns can be mapped to local demographics and the microeconomic factors in your business. Analyzing that data can help improve your revenue margins over time.
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Conclusion: The road to value has been paved
The promise of digital transformation is no guarantee. For CFOs faced with multiple tactical options, our experience points to a principle of “the right efforts, in the right order.” The mission should be carried out holistically, across data, technology, processes, and culture. Recognized digital leaders in every sector have shown the way, and pioneered effective digital transformation models. The task at hand for CFOs is leveraging the insight and operational savvy to adapt those precedents to their own sector, markets, and digital maturity.
We’ve taken note of CFOs willing to pilot and demonstrate what that means inside the walls of the core Finance organization. With the principles we’ve outlined, innovative CFOs can raise their bar, and drive digital transformation beyond Finance, and across the entire enterprise.