While Chief Financial Officers (CFOs) are typically involved in financial reporting and investment decisions, little is known about their involvement in promoting and driving digitalisation. Now, it’s possible Chief Financial Officers (CFO) are actually also quietly emerging as the real internal owner of digital transformation–especially if they work for an SME.
In Belgium, at least.
The message is the main finding of new research from that nation’s Vlerick Business School. It wanted to find an answer for what it claims is “a common problem” in many organizations: that there is no one to “stand up and take the lead” in a digital transformation process. And In its Do CFOs play a leading role in digitally transforming their SMEs?, based on talking to over 120 CFOs and finance leaders to assess their level of involvement in digital change, the CFO’s emerged as the secret leader—not the CIO.
“CFOs [can] act as evangelists, helping people understand the digital economy, as well as acting as architects, fitting together the pieces so that performance can be measured,” says the report’s author, Kristof Stouthuysen.
“The CFO can truly accelerate and improve the firm’s digital transformation process.”
‘Strong leadership skills’
Stouthuysen, Professor in Management Accounting and Digital Finance and Director of the Centre for Financial Leadership and Digital Transformation at the university, says no less than 92% of the Belgian CFOs he talked to were actively engaged in the digitalisation of their finance office and making decisions on new technological applications.
For example, they were heavily involved in the use of analytics to improve functioning, while 68% indicated that they play a leading role in the wider organization’s digital transformation.
Vlerick also compared the digital maturity scores of companies with CFOs very involved with digital transformation with companies in which they weren’t. What it found: organizations with an involved CFO perform 8% better in terms of digital maturity compared to those with a CFO who’s not involved.
The reason, Stouthuysen thinks, is that being a digitally mature company goes beyond the implementation of new technologies. Several other dimensions need to be considered as well as tech, be believes, like having a good digital strategy, encouraging cross-functional collaboration, creating a data-driven culture, and making sure the data is reliable.
However, it’s not every CFO who meets this standard. A digitally-successful CFO also needs to have strong leadership skills, combined with an innovative mindset and in-depth understanding of the latest technologies, says the study.
Still, the report is an interesting look at how CFOs need to step forward and take up a pioneering role in their firm’s digitalisation process, and guide their company to success.
See our recent coverage on the role of the CFO in automation success here.