CFOs Play Major New Role in Transformations

Digital transformations are expensive, so it's no surprise that the finance team is engaged in the process. It is somewhat surprising, however, to see CFOs so heavily involved in influencing decisions related to technology.

That is what's happening as a result of an enterprise focus on digital transformations, according to consultancy Grant Thorton. Its recent survey of 304 chief financial officers found that 69% plan to increase their investment in digital transformation in the coming year, and 40% of them plan to increase it more than 10% in the next 12 months. More than three-quarters of them said that digital transformation was critical -- 23% in the short term and 56% in the long term -- and 41% said they were undertaking transformations to differentiate from their competition.

Transformations have traditionally been about cost savings and efficiency, but digital transformations going forward are more strategic -- improving the customer experience, new products, innovation and differentiation.

Grant Thorton's survey was focused on the enterprise, but the results are certainly applicable in the telco space, too, where competition is fierce and customer experience management is the name of the game. The firm notes that customer experience is the top priority for the next two years, but product development and better innovation move up the priority list in two years' time. These current and anticipated goals, it says, can create tension in how funds are distributed -- whether they go to current needs for maintenance and system updates or to investing in new automation technologies (which are table stakes in the telco world).

"In our survey, executives agreed that their organizations' top IT challenges were systems complexity, including systems integration across the enterprise, upkeep of legacy systems and IT talent," Grant Thorton said, in a prepared statement announcing the survey results. "These foundational, urgent realities require significant investments, which possibly stall the pace of adoption of new technologies in other departments of the enterprise -- e.g., the finance function -- which could benefit from technology investments, but might be deprioritized in terms of budget, due to immediate technology needs."

That's where CFOs come into play. They have to balance what immediate investments are needed versus those with longer-term potential. They also have to understand the technologies in a way that today a data scientist/CTO/CIO might and will have to work more closely with the IT department. Grant Thorton concluded: "What will be required of future CFOs is a technical mindset that will include a strong understanding of the risks that new technologies bring about."

— Sarah Thomas, Contributing Editor, Telco Transformation