“CFOs are trying to figure out the digital landscape and ways to identify and execute cost savings opportunities in order to allocate more funding to digital initiatives,” said Dan Garvey, vice president in the Gartner Finance practice. “As with many business functions, COVID-19 has accelerated the pace of finance investment in digital transformation.”
“Digital investment and transformation are no longer things that CFOs can take a ‘wait and see’ approach on or throw small investments at. The time is now, and CFOs need to act swiftly,” he said.
Advanced data analytics, data storage, and robotic process automation (RPA) were all likely areas for investment in the next three years, while artificial intelligence (AI) and blockchain were less common responses
Blockchain also has great transformative potential, but right now out-of-the-box use cases are also limited and not applicable to most of the work that the finance organization conducts. The size of the business in revenue correlates closely with its propensity to invest in AI, Blockchain or the Internet of Things (IoT).
“This is likely in part because of the sophistication of an organization’s IT infrastructure,” said Garvey. “Implementing AI, blockchain or IoT is unlikely to be simple, and there are lower hanging fruit for most finance organizations that want to drive meaningful gains with emerging technologies.”
CFOs’ role change
Until recently there has been much discussion and debate on the relationship between finance and IT. The nature of collaboration between the CFO and CIO can make-or-break the organization’s ability to transform, believe experts as several studies have also emphasized that CFOs must understand and value the potential that CIO and his IT team brings, in the form of enhanced data analytics and technology adoption.
A Deloitte study goes one step ahead to show that in organizations in which the CIO reports to the CFO, the allocation of IT budgets to day-to-day operations is slightly higher (60%) than in those in which CIOs report to CEOs (53%) and these organizations also spend less on business innovation and incremental business change.
As Deloitte Consulting’s Principal Matt Schwenderman observes, “The CFOs that I consider to be progressive and innovative have a very different view of that relationship,” he said in a statement. “They actually look to the CIO for ways to improve their own function, and are using the CIO to bring knowledge and skills that can be leveraged by finance.”
From these research one can conclude that irrespective of the industry, IT teams should work hand in hand with the organization’s financial leaders to demonstrate the value and impact of technology and this partnership would be even more crucial going forward.