CFO 3.0: How digital transformation can improve financial reporting Sage’s CFO 3.0: Digital transformation beyond financial management research revealed that nine out of 10 senior financial decision-makers in South African businesses play a vital role in their organisation’s digital transformation. %���� By building on the existing review structure, the CFO ensures a strong connection between the transformation and ongoing business performance and avoids creating an additional layer of performance management. xref To promote progress and a sense of ownership, the CFO empowers project teams and supports them in resolving issues, making decisions, and removing obstacles. To assess whether transformations are creating value, we compared the growth of the total shareholder return (TSR) of transforming companies with that of their respective industry. 0000572993 00000 n I think one roadblock to transformation is the business functions around strategy, report, plan, and analyse. In addition, it produced detailed information on how the company creates value, giving the CFO a foundation for constructively challenging business leaders, identifying performance gaps, and proposing ways to close them. Finding the Value. Blog by CFO Rethink on common Accounting, Finance and Transformation solutions for SMEs and important blind spots to look out for. CFO 3.0: Digital transformation beyond financial management is a new guide that looks at the evolution of the chief financial officer. For example, the CFO can support a new CEO or other new members of the executive team in understanding the company’s cost structure, performance development, and ongoing improvement initiatives. To help teams manage performance, the CFO selectively adds milestone-oriented KPIs to the review structure, ensuring transparency into achievement of the initiatives. While continuing to serve as the financial face of their organization, CFOs are evolving to become digital transformation leaders within their companies, leaders that can bring an international perspective, a strong understanding of operations, and the ability to drive value through the use of data and analytics. 0000001558 00000 n The greater scope of responsibilities makes CFOs uniquely well positioned to understand the sources of value, set fact-based improvement targets, optimize resource allocation, and ensure accountability for results. The CFO adopts the forward-looking perspective taken by investors and proactively applies insights to reallocate resources and take corrective actions. This article was originally published by Financial Director on November 12, 2019. In defining the master plan for a global industrial company’s transformation, the CFO collaborated with the CEO to prioritize 50 improvement topics. Our research finds, though, that many transformations do not create shareholder value. ��� $ G"3D"3D"3D"3D"3DUfUfUfUfUfUfUfUfUfwwww"3D"3D"3D"3D"3D"3D"3D"3D"3DUf"3DUf 0000003516 00000 n To enable the CFO to assume an expanded role, most companies will need to strengthen the finance function. Earlier in her career, she held CFO positions at Walmart International and GameStop, among other The master plan sets out the transformation’s initiatives as well as their sequencing and resource requirements. <>/Outlines 125 0 R>> <]/Prev 1231922 0000002700 00000 n 0 0000599333 00000 n In an early phase, the CFO can step up to a greater role if the company lacks transparency into baseline performance or initiatives’ progress or has not adequately prioritized improvement projects or established clear accountabilities. The CFO agenda: Digital delivered, episode 3 | Organizational agility This edition takes a deep dive into organizational agility; what it means to be an agile finance organization in the COVID-19-driven new reality and beyond, and what it takes to become one. To support the plan’s development, the CFO assesses the quality of proposed initiatives and their contribution to value creation. Partner & Director, Center for CFO Excellence, Managing Director & Senior Partner; Global Leader, Center for CFO Excellence. Partnering for Performance. 0000542866 00000 n A year of resolution: Qualcomm CFO talks 5G, COVID-19 and digital transformation Akash Palkhiwala, CFO of Qualcomm, says COVID-19 has accelerated the adoption of … If a transformation is already under way, the CFO should be alert for inflection points that could be opportunities to significantly influence the program’s impact. In the role of chief performance officer, the CFO ensures a successful transition from the definition of the master plan to the execution of it. Boston Consulting Group is an Equal Opportunity Employer. What changes in a transformation— and why it matters to CFOs. In addition, the CFO designs the governance for the transformation, aiming to provide insight into the development and maturity of projects and promote accountability. %PDF-1.5 And they must ensure that investors understand how the transformation will boost the company’s TSR. 0000002739 00000 n By Shishir Agarwal, Ketil Gjerstad, Håvard Kalland, Matthias Krühler, Marc Rodt, Alexander Roos, Teemu Ruska, and James Tucker. Although the CFO gave leaders latitude to find the right way to execute the transformation, she also strictly enforced accountability and quickly took action in response to poor performance. The CFO needs to be a trusted adviser not only to the CEO, but also to the Board and to the rest of the management team. 410 0 obj 0000599360 00000 n Indeed, among recently launched transformations, only one in four has succeeded in creating shareholder value above the industry average. One of the CFO’s primary roles is around financial disciplines and resource allocation. CFOs increasingly find themselves in the thick of transformation efforts, whether they involve overhauling the finance function, reshaping the business model, or reimagining other functions. 0000002138 00000 n %%EOF While many digital transformation project fail, there’s still hope if an organisation can ensure that six critical success factors are in place, said Boston Consulting Group recently. 0000001361 00000 n According to Sage ’s recently commissioned CFO 3.0 research, based on a survey of more than 300 South African financial decision-makers and CFOs, the role of the CFO has changed dramatically in recent years. While […] To facilitate frequent performance reviews and rapid course corrections, the company implemented a governance structure that enabled the CEO, the CFO, and the chief human resources officer to actively manage the improvement portfolio. 0000598317 00000 n The best performers recognize that margin growth not only contributes directly to TSR but also generates cash to invest in growth opportunities and pay dividends. <> 0000584697 00000 n Cathy was CFO of Target from 2015 to October 2019 and was a key contributor to the company’s digital transformation program. 0000543623 00000 n 0000543134 00000 n 0000598514 00000 n 409 0 obj It’s a business process issue, and this is where the CFO is becoming integrally involved,” Goldstuck added. Most recently he was CFO and chief operating officer at Qontigo and previously a CFO at Axioma. The CFO’s performance, like all members of the executive team, is measured against the success of these company-wide initiatives and plays a proactive role in driving progress. 408 44 The reviews set clear expectations regarding the corrective actions that would be taken if progress fell short of targets. Successful digital transformation within the enterprise requires collaboration between CFOs and CIOs. 0000584255 00000 n In addition, the CFO designs the governance for the transformation, aiming to provide insight into the development and maturity of projects and promote accountability. In our survey, 60% of the finance executives said they will devote at least 20% of their finance budgets to digitally transforming the function. 0000599194 00000 n Moreover, many of these companies are launching transformations in rapid succession: 73% announced two rounds of cost restructuring combined with reorganization or downsizing within two years. The CFO’s Role in Business Transformation The CFO of Ricoh Americas analyzes the business transformation of the company as it changes its identity from a hardware supplier to a services provider. To optimize TSR, CFOs should play a role in all four phases of a transformation (see Exhibit 2): CFOs’ actions across these four phases can be distilled into a set of imperatives to transform for value. The CFO’s Vital Role in Corporate Transformation. Today, we help clients with total transformation—inspiring complex change, enabling organizations to grow, building competitive advantage, and driving bottom-line impact. 0000573805 00000 n The CFO is the second-most-common leader, after the CEO, identified as initiating a transformation. FutureCFO.net is about empowering the CFO and the Finance Team to take on the leadership position in the digitalization of the enterprise. 0000010354 00000 n 0000002994 00000 n This entails clarifying the baseline performance, determining the right metrics for assessing value creation, and setting top-down targets. 0000573266 00000 n In one instance, the CFO of a US retail chain determined that the company would need to improve its margins in order to continue enjoying profitable growth. By challenging business line leaders about value creation opportunities, the CFO helps the company develop a value-oriented vision for its target operating model. In addition, the CFO designs the governance for the transformation, aiming to provide insight into the development and maturity of projects and promote accountability. To provide a fact base, the CFO conducted a systematic appraisal of baseline performance. In defining the master plan for a global industrial company’s transformation, the CFO collaborated with the CEO to prioritize 50 improvement topics. Only 24% of transforming companies experienced greater TSR growth than their industries over both the short term (one year) and the long term (five or more years). IT leaders’ top priority … Stephens, who has served as CFO since joining Barnes Group in January 2009, will continue in that role until December 31, 2020 to assist in a smooth transition. 451 0 obj In the past decade, it has become commonplace to see companies launch a transformation—a comprehensive change in strategy, operating model, organization, people, or processes. In finance transformations, CFOs have a strong chance of identifying and managing related risks. 日時 2019年5月29日(水)15:00-17:00(開場14:30~) 会場 Galleria 商. Tokyo 東京都千代田区丸の内3-1-1 国際ビル1F 主催 一般社団法人日本CFO協会 協賛 BOARD Japan株式会社 定員 30名 対象 CFOおよび経営企画・経理 In other types of transformations (for example, moving from traditional automobile manufacturing to developing digitally-equipped and driverless vehicles) there may be new risks that emerge, such as cyberthreats and data privacy breaches. Finally, the fourth role CFOs can play in digital transformation is in transforming their own department. 408 0 obj CFO Insights January 2020. However, a significant mindset shift would be required to motivate the organization to pursue margin-improving initiatives: executives and employees were proud of the company’s historically strong performance, and benchmarks still indicated relatively low costs. We covered the first four of … I believe the CFO-CIO relationship is a critical piece of a successful digital transformation journey. The function’s enhanced capabilities allowed the CFO to support the business through better transparency into cost performance, capital allocation, and investment headroom. Finance Function Excellence, So, then, how does the CFO engage in this Digital Transformation journey?The role of the CFO today is no longer confined to “keeping the books in good order” or as I like to say “running the trains on time”. There is a strong case for a transformation if the company is struggling to meet shareholder expectations. All qualified applicants will receive consideration for employment without regard to race, color, age, religion, sex, sexual orientation, gender identity / expression, national origin, protected veteran status, or any other characteristic protected under federal, state or local law, where applicable, and those with criminal histories will be considered in a manner consistent with applicable state and local laws. 0000572344 00000 n The assessment took into account the development of costs over time as well as the maturity of existing improvement initiatives and their potential impact. 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