CFO's paramount role in digital transformation
Unfortunately, many CFOs remain unconcerned in their confusing involvement supporting strategic planning and budgeting process. Their focus on revenue centers, cost centers and some useless standards is an evil that afflicts many finance teams, and what is worse, this evil is often spread through multidisciplinary teams that are responsible for making decisions related to the digital transformation of their organizations.
Digital Strategy is only as good as the professional building it to promote trust!
More than 100 years ago, Arthur Andersen and James McKinsey were the first management accountants who discuss the importance of focusing on business efficiency and shareholder value. And not just pay attention to review classic financial statements that so pleases yesteryear decision makers.
"Cloud computing, process robotics, visualization," advanced analytics ", cognitive computing, the block chain," in-memory of Hana or Barbara computing "are digital technologies in our capitalist world that NEVER are going to be more important than a proper Return on Invested Capital (ROIC).
The CFO as the main safeguard of the ROIC must develop its skills and knowledge to be able to recommend if digital proposals are adequate to strengthen competitive advantages and increase business value.
In the first decade of the 21st century, we learned what was a bubble in the world of eEconomy and the acquisition of many digital platforms that did not meet the expected results.
¡AMIGO! As a CFO you need to be sure that your organization does not invest in a new IT bubble to succeed in the world-famous digital business.
What can I do as a strategic CFO?
Of course, organizations must be prepared for the future but many of the IT trends mentioned earlier as well as other innovations like Augmented Reality, Mixed Reality, 3D printing, and robotics are overall not very new. For this, It is very important to maintain clear financial expectations about digital tools that have to strengthen the business model competitiveness.
Digital initiatives that support value creation consume resources that must be prioritized in strategic planning and budgeting. The demands of the digital business require organizations to implement initiatives at a different speed to achieve a breakthrough in their strategy and to maximize shareholder value at the appropriate time.
Scenario Envisioning is the tool that should be used as the cornerstone of the modern planning process to overcome the limitations of traditional strategic planning. A new vision of an organization's possible future, encouraging it to rethink how the driving forces in their industry might combine in surprising ways.
CFO I hope this blog motivates to improve your strategic planning model and budgets, so that you can execute it based on scenarios to ensure that each digital initiative complies with SHV expectations.