Earlier this week I came across a finance professional who called herself a Digital CFO. The obvious question that ran through my mind is, what is a Digital CFO and, if I am not a Digital CFO does that make me an Analogue CFO?
In recent months we have probably all seen the market whip itself up into a frenzy about digital this and digital that. We have digital finance initiatives, digital transformation experts and digital technologies. The trouble is that I am having problems differentiating between a supposed digital world and what existed before.
Yes, there is a difference between, say, printed newspapers and digital media delivered on a Kindle or iPad. My Apple watch is definitely very different form the wind-up variety of my father’s generation. But when did ERP systems become digital? What is the difference between a digital CPM system and, presumably, a non-digital CPM system? More than 70% of finance professionals use a spreadsheet, some of us have done so for nearly four decades. Does that make us digital or non-digital?
Are we being corralled by the tech industry, new media, YouTubers and the advertising industry into a digitally infused sales bubble or is there substance to the digital era?
The Digital CFO
There are 491 people in my LinkedIn network that claim the mantle of Digital CFO, but there is little in their career track record to suggest why? So, is it just a fashionable, trendy title or does in confer real meaning?
More importantly does this title connote an affinity for, and knowledge of, certain technologies or does it describe a certain attitude of mind?
A Digital Mindset
Funnily enough, I am more persuaded by a special mindset. So, what would characterise a Digital CFO? Here is my list.
- A passion for innovation, prepared to constantly challenge and redesign embedded processes
- An affinity for new technologies, constantly exploring their potential application in the finance function
- A persuasive business leader (not a technology evangelist) who can successfully combine technology and business need and who has a vision of the transformational benefits that technology can bring to the modern finance function.
- A ‘change agent’ who can marshal resources across the entire enterprise to bring the benefits of technology to the whole organisation, not just the finance function.
Digital technology in the finance function is more difficult to pin down. Consultancies and commentators wax lyrical about digital technologies, such as, very large data sets, data science, analytics, data visualisation and process automation but in many respects, there is nothing new and certainly nothing extra-digital about the products on offer to the finance function. The exception may be the meetings products (Zoom, MS Teams etc) that have been the lifeblood of finance function communications over the last year.
In many cases “digital” is a pseudonym for advanced automation, better access to data and insight. If it does serve any purpose, then digital is a talking point, a spur to action and many of the industries that finance functions serve are truly digital. There are many examples in medicine, biotech, logistics and so on, that illustrate the power of automation and entirely new technologies and ways of working.
Finance isn’t there yet. FSN surveys consistently find that only 9% of organisations have transformed fully their finance processes and 49% believe that they haven’t fully exploited the technologies they already use.
So is the digital revolution just hyperbole? I really don’t think so. We need Digital CFOs to drive the change and we need better technology choices and digital skills if the finance function is not to fall behind the rest of the organisation.
THE DIGITAL CFO SERIES FOR THE MODERN FINANCE FUNCTION:
In this second video of the series, Ilan Cohen, a Digital CFO shares his thoughts on how CFOs should introduce AI and Machine Learning into the business, using the modern finance function as a launchpad. In this series of short videos, Ilan shares his thoughts with Gary Simon, CEO, The Modern Finance Forum on the challenges and scope for deployment of these advanced technologies within the modern finance function.
Part 1: FSN’s Digital CFO Series
Ilan Cohen is a Digital CFO and one of a rare breed of modern finance professionals, whose experience includes hands-on involvement with developing cutting-edge applications, utilising Artificial Intelligence, Machine Learning and data science more broadly.