The role of chief financial officers has long been evolving, especially following the drastic changes brought about by the advent of the COVID-19 pandemic.
One might say that it has been more than four years since, but it is an undeniable fact that shifts within the Finance function and the organisations as a whole are still ongoing here and there.
The lockdowns and quarantine situations introduced changes in the business world that are still visible up until now, if not continuously developing and progressing.
Such shifts include digital transformation, of course.
2024 FutureCFO Awards finalists for the Leadership in Digital Transformation AwardErvina Waty, group CFO at Ateria Group and Jackson Ng, chief operating officer & chief technology officer at Azimut Investment Management dive deep into their views on how CFOs steer the wheel when it comes to talks of digital transformation within their respective organisations, bringing them in as overseers of the technological advancements.
Strategic leaders
Ng believes CFOs play a pivotal role in spearheading the company’s digital transformation initiative, acting as a strategic leader in aligning financial goals with technological advancements.
Jackson Ng
“They are responsible for assessing the financial feasibility of digital projects, ensuring their alignment with the company’s overall objectives, and allocating resources efficiently.”
Jackson Ng
Ng thinks the CFO oversees the implementation of robust financial controls and risk management strategies to safeguard the organisation throughout the transformation journey.
This view is echoed by Waty, who says the CFO plays a crucial role in a company’s digital transformation.
As CFOs are in charge of managing finances, coordinating digital initiatives with financial objectives, and determining return on investment, they work with executives, oversee budgets for technology adoption, and assess the risks involved with digital initiatives.
“Strategic finance management plays a pivotal role in the efficacious integration of digital technology, augmenting operational efficiency and propelling sustained growth,” Waty says.
Challenges
It is a given that transformation comes with challenges and risks along the way. To achieve success and maximise the benefits of such technological advancements, financial leaders must embark on a journey towards the mastery of such changes.
Waty says CFOs must navigate regulatory landscapes, measure return on investment, mitigate the risk of
technology obsolescence, address cybersecurity threats, balance technology investments with costs, manage data security, overcome resistance, integrate digital tools, and attract and retain talent.
Additionally, CFOs are in charge of aligning strategic goals with larger business objectives in the context of digital transformation.
“A thorough grasp of the digital ecosystem and strategic financial management are necessary to meet these difficulties,” Waty points out.
Meanwhile, for Ng, leading digital transformation presents various challenges for CFOs. This includes navigating change resistance among employees accustomed to traditional processes.
Finance heads also must learn how to ensure seamless integration of disparate systems and technologies while maintaining data integrity.
“Cybersecurity threats demand constant vigilance, requiring CFOs to implement robust measures to protect sensitive financial information,” Ng says.
Furthermore, Ng sees that managing the costs associated with technology investments and balancing short-term expenses with long-term strategic objectives pose significant challenges.
Overseeing the initiative
CFOs, as part of the leadership board of organisations, grasp control and therefore has a say when it comes to the direction of the company’s digital transformation initiative.
For Ng, the CFO wields substantial influence over the organisation’s transformation initiative, particularly regarding financial aspects and resource allocation.
“While they may not dictate every aspect of the transformation, their strategic oversight ensures alignment with financial objectives and risk management priorities,” he opines.
Ng thinks that by leveraging financial insights and forecasting capabilities, the CFO can guide decision-making processes, mitigate risks, and optimise resource allocation to drive the transformation initiative in the desired direction.
On the other hand, Waty sees CFOs as a crucial player in an organisation’s transformation endeavour as they manage resource distribution, evaluate the financial sustainability of digital expenditures, and set budget allocations.
“They work along with other executives, frequently in coordination with the CEO and other stakeholders, to match transformation objectives with financial goals,” Waty says. “Their influence is felt by directing financial plans that propel and uphold the agenda for change.”
Tools and efforts
For Waty, it takes a mix of resources, abilities, and tools to implement digital transformation.
“Cloud computing, analytics platforms, and collaborative software are important technologies,” Waty says, that is why it is imperative to have competencies in data analytics, cybersecurity, and change management.
Additionally, strategic financial planning, knowledgeable staff, and continuous training are examples of
resources on the road to digital transformation. “A successful journey also requires fostering a culture of creativity, teamwork, agile approaches, and ongoing learning,” says Waty.
Ng, meanwhile, thinks digital transformation efforts benefit from a combination of tools, skills, and resources.
“Advanced technologies such as automation, artificial intelligence, and blockchain offer opportunities to streamline processes, enhance data analytics capabilities, and improve decision-making,” he continues.
Ng also believes investing in employee training and upskilling programs equips the workforce with the necessary digital literacy and technical expertise to adapt to new technologies effectively.
Moreover, collaboration with external partners and consultants can provide valuable insights and support throughout the transformation journey.
Measuring success
As overseers of digital transformation in their organisations, CFOs must utilise metrics to look into and review their success in their efforts.
Ng thinks that when leading digital transformation, CFOs should make use of a mix of financial and operational metrics to measure progress.
“Financial metrics such as return on investment (ROI), cost savings, and revenue growth quantify the tangible impact of digital initiatives on the bottom line,” Ng explains. “Operational metrics, including process efficiency, customer satisfaction, and employee productivity, provide insights into the qualitative aspects of transformation efforts.”
He adds that continuous monitoring and evaluation of these metrics allow CFOs to assess success, identify areas for improvement, and ensure alignment with strategic goals.
On the other hand, Waty believes CFOs should take into account data related to finances, operations, customers, and cybersecurity to evaluate the effectiveness of digital transformation.
ROI, cost-cutting, revenue growth, process efficiency, customer happiness, worker productivity and innovation indicators are some examples of these metrics, according to Waty.
Ervina Waty
“By using a thorough approach, the CFO may assess the digital transformation’s overall performance from a financial, operational, and strategic standpoint.”
Ervina Waty
Identifying pitfalls
To better understand the journey and further ensure success, finance leaders must be able to identify common pitfalls that they should avoid.
In Waty’s view, common errors that CFOs managing digital transformation should steer clear of include
underestimating implementation costs, and/or changing course without considering change management, and failing to match digital strategy with business goals.
For the Ateria Group CFO, financial leaders must take a strategic, flexible, and all-encompassing strategy to lead the digital transformation. They should also refrain from strict adherence to conventional financial models, poor talent acquisition, and unclear communication about the financial ramifications.
Ng, meanwhile, opined that CFOs should be mindful of common pitfalls when leading digital transformation, including underestimating the cultural impact of change and failing to secure buy-in from stakeholders across the organisation.
“Overlooking cybersecurity risks or neglecting to implement adequate safeguards can expose the company to potential threats,” Ng says. “Moreover, a lack of clear communication and alignment between finance and IT departments can impede collaboration and hinder the success of transformation initiatives.”
For Ng, proactive risk management, comprehensive stakeholder engagement, and effective communication are essential to avoid these pitfalls and drive successful digital transformation.
* Editor’s note: Ateria Group and Azimut Investment Management were finalists at the 3rd annual FutureCFO Excellence Awards 2024in the category of Leadership in Digital Transformation Award.
* Editor's note: FutureCFO is inviting submissions to the annual FutureCFO 2025 Excellence Awards. Click here for more information.
Arra Czarina Igno is an experienced News Writer with a demonstrated history of working in the financial services industry.
She is a media and communication professional with a Bachelor’s Degree focused in Broadcast Communication from Polytechnic University of the Philippines.
