10 CFO Opportunities to Accelerate Digital Transformation: Gartner

Qinthara Fasya | 22 November 2021

How pressures culminate in 10 digital imperatives for CFOs — to accelerate the digital enterprise and the digitalization of the finance function itself

Richard Ries, Vice President and Research & Advisory for Gartner

Sixty-nine percent of business leaders say digitalization initiatives are accelerating, and most expect digital technologies to dramatically transform their industry by 2026. These pressures meet at the CFO, who now faces a critical dual mandate: Lead the finance function through a digital transformation and enable the organization to accelerate digitalization. Gartner recently released its report for CFO strategies to drive digital transformation where it narrows down 10 must-dos for CFOs.

Most business leaders expect revenue to return to or exceed 2019 levels in 2021-22, and CFOs are drivers, or at least key stakeholders, in a range of critical issues that will drive this postpandemic recovery. CFOs also have a function to run. They are entering a period of significant transformation for finance, with new technologies readily available to help drive efficiencies and insights into business performance.

1. Align Digital Strategies and Business Outcomes

What’s happening

Business leaders are clearly signaling an acceleration in digital business initiatives. Many expect digital technology to lead to substantial or total transformation for their industry by 2026.

What it means

The pandemic uncovered new customers and sources of demand for all organizations; CFOs must enable pivots to new products and opportunities.

Strategic plans will feature business-driven digital initiatives

64% of business leaders say they will use the COVID-19 and related economic crises as an opportunity to focus on redesigning their businesses. 69% say digitalization initiatives are accelerating. CFOs are critical enablers of these enterprise ambitions.

Business models will need to shift, for example, to account for the new “everywhere, everything” customer.

2. Design flexible planning and budgeting

What’s happening

Planning and budgeting activities, historically conducted on an annual basis, aren’t fit for today’s dynamic environment.

What it means

Budget rigidity impedes the ability of business leaders to pivot and capture new opportunities as they emerge.

Support scenario-based, agile, iterative planning

First, be clear on business priorities and realign the budget to support them — which might require zero-basing budgets and resource allocation decisions.

Then consider contingency budgeting, even if it’s only for select cost categories for different scenarios.

3. Rethink digital business performance management

What’s happening

The growing diversity of investment projects — especially given digital acceleration — pushes more investments outside the scope of traditional capital budgeting methods.

What it means

New digital business cases are difficult to quantify using return-based measures, potentially nixing opportunities too soon.

Rethink how to measure, fun and manage digital business performance

CFOs need to promote a culture in which investment management processes balance innovation and financial accountability and champions a test-and-learn mentality. New metrics will be required — with, for example, a more venture-capital-like approach to measuring investments.

4. Allocate costs to fund digital growth and new business models

What’s happening

As CFOs look to set their organizations up for success over the next 12 months and beyond, job No. 1 is to fund new (or existing) growth.

What it means

To avoid an overly conservative approach to the renewal period, CFOs need a more sophisticated lens to evaluate costs and growth opportunities.

Focus costs on differentiating initiatives

Many CFOs prioritize investments based on external factors such as what peers are doing. The most effective CFOs focus on costs and investments that are differentiating.

Take the differentiating approach and keep the organization focused on costs that align with digital growth and new business models.

5. Invest in Employee performance in a hybrid work environment

What’s happening
Almost all organizations expect to allow employees to work remotely at least some of the time even after
COVID-19 subsides.


What it means
CFOs must help the organization provide employees with whatever they need to be productive when remote.

Fund the right investments to increase employee performance in a hybrid workplace
The pandemic offered critical proof that efficiency often comes at the cost of flexibility. But, equally, you
can’t build resilience at any cost. CFOs are key to ensuring that the right resources and support flow
to employees. For example, 70% of businesses are allowing employees to bring home work equipment, and 58% have supplied new hardware. CFOs must protect these and other enabling expenses, such as contracts around data security, cloud storage and VPN.

6. Reduce Waste and redundancy to free up capacity

What’s happening
Robotic process automation (RPA) has brought speed, efficiency and cost optimization, but finance is
still expected to increase decision support while reducing costs.


What it means
Finance needs to critically reassess the benefits of existing RPA programs and ensure they are aligned to enterprise goals.

Free up capacity from repeatable and transactional finance processes
RPA is limited by its adherence to rigid rules, and it can’t execute decision-oriented tasks. By adding machine learning, RPA can be used for more complex activities, such as budgeting and forecasting. This will free up relevant staff to focus on the most impactful decision-support aspects of their jobs.

7. Invest in value-driving finance technology

What’s happening
Many organizations continue to run unwieldy finance processes using outdated technology.


What it means
Less than one-third of CFOs are confident that their technologies are aligned with their requirements
for ensuring the future success of the organization.

Invest in finance technology that enables finance to deliver value
CFOs have allowed finance to rely too heavily on RPA, and they now need a defined strategy to scale automation with tactical and strategic goals. By using additional technologies to automate complex finance processes, CFOs can focus on identifying new value-adding services, such as automatically
forecasting long-term real estate value or predicting pricing based on consumer behavior.

8. Deploy data and analytics insights securely at scale

What’s happening
Finance executives have insufficient technical or domain expertise to perform more complex data analysis.


What it means
Without the help of professional data scientists, finance is challenged to generate insights that business leaders can use to make decisions.

Reduce the need for specialized skills to perform complex analysis
To unlock data and insights for the business at scale, CFOs must champion “democratization” — providing a radically simplified data and analytics experience to finance teams. A specialized team, for example, could leverage augmented analytics to facilitate data generation and preparation, and the discovery and visualization of findings without the need to build models or write algorithms. By 2023, augmented data management will reduce the reliance on finance analysts for repetitive and routine data management tasks, freeing up to 20% of their time for collaboration, training and high-value analytics tasks.

9. Accelerate cloud adoption with right-size, right-choice vendor selections

What’s happening
COVID-19 forced many finance teams into remote operation. Many organizations plan to keep
some level of staff workloads permanently remote.


What it means
Finance has successfully shifted key activities to the cloud, but must continue to demonstrate value in
scaling processes to support business imperatives.

Accelerate cloud adoption and acquire data analytics tools
Cloud service providers’ expertise in handling large volumes of data means they can better ensure data security than on-premises or private cloud solutions. The imperative for CFOs is to find the right vendors, at the right time, at the right price, and deploy solutions in places that will improve the speed, trust and predictive nature of insights.

10. Hire, retain and develop digital skills in finance

What’s happening
Only one-third of finance leaders agree that their teams have sufficient competencies required for a digital finance function.


What it means
The growing digital skills gap in finance reduces the function’s ability to successfully exploit digital technology capabilities.

Hire, retain and develop finance digital skills
Digital skills are needed to support an always-on, technology-driven, real-time business. Because skill needs are changing so quickly, finance leaders need an “always on” skills-sensing ability to locate new skills and evaluate skills-development priorities. This enables finance to course-correct quickly and apply skills closer to the time of need.

Read the full report here.