Role and responsibilities of CFOs in Digital Transformation

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The Key Role of CFOs in Accelerating Digital
Transformation

• Ramakrishna K
• Admit it most people picture a person who is
  more worried about the company's financial line
  than its future when they hear the title Chief
  Financial Officer (CFO). Modern CFOs, however,
  are breaking well beyond that mold in the
  digital age. The role of the CFO has evolved,
  shifting from a purely numbers- focused role to
  one that is central to an organizations
  innovation, agility and digital transformation.
  In fact, CFOs are becoming critical players in
  driving digital transformation.
• But waitwhat exactly is digital transformation?
  And why are CFOs leading the change? Let's unpack
  this, and along the way, youll see how the
  right kind of financial leadership can be the
  cornerstone for an agile and innovative
  organization.
• The CFOs New Mandate Navigating the Digital
• Frontier
• Gone are the days when CFO roles and
  responsibilities were limited to ensuring
  financial compliance and risk management. Today,
  they are not just financial gatekeepers but
  strategic partners in driving technological
  innovations. Digital transformation involves the
  integration of technology into all areas of a
  business, fundamentally changing how it operates
  and delivers value to customers. For CFOs, this
  transformation represents an opportunity to play
  a more strategic role by
• Streamlining Financial Processes with Technology
  By leveraging AI and automation, CFOs can
  eliminate manual, repetitive tasks, making room
  for strategic decision-making. This frees up time
  for finance teams to focus on value-added
  activities like forecasting and analysis.
• Enabling Data-Driven Decisions Digital tools
  allow CFOs to access real-time data and insights,
  which can then be used to guide not just
  financial decisions but overall business
  strategies. With data-driven foresight, CFOs can
  predict market trends, optimize resource
  allocation, and improve financial performance.

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3. Transforming Business Models Digital
transformation is not just about upgrading
technology but also about rethinking traditional
business models. The role of CFOs in digital
transformation now includes evaluating the
financial viability of new digital initiatives,
ensuring they align with the companys long-term
goals.

• Driving Strategic Innovation CFO as the
  Innovator
• As organizations look to innovate, CFOs are
  crucial in ensuring that digital investments
  align with the overall strategic vision of the
  company. But how exactly does a CFO drive
  innovation?
• Investing in Future-Proof Technologies With the
  proliferation of emerging technologies like AI,
  Cognitive Process Automation (CPA), blockchain,
  and machine learning, CFOs are challenged with
  making the right investment choices. Their
  ability to foresee the long-term benefits of
  these technologies and justify their cost is
  critical in ensuring that companies don't fall
  behind in the digital race. Consider the case of
  Procter Gamble (PG). The companys CFO, Jon
  Moeller, led the push for a digital overhaul by
  investing in AI and data analytics. This move not
  only helped streamline supply chain operations
  but also boosted profitability by optimizing
  marketing efforts with data-driven strategies.
• Breaking Down Silos Digital transformation
  requires cross-functional collaboration. CFOs,
  with their roles and responsibilities
  encompassing a comprehensive view of the entire
  organization, are well- positioned to break down
  silos and encourage cooperation across
  departments. This is particularly important when
  rolling out large-scale digital projects that
  impact multiple areas of the business, ensuring
  alignment and smooth execution.
• Agile Budgeting for Rapid Innovation Traditional
  budgeting cycles can stifle innovation due to
  their rigid, annual nature. The role of CFOs in
  digital transformation now includes championing
  agile budgeting, allowing for more flexibility
  and quicker responses to new opportunities. By
  enabling iterative funding for experimental
  projects, CFOs foster a culture of continuous
  innovation. General Electric (GE) embraced agile
  budgeting to speed up its digital transformation
  efforts. CFO Jamie Miller supported an agile
  funding model that allowed GE to pivot quickly
  and invest in emerging technologies without
  being hamstrung by lengthy approval processes.
  This approach helped the company stay
  competitive in a fast-moving digital landscape.

Fostering Organizational Agility A CFO as the
Catalyst for Change
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• In an era where market conditions can change
  overnight, agility is paramount. CFOs are pivotal
  in creating a more agile organization by
  focusing on financial flexibility, risk
  management, and adaptability. Heres how
• Reassessing Risk in a Digital World As
  businesses adopt new technologies, the risk
  landscape shifts, presenting new CFO challenges.
  CFOs must navigate new risks related to
  cybersecurity, data privacy, and regulatory
  compliance. Being proactive in identifying these
  risks and developing mitigation strategies is a
  critical part of fostering agility. Companies
  like Cisco have made cybersecurity a priority in
  their digital transformation journey. Their CFO
  works closely with the Chief Information Officer
  (CIO) to ensure that new digital initiatives are
  backed by robust security measures, thus reducing
  the companys exposure to cyber threats.
• Enabling Scalable Growth Digital transformation
  allows companies to scale rapidly, but only if
  the financial infrastructure is in place to
  support such growth. CFOs play a key role in
  ensuring that the companys financial systems
  are scalable and can support increased demand
  without compromising efficiency while backing
  digital transformation initiatives.
• Continuous Improvement through Digital Metrics
  The introduction of digital tools allows CFOs to
  monitor key performance indicators (KPIs) in
  real-time, ensuring that the company remains
  agile and responsive to market changes. By
  tracking digital transformation progress and
  making data-driven adjustments, CFOs can ensure
  the companys long-term financial health.
• Case in Point Microsofts digital
  transformation, spearheaded by CFO Amy Hood,
  involved a heavy reliance on data analytics to
  monitor performance and make real-time decisions.
  This approach allowed Microsoft to pivot its
  business model toward cloud computing, driving
  revenue growth while maintaining operational
  efficiency.

CFOs and E42Partners in Digital Transformation
In any enterprise, the CFO must have an intimate
understanding of the companys financial health.
From managing cash flow to ensuring that
resources are allocated efficiently, a CFO plays
a pivotal role in keeping the organization
financially sound while driving digital
transformation. Yet, despite increasing
technology investments, 88 of CFOs do not see a
significant return on investment from their
digital initiatives, according to a PwC report.
One process that can drive this ROI is Accounts
Payable automation, where advanced technologies
like AI and Cognitive Process Automation (CPA)
are making a profound impact.
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Accounts Payable Automation for Todays
CFOs Enter the AI Accounts Payable Executive,
built on E42, a no-code CPA platform. This
AI-driven solution transforms invoice processing
by automatically verifying invoice data,
cross-referencing it with purchase orders, and
processing payments with remarkable precision.
Achieving a 90 straight-through processing
(STP) rate and enabling near-touchless invoice
handling, it minimizes manual intervention while
ensuring operational efficiency. CFO's roles and
responsibilities now include overseeing such
automation initiatives to drive efficiency and
reduce operational costs. Within just 15
minutes of deployment, the AI establishes
baseline accuracy, continuously enhancing it
through progressive learning. Over time, this has
enabled the AI Accounts Payable Executive to
extract data from more than 10 million invoices
with over 95 extraction accuracy, even for the
most complex formats, including skewed layouts
and handwritten entries. By eliminating delays
and discrepancies in payments, this intelligent
automation not only boosts internal efficiency
but also strengthens supplier relationships. The
Measurable Benefits of AI-Led End-to-End AP
Automation The financial benefits of such
automation are striking. Manual invoice
processing can cost up to 12 per invoice. In
contrast, automating the process with the AI AP
Executive can reduce the cost to as little as 1
per invoice, improving efficiency by over 85.
Moreover, poor data quality has significant
financial implicationsMIT reports that
companies lose between 15 and 25 of their
revenue due to errors, rework, and
inefficiencies resulting from bad data.
Automating Accounts Payable with AI prevents such
costly errors, protecting revenue and
streamlining operations. Discover how E42's
AI-led automation solution can revolutionize your
Accounts Payable process and accelerate your
financial transformation. Contact us today at
interact_at_e42.ai.