There's nothing wrong with being old school. Flannel shirts and a worn pair of Chucks are timeless. Same with Zeppelin on vinyl, Paul Newman, and a cold PBR. But there's a distinction between old school and stubborn. Hard-headed. Narrow-minded. And CFOs just don't have the latitude to test those boundaries anymore. That is, assuming they want to avoid extinction for their companies.

In an increasingly data-driven world, CFOs should be leading the transformational charge in their organizations. Because, as we're about to discuss, the tech eruption in accounting and finance is no longer a hypothetical. It's already here, knocking at the operational door. And there's no one better than the once mild-mannered, now revolutionary chief financial officer to welcome it in and help it feel at home.

Old Habits Die Hard in the Finance Function

Tell me if this sounds familiar. Automation is for production lines, not finance and accounting. Real finance takes place in Excel, through countless, behemoth workbooks that are fragile, archaic, and oh-so tedious. But that's just the way finance goes. Always has and always will.

If any of that rings true, you're in the right place. And definitely not alone. But what if that old-school mentality does more harm than good at this point? What if “traditional” ways are now preventing finance from stepping into the much-deserved strategic spotlight?

Think about it – nearly every kilobyte of data coursing through your company's veins passes through finance in some way. But it hasn't been until recently that technology has allowed finance to actually do something about it, pick up the analytical baton, and squeeze genuine, forward-looking business intelligence (BI) from all of that data.

Put another way, Excel can be an analytical prison cell for your business information if you let it, at least if you only free it to spit out another static report for some classic top-down decision-making. Thankfully, there's some good news amongst such bleakness – CFOs and their finance teams now have choices. Lots of choices. Some are big and bold, like a shiny new ERP, while others are more subtle and succinct, like using RPA to automate a handful of month-end reporting processes.

The point is, Excel will always have a vital place in accounting and finance. But generating nuanced, real-time insights to guide your organization through a minefield of variables isn't it. Ready or not, there's a new sheriff in town, one that doesn't hold old habits and traditions as gospel. And their importance in the big data and decision-making food chain is tough to overstate – the digital CFO. 

Why the CFO?

Of course, we're not trying to minimize the rest of the C-suite, especially those organizations with CIOs. However, as we said, no department has a better view of a company's data, business units, and how it all meshes together than finance. So, to state the obvious, with the CFO being the top rung of the accounting and finance ladder, it's a role that's uniquely suited to oversee all things data and process-driven.

For example, HR and talent teams, sales, marketing, supply chain – they all generate mountains of data that must somehow fit into operations, propel the enterprise forward, and ultimately strengthen the customer experience. But that's easier said than done, particularly when you have disparate systems and data sources all crowding into the same back-office without a course of action.

That's exactly what makes the CFO such a critical component of any transformation initiative. Not only is finance the linchpin to most – if not all – of those different data streams, but is also responsible for telling the story behind those numbers, what they really mean, and identifying any underlying dynamics that leadership should take into consideration.

All that's to say, finance should be the strategic hub of the entire enterprise. And as leader of that critical hub, the CFO should be the one putting everything into action to make the transformation wheels turn. Note, however, our use of the term should be rather than is.

Unfortunately, too many finance leaders still can't see the BI forest through the Excel trees, and it's putting their organizations at a significant disadvantage, one that will only expand with time. But we think you, a finance leader with big dreams and even bigger plans for your company's future, are just the person to buck that particular trend and boldly go where too few CFOs have gone before.

Transformation Isn't a Fad

Setting hyperbole aside and getting to the brass tacks of it all, what specifically makes transformation so terribly crucial for CFOs, finance, and the organization as a whole? Well, borrowing our own definition, a CFO-led transformation involves:

• The finance function building on its traditional roots to incorporate more strategic thinking and planning, making it the central figure in an organization's strategic initiatives
• Integrating digital technologies like advanced analytics to give leadership more precise, far-reaching insights across business units
• A heightened sense of agility & adaptability to meet the demands of a fluid, dynamic marketplace
• CFOs becoming key figures in all strategic matters, creating new value through innovation in thought, tools, and practice

While all four bullet points are crucial, that third one is especially important considering the days we live in. With so many variables in play – COVID, war, hyper-volatility, increasingly finicky customers – risk and uncertainty are at all-time highs.

As a business leader, did you ever think you would have to game plan around actual, Old Testament-style pestilence? Probably not. But the pandemic changed a lot of things in the world, placing an emphasis on how companies should manage risk and prepare for the unknown.

That's not to say the traditional role of the CFO no longer applies. Businesses will always need the ability to look back and understand why things happened. However, a digital transformation powered by a company's people, processes, and technology allows the CFO to be far more proactive than reactive, strategizing for what's ahead rather than trying to explain what already occurred.

Embark's Transformation Story

Drilling in further, no company is immune from the data-driven future or the inevitable potholes and detours involved in preparing for it – even Embark. So, although we're experts in such matters and have helped countless clients transform themselves for these data-driven times, we're still dealing with the very same internal and external factors that brought you here today.

As you may or may not know, we've experienced extreme hypergrowth over the years. And while that's certainly a good problem to have, it's still problematic. Doubling revenue every year means operations become very complex in a hurry, making it more challenging to analyze, report, and forecast on data streams coming out of our ears.

Simply put, our business was rapidly approaching an inflection point of sorts, a critical mass where, unless we did something about it, we would lose the ability to accurately game plan for the road ahead. Now, granted, given what we do for our clients, we didn't have to look very far for answers. However, implementing those answers – a process with no endpoint – is always a bit unnerving, no matter who you are or what you do.

In reality, optimizing our people, processes, and technology is a constant because change is a constant. Everything around our firm – and clients – is in a perpetual state of flux, evolving according to those countless factors we've already mentioned. But without that continual optimization, we can't reliably read the tea leaves and strategize for where we want to be three, five, ten years in the future. And that wouldn't be great.

Long story short – we hit a point where anecdotal evidence and guesstimates were no longer good enough. We needed to extract mountains of data, transform it into actionable insights, and strategize around those insights. And lo and behold, that's exactly what we did and continue to do, all spearheaded by the office of the CFO.

The Transformational Why: Holistic Decision-Making

Ultimately, when you cut through all of the background noise and business speak to focus on the heart of any transformation, it all distills down to a single transformational why – holistic decision-making.

That's the brass ring. The grand prize. The ability every organization wants, but too few know how to attain. From a CFO's perspective, that means becoming a true business partner for the rest of the organization. It's helping others see how their decisions drive particular metrics and KPIs, from revenue to talent acquisition and everything in between.

Painting with a slightly broader brush, when a CFO embraces and drives transformational change in an organization, they're pulling the curtain back on what's really driving growth. Or, once again, they're telling a story with the data, providing much-needed context to guide everyone and everything forward.

To use a practical example, let's assume a CFO has implemented the right technologies, improved the right business processes to identify the correlation between outbound call volume and sales conversions. For simplicity's sake, after analyzing the data, the CFO finds roughly 100 calls per day equates to $1 million in quarterly revenue.

Of course, that kind of data doesn't do much good if you don't action plan around it. Therefore, the CFO should take that information to the growth leader and incorporate it into the sales team's goals. Taking that a step further, they can use the data to extrapolate the revenue and profitably if they expand the sales team, integrating it into new business models. However, as great as that sounds, none of that is possible without first extracting the data and then transforming it into something tangible.

Yes, that's a very simple example, but you get the drift. Data allows businesses to think and plan differently. To forecast and strategize for uncertainty, improve risk management, and share the business intelligence bounty across the enterprise. That is, if the CFO is ready, willing, and able to lead the charge.

First Steps for a CFO and Team

Suffice it to say, if a CFO is the person leading the initiative, they should have a near expert-level understanding of the new technologies and nuances involved in a transformation – artificial intelligence, machine learning, process automation, cybersecurity tools. The whole shebang.

Nah, just kidding. Sure, it helps if leadership understands the tools and tactics involved, but it's certainly not a requirement. In that sense, the CFO just needs to know how to drive the car, fill it with gas, and get it to the right destination. And the gauges in the dash – real-time reporting via data dashboards in this analogy – let the CFO know when fuel is low, the temperature is high, or they're speeding in a school zone.

IT and trusted third parties are the ones with the highly specialized skillsets that rebuild the transmission when the car slips gears. Or install new tires and shocks when the ride is too bumpy. As the CFO, you're there to lead the way and recognize what data you'll need for digital strategy and planning.

That said, leading the way requires a sense of direction and course of action. And if you're new to digital transformations, neither of those are necessarily automatic or intuitive. So, to that point, we have some insights and best practices to get you on your way.

Don't Rush

Rome wasn't built in a day. A journey of a thousand miles begins with a single step. Whatever your preferred idiom, take it to heart because you're in a transformation for the long haul. And by long haul, we mean forever. This isn't a one-and-done scenario but, instead, a new way of looking at operations and strategy, one that focuses on being adaptable and flexible to a dynamic environment that's constantly evolving.

Start with Small Ball

Expanding on the previous insight, don't feel as if you need to hit home runs immediately. Actually, you're doing more harm than good if you're swinging for the fences from jump. Start by playing small ball, hitting singles to get on base. That could mean just a handful of revamped processes, maybe automating one or two in accounting to get your feet wet.

At Embark, one of our first transformational steps was to simply automate data flow into reporting dashboards, requiring roughly four hours of work but saving thousands of collective hours for our team. Initially focusing on your people and processes is a great way to begin a transformation without investing time or effort into highly sophisticated new tools.

Build a Data Culture

We've previously spoken at length about the importance of a data culture and how to build one in the office of the CFO, so we won't completely rehash our thoughts. However, just know that for a transformation to take root and grow, you'll need to ingrain it into the DNA of your organization and construct a culture around it, brick by metaphorical brick.

As you probably already know, throwing additional headcount at issues involves some seriously diminishing returns. It's simply not an efficient strategy anymore, particularly when entire industries now look toward digital transformation initiatives to solve the same issues, only faster and more effectively.

Therefore, make it clear to every level of the organization that the enterprise-wide goal is to move toward data-driven decision-making and away from gut feel and instinct. This is going to take some time and effort for everyone to understand not only why you're doing it but, even more importantly, the benefits a data culture can provide to everyone in the company.

So, to make the transition as smooth and painless as possible, you'll want to implement a sound change management framework to ensure people buy into the initiative, perhaps relying on outside specialists if necessary. Slowly but surely, building on initial successes and quick, easy wins, you'll establish the momentum to put your transformation into a higher gear.

Automate Accounting and Reporting Processes

Speaking of easy wins, there's no better place for a CFO to start building that critical transformation momentum than right in their own backyard. Enabling self-service analytics via data dashboards can be a relatively easy lift – depending on your data environment, but more on that in a minute – that generates quick and powerful results.

By giving leadership the power to effortlessly drill down into information from a phone or tablet, they're able to make better decisions faster through more timely, nuanced, and relevant data. Needless to say, this type of thing isn't really possible with Excel unless you have a fleet of spreadsheet warlocks on staff, and even then it's no guarantee.

Data Integrity Is Critical

To state the obvious, without accurate, reliable, timely data, there's no point in trying to build a data culture or lean on data-driven decision-making in the first place. When it comes to all things transformation, data cleanliness is indeed godliness, so effective data management by centralizing information and addressing disparate data sources and systems early in the process will pay exponential dividends down the line.

Don't Waste Daylight

As we said, if the competition isn't already knee-deep in transforming their own people, processes, and technologies, they will be soon. Thus, there's no time like the present to start formulating your game plan and putting the pieces in motion.

Remember, things will only get more complex for finance professionals and leaders in the future. ESG and sustainability reporting, for instance, will only grow in importance and magnitude in coming years. Therefore, the time to transform finance – and later, the entire enterprise – is now.

So on that note, don’t be old school to a fault because the world will pass your organization by. Instead, crack open a cold PBR, drop the needle on Zeppelin IV, and start game planning for your organization's data-driven future. And as always, if you need any help along the way, Embark's Business Transformation specialists are only a call away.