More and more, Chief Financial Officers (CFOs) are taking on a hands-on role to ensure the successful integration of digital technologies. However, new data from Gartner suggests that despite heightened focus, CFOs face challenges in realizing the impact of their finance transformation efforts.
Gartner's Top 5 Priorities for CFOs in 2024 report reveals that 70% of the 185 surveyed CFOs expressed dissatisfaction with the impact of their finance transformation, describing it as "less impactful or moving slower than expected." The findings underscore the complexities involved in aligning financial goals with broader organizational and cultural shifts.
Finance chiefs are leading initiatives on multiple fronts, with 79% prioritizing leading transformation efforts, followed by improving the finance function's strategy and design (78%) and enhancing finance metrics insight and storytelling (76%). The survey also highlights an increase in spending on transformation tools, yet 54% of respondents reported challenges in producing trustworthy reports for stakeholders.
Notably, effective communication is identified as a critical element in CFO-led transformations. CFOs must convey the value of new technologies to the organization, ensuring that employees are informed and engaged throughout the integration process. However, only 35% of CFOs believe their teams can accurately evaluate the value-creation potential of technology integration, revealing a gap in understanding within finance teams.
Marko Horvat, Vice President of Research at Gartner, observes a shift in CFOs' roles, moving beyond the traditional finance function toward an enterprise-centric focus. The priorities on transformation, functional design, and storytelling indicate a strategic shift towards leveraging data as a foundation to better run the entire business.
The introduction of new technologies, particularly AI, has acted as a catalyst for CFOs to spearhead transformation initiatives. Horvat notes that disruptive technologies prompt CFOs to explore opportunities for enhancing the effectiveness of finance functions and enterprise decision-making.
Despite the challenges, finance teams anticipate increased spending to enhance their technology stacks in the coming year. Gartner advises CFOs to increase accountability for the cost-related issues associated with underperforming digital transformations. This includes developing living project charters, measuring costs around non-financial KPIs, and evaluating lessons learned from projects beyond their technological impact.
Gartner's study sheds light on the evolving role of CFOs and the intricate nature of digital transformations. Collaboration with IT and other organizational departments remains a key focus for CFOs looking to turn their aspirations into actionable results. As the financial landscape continues to evolve, CFOs must navigate challenges to realize the full potential of digital transformations.
