In an increasingly digitised world, businesses are pressured to undergo “digital transformation” to remain competitive. Broadly stated, digital transformation is the incorporation of digital technology into all aspects of a business to improve efficiency, increase revenue, and gain a competitive advantage.
Even with the increasing tide of digital transformation initiatives, a study by McKinsey found that only 30% of digital transformations are successful. There are several reasons for this failure rate, but one key issue is that the traditional method of digital transformation is becoming outdated and in need of a revamp.
Traditionally, digital transformation efforts have primarily focused on implementing certain technologies, such as automation, robotics, and digital finance transformation. While these technologies can undoubtedly bring advantages, they alone are not enough to ensure a successful digital transition. A more comprehensive approach is necessary, taking into account the organisational, cultural, and human factors that underpin the advancement towards a digitally empowered future. A holistic outlook is essential as it considers the interrelated aspects of the organisation, culture, and people required for a successful digital transformation.
A common area that often gets overlooked is the role of the CFO, who is typically responsible for handling financial matters and is uniquely positioned to drive digital organisational transformation. CFOs clearly understand the financial impacts and can use this understanding to make a case for investment in digital initiatives. They also have a strong sense of organisational and human factors and take them into play when making necessary changes in culture and behaviour. And CFOs can lead initiatives to develop their financial systems to cut costs and give a higher view of the financial movements of the firm for high-level executives to understand. They can then use this as a driving factor to make pivotal decisions.