How Finance Leaders Set the Pace for Businesses to Thrive

By Daniel Oh

No preceding crisis in our lifetime could have prepared Canadian businesses for the impact of COVID-19, which transformed a swath of industries at an unprecedented scale.

Yet even as vaccination rates increase and workers slowly return to the office, fewer than 40 percent of businesses with fewer than 100 employees have incorporated technology such as collaboration tools and cloud solutions into their operations. And with 77 percent of Canadian workers now demanding a flexible work environment, it’s clear that to thrive well into the future, businesses need to keep transforming, and quickly.

Which raises the question — who leads an organization’s innovation efforts? Many would say the CTO or CIO, but that isn’t necessarily true. While the former oversees the implementation of new technology and the latter keeps it running, the choice of which technology to adopt often lies with the finance department — the CFO.

It should no longer be a shock that the executive who oversees the company’s spending also has an instrumental role in driving its digital transformation.

The CFO 3.0

Globally, CFOs play a huge role in balancing business continuity with planning for an uncertain future. PwC’s CFO Pulse report found the pandemic left 60 percent of CFOs worldwide concerned about the impact of another global economic downturn, while a nearly equal number (58 percent) remain worried about another wave of infections.

Yet it’s worth asking what we expect of CFOs in this time of uncertainty.

With cashflow remaining a challenge for many businesses and governments doing their best to support them, many CFOs have focused on choosing where to allocate grants. However, as one CPA Canada executive aptly put it, no company wants to survive for one year only, and it falls to the CFO to ensure it continues to thrive well after the situation has passed.

Fortunately, today’s CFOs are better prepared for shifting circumstances than many of their C-suite colleagues. It wasn’t too long ago that their role was largely that of company historian, reviewing previous company performance to inform future recommendations. They were among the first to harness technology in their organizations too, which transformed them into analyzers of real-time data. Their successors — CFO 3.0 — have become visionaries, basing their decisions on how best to prepare their businesses for what lies ahead.

The importance of this visionary aspect has never been more apparent than during the past year. According to Statistics Canada, only one in 10 businesses with fewer than 100 employees adopted digital technology during the pandemic that helped them move operations or sales online — but signs point to those investments paying off. Around one in 10 businesses with fewer than 100 employees also made 50 percent or more of their total sales online last year, an increase of up to 100 percent from 2019. The conclusion is clear: Rather than analyzing a situation and responding in a way that worked best in the past, today’s financial leaders need to predict and innovate.

Sage research indicates these changes have been in the making for some time. A whopping 97 percent of financial professionals in Canada say their roles have significantly changed in the past five years, with 70 percent given full responsibility over their company’s digital transformation. Moreover, most financial decision makers (90 percent) are automating processes to drive efficiencies in their organization. COVID-19 has likely pushed the remainder into the informal role of Chief

Transformation Officer, as instrumental to guiding their company’s digital reinvention as any CTO.

The CFO’s best tool for success

Business success requires targeted, planned investment across channels, services, and technologies poised to deliver the highest long-term growth. The responsibility for identifying the right channels and driving upgrades needed to harness them ultimately falls to the CFO. More than ever, their colleagues expect them to advise them on investments most likely to achieve the company’s strategic goals.

Of course, guiding a company’s digital transformation requires access to digital tools — and the in-depth, real-time insight that come from them. It isn’t enough to simply rely on past experience or gut instinct; any advice, especially from the CFO, must be supported by realtime data and analysis. Unfortunately, that data can be hard to unlock for many businesses, which too often rely on heavily siloed, poorly integrated IT infrastructure. A recent survey of Canadian executives found that while 71 percent of businesses invested in on-demand digital services during the pandemic, only 40 percent had completed their transformation by year’s end.

Fortunately, there are apps and data environments with valuable insight that can empower CFOs to identify crucial opportunities for investment and growth. Cloud storage allows companies to create a central repository of research and insights they can access at any time, from any location, providing CFOs with an edge over their analogue counterparts. Another benefit of the cloud is the access it gives financial leaders to the latest tools, which are updated automatically with no manual maintenance needed.

The most effective CFOs use the automated machine learning tools embedded in many cloud-based data analytics platforms to eradicate resourceheavy manual labour, freeing up more time to focus on helping their business move and breathe, with an emphasis on their most important asset – employees.

It’s a team effort

CFOs cannot rely on technology alone to fulfill their digital potential. They need to recognize that they are also people leaders, who must support and mentor diverse teams with analytical, automation, and digital technology skills. When the pandemic passes, those with artificial intelligence, machine learning and data analytics expertise will be of most value to organizations seeking innovation and efficiency gains.

Business success requires CFOs to prepare their teams for a transitional period, one that requires investment in retraining or upskilling employees, with an eye towards making their business the type of supportive, engaging environment that attracts the best talent. Technology may be the engine of innovation, but the CFO — and the people who support them — remains its driver.

Daniel Oh is Country Manager (Interim) of Sage Canada.