CFO study: Seizing digitalisation as a strategic opportunity

Jakarta, 28 July 2022 - Digitalising their divisions is currently a high priority for many CFOs. This is according to 73 percent of the 522 CFOs surveyed worldwide in the current PwC study “The Digital CFO”. Nevertheless, the digitalisation of the finance sector is often still in its infancy in many companies. Dashboarding tools for clear reporting are already widespread, but technologies such as artificial intelligence or process mining are rarely used. Large corporations with a turnover of more than 10 billion euros, on the other hand, find it easier to deal with the issue, as they often have both the budget and the right staff for the job. 

Although CFOs are keen to advance the digitalisation of their divisions, digital finance projects often aren’t properly synchronised with the digitalisation strategy for the entire company. In addition, things can get stuck when it comes to incorporating existing digitalisation strategies into day-to-day work routines. One thing that is true is that CFOs should be even more confident when it comes to using new technologies. In addition, deeper digitalisation can offer strategic advantages for CFOs. All these points and more are discussed in the latest study, which was created as a joint project between the auditing and consulting firm PwC and the WHU – Otto Beisheim School of Management.

Subianto, Chief Digital and Technology Officer at PwC Indonesia stated that “Many of the finance functions in Indonesia are toying with the latest digital technologies like RPA, process mining, analytics, artificial intelligence to digitise their business process, improve employee experience and achieve quicker reporting timelines. Based on our interactions with local Indonesia CFOs, the opportunities and challenges related to digitization of the finance function are in line with the global trends highlighted in our Digital CFO report and it helps to adopt some of the global best practices around upskilling, change management and operating model transformation to achieve the benefits of Digitization."

Enough budget, not enough expertise

“The traditional work of finance departments – monitoring financial figures, payments and other risks – is largely based on clear rules that are easy to standardise and can be digitised cost-effectively,” says Ivan Phuah, Finance Transformation Leader at PwC South East Asia Consulting. One reason for the ongoing hesitancy towards digitalisation: From financial managers’ point of view, both employees and management lack expertise. In contrast, money is not the reason why digitalisation plans fail. Almost half of those surveyed (44 percent) expect the budget for digitisation projects to increase by up to 25 percent. A great opportunity for CFOs to further expand their strategic relevance with the help of digitalisation.

Realigning finance divisions

For many CFOs, the job now is to redefine their own role in their companies along with that of their finance departments. This is because digitalisation is leading to a shift in the financial sector away from administrative and regulatory tasks and towards value-adding activities. “Digitalisation creates new fields of activity for finance functions, for example in data management, forecasting and other analytical processes, which are supported by artificial intelligence,” explains Ivan Phuah. With the help of this type of predictive analytics and forecasting capabilities, CFOs are able to secure their scope of influence and establish the finance department as a pillar of strategic support for the CEO.