In a world where rapid digital transformation allows businesses to dream big and reinvent themselves, the role of the CFO is to keep it real. They are the pragmatists that sense check the revolutionary projects before they can become reality.

“If you want to have the biggest impact with a business, you need to follow the money. And that means follow the CFO,” quipped Dave Jordan Global Head, Consulting and Services Integration, Tata Consultancy Services.

Jordan moderated a diverse panel of senior finance executives at the 2019 TCS Summit, held in San Antonio, Texas. Titled ‘Funding Digital Transformation – Balancing Change, Risk and Continuity’, panel members included Mike Nuzzo, CFO and President of Services and International, Petco; Paul Palmisano, CFO, Novolex; Stuart Fraser, Vice President and Chief Accounting Officer, Weatherford; and Ravi Vazirani, Managing Director and ISG CFO, Morgan Stanley.

Source: Tata Consultancy Services

What’s the cost?

The panelists encouraged delegates to think about the cost of digital transformation projects in their broadest sense. Simply looking at the money they need to spend to bring new technologies online doesn’t give the whole picture.

“When we were looking at our transformation project, we took account of its impact across all the different parts of the business,” explained Palmisano. “This includes the cost saving impact of eliminating errors, meaning you get all your money and more quickly. Or it could mean the ability to monitor and maintain equipment, regularly spending with small dollars, rather than a big capital expenditure further down the line.”

A broad perspective

TCS research shows the majority of CFOs feel a level of responsibility for their transformation projects. As they increasingly work alongside CIOs and CTOs to make sure the benefits of the Business 4.0 world are felt throughout the company, old school jokes about CFOs being ‘Mr No’ and the place where deals go to die just don’t stand any more. Finance workers need to be prepared to think of themselves as being part of the business as a whole – not just part of the finance team.

Relationships really matter,” Nuzzo confirmed, “and one of most significant is between the CFO and CIO. You can achieve a lot more when you have CFO and CIO that trade roles and ideas and have respect for each other’s ability to get to business to the right place. CFOs need to be able to bring their analytical characteristics to the table without being seen as Dr Doom.”

Source: Tata Consultancy Services

A place in the ecosystem

As businesses increasingly understand the power of their own ecosystems as well as the broader partner ecosystem they sit within, the way in which the CFO role is morphing comes more into focus.

The challenge for us is, even if you can process things at the front end, and route requests and actions quickly, if we aren’t quick at putting a price on it and understanding it, we slow everything down,” said Vazirani. “If we turn out to be the weakest link in the ecosystem chain, it impacts profitability.”

Fraser says he is increasingly being asked to partner with his sales team when visiting clients. Transformation programs need to come alongside collaboration within businesses and ecosystems. And together the two drive greater customer engagement.

“Everyone needs clear roles and responsibilities. And alongside that you need metrics and accountability. But behavior is a massive piece of the picture. It drives strong cultures and helps with better, clearer decision making,” Fraser commented.

Strength in numbers

But the panel also sounded a note of caution amid all the greater collaboration and interplay within ecosystems.

You need to be mindful of who you are collaborating with. And you need to make sure regulators, compliance officers and tax authorities across systems are having the right conversations to avoid you paying the price,” warned Vazirani.

Jordan went further: “If you are the ecosystem driver or owner does that mean you are responsible for compliance across that ecosystem? And if not, who is? Because someone needs to be.”