3 Digital Transformation Trends that CFOs Need to Know in 2024

Authored by Tom Hood, Principal, Finance Modernization

The CFO’s role is evolving. A new era of rapid tech advancements is transforming the modern finance function, led by powerful tools like AI and machine learning. Looking ahead to 2024 and beyond, three pivotal trends emerge at the forefront of this transformation. We’re exploring the impact of these trends, their link to the underlying need for upskilling, and how CFOs can leverage them for success.

Trend #1: The Convergence of Technology and Talent Strategy

As CFOs focus on hiring and retaining talent, they must recognize that a progressive tech strategy is increasingly important to current and future employees. With 82% of finance and accounting managers in public companies are battling talent retention, this awareness is crucial.

Finding and retaining diverse talent, accelerating business and digital transformation, redefining how we measure value — they’re all driving the need for new and enhanced skills. The finance team can’t do things the way they used to.

Tom Hood, CPA, CGMA, CITP, EVP Business Engagement & Growth, AICPA

Today’s talent pool seeks meaningful work beyond manual tasks and cumbersome spreadsheets. Leveraging new technologies like automation allows employees to concentrate on valuable and impactful tasks, like interpreting data trends for better decision-making. This shift is vital in a competitive market with a shortage of skilled finance professionals. The way finance leaders approach technology will affect how candidates imagine their roles at your organization, and the likelihood they will join your team.

Opportunity for CFOs

Finance leaders should lean into continuous digital transformation and proactively introducing new technology. As tools like Gen AI become integral, upskilling will be essential to maximize their potential while fostering a forward-thinking finance function.

Here are a few tips to get started:

  • Understand the changing competencies and mindset that finance professionals must adopt to ensure they can address current and emerging challenges.
  • Develop a strategic roadmap for digital transformation, including short- and long-term goals aligned with business objectives.
  • Cultivate a culture of continuous learning and upskilling through training programs, workshops, and timely resources.
  • Experiment early and often with new technology. Continuously monitor the effectiveness and adapt and refine your approaches based on feedback.

Trend #2: The Rapid and Responsible Adoption of AI and Machine Learning

Gen AI and Machine Learning are accelerating digital transformation as they expand in usage and capabilities. These technologies are not merely altering the finance function, they are fundamentally reshaping it. With the ability to expedite data analysis, bolster accuracy in decision-making, and streamline reporting, Gen AI and Machine Learning open doors to unparalleled opportunities for value creation, customer engagement, and innovation.

Yet, with these advancements come inherent risks and challenges. This demands proactive leadership from CFOs. Success teeters on leadership’s ability to make smart, strategic tech investments while addressing complexities of data security, ethical considerations, and regulatory compliance. Establishing robust governance frameworks and controls to safeguard their organizations is critical.

Opportunity for CFOs

Adopting an agile, forward-thinking mindset when responding to new tech trends like real-time reporting, predictive analytics, and scenario planning is critical for success. Equally important is the ability to equip leaders and their teams with the necessary tech foundation, skills, and competencies.

Here are a few tips to get started:

  • Clean up your data and software. AI/ML models heavily rely on data, so accurate information and a reliable ERP and EPM system are essential for successful implementation.
  • Outline specific goals and implementation timelines to develop a clear strategy for how your business will integrate AI/ML to enhance finance operations.
  • Allocate resources towards acquiring the right talent while developing the skills of your existing team. A holistic skillset is crucial for success: business acumen, technical expertise, and a mindset that’s open to change and innovation.
  • Establish a robust governance framework that appropriately addresses the risks associated with AI/ML adoption to ensure data security and ethical use of technology.
  • Begin with a small-scale pilot project to test the effectiveness of AI/ML tools in a controlled environment. Once proven successful, you can scale up the implementation.

Trend #3: The Role of the CFO Now Demands Value Creation for the Business

No longer confined to traditional data analysis, CFOs are poised to become strategic partners for the organization. The finance function has emerged as a linchpin for value creation, leveraging tech-driven data analysis to make insightful investment decisions.

However, recent findings from a Gartner survey reveal that a mere 20% of CFOs are deemed personally effective in steering short-term financial performance and long-term growth, but not for a lack of trying. Many CFOs find themselves entangled in traditional, low-value activities, wishing for more time to focus on impactful actions. Daily demands keep them stuck in the past instead of planning for the future.

But as the digital finance transformation continues to drive change, C-suite leaders are recognizing the importance of data-driven decision-making. The journey ahead promises to be exhilarating and impactful for finance leaders. It’s just the beginning of an exciting era led by change and innovation.

Opportunity for CFOs

Powerful advancements in technology are the catalysts of the CFO’s transformation, enabling the shift from informers to impactors. Instead of providing tips to get started, we’re sharing the comprehensive digital finance transformation roadmap for creating value and driving revenue.

Looking Ahead: Modernizing Your Finance Function

As finance leaders grapple with a fast-moving technology landscape, the need for guidance and expertise becomes paramount. Most finance teams are already strapped for time and resources—plus, the most valuable tech investments won’t help your organization if you’re not leveraging them properly. An experienced, strategic partner can help your team navigate these trends and build a forward-looking vision for the future. To learn more about modernizing your finance organization, click here.