The increase in new business demands and technologies has dramatically changed the ecosystem that CFOs and their teams operate in. But the way in which accountancy is taught, understood and operates has not really changed.
This is not sustainable. We need a new unifying framework as a reference for what industry accounting and finance has become.
Alongside this need for a new framework, there are new requirements for finance function competencies and capabilities around domains of expertise like data and analytics, data visualisation, automation, collaborative modernisation, which are neither properly understood nor being met. This is acknowledged by the in the accountancy profession and industry leaders but not reflected in any definitive model.
Due to these changes, and the rise of digital transformation, the finance function is going through an existential crisis: it is not clear on its own remit, it does not know what skills it needs nor how to organise itself and it struggles to resolve a dislocation not only in how it interacts with other business functions but within itself with ‘digital’ vs ‘traditional’ schisms.
In Memo to the CFO, recently published by McKinsey, we are reminded that CFOs have been given a clear mandate to lead digital transformation in their teams and across their businesses, yet CFOs still spend less time on digital trends than they do on traditional finance activities. The CFO is also critical to digital investment and innovation, as explained in Gartner research.
Both reports also highlight that many CFOs are unsure where to start, and despite thought leadership from accounting institutions, such as the ACCA’s Digital Intelligence Hub, this is not enough to enable CFOs to operationalise the digital shift.
Why is there such a lack of focus and uncertainty from finance leaders who have a clear mandate to lead? Because of poor organisational design resulting from confusion around what finance actually does and needs to do.
The Digital Finance Function|DFFM
If CFOs can not act on the digital agenda and agree where to start, there will be severe repercussions on them and their teams. That is why the Digital Finance Function Model was developed.