Financial Digitalization in 2022: Strategic Priorities for Chief Financial Officers
Among many business functions, finance should be the first to embrace digitalization. Nick Rose, CFO of Enable, points out that outdated technology, unreliable data processes, and old habits relying on manual spreadsheets are hindering finance teams from improving performance and competitiveness. In 2022, financial leaders are placing digitalization at the core of their agenda, but successful transformation depends not only on technology adoption but also on supporting cultural and organizational adjustments. This article cites research data from Ventana Research, Gartner, PwC, and McKinsey, combined with practical cases from Enable's partners, to illustrate the key role of financial digitalization in process optimization, talent reshaping, and forward-looking decision-making.
Editor's note:Nick Rose is the Chief Financial Officer of rebate management software companyEnable. The views expressed in this article are solely those of the author.
Of all the business functions that stand to benefit from digital transformation, finance should be at the top of the list. As finance leaders, we must be able to adapt quickly to changing circumstances, make decisions across multiple time horizons, and continuously improve operational efficiency. Yet many of us remain constrained by legacy systems that make our jobs harder.
It is these challenges that led finance leaders to make digitalization a priority in 2022. Outdated technology and unreliable data processes have become major obstacles to improving performance, spotting opportunities, and maintaining competitiveness.
But digitalization is not just about technology adoption—it also requires cultural and organizational change to ensure the right people are in the right roles. CFOs have a responsibility to rally stakeholders around a data-driven growth agenda that will help companies scale in an agile and sustainable way.
Saying goodbye to manual processes
Despite finance's heavy reliance on data aggregation and analysis, many businesses still manage data using manual processes. According to research by Ventana Research,70% of businessesuse spreadsheets as the "preferred technology to support a broad range of planning processes." Ventana also found that 88% of spreadsheets used in field audits contain errors.
One of Enable's partners once tried to manage trading agreements with over a thousand suppliers and over a million products using piles of paper documents and handwritten notes, a process that made tracking deals extremely difficult. Meanwhile, agreements were scattered across Word documents, spreadsheets, and emails. This meant the finance team had to consolidate and interpret a large amount of information before copying it into data management systems, many of which lacked the ability to reliably record all relevant details. Given thin profit margins and the significant share of profits contributed by rebates, even small errors can have a major impact.
Our partner is not an isolated case. Technology adoption across industries has been slow. Gartnerreportsthat fewer than one-third of CFOs are "confident that their technology architecture will ensure their organization's future success." This issue is even more pronounced given the evolution of the finance function. In recent years, data sets have grown exponentially, and finance departments must use this information to help companies make strategic decisions. Finance has moved beyond historical analysis and financial statement preparation to become a key part of the corporate growth agenda.
Finance teams are moving away from traditional data management practices toward technology-driven agility. This enables companies to adapt to changing market and economic conditions, accelerate decision-making, identify inefficiencies and potential opportunities, and plan for the future. Companies that complete their technology transformation first will gain a competitive advantage in the coming years.
Reshaping the workforce
According to a 2021 PwCsurvey, 68% of CFOs said they would increase investment in digital transformation over the next year. Digital transformation has become the "top investment priority for the future of work," reminding us that technology and talent are directly linked. When our partner adopted a centralized digital ERP, the commercial team was able to immediately spot errors and correct them. With all relevant information accessible through a single system, the company had to make significant cultural and organizational adjustments to fully leverage the new data management strategy.
Cultural change is critical to the success of any digital transformation. When companies adopt tools like centralized ERPs, employees and managers need to know how to use them. For example, our partner can now forecast based on year-over-year changes, ensure these changes are incorporated into relevant terms and conditions, and analyze the impact of price changes on margins. With the predictive power of data, finance teams can avoid sudden changes in costs, delivery schedules, and other key shifts that could damage trust with suppliers and partners. Today, the company has increased rebate revenue, improved margin transparency, centralized and streamlined cash collection processes, and enhanced visibility into deal performance. This means it can negotiate more mutually beneficial deals.
Technology can strengthen workplace culture by providing employees with digital resources that help them collaborate and work efficiently—from cloud-based communication and collaboration platforms to centralized data hubs that give everyone access to the same information. But the key is that employees must be able to use these tools effectively. When today's finance talent is matched with tomorrow's technology, digital transformation will be seamless and sustainable.
Shifting to proactive work
CFOs have always been responsible for financial discipline and resource allocation, but they are also increasingly playing an active role in strategic planning. At the same time, the demand for clean, reliable, and focused data is rising, enabling companies to gain clearer insights into costs, efficiency, and service quality. McKinseyfoundthat the most successful finance leaders focus on "value-added activities such as financial planning and analysis (FP&A), strategic planning, treasury management, operational risk management, and policy development."
According to Gartner,93% of finance leaderssay they "expect the finance function to be leaner (with fewer employees), more digital, and more data-driven by 2025." CFOs are prioritizing digital transformation because it will help them identify and respond to trends, build resilience by targeting enterprise risks, evaluate interventions using concrete performance metrics like ROI, integrate data and ensure key stakeholders can access it, and provide data-driven predictive insights. Companies often struggle to aggregate, format, and harness the power of data, but the right technology can help them do so.
Effective CFOs use data to help companies diagnose problems and determine responses. Never before have we had access to so much information about how companies operate and perform, and they clearly recognize that this information is indispensable for building a more agile, evidence-based finance function. The immediate challenge will be overseeing digital transformation so that finance leaders can collect and analyze vast amounts of data, move away from inefficient and outdated tools like spreadsheets, and build a culture that can fully leverage technology.