Nine out of 10 CFOs in South Africa are playing a role in their organisation’s digital strategy, with 15% being fully responsible for digital transformation.
This finding emerged from a new research project conducted by World Wide Worx for Sage, entitled CFO 3.0 – digital transformation beyond financial management. The research highlights the impact of digital transformation on South African businesses of all sizes, revealing a radical new remit for senior financial decision-makers as drivers of strategic change and digital visionaries.
The research finds that, where CFOs don’t take the lead, they are key partners with other members of the C-suite. In 75% of businesses, the CEO drives the overall strategy, with input and insight from the CFO and CIO.
COVID-19 as a game-changer for finance
The research reveals how COVID-19 is creating new challenges for South African CFOs, including ensuring compliance across a decentralised network, and a scattered workforce. With one in four senior financial decision-makers involved with remote worker management, compliance has risen to the top of the agenda.
Despite the new pressures COVID-19 has brought to bear, many respondents that were already in the cloud and using financial management solutions are optimistic about the future. In fact, 49% of these companies have seen moderate to strong growth in organisational performance over the past year, despite the recession. And 78% of these businesses expect even further growth.
Regardless of the negative impact of the coronavirus on South Africa’s economy, most senior financial decision-makers in the survey have a positive growth outlook.
- Nearly half of businesses (44%) said COVID-19 increased demand for their services.
- 78% of businesses reported growth in revenue in recent months.
- A third of businesses reported little change in revenue over the past year. Those that reported a decline in revenue said they were still able to maintain profitability.
Leading the drive towards digitalisation
South African CFOs are embracing technology in the finance function as a lever for improving performance. Some 90% of senior financial decision-makers have adopted emerging technologies in some form. As many report, they are hands-on with their companies’ digital transformation strategy – and approve the spend.
AI holds no fear for senior financial decision-makers: over two-thirds are not at all concerned about it, and only one in 10 believe that it will impact jobs. In fact, nine out of 10 CFOs welcome automation performing more of their day-to-day accounting tasks in future, and 40% believe that AI and machine learning will improve forecasting and financial planning even further.
With just a little over half of the respondents stating most processes are automated in their businesses, this suggests that a massive shift is still coming – especially with over 80% of CFOs believing that financial management technologies can help their businesses to discover new opportunities and better manage risk.
Pieter Bensch, Executive Vice-President at Sage Africa & Middle East, says: “Our research highlights how the role of the CFO has evolved from managing compliance and accounting activities to providing strategic leadership and driving digital transformation. As finance enters the CFO 3.0 era, CFOs need tools that enable them to deliver on their core competencies, and to be confident in driving the digital agenda throughout their organisation.”
Three core technologies driving finance productivity
In further evidence that South African finance leaders have taken a forward-looking approach to digital technology and automation, the Sage CFO 3.0 research identified three core technologies driving productivity in the finance function:
- Data analytics: Two-thirds of senior financial decision-makers use data analytics to drive productivity in finance. However, the rest say costs and data integration are affecting their move to next-generation finance technology.
- Cloud-based accounting platforms: Over four in five large businesses use cloud-based solutions for financial management, and over 80% say cloud technologies help to create more agile and cost-effective in-house finance functions.
- Compliance automation: Two-thirds of large businesses rate their company’s investment in automating financial management as “good” or “excellent”, with over 80% using financial management technologies to uncover efficiencies, optimise operations, and automate and expedite compliance reporting.
“We were already witnessing a shift in the CFO’s responsibilities and the finance department’s adoption of technology before the outbreak of the coronavirus,” says Arthur Goldstuck, managing director at World Wide Worx. “Now, all the trends that were at play before the pandemic – the move to the cloud, managing remote work, and getting on top of compliance – have been accelerated.”
Supporting CFOs on their journey to a digital future
On 21 August, Sage will release its award-winning Sage Intacct to the South African market, providing CFOs with a new platform addressing the challenges finance professional face in digital transformation. 14 Business partners will be ready to help Sage customers in South Africa unlock the power and value of this financial management platform.
“As a cloud-based financial management platform designed for and by CFOs and finance professionals, Sage Intacct provides deep multi-dimensional accounting, automation for efficient financial operations, sophisticated visibility for real-time decision making and a low cost of ownership,” says Bensch.
Aaron Harris, Chief Technology Officer at Sage, says: “We are committed to providing financial leaders with tools that not only enable them to digitalise and automate core processes in their function, but also to drive the strategic growth agenda in their business. Sage Intacct empowers CFOs to streamline complex financial processes and deliver the rich financial and operational insights they need to scale and transform their organisations.”