Digital transformation a top priority for CFOs in DACH region

06 November 2018 6 min. read

Chief Financial Officers (CFOs) in Germany have digital transformation at the top of their agendas. According to a study by German consultancy Horváth & Partners, 77% of CFOs in the country now view their digital journey as the biggest challenge within their company, ahead of other priorities including adapting to new business models, regulatory compliance and data management.

The study by the firm asked around 200 CFOs and other finance executives to provide insight into their agendas for 2018. The researchers found that, similar to other industries and functions, digital is the top focus area for advancing the operations of the finance department.

So why is digital top of the wish-list for Chief Financial Officers? First, it supplies more efficiency. New technologies, robotics and algorithms are making processes more efficient, either by cutting out the middle men or by speeding up activities. Robotics process automation, known as RPA, is a key development, supporting the complete automation of, for example, accounting processes, or the end-to-end financial processes in the O2C, P2P and R2R arenas.

Secondly, it can improve the quality of outcomes. Leveraging major computation power, algorithms can performs tasks in minutes what humans need days for, improving the level of accuracy in work carried out, as well as the speed at which it is done.

On top of this, digital can improve information management. The CFO is the financial brain of an organisation, providing the necessary insights in financials, margins, and profits, and that in turn helps leaders oversee if they are heading in the right direction. Through more modern solutions and digital-savvy processes, CFOs and managers can receive automated and real-time decision-relevant information, in order to optimise control and decision support. This is why the CFO is so often at the centre of a firm’s digitalisation drive.

Digital transformation a top priority for CFOs in DACH region

According to Horváth & Partners, following digital, the second and third priorities of CFOs relate to having to cope with changing business models. At second place with 64% is the realignment of finance departments with new, overwhelmingly digitally-driven business models. This change is being prompted by new developments in fundamental technologies such as in-memory and in advanced analytics, according to the authors.

Meanwhile in third, 63% highlight having to deal with the complexity arising from heterogeneous business models. Finance is an advisor and business partner to the line organisation, however, if an organisation has a range of different models, then finance consequently has to differentiate its own offering. Such hybrid partnering roles provide CFOs with a demanding environment. 


At the same time, not surprisingly, regulatory pressure and compliance are both high on the list of CFOs’ anxieties. Since the outbreak of the financial crisis there have been a slew of global regulations aimed at curbing risk in financial organisations. This has understandably complicated the role of CFOs in the financial services industry, with the professionals facing a higher burden of work in order to maintain compliance. New rules such as PSD2, KYC, AML and more, on top of the fact that non-compliant companies now face huge financial penalties, mean that regulation presents a major headache.

The next points on the list of priorities for CFOs largely relate to preparing for a digital transformation journey. For instance, every second CFO – and 20% more than last year – complained in this context about a fragmented and heterogeneous IT landscape. For digital advancement to be successful, firms must have access to structured, group-wide, standardised and valid data. As a result, thanks to legacy IT infrastructure, faulty and incomplete data is a real challenge CFOs face. According to the survey’s respondents, upgrading legacy IT to a modern infrastructure, coupled with standardisation of business and IT processes are the most often mentioned countermeasures which should be initiated to pave the way for successful digital adoption.

In a study conducted by Capgemini Invent, meanwhile, researchers found that it was also important that leadership capabilities were in place to support digital transformation. Specifically, Germany seems to be in a leading position on this matter, with another study by KPMG showing that CEOs are quite committed in the country to take personal ownership for driving digital transformation.

According to Kai Grönke, an advisor at Horváth & Partners and one of the study's authors, the developments outlined in the firm’s report shows that finance professionals with in-depth data handling and systems skills are seeing higher demand, as are those experienced in data security, cybersecurity, business intelligence and advanced analytics. This is the driving factor behind the increase in roles advertised in the finance function explicitly requiring IT skills, up by 7% in the past twelve months.

Commenting on the study’s main outcome, Grönke said, “It is becoming increasingly necessary to make the best possible use of the opportunities afforded by digitisation in order to achieve their actual efficiency goals. This is done by CFOs driving forward issues such as automation, standardisation and systems integration. Most companies will have to develop their CFO set-up using optimised processes and reinforce it with new skills and expertise over the next few years.”

Related: AI and robotics will change the skills demand of finance professionals.