Today’s finance function should be able to process, analyse and visualise huge amounts of data from various sources at high speed – generating the strategic business intelligence and actionable insight required to unlock value for the enterprise. Therefore, chief financial officers (CFOs) should recognise that harnessing the transformative potential of technology should be their priority. When CFOs were asked in the EY Global DNA of the CFO Survey about their finance change agenda for the next three years, respondents put technology transformation first.

The co-dependence of data and AI

As part of that technology transformation, CFOs will likely need a close understanding of how generative AI (GenAI) can reshape analytics and insight-generation. While GenAI could transform the way finance develops strategic insights, successful adoption can depend on accurate, high-quality data.

The link between data and digital technologies such as GenAI is a symbiotic one. Advances in artificial intelligence (AI) can be accelerated by the quality of the data used to train these complex systems. Higher-quality data inputs can create better insights through pattern recognition and prediction. By recognising this relationship, finance leaders can better leverage AI as a strategic enabler, helping them transform finance into a high-performing function integral to an organisation’s value creation.

However, EY research shows that many finance teams have further to go in building the governance, processes and capabilities required for data integrity. For example, the EY Global Corporate Reporting Survey revealed that when it comes to reporting “investor-grade” sustainability data and disclosures, very few finance leaders have complete confidence in their ability to gather, clean and analyse the supporting data.

Just 26 percent said they have access to all information required “in a systematic, controlled reporting environment” when trying to collate meaningful data to support mandatory or voluntary sustainability disclosures.

A minority said that their finance functions have a robust capability when it comes to meeting reporting expectations, including skills, systems and data, and controls.

People should be an essential part of the digital agenda

Technology transformation is not always successful, and ignoring the people dimension can increase the chance of failure. For example, putting in the tools for data-driven visualisations will not necessarily provide organisations with greater value unless they have people with the technical skills to use advanced systems effectively as well as the ability to interpret the output and translate it into insights.

However, talent is not always getting the focus it requires. Technology transformation might be a clear priority for finance leaders in the EY Global DNA of the CFO Survey, but talent was their least important priority in terms of the finance change agenda for the next three years. This could prove shortsighted.

How to transform talent alongside tech

1. Build a diverse team with diverse skills

The team that can execute a finance leader’s vision of a digitised finance function is a diverse one. Its skills should include financial analysis, data science, and storytelling – as well as the kind of interpersonal skills that increase trust and influence at all levels of the organisation.

Based on a vision for finance transformation that is aligned with the company’s overall strategic priorities, finance leaders can create a coherent talent and skills strategy that drives both functional and business outperformance. Successful execution will draw on a range of tactics, but could mean making changes to hiring profiles and starting to strategically replace existing skillsets with new ones.

2. Create an innovative mindset

As well as skillsets, mindsets are equally important. CFOs will likely require people who are willing to challenge traditional finance approaches and explore creative ideas for data analytics, seeing any setbacks as an opportunity to learn and grow.

Finance teams might struggle to get any value from data analytics technologies if they still have a “back-office” mindset, because to use data analytics effectively they will have to experiment and collaborate effectively, including working across different functions to access the data that powers analytics platforms.

To shift mindsets, CFOs should model the behaviours they want to see in others – demonstrating that you yourself are open to challenging existing beliefs. They should also establish guardrails around innovation in finance: setting out that thoughtful exploration of new ideas is welcomed, even if reckless risk-taking is not. At the same time, finance people should be encouraged to learn from both successes and setbacks. In this way, finance leaders can show that experimentation and learning are prized.

3. Stay up to date, continuously

The ongoing skills strategy should also tackle how people refresh their skills and keep them relevant. More than half of the senior finance executives in the EY Global Corporate Reporting Survey said that finance people “will need to do more to embrace self-learning and continuous improvement” to keep their skills relevant. This can also require a change in mindset: embracing a “growth mindset” where people see every new challenge or unknown as an opportunity to learn and develop rather than a threat.

Finance people should embrace opportunities and experiences outside of the finance function. This can be critical when building their own knowledge and experience in diverse areas, from technology transformation to commercial awareness. Refining interpersonal skills can also be important – as well as the ability to “read” data, finance people will likely require the emotional intelligence to read people and understand their motivations.

Finance leaders want to build world-class digital finance functions, but to do this they should take a more active role in the talent and skills agenda. Do they have the talent, skillsets and mindsets to achieve this?

Global DNA of the CFO Survey 2023: Read the EY report to find out how finance leaders are reconciling the three critical paradoxes in their role.