A version of this article first appeared on EideBailly.com.

The role of the finance office is evolving to meet the demands of the digital age. Traditionally focused on financial reporting, budgeting, and compliance, modern finance teams now are responsible for strategic planning, technology adoption, and risk assessment. In fact, many financial leaders are increasingly responsible for digital initiatives alongside IT departments.

Critical to this shift is the use of data to drive decision-making. Our recent survey found that inaccurate or inconsistent data, islands of data in disparate systems, and manual data processes are affecting a broad range of clients and inhibiting overall business performance.

Data chaos affects performance and visibility, with inaccuracies leading to uninformed business choices. Data silos hinder a unified view of performance, while manual processes are time-consuming and error-prone. Further, the quality, quantity, and accessibility of data will also determine an organization’s ability to utilize AI, stay competitive, and foster innovation.

HOW TO CREATE A HIGH IMPACT DIGITAL INVESTMENT STRATEGY

The reality is, nearly 80% of organizations need to adapt every two to five years in order to remain relevant. This requires each member of the C-suite, including your financial team, leaning in to create a high-impact technology investment strategy.

To define your digital strategy, document your team members' capabilities, business structure, and existing technology stack.

• Analyze your organization’s strengths and weaknesses.
• Evaluate team members’ skill sets and capabilities as they pertain to their roles. Assess whether departments are under- or overstaffed and if staff have the necessary expertise and willingness to change.
• Assess employees’ processes and the technology they use. Determine which tasks must be performed manually and evaluate the efficiency of these processes and systems.
• Determine the capabilities of the current technology systems and identify what is missing to support your business objectives.

After completing your assessments, collaborate across the organization to identify inefficiencies, gaps, threats, and opportunities before setting goals and strategizing. Remember: building a digital future requires ongoing evaluation and adaptation.

Why IT Risk Matters to the CFO

Successful implementation of a digital strategy (and maintenance of your technology environment) will help your organization thrive in the current landscape and prepare for the future.

After all, the risks associated with technology extend well beyond the IT department. These risks include:

• Technological: Potential failures or vulnerabilities in IT infrastructure, such as hardware malfunctions, software bugs, cybersecurity breaches, and data loss.
• Financial: Costs associated with data breaches, regulatory fines, legal liabilities, and operational disruptions.
• Operational: System outages, process inefficiencies, and the inability to access critical data, leading to productivity losses and affecting customer service.
• Reputational: Data breaches, privacy violations, and service outages can erode customer trust and spread quickly through social media, making reputational damage a critical concern.

Given these stakes, it is essential for CFOs to be actively involved in managing IT risks. Involving financial leaders in technology planning is crucial for several reasons:

• CFOs balance short-term costs with long-term benefits, ensuring technology investments drive both innovation and financial stability.
• Financial leaders ensure digital initiatives are integrated seamlessly across the organization, enhancing the effectiveness of technology projects.
• CFOs emphasize cost control, ROI analysis, and value creation, preventing overspending and ensuring digital initiatives deliver tangible benefits.
• Financial leaders evaluate technology proposals, making informed choices with insights from CTOs on technical feasibility and potential impact.

By embracing responsibilities around digital initiatives and technology planning, CFOs can drive innovation, mitigate risk, and ensure their organizations' financial health.