The Digital Finance Imperative

Digitisation threatens and transforms business models and will change the nature of work in many sectors. Here are some insights from CIMA's recent research.


What is finance’s role in measuring and monitoring the new value drivers in today’s digital economy? To find the answer, we recently conducted a research into the value drivers in the digital age; the new and required performance measures; who provides these measures; and the implications for CFOs and management accountants. Nearly 800 people contributed to this report through a global online survey and interviews.

 

Digitisation and globalisation cause commoditisation and threaten established business models. Intangible assets – such as brands, customer relationships, intellectual property and human capital – have become the main value drivers in the business. Consequently, business leaders may need to adapt their business models or develop new ones. To achieve this, quality decision-making and value-creating data insights are essential and are rapidly becoming determinants of organisational success. Equally, organisations need new measures to manage performance, develop intangible assets and achieve their strategic goals.

 

CAPTURING VALUABLE DATA

In recent decades, finance embraced technology-led innovation, automating back office processes to boost productivity, decision-making and performance management. Today, however, finance may lag behind marketing, sales and other customer-facing functions that are investing widely in digital technologies to capture valuable data about intangible assets such as brands, customer relationships, intellectual property and human capital.

 

BRINGING RIGOUR TO DECISIONS

Management accounting has the potential to bring professional rigour to decision-making by ensuring that decisions and performance management are informed by proper analysis of the relevant information and that the business is managed in the long-term interests of its stakeholders.

 

FINANCE MUST MODERNISE

The digital age has redefined business roles. CFOs and their finance teams are being asked to help define and implement new, digitally-enabled business models, and must expand their existing competencies with in-depth knowledge of technology and analytics, as well as broader leadership and business partnering skills. Traditional performance metrics no longer capture the value being created by intangibles. CFOs need new metrics to measure and monitor these value drivers using the latest cloud-based tools and technologies.

 

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