Chief financial officers are taking over an increasing amount of operational roles that directly involve them in far-reaching company strategies.
Despite their evolving role, many CFOs are failing to recognize the impact the digital shift is having on their business and operating models.
EY’s Global Capital Confidence Barometer survey of 652 CFOs, in addition to in-depth interviews with CFOs and CEOs, revealed that only 50% of CFOs are making the shift to a digital business model a priority over the next three years.
Less than half (49%) said they will make a high or very high contribution to the company’s digital shift.
The study suggests that many CFOs do not fully understand the impact that a digital shift will have on their business in the short and long term.
“It’s surprising that few CFOs are placing a high priority on digital because the digital transformation is arguably one of the biggest challenges and opportunities facing firms today,” said Laurence Buchanan, EY’s digital leader for Europe, Middle East, India, and Africa. “The consequences of ignoring the shift to digital are far too great for only half of CFOs to be embracing it.”
“It has the power to transform some organizations from market leaders to irrelevance in a frighteningly short timeframe,” he said. “CFOs who don’t embrace this shift will be caught playing catch-up as their competition takes advantage of the digital culture to gain traction in the industry.”
When asked what the biggest concern for disruption was for their business, only 12% of finance leaders said advances in technology and digitization.
CFOs were also asked how cybersecurity was affecting deal-making. Half of CFOs said cyber attacks were high on their list of concerns, while 42% said it posed a medium risk, and 8% placed little concern on cyber security.
Surprisingly, 38% of CFOs said they only perform a medium amount of due diligence regarding cyber security during mergers and acquisitions, and 6% place very little emphasis on it.