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Aside from generative AI, not all CFOs have cracked the code of digitization, says Christoph Stouthuysen.
Thirteen years ago Stouthuisen received his Ph.D. He has a PhD in Management Accounting and is continuing his studies in finance and CFO. As an academic researcher and consultant, he has studied hundreds of financial officers and senior financial leaders in his 20+ industries for global companies with revenues ranging from his $250 million to over $20 billion. rice field.
He is currently Professor of Management Accounting and Digital Finance at the Vrelik Business School and University of Leuven, and is Director of Vrelik’s Center for Financial Leadership and Digital Transformation.
In his latest report, MIT Sloan Management Review, Stouthuysen shares the last six years of research on digital transformation in finance. In his report, he points out seven key competencies CFOs should possess to become digital leaders. Unpack and explain the machine learning output. Collaborate on data management across departments. Embed analytical skills. Explore and experiment. Manage cultural change. Get everyone on your team involved in your digitization efforts.
And Stouthuisen gave us three main reasons why some CFOs are slow to take full advantage of new technology.
1) How do you define yourself? “Many CFOs still act as if reporting the numbers is their only job,” says Stouthuisen. “Her CFO, a traditional bookkeeping type, spends too much time on transaction processes.” Then it becomes a perception problem.
“On the one hand, some CFOs do not take the initiative to start investing in digital solutions. On the other hand, CFOs are not perceived by their colleagues as true business partners,” he explains. Digital finance leaders Stouthuysen spoke to see technology and advanced analytics as strategic priorities for protecting corporate assets and achieving measurably better business outcomes. . “Without the CFO, it will be difficult to build a foundation for digital transformation in finance,” he says.
2) They don’t understand technology. “If you look at one of the key technologies behind advanced analytics, machine learning, it’s still an unknown technology for many financial leaders,” says Stouthuysen. “They still don’t understand the basics behind it, what the technology can do, and how to get started.”
He gives the following example in his report: “The CFO of a global automaker found that one of the main challenges in using AI and machine learning to detect financial and credit risk was explainability and interpretability. In such circumstances, how should the model make predictions to ensure that it does not use a surrogate of demographic characteristics that is illegal or unethical to consider when considering a credit application? It’s important to understand what you’re doing.”
3) Lack of advanced analytical skills in finance organizations. “We definitely need a strong, visionary, tech-savvy CFO,” says Stouthuysen. “But a great CFO also needs great talent to execute.” Digitally mature finance firms have upskilling his programs that provide additional training, he says. .
Report example: “To develop a team that is more analytically oriented, the CFO of an international hotel group stopped hiring candidates with traditional finance or accounting backgrounds and instead hired data scientists, We hired mathematicians and data engineers, and she provided these new hires with on-the-job training in budgeting, financial analysis, compliance, risk management, and other fundamentals of accounting principles. We were required to spend at least one day a week helping our staff develop their accounting and financial skills.”
Final Thoughts? “His successful CFO recognizes that the technological evolution we are currently facing can bring many benefits to the finance department,” he says Stouthuysen. “That CFO is very open to change.” He also says that CFOs should not just jump on new technology solutions, but “have a real strategy to move forward.”
Cheryl Estrada
sheryl.estrada@fortune.com
This article originally appeared on Fortune.com
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5 Side Jobs That Could Earn $20,000+ A Year While Working From Home
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