Who’s shaping the future of your agency? Increasingly, it’s the CFO
This article was first published on Federal News Network.
For years, the role of chief financial officer within a federal government agency was considered an administrative back-office function. Financial reporting was not done in real-time and process was focused on the tactical recording of transactions. It was straight-forward and reactive.
The tide started to change in 1990 when Congress passed the CFO Act, a clear signal that, while responsible financial stewardship was vital, it was no longer the CFO’s only role. The CFO Act went a long way toward improving the government’s financial management processes and outlining standards of financial performance and disclosure. But the most intriguing part was that it put the CFO in a proactive leadership position reporting directly to the agency head. Consequently, CFOs have since become more than guardians of government fiscal stability and soundness. They are part of top strategic leadership and an important advisor on the best deployment of limited resources to meet mission priorities. They also continue to emerge as leaders in workforce agility and drivers for IT modernization and digital transformation using tools like automation and artificial intelligence, but there’s still more to be done.
Based on our continued conversations with CFOs and their staffs across federal agencies and additional insights from recent research on the digitalization of the CFO function by the IBM Institute for Business Value, several recommendations have emerged for kick-starting and sustaining not only financial systems modernization, but any government agency’s IT modernization initiative.
Foster an agile, learning-based culture
One key to digital transformation is to create a culture that understands and values its potential. New technology is creating nearly constant change within the federal workforce – resulting in new roles that require new increasingly complex skills. To succeed, finance staff will need access to continuous learning tools and dynamic training content, with an eye on the latest technologies. For example, within the Department of Homeland Security, the Office of the Chief Financial Officer established a very effective Workforce Development Division. As IT modernization efforts require finance staff to gain and grow new levels of job proficiency and skills, this group prioritizes and creates the corresponding educational programs.
It’s equally important for CFOs to encourage senior finance staff to take temporary assignments in other offices within and outside of their current agency, in addition to interacting with industry to gain new perspectives, skills and relationships. Learning can come in many forms and from many sources. A CFO that is willing to encourage their best leaders to find opportunities for growth outside of their organization, knowing they could lose them, sends a message to the finance staff as a whole that the CFO organization is committed to their development.
Lead by unlocking the value of data
Siloed data and manual operations can be a hindrance to not only timely, data-driven decisions, but also to generally working and communicating efficiently day-to-day. The CFO should proactively establish a data strategy that standardizes financial and nonfinancial data definitions as well as an agencywide data governance framework with central data repositories. New concepts that provide greater agility without sacrificing integration or governance – such as a data fabric architecture – are also starting to take shape. Done right, a data fabric can connect the right people with the right data at the right time, helping reduce the technological complexities involved in data movement, transformation and integration. Taking these actions, and staying in the know about the latest technology advances, can be important and digestible first steps to becoming a world class data driven organization.
A related developing issue that should also be acknowledged and addressed head on is the role and placement of the chief data officer within the agency. As a key agency leader and mission advisor, the CFO has the opportunity to firmly influence and possibly lead this new CDO role to its full potential.
Identify intelligent workflow opportunities and deploy automation and AI
Numerous emerging technologies are available to help government agency CFOs and their staff get more from their data and work smarter. Automation and artificial intelligence, for instance, are key components to building intelligent workflows for the execution of more routine tasks, and can free up staff for higher-value activities like real-time planning and performance management.
Because piloting process automation tools can be less costly, CFOs are also seeing many automation initiatives, such as intelligent workflow through robotic process automation, in isolated pockets within the agency. These pilots should be encouraged and harnessed for the greater good of the organization by establishing a center of excellence. The COE can enable the sharing and deployment of best practices and consolidated reporting to the benefit of the agency as a whole. This can further drive value creation and informed decision-making while bringing a government agency to a new level of digital maturity.
These recommendations are just a start. The role of federal agency CFO will continue to expand and evolve to meet the demands of IT modernization. We can confidently say that CFOs who provide and support a learning based culture, lead the agency data journey and focus on continuous process improvement through automation can be positioned to guide and advise their organization and agency leader. Timely and effective decision-making will only get more integral to the CFO function. A clear and deliberate action plan can help guide CFOs, now and in the future.