Who is shaping the future of your agency? Increasingly, it’s the CFO
For years, the role of chief financial officer in a federal government agency was considered a back-office administrative function. Financial reporting was not done in real time and the process was focused on tactical recording of transactions. It was direct and responsive.
The tide began to change in 1990 when Congress passed the CFO Act, a clear signal that while responsible financial management was vital, it was no longer the CFO’s sole role. The CFO Act has done much to improve government financial management processes and set standards for financial performance and reporting. But the most intriguing part was that it put the CFO in a position of proactive leadership reporting directly to the head of the agency. Consequently, CFOs have since become more than guardians of government fiscal stability and soundness. They are part of high-level strategic leadership and are 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 of IT modernization and digital transformation using tools such as automation and artificial intelligence, But there is still a lot to do.
Based on our ongoing conversations with CFOs and their staff at federal agencies and additional information from recent to research on digitizing the CFO function by the IBM Institute for Business Value, several recommendations emerged to initiate and support not only the modernization of financial systems, but also any government agency’s IT modernization initiative.
Foster an agile culture based on learning
One of the keys to digital transformation is creating a culture that understands and values its potential. New technologies create almost constant changes within the federal workforce, resulting in new roles that require new and increasingly complex skills. To be successful, 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 has created a very effective Workforce Development Division. Since IT modernization efforts require finance staff to acquire and develop new levels of professional skills and competencies, this group prioritizes and creates corresponding educational programs.
It is equally important for CFOs to encourage senior finance executives to accept temporary assignments in other offices within and outside their current agency, in addition to interacting with industry to acquire new perspectives, skills and relationships. Learning can take many forms and come from many sources. A CFO who is willing to encourage their top leaders to find growth opportunities outside of their organization, knowing they might lose them, sends a message to all finance staff that the CFO’s organization finance is committed to their development.
Lead by unlocking the value of data
Siled data and manual operations can be an obstacle not only to timely, data-driven decisions, but also to generally effective day-to-day work and communication. The CFO should proactively establish a data strategy that standardizes financial and non-financial data definitions as well as an agency-wide 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 beginning to take shape. Done well, a data structure can connect the right people to the right data at the right time, helping to reduce the technological complexities of moving, transforming, and integrating data. Taking these steps and keeping abreast of the latest technological advancements can be important and digestible first steps towards becoming a world-class, data-driven organization.
A related developing issue that should also be recognized and addressed head-on is the role and placement of the data manager within the agency. As a key agency head and mission advisor, the CFO has the opportunity to strongly influence and eventually lead this new role of chief distribution officer to its full potential.
Identify smart workflow opportunities and deploy automation and AI
Many emerging technologies are available to help CFOs in government agencies and their staff get more out of their data and work smarter. Automation and artificial intelligence, for example, are key elements for creating intelligent workflows for performing more routine tasks and can free up staff for higher value-added activities such as time scheduling. real and performance management.
Because piloting process automation tools can be less expensive, CFOs also see many automation initiatives, such as intelligent workflow through robotic process automation, in isolated pockets at the within the agency. These pilots should be encouraged and leveraged 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 for the benefit of the agency as a whole. This can further drive value creation and informed decision-making while taking a government agency to a new level of digital maturity.
These recommendations are just a start. The role of the federal agency chief financial officer will continue to expand and evolve to meet the demands of IT modernization. We can confidently say that CFOs who deliver and support a learning-based culture, lead the agency’s data journey, and focus on continuous process improvement through automation can be positioned to lead and advise their organization and the head of agency. Fast and effective decision making will only become more integrated into the CFO function. A clear and deliberate action plan can help guide CFOs now and in the future.
Troy Edgar is a partner, finance and supply chain transformation, for IBM Consulting’s Federal Markets organization. He previously served as the Chief Financial Officer of the Department of Homeland Security. Susan Wedge is the Managing Partner of IBM Consulting’s Federal and Government Procurement organization.