Digitalization of Corporate Finance: How Finance 4.0 is changing the role of Chief Financial Officer (CFO)?

Digitalization of Corporate Finance:

How Finance 4.0 is changing the role of

Chief Financial Officer (CFO)?

MASTER THESIS WITHIN: Business Administration NUMBER OF CREDITS: 15

PROGRAMME OF STUDY: International Financial Analysis AUTHOR: Rusne Sablinskiene

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Master Thesis in Business Administration

Title: Digitalization of Corporate Finance: How Finance 4.0 is changing the role of Chief Financial Officer (CFO)?

Authors: Rusne Sablinskiene

Tutor: Dinara Tokbaeva

Date: 2021-05-24

Key terms: CFO, Finance 4.0, Industry 4.0, Digitalization, Digital disruption, Digital

transformation, Corporate finance

Abstract

Background: While technologies are progressing exponentially and inevitably becoming an essential as a means for business to adapt and survive, no exception is the finance division. Digitalization activities have become do or die tasks for many companies and have been a challenging process for finance departments. Yet, in the context of Finance 4.0 it is barely researched. Due to evolving understanding of how finance departments should look, the Chief Financial Officer (CFO) as the leader of the whole finance division is going through a lot of changes surrounded by uncertainty. The expectations for CFO and finance department are increasing and it becomes unclear what financial specialists should actually deliver for business. Hence, this paper aims to identify how CFO’s role is changing because of Finance 4.0, otherwise known as finance function digitalization, and what skills will be needed to successfully work as CFO in the new environment that seeks to become fully digital and automated.

Purpose: The purpose of this master thesis research is to identify and analyze how the CFO’s role is changing because of Finance 4.0 and what skills will be required in future for the CFO position.

Method: A qualitative study with interpretivism philosophy, inductive approach and narrative inquiry strategy is taken as the best options for this particular study. Semi-structured interviews with Chief Financial Officers (CFOs) is a method for primary data collection as well as thematic data analysis for gathered data analysis are chosen in order to answer research questions.

Conclusion: This research investigates how Finance 4.0 is changing the role of CFO as well as explores what future skills are required for the profession. The research clearly reveals that digitalization is affecting CFO’s role significantly and brings more uncertainty. Research results show that fundamental responsibilities of a CFO will not undergo changes any time soon as well as the skills required for work will remain largely the same. This is because the professional skills of a CFO directly reflect the responsibilities and working tasks, and, moreover, the finance departments are not completely undigitized. However, even

though the foundation of the CFO role remains the same, digital disruption causes expansion and increased complexity. While existing academic knowledge is focused mostly on the change process itself and the benefits of digitalization, CFOs revealed what is challenging for them during this digital journey and what negative effect they have experienced.

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Table of Contents

1 Introduction

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1.1 Background 1

1.2 Problem description 1 1.3 The aim of the study 2 1.4 Research question 2 1.5 Research methodology 2 1.6 Structure of thesis 2

2 Literature review

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2.3 Chief Financial officer’s (CFO) role and responsibilities 7 2.4 CFO’s professional skills 8

3 Methodology

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3.1 Research philosophy 11 3.2 Research approach 12 3.3 Research design (methodological choice) 12 3.4 Research strategy 13 3.5 Time horizon 13 3.6 Data collection 13 3.6.1 Secondary data collection 13 3.6.2 Primary data collection 14

Sample 15

Interview guide 17 3.7 Data quality 18 3.7.1 Reliability 18 3.7.2 Trustworthiness 19 3.8 Data analysis and ethics 19 3.8.1 Data analysis method 19 3.8.2 Data ethics 20

4 Research findings

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4.1 Digitalization of the finance function 21 4.2 CFO’S role and responsibilities 24 4.3 Digitalization challenges for CFO 24 4.4 Future of the CFO’s position 25 4.5 Traditional and additional CFO’s skills 26

5 Research analysis

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5.1 Need of digital solutions for finance function 28 5.2 The other side of digitalization 30 5.3 CFO: from gatekeeper to creator 31

6 Conclusions

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7 Discussion

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7.2 Limitations 37

7.3 Future research 38

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Figures

Figure 1 The four stages of the Industrial Revolution. Source: Kagermann et al. (2013) 3 Figure 2 Phases of the Finance departments’ evolutionary journey. Source: Govender

et al. (2019) 8

Figure 3 What Is and What Is Not a CFO? Source: Dergel (2014) 9 Figure 4 The Research Onion model. Source: Saunders, Lewis and Thirnhill (2012) 11 Figure 5 Research themes identification procedure. Source: Author 19

Tables

Table 1 Information about the interview participants and interview. Source: Author 17 Table 2 Traditional & Additional (future) CFO’s skills. Source: Author 27 Table 3 CFO’s responsibilities from literature review & semi-structured interview.

Source: Author 31

Appendix

Appendix 1 GDPR Thesis Study consent form 43 Appendix 2 Interview guide 45 Appendix 3 Data analysis final coding 48

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1. INTRODUCTION

_____________________________________________________________________________________ This chapter introduces the background of the paper as well as the problem, aim of the study. Moreover, a short presentation of the research methodology and the structure of the thesis can be found.

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1.1 Background

Nowadays technologies are progressing exponentially and inevitably becoming an essential as a means for business to adapt and survive (Deloitte Touche Tohmatsu Limited, 2020a). It is changing more fundamentally than the world has ever seen (Justenhoven, Loitz & Sechser, 2018) and expectations for business are growing (Sher, Ehrenhalt & Englert, 2018). Digitalization is all about improving business economics, consumer and employee experience, so in order to successfully operate in the modern world, digital transformation and technologies have to be taken seriously (Deloitte Touche Tohmatsu Limited, 2020a). Anyway, it is often easier said than done. Today it is not enough just to be open minded for technologies, companies have to ensure commitment from all levels of the organization to successful digital transformation (Deloitte Touche Tohmatsu Limited, 2020a).

As companies are transforming, so too is their finance division (Justenhoven et al., 2018). Even though finance departments are far behind with technologies compared with other departments, due to dramatic changes caused by the financial crisis in 2008 (Govender & Monteiro, 2019), employees are starting to do new things in new different ways (Sher et al., 2018). Moreover, the modern outlook to controllership is sharply contrasting to the past (Kaplan, Waelter, Nuttycombe & Carrington, 2017). The idea of Chief Financial officers (CFO), as a leader of the finance function of the company, becoming agile, oriented on innovations and strategic decisions, instead of being mostly technical functions, is getting stronger (Kaplan et al., 2017). It is clear that the old way of doing things is not enough anymore and executives have to be ready for the Fourth industrial revolution (Deloitte Development LLC, 2018a). Hence, for CFOs there are only two options to choose from: either change and adapt or retire (Sher et al., 2018).

1.2 Problem description

Exponentially progressing technologies are changing daily work and business routines from the basis. Since digitalization is a quite new phenomena, it brings a lot of

uncertainty that leads to complications in reacting and adapting. As well as can require a lot of financial resources and can cause quite a lot of stress. Therefore, The issue of uncertainty about CFO function and the diverse set of professional skills required to successfully adapt in the Finance 4.0 environment is the focal problem of this paper.

2 1.3 The aim of the study

The aim of this paper is to identify how the CFO role is changing because of the Finance 4.0 and what can be identified as a set of skills needed to successfully work in this position.

1.4 Research questions

In order to fulfil the aim of this study and ensure the consistency of the paper, it is important to define research questions. After conducting a literature review, these are the research questions that this particular study aims to answer:

- How is Finance 4.0 changing the role of CFO?

- What are the future professional skills required for a CFO position?

1.5 Research methodology

Methodology of this research is based on the model called The research onion presented by Saunders, Lewis and Thornhill (2012). As for the methodological choice, qualitative study with interpretivism philosophy, inductive approach and narrative inquiry strategy is decided as the best options for this particular thesis. Narrative literature review for secondary data collection and semi-structured interviews with Chief Financial Officers (CFOs) for primary data collection are found as the best methods in order to answer research questions as well as thematic data analysis method is chosen for research findings and research analysis chapters.

1.6 Structure of thesis

This master thesis consists of literature review, methodology description, research findings and analysis, conclusions and discussion that involves implications, limitations and future research. As for literature review, it explains the existing knowledge on main definitions of the study: Industry 4.0, Finance 4.0, Chief Financial Officer

(CFO), CFO’s professional skills and responsibilities. Also, analyzes the existing predictions about how the CFO role should look in future. The methodology describes the philosophy, approach, design, time horizon and process of the research as well as explains chosen methods and techniques. Further, the research findings and analysis part is focused on identification of patterns of meaning in the dataset which is used to create coding that leads to themes and helps to answer the research questions.

Conclusion of this master thesis summarizes the output from the analysis and the discussion part leads to limitations faced in this study, defined theoretical and practical implications as well as potential future research possibilities.

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2. LITERATURE REVIEW

___________________________________________________________________________________ The purpose of the Literature review chapter is to explain the existing knowledge about the main definitions of this master thesis: Industry 4.0, Finance 4.0, CFO’s role & responsibilities as well as CFO’s skills. Moreover, to examine what are the challenges and opportunities of the digitalization of corporate finance, as well as future predictions for the CFO role.

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2.1 Industry 4.0

The main focus of this paper is the Finance 4.0 environment, but in order to understand it, we need to start from defining what is Industry 4.0, otherwise known as the fourth industrial revolution (Stefanuk, February, 2021). In history, the world has faced four industrial revolutions and each of them brought more and more complexity to the systems and environment. (Kagermann, Wahlster, & Helbig, 2013) (Figure 1).

Figure 1. The four stages of the Industrial Revolution. Source: Kagermann et al. (2013)

In the late 18th century the water and steam powered production mechanization was introduced to the world and that represents the first industrial revolution (Kagermann et al., 2013). Following electricity powered mass production based on assembly lines discovered in the late 19th century marked the second industrial revolution (Kagermann et al., 2013). Afterwards, due to advancement of the information technologies in the

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second half of the 20th century, the automation of manufacturing started to rise and led to the third industrial revolution (Kagermann et al., 2013). The term Industry 4.0 was first presented in 2011 by German government at the Hannover Fair event, symbolizing a brand new era for industries - fourth industrial revolution (Tay, Aziati, Chuan & Ahman, 2018). However, Industry 4.0 term is not commonly used outside the german speaking countries and Scandinavia, even though it represents digital transformation (or in other words digitalization) of industries (Catkin, June 2016). Hence, in this paper digitization and digital transformation are used as synonyms for Industry 4.0 (later on, for Finance 4.0 as well).

Industry 4.0 represents the way in which smart connected technology becomes embedded within organizations (Deloitte Development LLC, 2018). The Fourth Industrial revolution has a power to change many things around - work, operations, society (Deloitte Development LLC, 2018). Basically, the main idea of Industry 4.0 is that businesses are enabled to take advantage of modern technologies to create

innovative business solutions instead of using technologies in the same old way of doing business (Deloitte Development LLC, 2018). This transformation involves and affects everything and everyone around, so it is crucial to have a good understanding about the connection between business and social needs, between financial outcomes and innovative strategies, between workforce productivity and people’s well-being as well as integration of existing technologies within creation of new ones (Deloitte Development LLC, 2018).

Over time the Industry 4.0 term was evolving, getting broader and now it is one of the greatest market shaping trends in the world. Research shows that digital business strategy has a positive impact for companies: encouraging innovative solutions lead to increased agility and profitability of the business (Murawski, Bühler, Martensen, Rademacher & Bick, 2018). Biggest benefits of the digitalization for the companies are increased revenue (Westerman, Tannou, Bonnet, Ferraris, & McAfee, 2012) and

competitive advantage (McKinsey Digital, 2016) which are the result of increased sales, risk reduction, efficiency improvement, expanded digital channels and new business fields (Neumeier, Wolf & Oesterle, 2017).

Digitalization today provides many extraordinary opportunities and even opens the window to Winner takes all dynamics for those that find a way to pursue modern technologies and benefit from innovative business models (Schreckling & Steiger , 2017). However, this revolution can take decades and can also bring nearly as much uncertainty as possibility (Deloitte Development LLC, 2018). While some companies are enjoying the success that digital disruption has brought, market players that are not that agile and open for technologies are struggling (Schreckling et al., 2017).

Companies that are ignoring the fact that technologies are already here and it is crucial to transform and adapt, are at risk to be outcompeted by those faster and smarter ones (Schreckling et al., 2017).

2.2 Finance 4.0

As the present world is going through a fourth industrial revolution, which aggressively transforms every part of the business, no exception is the finance division. One of the major challenges nowadays for finance functions is digital transformation which in many companies is a do or die task (Glader & Strömsten, 2020). However, due to the

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great crash in 2008, finance departments and financial services organizations have experienced dramatic changes that enabled them to fully benefit from the technological innovation disruption of the past decade (Govender & Monteiro, 2019). Because of the financial crisis back then, Finance departments as non-revenue generating departments were forced to rapidly cut the costs and undergo around a decade of adopting and complying with constantly changing regulations (Govender et al., 2019). Not surprisingly, the budget of the financial department was focused on complying with regulations, because it was mandatory when at the same time technological solutions were just nice to have (Govender et al., 2019). Of course, during the past decade major steps were taken: beginning of transactional accounting outsourcing to low cost

countries and business-oriented controllers separation from statutory dimension (Glader et al., 2020). Unfortunately, even now when the world is stepping into the digital era, technological solutions such as Excel are still most widely used as a work tool, which shows that the finance division is far behind regarding technologies in comparison with other departments (Govender et al., 2019). This is quite ironic due to how many parts of any business are affected by finance functions (Klimas, January, 2019).

Govender and Monteiro (2019) talked with CFOs and other senior finance leader from the companies at the different stages of digitalization and all of them agreed, that it is critical for finance departments to become more digital. They also claim that even though digitalization takes time, effort and requires long-term strategy, the finance division has to see technologies as worthwhile, which are basically short or medium term benefits (Govender et al., 2019). Generally speaking, digitalization has to solve real problems that finance departments are facing. Research shows that nowadays CFO are actually seeing long-term value of digitalization embedding with corporate

reporting, organization culture and decision making processes (Corson & Klimas, 2020).

Data quality has always been a great problem of a finance division (Govender et al., 2019). Due to this issue, finance departments are still spending large amounts of their time searching for mistakes and correcting them (Govender et al., 2019). Moreover, finance function of the large multinational corporations are still spending about 30% of the time creating reports (Glader et al., 2020). CFOs and other finance professionals are

buried in reporting together with governance and the need for these two functions is

only increasing (IMA; ACCA, 2014). Due to technological disruption the complexity of business as well as amounts of data are growing and it gets more and more challenging to finance professionals to gather meaningful information for effective and efficient decision making process (IMA; ACCA, 2014). Moreover, it gets more challenging to build well operating ERP systems for large scale enterprises (Glader et al., 2020). Finance departments are still seen more as scorekeepers that provide data to management than value added participants in the decision making process

(IMA; ACCA, 2014). Hence, digital disruption has brought these challenges into the spotlight, now it is time to change and move the finance division and its professionals into the digital era.

Finance 4.0 is a fourth industrial revolution for finance or as a subset of Industry 4.0 (Klimas, January, 2019; Stefanuk, February, 2021). For no other business function digitalization is truer than for finance (Klimas, January, 2019). For example, traditionally account payables and receivables is a back-office function, but in the digital economy with involvement of technologies it could be automated (Klimas,

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January, 2019). We can only imagine how much time it would save for CFOs as well as their professional team and that is where we start to see real benefits. It is even believed that outcomes like that would totally free finance specialists from report generating processes, and also encourage faster and more efficient decision making processes (Glader et al., 2020).

The whole idea of Finance 4.0 is to involve intelligent technologies such as Internet of Things (IoT), Artificial Intelligence (AI), Blockchain, Robotic Process Automation (RPA) and innovative visualisation tools into the finance function (Klimas, January, 2019; Govender et al., 2019). The journey starts with technological solutions taking over building block activities - processing, recording, correcting and controlling (Govender et al., 2019). New digital tools will even create a possibility for financial controllers' make monthly reporting into a zero day's work (Glader et al., 2020). This would allow finance departments to spend minimal time dealing with daily operations such as reporting and compliance with regulations (Govender et al., 2019). Needless to say, that would leave more space for focusing on value enhancing activities, such as predictive insights that in nowadays dynamic business environments are crucial (Govender et al., 2019). Also, it will allow more time to work with business partners (Glader et al., 2020). Of course, CFOs and other finance professionals will continue to interpret accounting and regulatory rules, but due to modern modeling capabilities, they will be better equipped to respond quickly and strategically (Govender et al., 2019). This strongly refers to another common problem of large Scandinavian corporations - visualization (Glader et al., 2020). Even as just the start of a long journey, it will change CFOs’ and the whole finance department lifes significantly. Corson et al. (2020)

predicts that in 2025 finance will be more open because of the extended ecosystem, deeper collaboration and a more fluid operating model.

Moving forward on the digitalization path, the next significant change has to be automation by involving intelligent robots (Govender et al., 2019). Ideally, future finance departments should get fully automated from input to output (Govender et al., 2019). Of course, it is not an easy task and requires long-term strategy, but benefits are worthwhile to give some effort (Govender et al., 2019). RPA systems have a short payoff period, they can work 24/7, they don’t get sick and they are self-learning (Govender et al., 2019). Since finance function is very sensitive for any deviations according to the task performance - RPA systems solve this problem: robots do not make any deviations and once a robot program is created, it can be copied to another robot (Govender et al., 2019). According to Sher et al.(2018) predictions, transactions of the finance department should become touchless because of blockchain technology and periodic reporting will no longer drive operations and decisions.

Anyway, after talking with CFOs IMA and ACCA (2014) defined an ineffective Finance - Business partnering problem as a result of the evolving technological

environment. Additionally, the decision making process not necessarily will benefiting from increased speed of work: while with the help of the Cloud technology everything will become agile, accessible and easier for companies, it can potentially give an end for the internal discussion about what should either be centralized or decentralized (Glader et al., 2020). In response, Govender et al. (2019) sees Cloud technology as a solution rather than a threat. The biggest advantages for the finance department that Cloud can bring are the cost of finance technology becoming OPEX instead of CAPEX,

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any corner of the world that naturally should increase the ability to communicate (Govender et al., 2019).

As this significant transformation is happening, it inevitably changes the understanding of what kind of professionals should be working in the finance department of the future. Of course, core accounting knowledge and controlling understanding are crucial for successful finance specialists, but instead of previous experience with specific production processes, communication, data science skills and ability to innovate becomes more important (Govender et al., 2019). Individuals must embrace digital and technological change and it naturally will change the required skills set (Glader et al., 2020). Since CFOs are professionals with many years of experience in finance, that kind of radical change of expectations brings an uncertainty about the future of the CFO in the Finance 4.0 environment.

2.3 Chief Financial officer’s (CFO) role and responsibilities

Good business is like an engine for society and it needs a good oversight which is the role of the Chief Financial Officer (CFO) (Mellon, Nagel, Lippert & Slack, 2012). Yet, a lot of business people asked about what CFO is, finding it difficult to define (Dergel, 2014). Cambridge Business English Dictionary defines CFO as “the most important financial manager in a company or organization, who is the head of the finance department” (Cambridge Business English Dictionary, 2021). CFO responsibilities involve managing the budget, corporate spending, internal control as well as supervising financial reporting and ensuring compliance with accounting regulations (Hoitash & Kurt, 2016). It also involves outsourcing financial data management, provision of management information, managing investor relations, insurance and treasury activities (Mellon et al., 2012). It is clear that CFO already has a wide spectrum of financial responsibilities (Mellon et al., 2012). Usually, the CFO is considered as the second in importance after the Chief executive officer (CEO) in the corporate hierarchy (Hoitash et al., 2016). Generally speaking, while the CFO looks after accounting and all the finance functions of the company, other parties such as CEO and the board members are responsible for making decisions that affect the business (Hoitash et al., 2016).

Moreover, financial reports provided for the audit committee supervision, have to be certified by both CEO and CFO (Hoitash et al., 2016). Nevertheless, CFO is not a single decision maker with respect to accounting, investing and financing, but more as a advisor that gathers data and performs financial analysis required for major business decisions (Hoitash et al., 2016). The financial probity has never been more important than now as well as the job of the CFO has never been as complex or broad (Mellon et al., 2012).

Since expertise and unique technical knowledge of CFOs position is crucial for successful key business decisions, expectations for finance executives to partner more closely with the business are rising (Kaplan et al., 2017). Companies nowadays are looking for CFOs that would not only focus on financial reporting and supervision, but would also be involved in major business decision making processes (Caglio, Dossi & Van der Stede, 2018). Moreover, nowadays financial departments, the same as any other business function, have to deal with accelerating digital disruption that brings even more expectations and uncertainty to the CFO role and whole vision for controllership.

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Govender et al. (2019) created a model, that explains how CFO functions will change in different phases of finance digitalization evolutionary journey (Figure 2). As can be found in Figure 2, there are four phases of the finance department evolutionary journey: Legacy dominated CFO, Digitally enhanced legacy CFO, Digitally enabled CFO and Digitally optimized CFO (Govender et al.,2019). The journey starts from the CFO that is working on mostly building block activities, does not initiate changes in finance processes for decades, does a lot of work manually, does not use Cloud technology and involves a little or none of robotics and AI into daily work (Govender et al., 2019). With the knowledge that we have about the digital transformation now, the most digitally matured CFO represents Digitally optimized CFO, who spends most of the time on value driven activities, optimally manages and controls, uses Cloud possibilities at its maximum as well as finance block activities are fully driven by AI (Govender, 2019). Basically, it is a journey from 80% of building block activities, all the way up to high AI involvement and 95% of value enhancements.

Figure 2. Phases of the Finance departments’ evolutionary journey Source: Govender et al.

(2019)

Corson et al. (2020a) also claims that modern CFO should focus on how to balance between long-term value and short-term results. Also, every CFO knows that a company would benefit a lot if the finance department could deliver better quality financial information in a more timely fashion (Sher et al., 2018).

2.4 CFO’s professional skills

According to Mellon et al. (2012) there are two types of CFOs: financial CFOs and operational CFOs. Basically, most of the CFOs are either strong in financial decision making or have strong operational backgrounds, rather than being strong in both

(Mellon, 2012). However, in today's complex world successful CFOs are those who can balance between traditional approach and new mandates while protecting values

together with future growth (Corson et al., 2020a). Mindset of the CFO plays a break

from the past role and becomes as crucial as the finance skills (Mellon, 2012).

It is important to understand that having a title CFO does not necessarily mean being a

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strategist, leader and advisor at the same time (Dergel, 2014). Figure 3 summarizes what is and what is not a CFO.

Figure 3. What Is and What Is Not a CFO? Source: Dergel (2014)

CFO strategist makes business decisions and creates plans of actions based on the company’s strategy as well as participates in the company's strategy development (Dergel, 2014). As for the future, CFOs are increasingly seen as key stakeholders of the company (Corson et al., 2020b). Moreover, CFOs are expected to put the finance department into a more central position when reframing long-term value creation goals (Corson et al., 2020b).

Everyone would agree that as a real leader, CFO is a person that inspires, sets the pace and acts as an example for the people that are working under their authority as well as for other executives (Dergel, 2014). As it is about the CFO himself it is also about the people in the finance department. Usually, a CFO is defined as a left-brain approach manager due to strong rational thinking and analysis based decision making (Corson et al, 2020b). However, it is often the case that the finance team is not developed broadly enough to reach success (Mellon et al., 2012). There are two reasons why it happens: relatively narrow finance professionals' career development and extended finance teams, in many cases even spreaded around the globe (Mellon et al, 2012). Hence, as a leader of the finance division, CFO has to build the trusted relationship for a strongly connected leadership team and for that a right-brain capabilities are needed (Corson et al., 2020b). CFO has to become a leader that communicates, inspires and motivates people as well as encourages discussions between fair and balance (Corson et al., 2020a).

CFO plays an advisor role by sharing the knowledge with CEO and other executives when making major business decisions (Dergel, 2014). Emotional intelligence plays an important role here: to create a stronger leadership team and close relationship with other C-suite peers, CFO needs to recognize and understand people’s emotions,

especially in difficult conversations as well as find the ways to speak the same language (Corson et al., 2020b).

Additionally, most of the data managed by the finance department today is delivered by ERP systems (Glader et al., 2020). Also, a survey conducted with CFOs by Corson et al. (2020a) shows that many finance functions, such as internal auditing, financial

reporting, planning, control, risk, compliance, tax and treasury, are under the threat of being displaced by AI and automation. Therefore, it is important to understand that skills needed to be a successful CFO are also evolving and require additional ones than only traditional CFO skills. Potentially business will require skills in dealing with AI and machine learning (Glader et al., 2020). However, survey shows that CFOs are aware about the pressure to change and at least 40% of CFOs participated claimed to

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have advanced capabilities in areas such as blockchain-based tools, advanced analytics, AI, automation and RPA, ERP systems and Cloud (Corson et al., 2020). It is still not that clear what skills will be needed in the new digital environment, but if a finance degree stops being an absolute necessity for a career, it raises a concern about finance specialists' knowledge about the fundamental mechanics of accounting and

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3. METHODOLOGY

___________________________________________________________________________________ The purpose of the Methodology chapter is to present research philosophy, approach, design, strategy, time horizon and quality. Also, to present secondary & primary data collection, research ethics as well as methods used for analysis of collected data.

______________________________________________________________________ Methodology is an integral part of this master thesis and can be defined as a general strategy of how research is performed (Melnikovas, 2018). It explains the understanding of the research questions and the research method choice as well as lets to ensure the consistency between chosen tools, techniques and underlying philosophies (Melnikovas, 2018). Accordingly, The research onion presented by Saunders, Lewis and Thornhill (2012) (Figure 2) is seen as a best suitable methodology construction for this particular research. The main idea of this model is to provide the explanation for assumptions of each stage of the methodology which is necessary in order to have a high credibility of the paper (Saunders et al., 2012). The research onion has 6 layers that represent

research stages: research philosophy (3.1), research approach (3.2), research design (methodological choice) (3.3), research strategy (3.4), time horizon (3.5), techniques and procedures (data collection) (3.6), data quality (3.7) as well as data analysis and ethics (3.8). The structure of the methodology chapter is based on these layers.

Figure 4. The Research Onion model Source: Saunders, Lewis and Thirnhill (2012)

3.1 Research philosophy

Classical research methodology is usually based on specific philosophical theory which later on defines used strategies and techniques, so it is important to define research philosophy from the very beginning of the research (Melnikovas, 2018; Saunders et al., 2012). There are few different research philosophies (so called research paradigms) that

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can be classified by the responses to three fundamental questions: ontological (explained by the nature of reality or being), epistemological (explained by the

acceptable knowledge) and methodological, so called axiology (explained by the role of values in research) (Aliyu, Singhry, Adamu & Abubakar, 2015; Saunders et al., 2012). According to that, Saunders et al. (2012), classified four main research philosophies: pragmatism, positivism, realism and interpretivism. Pragmatism, positivism and realism were rejected as they do not match with the aim and purpose of the study, so

interpretivism was selected as a most suitable paradigm for this particular paper.

Basically, this study requires small samples with depth investigation (i.e. semi-structured interviews) instead of having large samples with standard data (i.e. annual reports). Also, the study has a focus on a very specific target group - Chief Financial Officers, in a clearly defined environment that is surrounded by uncertainty - Finance 4.0. Due to that, research is relatively subjective. Moreover, interpretivism philosophy claims that it is necessary to take a human factor into consideration which is also seen as an important aspect for this paper (Saunders, 2012). Besides, interpretivism claims that the future is unpredictable and knowledge of the future events can be collected only using intuitive strategies (Melnikovas, 2018). Digitalization in general is surrounded by uncertainty.

3.2 Research approach

There are three main research approaches presented by Sanders et al. (2012): deduction, induction and abduction. Generally speaking, while deductive approach moves from theory to data and is mainly about building and testing a theory, inductive approach moves from data to theory and creates a generalizable projection based on observations (Saunders et al., 2012; Azungah, 2018). On the other hand, the abductive approach starts from the observations and moves forward to creating a theory of how it could have occurred (Saunders et al, 2012). Collecting a substantial amount of data, then moving forward to searching for patterns in the data and finally creating a general set of propositions is considered as the most suitable way of conducting this research. Hence,

induction is a research approach selected for this paper. 3.3 Research design (methodological choice)

Research design can be defined as an overall plan for answering research questions (Saunders et al., 2012). Along with what researcher wanted to achieve, the research design can be quantitative, qualitative or a complex mix of both (Saunders et al., 2012). While quantitative research is based on numeric data and describes what exists,

qualitative research refers to the collection of descriptive data and conveys what exists (Saunders et al., 2012; Melnikovas, 2018; Gray, Williamson, Karp & Dalphin, 2017). Due to interpretivism as a research philosophy and inductive research approach selected, the most appropriate research design for this master thesis is qualitative. The biggest advantage of the Qualitative research method is that it allows us to identify subtleties and interpret data that numbers do not convey (Gray et al., 2017). It also seeks to create a better understanding of social realities and focus on meaningful patterns, processes and structural features by looking from research participants point of view (Flick, Kardorff & Steinke, 2004). Digitalization of corporate finance in general is a field that is surrounded by uncertainty about the future and has a lack of previous findings, thus taking a research participants point of view (which in this particular study

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are CFOs with many years experience in finance function) creates a bigger chance to provide real predictions and solutions with potential implications.

3.4 Research strategy

While research design illustrates the overall plan for answering the research questions, research strategy is a plan of actions to achieve the goal (Saunders, 2012). There are quite a few strategies to choose from, such as experiment, survey, archival research, case study, but narrative inquiry strategy is considered as the most suitable for this study. Narrative inquiry is a set of human stories of experience that provides a strong foundation for investigating how people experience the world (Webster & Mertova, 2007). Main prons of this research strategy are simpliness of getting people to tell their story, because people do like to share their experience; It is possible to gain in-depth data because it occurs easily in narrated events; People do not tend to hide true facts when telling their story (Savin-Baden & Niekerk, 2007). The target group of this

particular study is CFOs from different backgrounds and it can be difficult to collect the right amount of acceptable qualitative data. Hence, it is important to choose the right research strategy that empowers researchers to reach the most relevant information. Moreover, investigating topics such as digitalization which is accompanied with uncertainty, it is important to focus on experience and insights from practice.

3.5 Time horizon

Saunders et al. (2012) have provided two options of time horizon: Cross-sectional and Longitudinal time horizon types. Since only studies conducted through a short period of time are used for this particular research, the time horizon selected for this paper is

cross-sectional (Saunders et al., 2012). Data used for research is collected in

approximately 4 months due to time limitations, but can still be applied to different contexts because of the variety of industries.

3.6 Data collection

The research involves both primary- and secondary data. As for secondary data

collection, a comprehensive literature review was conducted in order to gain knowledge about the subject and prepare for the further investigation. Review involves secondary data analysis on Industry 4.0 and Finance 4.0 phenomena as well as the role of CFO and skills required for work now and in future. After successfully conducting secondary data collection, researcher held eight qualitative semi-structured interviews with CFOs from two different countries and different industries in order to gather empirical evidence for further analysis and research questions.

3.6.1 Secondary data collection

First step of data gathering is identified as a secondary data collection - narrative

literature review. Narrative literature review can be described as a discussion of

important topics from a theoretical point of view (Jahan, Naveed, Zeshan & Tahir, 2016). This literature review method allowed researcher to scan literature on a broader scale than traditional systematic review (Phillipson, Goodenough, Reis & Fleming, 2016). Main purpose of narrative literature review was to investigate the current

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knowledge on the subject, provide an extensive overview for the reader and place information into perspective (Green, Johnson & Adams, 2006). Moreover, as an additional benefit of narrative literature review a potential to reduce the author’s bias was seen (Green et al., 2006).

To gain a better understanding about the subject, research involves not only academic publications, but also reports from consultancy services companies such as Deloitte, PricewaterhouseCoopers, McKinsey & Company and others. These reports are treated as up-to-date material with a potential to build a basis for future predictions. Anyway, the risk of data being biased is taken into account.

The goal of the researcher was to have literature review as exhaustively as it relatively possible. To fulfill this expectation, four scholarly databases were used: Primo by the Jönköping University, Google Scholar, Business Source Premier and RePEc IDEAS. Criteria followed during literature review by researcher:

- Only articles published January 1, 2000 or later; only reports from consultancy services companies published January 1, 2014 or later.

- Only reports from large scale and reliable consultancy services companies can be accepted.

- Peer-reviewed articles.

- Articles released by authorities or other official executives. - Articles published in academic journals.

Additionally, reference lists of the most relevant articles and reports of consultancy services companies were investigated for potential literature sources.

3.6.2 Primary data collection

For the primary data collection eight semi-structured interviews were conducted. Semi-structured interviews are pre-scheduled and relatively detailed interviews held in order to collect sufficiently objective knowledge from the respondents that have experience related with the subject (McIntosh & Morse, 2015). Analytically, it is easy to compare respondents of the research after conducting this kind of interviews and quantify data if needed, because all the interviewees get the same questions in the same order

(McIntosh, 2015). This method of primary data collection was selected for the research, because of these reasons:

- Digitalization is surrounded by uncertainty, hence it is inefficient to hold strictly structured interviews; It is a risk that something important will not be asked. - It has a basic structure that helps to keep the consistency of the interview and the

whole research, but at the same time leaves space to get insights that were not taken into consideration during the literature review.

- Quantitative analysis might be recommended for future research and this type of primary data collection empowers researcher to quantify collected data if

needed.

As this particular research aims to identify CFO role and skills changes, it was decided to hold interviews with CFOs regardless of the country, age or industry they represent. Criteria how potential interviewees were selected , presented more detailed in the remaining chapter.

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McIntosh et al. (2015) also recommend holding a pilot interview in terms of critically testing the prepared interview questions. However, due to limited possibilities to reach the necessary number of research participants, it was decided to involve all the

conducted interviews into the further research analysis.

Sample

Many discussions about the size of the sample of qualitative research in literature can be found. However, according to McIntosh et al. (2015), the size of the sample has to ensure the adequacy of the data collected. However, Sim, Saunders, Waterfield & Kingstone (2018) made a statement that it is problematic to predefine a size of sample for inductive research, because of the complexity to predefined the themes. Also, Emmel (2013) declared that it is way more important what has been done with the data collected instead of the number of cases counted.

With this in mind, snowball and judgemental methods were selected as the best way to find the right participants for the research. First, the profile of the potential respondent was identified:

- Currently working or has recently worked as CFO. - Has at least 5 years experience in finance.

However, such indicators as country of origin, age, gender or working industry were not taken into consideration due to ambition to build an overall picture of the finance

department and CFO role and skills required in any background as well as assuming they do not have an impact on the results. Moreover, the variety of industries helps to reduce a possible bias because of the industry. Only because of simplicity and increased possibilities, CFOs that were working in companies that operate in either Sweden or Lithuania were counted as suitable.

Second, several potential respondents were contacted using personal connections, official email address and Linkedin.com social media platform. As it was expected, few of them gave further recommendations of people that in their opinion would be a better fit for semi-structured interviews within digitalization topics focused on CFOs. As expected, more than 60% of invited CFOs have declined the invitation or have not responded to mail or message. Also, those who accepted the invitation mentioned that topic sounded interesting and a lot promising. Moreover, few of them admitted agreeing to the interview with the expectation to learn something new about the subject as well. Due to privacy and confidentiality reasons that are defined by GDPR thesis study

consent (can be found in appendix 1), there are no names provided of interviewees and

the company/organization they are working in. Hence, every interviewee got the code name Participant X (PX), depending on the order of interviews. Moreover, all the participants’ specifications are presented in the same structure: Working industry, age category, gender, experience in Finance, experience as CFO, previous position, size of the managed team.

Eight interviews in total have been conducted during primary data collection, with four CFOs from companies operating in Lithuania and the same number of CFOs from the companies operating in Sweden. In table 1 code of the participant, specifications, date and duration and the language of the interview can be found.

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Interviewee Specifications Date and duration Language

Participant 1

P1 - Corporate (cruise ships/real estate) - Operating in Lithuania - 40-50 age category - Female - 20 years of experience in Finance - 10 years as CFO - Previously as CAO - Managing 5 people team

Date: 2021-03-31

Duration: 1 hour Lithuanian

Participant 2 P2 - Pharmaceuticals - Operating in Lithuania - 30-40 age category - Female - 20 years of experience in Finance

- Not a CFO at the moment, current position - Strategy Director

- 5 years as CFO

- Previously as project manager - Managed 10 people team

Date: 2021-04-01 Duration: 1 hour Lithuanian Participant 3 P3 - Fintech - Operating in Lithuania - 30-40 age category - Male - 10 years of experience in finance - 1 year as CFO - Previously as Co-founder/CEO - Managing 4 people team

Date: 2021-04-02 Duration: 0,5 hour Lithuanian Participant 4 P4 - Financial Services - 40-50 age category - Operating in Lithuania - Female - 17 years of experience in Finance

- 10 years as CFO and CEO - Previously as CAO

- Managing 3 people team

Date: 2021-04-06 Duration: 1,5 hour

Lithuanian

17 P5 care services

- Operating in Sweden - 30-40 age category - Female

- 8 years experience in Finance - 2 years as CFO

- Previously as Financial Analyst - Managing 6 people team

Duration: 1,5 hour Participant 6 P6 - Financial Services - Operating in Sweden - 30-40 age category - Female - 10 years of experience in Finance - 1 year as CFO

- Previously a Financial Auditor - Managing 5 people team

Date: 2021-04-25 Duration: 1 hour

Lithuanian

Participant 7

P7 - IT Consulting - Operating in Sweden - 40-50 age category - Male - 20 years of experience in Finance - 4 years as CFO - Previously as CAO - Managing 8 people team

Date: 2021-05-05

Duration: 1 hour Swedish

Participant 8

P8 - IT Consulting - Operating in Sweden - 50-60 age category - Female - 20 years of experience in finance - 5 years as CFO - Previously as CAO - Managing 8 people team

Date: 2021-05-06

Duration: 1 hours Swedish

Table 1. Information about the interview participants and interview. Source: Author

Interview guide

Before starting semi-structured interviews with selected CFOs the guide of the

interview was set. It consisted of explanation of confidentiality and GDPR thesis study consent for the interviewee as well as permission to record the interview, introduction to the interview and research itself, interview questions and closure of the interview. The interview guide can be found in Appendix 1. It was chosen to divide interview questions into three parts in order to ensure the basic structure and the quality of the interviews. Since this particular study has two main research questions, first part questions for

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CFOs covered general information of the respondent, second part questions covered role of CFO and skills required and thirt part of questions focused on challenges and opportunities of digitalization for finance division. Every interview was closed with the extra question about additional comments to encourage discussions as it was

recommended by Bryman & Bell (2011). Moreover, most of the questions were structured to start with “How” and “What” as well as lead to the examples from respondent experience.

As for the language of the interview, researcher was able to hold meetings in three languages: Lithuanian, Swedish and English. The mother tongue of all respondents was either Lithuanian or Swedish which was beneficial in regards to ensuring the uniqueness of the content. Also, all of the meetings were held online using Google meetings and

Microsoft Teams platforms due to Covid-19 restrictions. Average duration of each

interview is provided in table 1. The duration of interviews varies from 0,5 to 1,5 hour with an average of 1 hours.

As it was mentioned before, CFOs are the representatives from the management team with many responsibilities that affect their availability for interviews as such. Hence, it was tried to make a process as simple as possible for CFOs:

- GDPR thesis study consent for signing was provided online for digital signature. - Interview questions were sent in advance in two languages: English and

Swedish/Lithuanian.

- Topic, purpose of the study and short presentation was sent out in advance by email.

- Respondents had a chance to choose the most preferable communication tool (i.ex. email, LinkedIn.com, Microsoft Teams, etc.).

- Agreed time schedule of the interviews was strictly followed.

- After signing GDPR thesis study consent interviews were recorded instead of making notes in order to ensure data quality and safe time.

3.7 Data Quality

3.7.1 Reliability

Reliability of the study is about whether the data collection techniques and procedures would ensure the consistent findings while repeating the same research, but on a different occasion and by different researchers (Saunders et al., 2012). However, it is not possible to measure how research conducted by qualitative methods is reliable and it is more focused on how data has been collected and processed (Bryman et al., 2011). Since semi-structured interviews selected for primary data collection do not have a strict structure, doubts about the reliability could arise. However, to avoid a risk of research being unreliable, researcher have spent an additional time with explanations and presentations about the subject and the research. Generally speaking, the more

structured research has the higher chances to ensure the reliability of the study. It is an important factor for the research, because the lack of reliability can create a lack of trust in the credibility of the study as well.

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3.7.2 Trustworthiness

Trustworthiness of the research is the level of confidence in collected data, used methods and interpretations in order to ensure the quality of the study (Polit & Beck, 2014). To guarantee the acceptable trustworthiness of this particular research, a lot of attention was given to create the logical connection between the purpose of the study and the research questions. This was achieved by critically selecting relevant literature for the literature review part which later was a basis for pre-prepared semi-structured interview questions and interview guide. As for the generalisability, the study aims to increase the understanding about how CFO’s role is changing because of Finance 4.0 and what skills will be needed rather than provide generalizable results. Hence, generalisability is considered to be relatively low.

3.8 Data analysis and ethics

3.8.1 Data analysis method

For the research analysis part, the thematic data analysis method, which in qualitative research is the most widely used, has been selected (Bryman et al., 2011). The purpose of the method is to identify and analyze patterns of meanings in the collected data in order to answer the research questions (Braun, Clarke & Rance, 2014). Also, the method is well suited for qualitative data analysis collected via interviews, which is the primary data collection method taken in this paper (Braun et al., 2014).

Braun et al. (2014) present two ways of identifying themes in the data set: inductive and deductive. For this particular research, deductive approach is taken as the best fit due to study being affected by theoretical and analytical interest (Braun et al., 2014). Also, since pre-prepared semi-structured interview questions were divided into three categories according to the research questions, it means that themes identified are referring to the specific contexts.

An important part of thematic data analysis is to identify and categorize the themes according to the major trends in the data set. For being able to set the themes for the research analysis part, coding of the collected data was conducted. Final coding procedure can be found in the appendix 3. Also, Figure 5 below illustrates the whole procedure of identifying research themes starting from audio recordings taken during semi-structured interviews.

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3.8.2 Data ethics

Research ethics is the critical aspect of every successful research (Saunders et al., 2012). It refers to the standards of behaviour that ensure study being in relation to the rights of those who were participating in the research or affected by it (Saunders et al., 2012). This paper represents a qualitative study that involves secondary and primary data analysis, so it is the researcher's responsibility to ensure the high ethical standards during the whole research process. First, in order to avoid plagiarism, all literature used in this particular paper is appropriately cited or referenced. Second, for primary data collection, it was important that semi-structured interview participants were fully informed about the purpose of interviews, how information collected will be handled and what are their rights (such as skip any questions they do not feel comfortable with). For the data protection purposes name, surname and company/organization of the participants is kept fully confidential. Audio recordings of interviews were only made with the permission of interviewees as well as agreement to erase them after the

submission of the paper. It is an important to mention, that none of the interviews were conducted without signing GDPR thesis study consent and sharing pre-prepared questions with the participants. GDPR thesis study consent consists of the clear

description of the research, rights of the respondent, confidentiality explanation, contact information in case of any data protection violations. GDPR thesis study consent can be found in the appendix 1.

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4. RESEARCH FINDINGS

___________________________________________________________________________________ The purpose of the Research findings chapter is to present research results gathered during semi-structured interviews. This Master thesis section starts from brief general findings about the participants of the study, then moves on to findings that cover digitalization of the finance function and findings about CFO’s role and

responsibilities. Moreover, the chapter presents research results on traditional and additional CFO’s skills.

______________________________________________________________________ The purpose of this master thesis is to identify how the CFO role is changing because of Finance 4.0 and what will be the skills required in future for the position. Therefore, the researcher has conducted semi-structured interviews with eight CFOs from two

different countries, different industries and age categories. All of the interviews were recorded and transcripted in order to ensure the quality and consistency of data analysis as well as identify patterns and create coding that leads to specific themes. Together with focus on CFO and professional skills, study brings out information gathered regarding finance division digitalization due to better understanding about the environment CFO works in.

The general information about the respondents gives a chance for researcher to gain knowledge about their background and the origins of the examples provided during interviews. Even though the country respondents come from was not taken into account for analysis data, four of the respondents were representing companies operating in Sweden and the same number represented companies operating in Lithuania.

Respondents also represented six different industries: Pharmaceuticals, Cruise ships/real estate, Fintech, Emergency responses and health care services were represented by one respondent each, when two of the interviewees were from the Financial services sector and two from IT-consulting. With respect to research participants' age, none of the interviewed CFOs were younger than 30 years old and only one was older than 50. Rest of interviewees were between 30 and 50 years old.

The main characteristic that all CFOs participating in the research had in common is experience in finance. All of them regardless of country, industry or age had at least 8 years of experience. The average of respondents' experience in finance is 15,6 years. Moreover, all of them have worked as CFOs for at least one year, but this number of years differs from 1 to 10 in regards to years of experience in finance. Since CFO is a position from the top management, all of the participants had a team to manage, formed from 3 to 10 people.

4.1 Digitalization of the finance division

As it was already defined in the literature review chapter, to have a good understanding about Finance 4.0, it is important to be familiar with the Industry 4.0 definition first. Respondent P5 have showed some solid knowledge and interest about the phenomena as well as P2 and P8 have heard it before and had an idea about what it could be. The rest of the respondents have not heard it before. Finance 4.0 definition was completely new for all of the respondents. However, when asked about digitalization all of the

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respondents recognized the word and had some experience to share about how this phenomenon has already affected their work.

Everyone agreed unanimously that the finance division needed digital solutions for many different reasons. P3 as well as P7 even mentioned that nowadays it is hard to find a finance department that is completely non-digitized and we should talk not only about digitalization, but more about automatization. Nowadays all of the finance departments are working with softwares that is an inseparable part of daily work. Also, P1 explained that demands for standardization from public companies, such as The State Tax

Inspectorate, increases as well so there is no other choice than to adapt and embrace digital tools used by authorities. P2 was focusing a lot on digitalization on workflow and how it simplifies daily work of the whole company. For example, if a finance specialist needs a report from the sales about the last month's numbers, because of the digital workflow he does not need to disturb a colleague from another department and can find everything himself. According to P2 it has also affected the finance

department's relationship with management: before high importance meetings that involve questions such as budget or investments, finance specialists have a possibility to

slice and dice financial data the most efficient way and see outcomes in the very early

stage. In some cases, correctly modeled data can show that some kind of questions can not even be brought up, so it saves time of endless discussions. Moreover, P4 shared an example about computer failure right before financial year closing reporting that caused a lot of chaos, because the finance department P4 worked at did not have a practise to save copies of everything in the Cloud. At the moment, lessons are learned and Cloud has not only fixed data storage questions, but also made easier access to information for all team members. Anyhow, P2 and P8 admonishes that digitalization should be

embraced within mind, evaluating abilities and possibilities.

Even though digitalization has affected each of CFOs' work significantly, opinions about the future differ. P1 has shared the idea that in a long perspective the finance department should be set only from CFO and financial analysts when roles such as accountant, auditor or even controller should be fully outsourced or automatized. On the other hand, P7 was quite sceptical about fully outsourced accounting services or

automatized auditing any time soon. Respondent shared the example about accounting and auditing services in Sweden outsourced to India: when accounting looks to work fine, auditing did not pass the test because of the language barrier and high demands in regards to regulations in Sweden. P6 as a representative from the financial services sector agreed that companies increasingly decide to outsource their unessential financial functions to India and that aligns well with high demands and regulations in Sweden, when at the same time this type of outsourcing does not look possible for audit. P2 have represented a company operating in Lithuania and have expressed an opinion that unessential functions and those that do not require special knowledge in the field should be outsourced, but the company should not expect any miracles from that. Of course, it gives freedom to reallocate resources, i. ex. substitute accountant with controller instead, but it does not give a space to get rid of the internal finance department: somebody will still need to prepare the material for outsourcing and control the work. Moreover, P3 admitted using outsourcing for accounting functions, because the

company simply does not need a full time internal resource for that, but highlighted that you can never expect the same engagement to the company from external players as from internal employees. P2 also highlighted that an important factor of the future of the

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finance department is to become from cost center to profit center. That is where the finance function is actually heading and that is where digitalization will play its role. Nevertheless digitalization has many positive sides, research has identified some negative effects as well. P1 has expressed a concern about the security and data protection regarding auditing procedures in the digital environment, when all the financial documents of the listed company are sent by email or can be found online. P3 has also agreed that security and data protection in the Fintech industry is a sensitive question regarding digitalization, especially when talking about global problems such as money laundry, information leakage, etc. Otherwise, P6 being closely involved in auditing processes at work stated that security or data protections should not be a problem if the right tools are used. Same position was taken by P7 and P8.

One more negative factor about digitalization brought by P7 was technical failures. If the system the whole finance department works with shuts down for a day and

everything is based on that system - nobody is able to work that day. Also, P2 explained that when the finance department decides to initiate any new ways of working (specially digital), for at least a month or even longer, employees are duplicating work. At the very early stages of new tools integration, all kinds of technical errors are not

uncommon, so duplicating is a security measure to avoid mistakes and consequences. Here, P8 agrees with P2 that new initiatives regarding digitalization require additional resources, time and budget. Also, P2 gave an example that sometimes finance

departments initiate solutions to solve specific problems and when it reaches users or/and consumers - it does not solve problems for them. Hence, user experience and testing should be taken very seriously.

When digging into topics such as digitalization, even though the focus is on a specific department, it is important to get an overall picture of the whole organization. The respondents were asked about the support from the company regarding digital tools and all of CFOs gave positive answers. Both P1 and P4 mentioned being users of financial and ERP systems from authorized providers. P2, P5 and P6 were employees of the large scale listed companies, so they have shared that all three companies invest a lot of time and money to educate people about technologies. Furthemore, P3, P7 and P8 were representing IT-consulting and Fintech companies, so high quality IT support was common sense. P1 even came up with the idea that IT support nowadays sometimes understands more about financial operations than accountants that worked at the

company for 10 years. Anyway, together with positive answers about support regarding digital solutions, P2 and P6 mentioned sometimes feeling that support outgrowing into a pressure.

Regarding how other departments in the company are dealing with digital disruption, all CFOs, except P7 and P8 (Who were representing IT-consulting companies), marked out the finance department as a good example for others. P2 shared how the finance

department of the company were proactive and were periodically presenting new digital solutions for not only finance division work, but also for other departments. Respondent highlighted the marketing department being quite resistant to new ideas and

complaining until the last moment benefits are seen. P1 shared similar experience about finance division representatives volunteering in all kinds of technology and daily work

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improvement fairs as well as bringing new ideas to the company. P3 could not exclude one department from the whole picture because of being a Fintech startup.

The clear message that was communicated in every interview was that the financial department is definitely changing and together with that - old structure and ways of working have to be changed.

4.2 CFO’s role and responsibilities

All of the research participants shared what are the responsibilities of a CFO and what they see as the most important work tasks. Respondents agreed that it really depends on the organization, but researcher was able to see clear patterns between the answers. Internal & external reporting, Cash flows control, budgeting, investment supervision and involvement in the strategic decision making process were the responsibilities mentioned by all interviewed CFOs. P1 explained that in listed companies annual planning is a highly important task as well as its review every month. CFO role here is to keep an eye on financial indicators of profitability such as EBIT & EBITA and report to the group board if any deviations from the plan are observed. Of course, special attention is given to cash flow control and payback of investments. P2, P5 and P6 have also given a high importance for internal reporting that involves stakeholders,

management, group board and external reporting that is mainly about authorities. The rest of the respondents expressed the importance of the reporting and governance as well, but since their companies were smaller scale, they did not focus that much on the annual plan and the board but more on compliance with regulations and reporting to authorities.

As it was expressed by most of the interview participants, a big part of CFO work is to enable business to create value by supporting management with internal control, risk management and ensuring financial resources. P7 even explained that a company can not ensure growth without taking a risk and it is CFO responsibility to see what risks are worth taking. Moreover, the most important task for business is to ensure the liquidity of the company, which covers most of the tasks in the CFO basket. However, when asked about what tasks that take most of the working time, all of the CFOs answered that it was either reporting and compliance with regulations or supervision/governance tasks, but not strategic or advisory ones. Basically, not necessarily most important tasks take most of the time and everyone has agreed that it has to change.

4.3 Digitalization challenges for CFO

Researcher also tried to find out if being CFO nowadays when digital disruption has reached exponential growth on a large scale can be challenging. P2 shared that it can be a challenge to be a CFO in general sometimes, because this is a role that involves a lot of responsibility and usually is followed by strict deadlines. Generally speaking, usually there is no I can’t now if work has to be done. P4 relied a lot on deadlines and pressure during financial reporting periods as well as P6 on finance function being very seasonal work. P2 mentioned that CFOs are often introverts that prefer to deal with duties individually in the way that feels most efficient for them, so additional tasks such as implementing digital solutions that require time, forces CFOs to reorganize their schedules, delegate tasks and plan more. P1 also agreed that for CFO work it is usually