- Harmit Singh, chief financial officer at Levi Strauss & Co., says the digital preferences of consumers are shaping the investments CFOs need to make.
- C-suite executives need to understand that digital transformation is a key part of sustainable profitability and shareholder value creation, even if the costs can be hard to understand upfront.
- This thinking includes cloud adoption to keep legacy systems from falling behind; digital upskilling and employee hackathons; data visualization and artificial intelligence; and robotic process automation.
The role of the chief financial officer has expanded well beyond traditional finance. Companies' critical need to build for a digital future — driven by consumers whose digital preferences continue to accelerate — is adding a new technological remit to CFOs of all industries. Today, CFOs are responsible for allocating resources to set up strong digital foundations; championing the right talent and organizational structure to implement digital objectives; testing before quickly scaling value-creating technologies like data visualization, robotics, artificial intelligence; and relentlessly measuring while communicating the shareholder value created.
Serving as more cross-functional C-suite executives, CFOs are working side-by-side with their C-suite colleagues to restructure and refocus businesses for sustainable profitability while defining and telling the story of how value is created by digital transformation.
As the CFO of the 168-year-old company Levi Strauss & Co., I'm constantly working with my colleagues to identify ways in which we can do things better, faster and more efficiently through the use of emerging technologies and efficient business processes. Having the CIO and the ERP team report into me enables me to ensure that resources are allocated towards automating and digitizing the processes across the organization. Investing in this proactively as we test and scale digital tools, like robotics and AI capabilities, across the enterprise helps us unlock real growth opportunities and ultimately drive our business forward.
As more companies embark on their own digital journeys, here's my advice for other CFOs looking to understand their role in leading and pursuing a successful digital transformation.
For a true digital transformation to take hold and prove beneficial long-term, companies have to start with a solid plan and build the right digital foundation. CFOs, in partnership with their C-suite colleagues, need to think holistically across the organization and implement technology systems at the core of their operations to enable simplified, standardized, and integrated processes throughout every team of the enterprise.
While relatively dated, enterprise resource planning (ERPs) systems are still the lifeline for businesses. These systems have modernized throughout the decades to keep up with orbiting technologies, but it's on the CFO to ensure these systems integrate with pricing systems, operations, supply-chain-management systems, and every other aspect of the organization. They are one of the foundations of a successful digital transformation. My role, working with the ERP team, is to ensure that our employees and customers experience this digital transformation not as a pure technological change but a change that simplifies their work and allows them to make data-driven decisions with real-time business insights — ultimately accelerating market share growth and profitability.
Our own digital transformation started with a dedicated team made up of both business and technical talent upgrading to a cloud-based ERP platform, enhancing visibility into key wholesale, direct-to-consumer and manufacturing data across all sales channels and regions globally. Defining the processes and configuring the platform to deliver these processes across order management, inventory management and omnichannel allocation — as well as one single global financial system of record — supercharges our operational efficiency and fundamentally changes the way we do business. That's game-changing value.
Building the right global diverse team and a culture of innovation to create, implement and manage these platforms and new technologies is equally important. We're living in an era where talent, especially tech talent, is hard to secure, and we're competing with companies that span industries. But while there is great global talent to recruit, there is also great talent to build.
At Levi Strauss, we're focused on fostering an enterprise-wide culture of innovation and are investing in our people — some of the best talent in retail. Our people are the key drivers of our digital transformation and the best ones to build the future of our company. We've embarked on a company-wide digital upskilling initiative to help our people learn and practice the skillsets we need to achieve our digital transformation from the inside. Digital savvy employees must live across all departments, including finance. We have also established global capability centers that allow us to not only recruit talent closer to our consumers but also build a diverse talent team.
Similarly, creating the programs, initiatives and space for innovation is also vital, and it's the C-suite's responsibility to champion these opportunities. For me, I'm proud to play my part and have been a sponsor of our ongoing hackathon series. By bringing our people together to collaboratively solve problems in a short period of time, we're creating a powerful engine for idea generation to better serve our consumers. Our 2021 hackathon event included 35 teams from across 11 countries that came together to share ideas and add to our digital future. The top three teams presented their business case for funding to the executive team where we could decide which ideas to take to the next level. From chat bots to self-checkout, the resulting software solutions presented at our hackathons have a business impact.
Everything that can be automated, should be automated. As CFOs, we need to constantly remember that, and push our teams to do the same. Our teams should not be spending hours entering data from one system into another, updating spreadsheets, or copying over datasets. Instead, we need to free employees from such tedious tasks and allow them to spend their time analyzing and solving the more complicated problems.
Robotic Process Automation (RPA) is gaining in popularity across all industries as more and more businesses see how its techniques can save businesses 30–40% of the hours typically spent on tedious tasks. I've been on a personal mission to address this within Levi Strauss, and I'm excited to see our organization embrace RPA with open arms. We created our own RPA Center of Excellence team where it's focused on finding automation opportunities and scaling automation across functions in our organization, in turn freeing up valuable resources to carry out our long-term digital-first vision.
The investment in technology is often intimidating. Returns are not overnight, making it hard to justify the cost. But as CFOs, we need to help prioritize projects that create value while balancing foundational investments that will accelerate digital transformation These technologies can unlock enormous potential across the business from saving on operational costs to uncovering new business opportunities to predicting areas of concern.
There has never been a more important time for CFOs to realize building for a digital future is paramount, especially as we continue to face challenges from the pandemic and plan for the future. In uncertain economic environments, it's key to have the most up-to-date, real-time data on hand to make quick decisions about the strategic direction of your business.
As the CFO of a brand steeped in heritage, I'm excited about the future and what's possible when we collectively lean into digital transformation.
—By Harmit Singh, Executive Vice President and Chief Financial Officer at Levi Strauss & Co. Singh is a member of the CNBC Global CFO Council.