The ERP paradox: How digital transformation reinforces CFOs as data gatekeepers

For decades, the chief financial officer has held a central, almost sacred role in corporations as the custodian of numbers and gatekeeper of truth. In the eyes of the CEO, their value goes beyond budgets and spreadsheets. It’s about their ability to forecast, interpret and influence strategic decisions using reliable data. That power didn’t just come from understanding the numbers; it came from owning the numbers. And more importantly, owning the systems that generate and control access to those numbers. 

Then came enterprise resource planning (ERP) systems; massive, expensive platforms intended to unify business processes and give everyone in the organization access to a single source of truth. But instead of democratizing information, ERP implementations often did the opposite. They reinforced the CFO’s dominance. 

Why? Because whoever leads the ERP project controls configuration, how data flows, control junctions, who sees it and how it’s interpreted. And in most companies, that person is often the CFO, as they are seen as worthy by the CEO to be given the lead for the digital transformation project, especially true in small to medium-sized businesses. This isn’t necessarily about CFOs being power-hungry; many genuinely believe that maintaining centralized financial oversight ensures data integrity and regulatory compliance. However, the result is the same: control over how the entire ERP system is configured and implemented. 

The evolution of ERP: From operations to financial control 

ERP systems originally emerged to support day-to-day operations. The earliest versions, like MRP systems such as MAPICS, early manufacturing resource planning systems and inventory management platforms, were designed for inventory management, manufacturing workflows, procurement and logistics. These systems served as the digital backbone of companies with complex supply chains or production lines. For instance, a large automotive parts supplier used ERP to track inventory, manage factory allocations and plan production schedules. 

Over time, ERP vendors expanded their offerings with powerful financial modules automated general ledger (GL), financial reporting, regulatory compliance and audit-ready features. Major vendors like SAP, Oracle and others began positioning their solutions as comprehensive business platforms rather than purely operational tools. These developments became magnets for CFOs. Financial benefits are often easier to quantify and present to the board than operational ones, making finance-focused ERP systems more immediately justifiable. As a result, ERP ownership frequently shifted. It was no longer solely about streamlining operations but increasingly about centralizing financial oversight. 

This shift often led to strategic design decisions that favoured finance, where all data, primarily financial transaction data, as opposed to broader operational metrics like customer behavior, supply chain efficiency or production output, sometimes passed through finance first. Operational managers across all departments (collectively referred to as RevOps throughout this article, encompassing all non-CFO/CEO stakeholders, including sales managers, operations managers, marketing managers and other departmental leaders) often found they had limited access to real-time insights, and self-service analytics were frequently delayed or gated, ostensibly to prevent misinterpretation. 

The result? These operational managers often found themselves waiting on finance to deliver critical insights, often after the immediate opportunity to act had passed. Meanwhile, the CFO became the one person the CEO could consistently rely on for “the truth”. 

Why operational managers play along 

This isn’t just a top-down power dynamic. Many operational managers across all departments may implicitly support or even welcome the CFO’s control over data, either actively or passively. This behavior aligns with broader patterns of information hoarding in organizations, where employees often hoard information because they feel a sense of job security when others consistently come to them for advice. 

First, it can shield them from immediate scrutiny. Imagine being the Head of Sales Operations and missing a weekly target. If the CEO had instant access to granular pipeline data, there might be intense pressure or questioning before you’ve had a chance to course-correct. Similarly, a manufacturing manager dealing with production delays, or a marketing manager facing campaign underperformance, can benefit from having time to develop explanations and corrective actions before facing CEO scrutiny. With delayed reporting, you can frame the story: “Yes, week two was soft, but we’ve recovered with new mid-funnel campaigns”. This provides a buffer for managing perceptions. 

Second, controlled narratives can be more comfortable. With scheduled reporting, teams have time to dig into anomalies, coordinate explanations and avoid knee-jerk reactions. Real-time dashboards might show fluctuations that seem alarming but are benign in context. A temporary spike in support tickets could stem from a software update rather than a product defect, but without context, leadership might panic. An inventory spike might reflect seasonal preparation rather than poor demand forecasting. A dip in customer satisfaction scores might coincide with a system upgrade rather than service deterioration. This management of narrative can reduce perceived volatility. 

Third, there’s an unspoken alliance. CFOs maintain data control to ensure consistency and compliance. Operational managers across departments may accept that control to avoid being exposed or second-guessed in real time. This creates a mutual protection system where everyone has time to prepare explanations for performance variations before facing executive scrutiny. The outcome can be mutual job security, but it often comes at the expense of organizational speed, agility and fundamental data trust across departments. 

The ERP implementation trap 

ERP projects often fall into the same pattern, a finance-led transformation that prioritizes compliance and control over agility and automation. CFOs typically sponsor ERP initiatives because financial ROI is often easier to quantify and justify to stakeholders. Additionally, in many organizations, especially smaller to mid-sized companies, the CFO is seen as the most qualified to manage large-scale technology investments due to their analytical skills and budget oversight responsibilities. Vendors frequently present finance use cases as quick wins. 

As a result, systems are commonly optimized for tax compliance, month-end closing and statutory reporting, but often not for the dynamic needs of operational departments. This frequently leads to features critical for operations like granular campaign attribution, lead automation, real-time inventory visibility, production scheduling optimization, or real-time customer sentiment analysis being postponed or deprioritized. 

It’s important to note that some finance-led ERP implementations have been successful, particularly in highly regulated industries like pharmaceuticals, banking or public utilities, where financial controls and compliance are paramount. In these cases, the CFO’s leadership ensures critical regulatory requirements are met. However, even in successful implementations, operational efficiency often takes a backseat to financial control. 

Consider the case of a B2B SaaS company that attempted to integrate HubSpot with its ERP to improve lead-to-cash visibility. The finance team, citing valid data quality concerns, rejected the initial plan. As a result, the sales ops team spent two years manually reconciling CRM and invoice data, a significant operational inefficiency. Similar scenarios play out across departments: manufacturing teams manually tracking production metrics outside the ERP, marketing teams using separate analytics tools because ERP reporting is too slow and customer service teams maintaining shadow databases because the ERP doesn’t capture service interactions effectively. 

Without ERP workflows that genuinely reflect operational realities, teams frequently rely on spreadsheets, manual exports and repetitive tasks. A marketing manager might download data from several platforms and stitch it together in Excel. A customer success manager might track usage patterns manually, instead of leveraging AI-driven churn alerts. A production manager might maintain separate tracking systems because the ERP’s manufacturing module doesn’t provide real-time visibility into floor operations. These inefficiencies ultimately stall decision-making and implicitly reinforce the CFO’s traditional control. 

The psychology of data control 

CFOs often understand that their influence is tied to exclusive access to critical insights. If every department had real-time, self-service data and executive dashboards, the CFO’s unique strategic advantage could diminish. This isn’t paranoia; it’s a reasonable concern in the era of AI and predictive analytics, where information ubiquity can redefine roles. However, it’s crucial to understand that many CFOs aren’t consciously scheming to maintain power. They often genuinely believe that centralized data control prevents misinterpretation, ensures regulatory compliance and maintains data quality standards. The challenge is that these well-intentioned controls can inadvertently stifle organizational agility. 

Operational managers, while seeking protection from real-time scrutiny, may believe that controlling the narrative protects them, but in truth, this often creates dangerous blind spots for the organization as a whole. You simply cannot effectively steer a dynamic business using outdated or incomplete data. 

There’s also the issue of institutional job security, where many stakeholders are implicitly playing defense. CFOs often don’t want their roles reduced solely to compliance officers. Operational leaders across departments don’t want to be challenged in real time on potentially volatile metrics. IT teams often lack the organizational authority or mandate to independently push for broad, cross-functional data democratization. Additionally, in public companies, regulations like Sarbanes-Oxley require CFO oversight of financial data flows, making some level of centralized control legally necessary rather than just preferential. This confluence often results in digital transformation efforts that appear modern on the surface but are unfortunately built on old habits and entrenched power structures. 

The consequences of data gatekeeping 

Simply put, the consequences of this data gatekeeping are tangible and significant. 

First, delayed decision-making. If pipeline deterioration is noticed in week five instead of week two, you’ve already lost a significant opportunity in that quarter. If production bottlenecks are identified through month-end reports rather than real-time monitoring, manufacturing efficiency suffers. If customer satisfaction issues surface through quarterly reviews instead of immediate feedback loops, customer retention becomes compromised. Real-time data could have enabled a timely pivot and corrective action. 

Second, innovation bottlenecks. ERP systems that disproportionately favour finance over broader operations limit a company’s agility, hindering its ability to rapidly automate, test new strategies and evolve. A digital marketing team that can’t connect ad spend to revenue in real time is operating at a profound disadvantage. A Customer Experience (CX) team that can’t automate follow-ups to unhappy customers will struggle to build loyalty and retain customers efficiently. A supply chain team that can’t access real-time vendor performance data will struggle to optimize procurement and logistics. 

Third, trust erodes. When critical business reports are filtered through different lenses or departments, teams can begin to doubt each other’s numbers and interpretations. Finance and operational teams, instead of collaborating, may find themselves questioning one another’s analysis, ultimately leading to fractured collaboration and suboptimal outcomes. 

Fourth, competitive disadvantage. While your organization waits for scheduled reports and manual data reconciliation, competitors with more agile data systems are making faster, more informed decisions. In rapidly changing markets, this delay can be the difference between capturing opportunities and missing them entirely. 

Breaking the cycle: The role of neutral leadership 

Finance-led ERP implementations often inadvertently fail operational departments because CFOs, by the nature of their role, prioritize structure, compliance and financial controls. They are experts in financial stewardship, but not necessarily digital architects for holistic business transformation across all functions. 

Modern operational requirements, by their very nature, require cross-functional visibility, real-time dashboards and often low-code automation to adapt quickly. But these crucial elements are rarely prioritized sufficiently unless someone with a truly objective perspective actively advocates for them. That’s why organizations frequently need a neutral transformation leader for ERP projects, not solely a finance-first project owner. 

This neutral leader could be an internal, non-biased manager such as a Chief Information Officer (CIO) or Chief Technology Officer (CTO) with a deep understanding of organizational systems and cross-functional needs, or it could be an external entity like a specialized independent consultant with no vested interest in departmental biases. The key is establishing a governance structure that includes: 

• Cross-functional steering committee with equal representation 
• Balanced KPIs measuring both financial control and operational agility 
• Regular review cycles that assess all departmental needs 
• Clear escalation paths for resolving conflicts between financial control and operational efficiency 

Such leadership ensures governance structures are put in place that elevate operational priorities alongside financial ones. Key Performance Indicators (KPIs) should measure both financial control and operational agility comprehensively. Only then can ERP systems truly fulfill their intended purpose: to connect and empower the entire business, not just a single function. 

Enter the CAIO 

As AI takes center stage in digital transformation, the Chief Artificial Intelligence Officer (CAIO) is emerging as a critical leader who can potentially bridge the gap between finance and operations through intelligent automation. A CAIO can integrate data across disparate systems, ERP, CRM and support platforms to deliver unified, comprehensive insights. 

Predictive models can surface emerging trends in sales, operations and customer sentiment before they escalate into significant issues. More importantly, the CAIO can enforce unbiased, outcome-driven analytics. By shifting the organizational focus from data control to actionable insights, they help ensure that data is shared transparently and used across functions to drive collective results. 

The CAIO role represents a shift toward data democratization, where AI-driven insights can provide the objective perspective needed to balance financial controls with operational agility. 

Take, for example, a typical national retail chain implementing a new ERP system. The finance department is usually at the helm, ensuring the general ledger, tax compliance and financial reporting are all ironclad. Meanwhile, operational teams like logistics, merchandising or store operations often find their real-time requirements pushed to the sidelines. Critical capabilities such as dynamic stock visibility, real-time store-level demand fluctuations or agile customer feedback loops are frequently tagged as “phase two” features that may never see the light of day, perpetuating operational blind spots. 

Final thought: Can your company break the cycle? 

The current system often benefits the gatekeepers, reinforcing existing power dynamics. But if companies genuinely want to thrive and compete effectively in a fast-moving, data-driven world, they need to move beyond traditional finance-first ERP implementations. The next phase of digital transformation must be inherently inclusive, increasingly AI-driven and truly collaborative across all business functions. This fundamentally requires empowering every function not just finance with real-time insights and actionable data. The critical question remains: Will your company double down on entrenched control mechanisms or will it courageously build a forward-looking culture where everyone is empowered to lead with comprehensive, real-time data? 

To truly assess if an ERP implementation is benefiting finance vs. operational divisions, consider these three crucial questions: 

1. What is the actual utilization of the ERP system when it comes to operations compared to finance? This helps reveal whether the operational modules’ licenses paid for were effectively implemented and are being used to their full potential or if significant functionality remains underutilized. 
2. Which operational and decision-making reports rely on direct data from the ERP, and which are still generated from disparate data extracted into Excel templates? This highlights instances where operational insights are being “window-dressed” or manually reconciled outside the core system, indicating a lack of trust or functionality. 
3. What is the ratio of manual Journal Vouchers (JVs) posted in the General Ledger that specifically touch on updating Operational Departments’ Profit & Loss (P&L)? A disproportionately high number of manual JVs often indicates underlying red flags regarding data flow, system configuration or process inefficiencies that force manual adjustments rather than automated financial capture of operational activities.  

In conclusion, CFOs are undeniably vital to a company’s financial health and strategic direction, providing crucial insights and ensuring fiscal discipline. Their expertise in financial governance is indispensable for stable growth. However, when it comes to ERP implementations specifically, the challenge isn’t that CFOs are bad leaders, but rather that their natural focus on financial controls can inadvertently constrain the operational agility that modern businesses require. For a digital transformation to truly unlock its full potential across the entire enterprise, it requires a broader, more holistic vision. 

This means CFOs, while maintaining their essential stewardship, may need to thoughtfully step aside from the direct governance of the holistic digital transformation project itself, allowing a truly neutral leader, be it a strategically positioned CIO/CTO or an independent external consultant, to guide the enterprise-wide change. This collaborative shift ensures that the ERP system evolves into a powerful, integrated tool that serves and empowers every operational division, driving comprehensive value and innovation for the entire organization. 

Author’s note: The observations in this article didn’t come from academic theory; they emerged from two decades of real-world experience auditing IT departments and ERP implementations. The patterns described here became crystal clear after witnessing the same scenario play out repeatedly across different organizations and industries. 

During my career conducting IT audits, I’ve consistently encountered a telling pattern: Finance Managers leading IT domains and ERP implementations. While I won’t name specific organizations out of professional courtesy, the evidence speaks for itself through the outcomes I’ve observed. 

Across approximately 25+ audit engagements, the data tells a compelling story. In organizations where CFOs led ERP implementations, I found that Finance departments were consuming the vast majority of system-generated reports, often 70-80% of total report usage, while some operational managers received only weekly or monthly summaries filtered through the finance lens. 

But here’s where it gets interesting: when I dug deeper into how operational managers were making day-to-day decisions, I discovered they were predominantly relying on alternative data sources. Spreadsheets, standalone applications and makeshift solutions operating completely outside the expensive ERP system they’d supposedly “implemented.” A few were shadowing IT Departments developing their in-house databases. The real-time operational insights they needed simply weren’t accessible through the main system, so they built their own workarounds. 

The most revealing evidence came from analyzing Manual Journal Vouchers (JVs). In six organizations where I conducted detailed ERP utilization audits, every single one showed an unusually high percentage of manual JVs; we’re talking about reversing entries, periodic expense allocations and constant manual adjustments that should have been automated. When your ERP requires that much manual intervention to reflect operational reality, it’s a clear sign that the system wasn’t configured to capture the full business picture from the start. 

These weren’t isolated incidents or poorly managed companies. These were successful businesses that had invested significant resources in their ERP systems, yet ended up with expensive financial reporting tools rather than the integrated business platforms they thought they were buying.

That’s what inspired this article: The realization that this isn’t just a technology problem, it’s a governance and leadership challenge that’s been hiding in plain sight for years. 

This article is published as part of the Foundry Expert Contributor Network.
Want to join?