In a recent survey conducted by Grant Thornton, 42 percent of CFOs said they are spending as much as half of their time as strategists. This is a 13-point jump compared to the same February 2020 pre-pandemic survey.
The Grant Thornton survey did not ask the respondents to identify specific activities where they had become key strategists in their organizations. However, a recent article by Financial Executives International provides unique insights through their conversations with finance leaders and identifies what the “strategist” role for today’s CFO entails. Here are three areas where CFOs are becoming key strategists to help drive critical business decisions within their companies.
COVID-19 brought a new level of uncertainty to the global economy. To compensate for this uncertainty and best prepare for whatever else may happen, many in the Office of Finance saw an increase in the number of requested forecast scenarios. Additionally, these forecasts now needed to include a new array of external factors that were previously unnecessary. Because of these factors, forecasting is now a much more labor-intensive and time-consuming process. However, the resulting “nuggets of insight” that can inform business decisions all flow through the Office of Finance at some point during the Record to Report process.
Shifting Business and Operating Models
As the impact of COVID-19 became more apparent, organizations began to prioritize making themselves as “lean” as possible. As companies began lowering infrastructure and delivery costs, they quickly realized that making minor changes was an unrealistic way to achieve this goal. This meant taking a step back and analyzing their entire operation in order to deliver transformational changes. Today’s strategic CFOs are relied on to be a guiding voice when it’s time to assess options, costs related to these options and execution to lead the overall organization in the right direction.
While COVID-19 has impacted every part of the organization, questions about existing pricing models and customer accommodations due to possible COVID-19 complications have become a source of unease for many. This has often resulted in new terms and agreements, adjusted pricing and restructured contracts, and strategic CFOs are regularly asked to lead the charge.
How CFOs Can Move Forward
While the COVID-19 pandemic will eventually subside, the impact that it has had on the global economy and the change it has brought to how we all conduct business will echo for years to come. Similarly, the role that the Office of Finance plays in the overall organization has permanently changed. Once under-appreciated and often thought of only as a back-office function, the pandemic has served as a proof point to the value that the office of the CFO can offer the entire organization.
The role of the CFO is constantly evolving, and it’s certain that the new expectations that have been placed on the Office of Finance will continue to increase as time goes on. As we enter year-end, the organizations that don’t actively work to make the CFO and Office of Finance more strategic will fail to meet these new expectations.
Learn more about the evolving role of the CFO and how you can best prepare for the future.