The Changing Role of the CFO
In recent years, the expectations for the CFO have shifted in many ways. The CFO is now expected to be a strong voice in times of crisis, a provider of key insights to drive the business forward and a bridge between the finance and accounting team and every other department within the organization.
Here are a few expectations that today’s CFOs are expected to fulfill.
Focus on Strategy
Recently, the typical organization’s view of the CFO as a number cruncher has shifted to a reliance on the position as a strategic leader. Deloitte says as a business strategist, the CFO is expected to steer the company in the right direction for the future, add value to the business, and enhance shareholder value. Strategy expectations encompass both the value of the business and the relationships within the organization the CFO maintains to drive the business forward. The CFO’s relationships with the CEO, the head of Financial Planning and Analysis (FP&A) and the Controller are very important to lead the organization to the right path for the future. Additionally, the CFO should be maintaining tight communication with other executives of the C-level team, specifically the Chief Information Officer, Chief Technology Officer or the Chief Revenue Officer. And lastly, the CFO needs to be open and transparent with the organization’s board.
Today there tends to be more urgency and expectancy placed on the CFO and the office of finance. EY states that finance stakeholders expect accurate, error-free information faster and with more detail and frequency than before. The CFO constantly needs to be creating and reporting relevant KPIs that drive the business, in addition to ensuring that their management team is focused on those numbers. This allows leadership to make decisions with accurate, relevant data for the company. This is especially crucial in times of crisis, when the entire business is looking to the CFO and finance team for information and direction— perhaps even more than the CEO.
Bridge Between Business Units
A modern CFO is expected to understand all parts of the business, how they individually drive the organization and develop a plan for the future of those units, whether it’s for one, three or five years out. Developing relationships with other C-level executives is key to understanding the business. One of these crucial C-level relationships should be with the Chief Data Officer. According to Gartner, by the end of 2020, 90% of major corporations will have a Chief Data Officer. Another important relationship the CFO should form is with the Chief Technology Officer, to identify the areas in which to drive automation in order to provide cost savings to the whole organization. Lastly, the Chief Digital Officer will help the CFO integrate technology and data for the organization and their customers.
In 2019, Business Wire conducted a survey of over 500 senior executives and found that automation is currently a chief C-level priority. Over 70% of the C-Suite respondents reported that RPA and AI initiatives were either a high or an essential priority to meet their strategic objectives and make their organization more competitive. Additionally, the study found that 61% of U.S. companies already make extensive use of automation somewhere in the business.
Based on these findings, if organizations haven’t implemented automation— especially the office of finance— then their company has already fallen behind in the market. However, one of the biggest hindrances when it comes to automating financial processes is the fear that technology leads to the replacement of real, human finance teams. According to PwC, the use of automation and robotics in business actually achieves the opposite and heightens the need for people and skillsets that can’t be replicated with machines.
The CFO is expected to be an influential voice in driving automation initiatives across the business by utilizing the key partnerships they’ve forged. Technology should be viewed as a partner for your organization, not a hurdle to overcome. Financial automation especially enhances your organization’s competitiveness by allowing your finance and accounting teams to move away from inefficient, manual tasks and focus on strategic initiatives, among many other benefits.
The future of the CFO is quickly changing to adapt to the climate of technological change that business is now undergoing. To learn more about how financial automation can benefit offices of finance and entire organizations, read our case studies.
The Evolving Role of the CFO Series
Part 1: 4 Challenges CFOs Need to Be Prepared For In The Upcoming Year
Part 2: Is Your Finance Team Prepared For the Future?
Written by: Ashton Mathai