With a unique and holistic view of their business, the modern CFO breaks traditional boundaries for finance-based roles. They are intrigued by developing inside-level strategies for growth. They empower CEOs to make data-backed decisions for the company at large by identifying opportunities and implementing strategic foresight.
If we look at virtually every company, the CFO is becoming the second most important C-suite executive. An effective leadership team depends on the CEO, and a strong CFO makes for a great double act. CFO services play a crucial role in making significant differences in companies and organizations.
The CFO can create more meaningful roles for their finance team members as routine tasks are becoming automated. By leveraging transformative technology, CFOs are becoming strategic enablers within their organizations.
- 81% of CFOs identify and target areas of new value as one of their primary responsibilities.
- 77% of CFOs believe in their duties for driving business with operational transformation.
The expectations of CFOs are rising as the technology is becoming more advanced, and they are no longer only responsible for focusing on a company’s bottom line. They are also expected to lead in the following areas.
- Finance teams use digital tools for automating routine tasks so they can focus more on higher-level initiatives.
- Finance teams and CFOs use data to make more strategic and informed judgments around growth within their organizations.
- Finance supports functions that drive recurring revenue at an enterprise level.
The CFO evolution
The modern CFO must keep an eye on emerging trends and strategies for helping their company grow, succeed, and stay one step ahead in changing times. Three emerging trends CFO’s are required to be aware of are:
- Evolving technology-centric solutions.
- The evolution of data analytics.
- Being aware of global trade and regulations.
- The rising role of automation and technology in business
In an interview with a CFO, it has been noted that the role of CFO fundamentally changes in today’s business climate. CFOs are dealing with a rapidly changing and competitive environment. Because of these circumstances, initiating strategic decision-making became more necessary.
The rising role of automation and technology in business
The generation of large and complex data presents a challenge and meaningful possibilities for deep insights into finance and business at large. The finance function and the CFO should be at the heart of this data revolution as better tools with eminent insights and efficient automation are continually coming online.
Technological development will serve in helping to gather, organize, integrate, and make data timely. It will drive more effective business intelligence by identifying new market and profit opportunities, measuring and managing business performance, running simulations, and bringing new customer insights.
The CFOs of the future and their finance functions need to be adept at delivering and leading this technology transformation. Less time will be spent on recording and verifying the numbers and more time making data connections and explaining the number implications to the business – and applying a finance lens on decision making.
The evolution of data analytics
Analytics takes business intelligence one step further. It involves querying data and reporting on the information required and correlating, forecasting, and predicting future business scenarios by connecting the data points. For instance, while analyzing revenue from customers, business intelligence will recognize the most profitable customers, while analytics will answer why they are.
Data analytics is evolving the finance function because there are so many tools nowadays that manage data collection to make it more streamlined, efficient, and accurate. Raw data is filtered through analytics, saving time from manually sorting it and identifying the most useful pieces.
It helps people within finance derive more insights from their numbers for making better-informed business decisions. With the help of the right analytics software solutions, CFOs can better predict and advise the company’s future by analyzing past, current, and forecasted future trends.
Global trade and regulatory dynamics
Skills in global trade could help in managing a company’s international growth, development, and investment strategy. Being aware of global business and regulatory conditions could help in identifying potential new markets and investment possibilities. A CFO can play a large and important role in concentrating on a company’s expansion strategy with a global finance business lens.
Nevertheless, for entering new markets successfully, a CFO needs to understand the compliance and administrative environment to provide better advice on expansion strategy.
The future of the CFO role
As the role of CFO’s is rapidly changing, individuals in this role need to develop analytical and collaboration-based skills, in addition to embracing and leading technological transformation within their organizations.
The traditional responsibilities of CFOs include making upper-level strategic decisions, including planning, forecasting, and budgeting. A CFO armed with analytics has more centralized control over operational business decision-making. With analytics skills, CFOs can answer questions, such as ‘What price point should be used for customers on this day?’ and ‘Which inventory items should be pulled out or forwarded on the supply chain?
With advanced analytics, businesses can hedge against volatility, with the ability to respond faster to changes. Analytics has predictive power, offering CFOs the ability to forecast pricing, supply chains, and other relevant aspects of the business.
It becomes easy to create a skill gap between the CFO and the rest of the financial team with a role that is so quickly evolving. But an opportunity lies within this challenge—automation of mundane tasks means opportunity for developing more productive and strategic initiatives for financial organizations.
Defining Analytics Advantage
Now more than ever, CFOs can demonstrate how financing can stay ahead of the game when it comes to analytics. This can be done by identifying business areas where analytics can bring value. With analytics, CFOs can drive operational insights faster and easier, thus, creating a competitive advantage. Through finance-supported analytics, CFOs can drive value outside the core functions of finance.
The importance of the CFO role will continue to grow and will develop a future CFO that looks very distinct from the past one. The future CFO will require a wide range of skills and capabilities to prepare for the possibilities and challenges ahead. Whether you are a current CFO or a future finance leader, continuing your personal and professional development will be critical for your success.
Considering programs designed for educating CFO’s on this evolving role further would be a great help. Essentially, try taking the initiative to gain broader experience, understand the value of data insights and the technology required for it, promote healthy relationships with technology and business stakeholders, sharpen strategic communication skills, and prepare for helping the organization drive innovation and adapt to constant change.