Being a Chief Financial Officer is no longer only a matter of numbers and financial analytics. For years now, the CFO’s job description has shifted from counting pennies to being a driver of change within companies. The successful CFO of tomorrow needs to understand the business drivers behind the numbers and take actions towards a continuous decrease in costs and increase in revenue. Inevitably, this requires knowledge in big data analytics to transform their evaluations into strategic advice, also regarding non-financial measures, for the management board.
“For the most part, CFOs understand that their roles continue to change and expect to adjust their course. About four
“For the most part, CFOs understand that their roles continue to change and expect to adjust their course. About four in ten CFOs say they spent the majority of their time in the past year on roles besides traditional and specialty finance. Among these other roles, CFOs most often focused on strategic leadership, organizational transformation, and performance management.” (McKinsey&Company 2016)
The same study suggests that two-thirds of all respondents are of the opinion that a CFO should actually spend on average more time on these non-traditional finance duties like strategic leadership, performance management but likewise on big data and technology trends. The latter is unavoidably the field that brings most concerns to current CFOs.
Many are insecure about their own and their company’s capabilities to be competitive in either digitization or cybersecurity. The future will require a closer cooperation between the CFO and the CIO in order to support sharper data insights and drive the business as a whole towards growth.
Nowadays, big data increasingly becomes too big for a human brain to capture and process. This is why CFOs are going to have to rely on Artificial Intelligence and machine learning as well as Internet of Things to grasp data even from outside the corporate walls.
CXOtoday.com has defined the Anatomy of the CFO of Tomorrow by starting with the top part of the human body and the most important one – the brain. The brain of millennials is what brings innovation along with trust towards technologies to adapt to their changed field of responsibilities. Secondly, the eyes must always see the bigger picture in all business areas through deep analysis of data and cutting-edge technologies. Important to mention here is that specialization is no longer aim of millennials, and thus for the future CFO, gaining broad knowledge about each department is crucial as it shapes and influences the success of a CFO. Their skills are meant to break organizational silos, identify new opportunities much faster to react to them immediately.
The biggest challenge here is to close the communication gap and build trust between CFOs and other C-Suite executives within the company. CEO’s often have difficulties adapting to the fact that their colleagues from the finance department are no longer only advisors but part of the actual decision-making process. This was partially made possible thanks to massive outsourcing and automation of routine work which freed up time for the financial department leaders to influence areas beyond traditional fields of responsibilities.
The technology that plays an essential part in this development is ERP systems and cloud computing. ERP not only covers all aspects of a company such as supply and demand planning, marketing or warehousing but it allows to store endless amounts of data on the cloud. The system has practically evolved in order to connect the dots between structured and unstructured data. “It also connects the relationships between things like non-financial measures, social data and other intangible, and effectively becomes a knowledge management system.” (Source: Financial Review, Mar 18, 2017)
Founder and Managing Director of EBCG and CFO Club Slovakia, Roman Slovinec, wraps up the topic.
“In recent years, CFOs have become partners to address corporate challenges that go beyond the standard financial issues. They will face the ongoing globalization of corporate processes, the transfer of competences, and the increasing volume of regulations and directives. Furthermore, their tasks include internal areas such as increasing efficiency, implementation of modern digital technologies into company activities, and potentially also changing business models under the influence of digitization.”