How The Role Of The CFO Has Changed
Over the years, the role of the CFO has shifted from financial, reporting and compliance-focused to one that is more influential and strategic, leveraging financial data and analysis to influence key operational decisions and strategies. In this article, we explore some key ways in which the CFO role has evolved.
The chief financial officer (CFO) is a key player in the C-suite of any organisation and is a role that has evolved significantly in recent years. Going beyond numbers and strategic advisory to the business, the role of the CFO's is to now to also embrace strategies that leverage technology allowing for more visibility and data access across the organisation to support key decision making. Further with rising costs in the aftermath of a pandemic and a talent war, there are many challenges facing the CFO currently that are shaping the scope of the role. Below we explore how the role and responsibilities of the CFO have changed and what priorities are important in 2022.
More Diverse Team
In recent years, the scope of the CFO role has evolved and become broader. CFO’s now lead a much more diverse working team from financial specialists to procurement and data analytics and reporting professionals. These specialist roles are something that evolved in the last few years and many predict roles working under the CFO will continue to evolve.
Previously, businesses under-invested in their finance departments in relation to technology. However due to the significant impact business technology was proven to have on finance departments and in light of the need for remote working options due to the pandemic, technology transformation has become more of a priority to CFO’s. CFO’s no longer want to be held back by legacy applications and want to adopt a more cloud-based approach. This allows FP&A teams to improve the speed and accuracy of their insights to support the business. According to a recent PWC survey, nearly 40% plan to use automation to streamline transactional processes and enable actionable and strategic insights, freeing up employee time for more challenging business issues. Further, 17% of CFO's report that they’re also planning to move finance to the cloud.
Agility and Risk Management
Following a few quite turbulent years for finance departments, risk and crisis management has become more and more important. Due to so much uncertainty, CFO’s have learned to become more cautious and strategic in their decision making. As well as ensuring they have the correct governance and controls in place, financial professionals must tap into data insights and up-to-date financial models to help support decisions and navigate any potential disruptions.
A more recent challenge for the CFO is the ongoing talent war brought on by a labour shortage following the pandemic. CFO’s like other business leaders are not only struggling to find the right talent in a competitive employment market but must also focus heavily on employee retention. CFO’s are in particular seeking new hires to not only demonstrate the importance of analysis in the finance function but who also have clear analytical and problem-solving skills. These skills are critical to support constantly evolving and data-driven functions and organisations in future years. According to a PWC survey, 83% of CFO’s say hiring, retaining talent is very important to growth – more than even the CHRO.
A new change to the role of the CFO is the increased need to work closely with the CIO or CTO to help align on business digitisation objectives. By working closely together, they can together identify and implement the correct technology to benefit the organisation. This collaborative approach is also helpful in shaping the financial planning and analysis team into one that can support the whole organisation. Overall, this is more effective for the organisation rather than both c-suite members taking a siloed approach.
Instant access to data allows CFO’s to help organisations stay ahead of competitors. Knowing this, many organisations have invested in automation software and intelligent dashboards to help collate data that may have otherwise been isolated. By tackling the issue of data accessibility with real-time data, all users can be more efficient in interpreting the relevant data to help support the organisation in its strategic initiatives. According to Gartner, by 2023, augmented data management will also reduce the reliance on financial analysts for routine and repetitive data management tasks, freeing up to 20% of their time for collaboration, training and high-value analytics tasks Through embracing what technology can offer the finance function, the CFO can go beyond being seen as a finance leader but also a data leader as they deliver critical insights that will support all essential business decisions.
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