It’s a new day for middle-market CFOs, who have traditionally been viewed primarily as number crunchers and financial risk managers. The CFO role is going through a major transformation. Organizations are relying on their CFOs as strategic leaders who are central to corporate planning and decision making.
While CFOs will continue performing foundational tasks like budgeting, financial reporting and cash flow management, it’s no longer enough for the CFO to just be the financial steward of the organization. The modern CFO is now expected to:
- Bring strategic ideas to the C-suite table
- Develop and executing the company’s strategic agenda
- Help effect change throughout the organization
As a result, this new strategic role requires a new skill set for many financial professionals.
Transformed by Technology
Technology is changing the role of the CFO. Innovation and access to massive amounts of data, both inside and outside the organization, are the drivers of this shift. Today’s CFO needs to efficiently leverage new technologies, while ensuring the financial processes are at the forefront of the organization’s digitization efforts.
In order to be successful, CFOs need to lead the charge in these new technologies. They need to be the change agents controlling the pace of transformation throughout the company. Those who are able to successful will become the key source for data-driven decision making. Thus empowered to drive their organizations to be more agile, dynamic and successful.
Three Key Technologies Leading the Way
There are three key technologies leading this transformation:
1. Automation — Automation of the financial processes is typically the first step in the technology transformation. According to a study conducted by McKinsey Global Institute, 42% of a finance team’s processes can be fully automated while another 19% can be highly automated.
Specific finance activities that lend themselves well to automation include general accounting operations, accounts payable, accounts receivable, payroll, financial controlling and reporting, and the tax workflow. By automating these processes, the finance team frees up significant time and resources to focus on driving strategy and change throughout the company.
2. Data Dashboards — When the automation of financial and operational processes is paired with the use of data visualization tools, organizations gain access to valuable real-time data.
Businesses often lack easy access to data. Usually the critical information they need is located in different parts of the company or in systems that aren’t integrated. Data visualization software pulls this raw data from various sources and organizes it. Allowing for the generation of clear, timely and actionable dashboards that can be pushed to the appropriate end users to enhance decision making.
3. Analytics — Automation helps streamline processes. Data dashboards provide real-time data. Data analytics is the advanced analysis of the vast quantity of data available. The companies that can leverage data strategically will be tomorrow’s market leaders. Such companies will make informed, tactical decisions and better identify growth opportunities.
Wearing Lots of Hats
With a keen focus on driving the strategic agenda throughout the organization, the CFO must know what areas need the greatest investment and where resources should be allocated. This shift from the traditional CFO role, means CFOs must wear many different hats to drive the greatest value.
Today’s CFO must work hand in hand with other members of the C-suite. Developing this integrated approach to the business and broad understanding of the organization’s entire value chain means working with:
- Human resources to help drive the talent agenda.
- IT to drive technology transformation throughout the organization.
- Operations to optimize efficiency in the supply chain, logistics, production and procurement functions.
- Sales and marketing to enhance visibility and target customers.
While the CEO remains the visionary leader of the company, the modern CFO pulls all the different pieces together. Resulting in a more forward-focused leader who is the chief executive’s most essential strategic partner, influencer and change agent.